Exhibit 4.1
EXECUTION VERSION
TRUST INDENTURE
dated as of June 26, 2001
between
LEASE INVESTMENT FLIGHT TRUST,
as the Note Issuer
LIFT TRUST-SUB 1,
as the Bridge Note Issuer
PHOENIX AMERICAN FINANCIAL SERVICES, INC.,
in its capacity as the Administrative Agent
and
BANKERS TRUST COMPANY,
as the Trustee
Reconciliation and tie between the Indenture, dated as of June
26, 2001, and the Trust Indenture Act of 1939, as amended. This reconciliation
does not constitute part of the Indenture.
Trust Indenture Act
OF 1939 SECTION INDENTURE SECTION
---------------------- -----------------
310(a)(1) 6.09
(a)(2) 6.09
(b) 6.10
311 6.11
312(a) 6.13
312(b) 6.14(b)
312(c) 6.14(c)
313(a) 6.15(a)
313(c) 6.15/12.05
314(a) 6.12(a) - (c)
(a)(4) 6.12(d)
(c)(1) 1.03
(c)(2) 1.03
(e) 1.03
315(b) 6.07
315(d) 6.01
316(a)(1)(A) 4.12
(a)(1)(B) 4.05
(b) 4.09
(c) 1.04(d)
317(a)(1) 4.03
(a)(2) 4.10
(b) 2.04
318(a) 12.13
TABLE OF CONTENTS
PAGE
Article I DEFINITIONS.............................................................................................1
Section 1.01 Definitions............................................................................1
Section 1.02 Rules of Construction.................................................................35
Section 1.03 Compliance Certificates and Opinions..................................................36
Section 1.04 Acts of Holders.......................................................................36
Section 1.05 Incorporation by Reference of Trust Indenture Act.....................................38
Article II THE NOTES.............................................................................................38
Section 2.01 Authorized Amount; Terms; Form; Execution and Delivery................................38
Section 2.02 Restrictive Legends...................................................................41
Section 2.03 Registrar and Paying Agent............................................................43
Section 2.04 Paying Agent to Hold Money in Trust...................................................44
Section 2.05 Method of Payment.....................................................................44
Section 2.06 Minimum Denomination..................................................................46
Section 2.07 Transfer and Exchange; Cancellation...................................................46
Section 2.08 Mutilated, Destroyed, Lost or Stolen Notes............................................47
Section 2.09 Payments of Transfer Taxes............................................................47
Section 2.10 Refinancing of Notes..................................................................47
Section 2.11 Additional Securities.................................................................49
Section 2.12 Book-Entry Provisions.................................................................50
Section 2.13 Special Transfer Provisions...........................................................52
Section 2.14 Temporary Definitive Notes............................................................56
Section 2.15 Statements to Holders and the Owner Trustee...........................................57
Section 2.16 CUSIP, CINS and ISIN Numbers..........................................................59
Section 2.17 Holder Representations and Covenants..................................................59
Section 2.18 Bridge Note Transfer Provisions.......................................................60
Article III ACCOUNTS; PRIORITY OF PAYMENTS.......................................................................60
Section 3.01 Accounts..............................................................................60
Section 3.02 Investments of Cash...................................................................63
Section 3.03 Closing Date Deposits, Withdrawals and Transfers......................................64
Section 3.04 Interim Deposits, Transfers and Withdrawals...........................................65
Section 3.05 Interim Deposits and Withdrawals for Aircraft Sales...................................66
Section 3.06 Calculation Date Calculations.........................................................66
Section 3.07 Payment Date First Step Withdrawals and Transfers.....................................68
Section 3.08 Payment Date Second Step Withdrawals..................................................69
Section 3.09 Allocations of Principal Payments Among Subclasses of the Notes.......................74
Section 3.10 Certain Redemptions; Certain Premiums.................................................74
Section 3.11 Adjustment of Certain Percentages, Factors and Balances...............................77
Section 3.12 Credit Facilities.....................................................................77
Section 3.13 Issuer Cure Amount....................................................................77
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PAGE
Section 3.14 Bridge Notes..........................................................................77
Article IV DEFAULT AND REMEDIES..................................................................................79
Section 4.01 Events of Default.....................................................................79
Section 4.02 Acceleration, Rescission and Annulment................................................80
Section 4.03 Other Remedies........................................................................81
Section 4.04 Limitation on Suits...................................................................81
Section 4.05 Waiver of Existing Defaults...........................................................82
Section 4.06 Restoration of Rights and Remedies....................................................82
Section 4.07 Remedies Cumulative...................................................................82
Section 4.08 Authority of Courts Not Required......................................................83
Section 4.09 Rights of Holders to Receive Payment..................................................83
Section 4.10 Trustee May File Proofs of Claim......................................................83
Section 4.11 Undertaking for Costs.................................................................83
Section 4.12 Control by Holders....................................................................83
Article V REPRESENTATIONS, WARRANTIES AND COVENANTS..............................................................84
Section 5.01 Representations and Warranties........................................................84
Section 5.02 General Covenants.....................................................................86
Section 5.03 Operating Covenants...................................................................97
Section 5.04 Compliance Through Agents............................................................101
Article VI THE TRUSTEE..........................................................................................101
Section 6.01 Acceptance of Trusts and Duties......................................................101
Section 6.02 Absence of Duties....................................................................101
Section 6.03 Representations or Warranties........................................................101
Section 6.04 Reliance; Agents; Advice of Counsel..................................................101
Section 6.05 Not Responsible in Individual Capacity...............................................103
Section 6.06 No Compensation from Holders.........................................................103
Section 6.07 Notice of Defaults...................................................................103
Section 6.08 May Hold Securities..................................................................104
Section 6.09 Corporate Trustee Required; Eligibility..............................................104
Section 6.10 Disqualification of Trustee..........................................................104
Section 6.11 Preferential Collection of Claims Against Issuer.....................................104
Section 6.12 Reports by the Issuer................................................................104
Section 6.13 Holder Lists.........................................................................105
Section 6.14 Preservation of Information; Communications to Holders...............................105
Section 6.15 Reports by Trustee...................................................................106
Article VII SUCCESSOR TRUSTEES..................................................................................106
Section 7.01 Resignation and Removal of Trustee...................................................106
Section 7.02 Appointment of Successor.............................................................107
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PAGE
Article VIII INDEMNITY..........................................................................................108
Section 8.01 Indemnity............................................................................108
Section 8.02 Holders' Indemnity...................................................................108
Article IX MODIFICATION.........................................................................................109
Section 9.01 Modification with Consent of Holders.................................................109
Section 9.02 Modification Without Consent of Holders..............................................109
Section 9.03 Subordination and Priority of Payments...............................................110
Section 9.04 Execution of Amendments by Trustee...................................................110
Section 9.05 Conformity with Trust Indenture Act..................................................110
Article X SUBORDINATION.........................................................................................110
Section 10.01 Subordination of the Securities and Other Subordinated Obligations...................110
Section 10.02 Rights of Subrogation................................................................111
Section 10.03 Further Assurances of Junior Representatives.........................................111
Section 10.04 Enforcement..........................................................................111
Section 10.05 Continued Effectiveness..............................................................112
Section 10.06 Senior Claims and Junior Claims Unimpaired...........................................112
Article XI DISCHARGE OF INDENTURE; DEFEASANCE...................................................................112
Section 11.01 Discharge of Liability on the Notes; Defeasance......................................112
Section 11.02 Conditions to Defeasance.............................................................113
Section 11.03 Application of Trust Money...........................................................114
Section 11.04 Repayment to Issuer..................................................................114
Section 11.05 Indemnity for Government Obligations and Corporate Obligations.......................114
Section 11.06 Reinstatement........................................................................114
Article XII MISCELLANEOUS.......................................................................................115
Section 12.01 Right of Trustee to Perform..........................................................115
Section 12.02 Waiver...............................................................................115
Section 12.03 Severability.........................................................................115
Section 12.04 Restrictions on Exercise of Certain Rights...........................................115
Section 12.05 Notices..............................................................................116
Section 12.06 Assignments; Third Party Beneficiary.................................................117
Section 12.07 Currency Conversion..................................................................118
Section 12.08 Application to Court.................................................................118
Section 12.09 Governing Law........................................................................119
Section 12.10 Jurisdiction.........................................................................119
Section 12.11 Counterparts.........................................................................119
Section 12.12 Table of Contents, Headings, Etc.....................................................119
Section 12.13 Trust Indenture Act..................................................................120
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SCHEDULES
Schedule 1 - Initial Aircraft
Schedule 2 - Issuer Subsidiaries
Schedule 3 - Class Percentages
Schedule 4 - Assumed Principal Payments
Schedule 5 - Principal and Maturity of the Bridge Notes
EXHIBITS
Exhibit A-1 - Form of Class A Floating Rate Note
Exhibit A-2 - Form of Class A Fixed Rate Note
Exhibit B-1 - Form of Class B Floating Rate Note
Exhibit B-2 - Form of Class B Fixed Rate Note
Exhibit C-1 - Form of Class C Floating Rate Note
Exhibit C-2 - Form of Class C Fixed Rate Note
Exhibit D-1 - Form of Class D Floating Rate Note
Exhibit D-2 - Form of Class D Fixed Rate Note
Exhibit E - Concentration Limits
Exhibit F - Insurance Provisions
Exhibit G - Form of Monthly Report to Each Noteholder
Exhibit H - Form of Certificate
Exhibit I - Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S
Exhibit J - Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
Exhibit K - Core Lease Provisions
Exhibit L-1 - Form of Certificate to Depository Regarding Interest
Exhibit L-2 - Form of Depository Certificate Regarding Interest
Exhibit M - Form of Bridge Notes
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This TRUST INDENTURE, dated as of June 26, 2001 (this
"INDENTURE"), is made between LEASE INVESTMENT FLIGHT TRUST, a Delaware
statutory business trust (the "NOTE ISSUER"), LIFT TRUST-SUB 1, a Delaware
statutory business trust (the "BRIDGE NOTE Issuer"), PHOENIX AMERICAN FINANCIAL
SERVICES, INC., in its capacity as the Administrative Agent, and BANKERS TRUST
COMPANY, in its capacity as the person accepting appointment as the Trustee
under this Indenture.
The parties to this Indenture hereby agree as follows.
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For purposes of this Indenture, the
following terms shall have the meanings indicated below:
"Acceleration" means, with respect to the principal, interest
and other amounts payable in respect of the Notes, such amounts becoming
immediately due and payable by declaration or otherwise. "Accelerate,"
"Accelerated" and "Accelerating" have meanings correlative to the foregoing.
"Acceleration Default" means any Event of Default of the type
described in Section 4.01(e) or 4.01(f) hereof.
"Account" means any or, in its plural form, all of the
accounts established pursuant to Section 3.01(a) hereof and any ledger accounts
and ledger subaccounts maintained therein in accordance with this Indenture.
"Acquisition Agreements" means the Asset Purchase Agreement,
Beneficial Interest Purchase Agreement and any agreements pursuant to which
Additional Aircraft are acquired.
"Act" has, with respect to any Holder, the meaning given to
such term in Section 1.04(a) hereof.
"Additional Aircraft" means any aircraft and any related
Engine acquired by any Issuer Group Member from a Seller or an Affiliate of a
Seller or (upon a Rating Agency Confirmation with respect thereto), from any
other Person after the Initial Closing Date (other than any Initial Aircraft,
Remaining Aircraft or Substitute Aircraft), excluding any such Aircraft after it
has been sold or disposed of by way of a completed Aircraft Sale.
"Additional Certificates" means any Beneficial Interest
Certificate issued pursuant to the Trust Agreement, the proceeds of which are
used, in substantial part, to acquire Additional Aircraft.
"Additional Interest" has the meaning given to such term in
Section 2.01(a) hereof.
2
"Additional Issuance" has the meaning given to such term in
Section 2.11 hereof.
"Additional Lease" means, with respect to each Additional
Aircraft, each aircraft lease agreement, conditional sale agreement, hire
purchase agreement or other similar arrangement with respect to such Additional
Aircraft on the relevant Closing Date.
"Additional Notes" means any Notes of any subclass of the
Class A Notes, the Class B Notes, Class C Notes and Class D Notes issued
pursuant to this Indenture, the proceeds of which are used, in substantial part,
to acquire Additional Aircraft.
"Additional Securities" means the Additional Notes and the
Additional Certificates.
"Additional Servicer Amounts" means, collectively, the
"Additional Sales Fee", the "Additional Disposition Fee" and the "Additional
Rent Collection Fee", each as defined in the Servicing Agreement.
"Adjusted Base Value" means, with respect to any Aircraft on
any Calculation Date, the average of the Base Values of such Aircraft as
determined by the Appraisals of such Aircraft delivered in connection with the
Relevant Appraisal with respect to such Calculation Date.
"Adjusted Portfolio Value" means, in respect of any Payment
Date, the sum of the products of (a) the Adjusted Base Value of each Aircraft in
the Portfolio on the Calculation Date preceding such Payment Date and (b) the
quotient obtained by dividing the applicable Depreciation Factor for such
Aircraft on such Calculation Date by the applicable Depreciation Factor for such
Aircraft as of the date of the Relevant Appraisal with respect to such
Calculation Date.
"Administrative Agency Agreement" means the Administrative
Agency Agreement dated as of the Initial Closing Date between the Administrative
Agent, the Trustee, the Security Trustee, the Note Issuer and each Issuer
Subsidiary.
"Administrative Agent" means the Person acting, at the time of
determination, in the capacity of the administrative agent of the Trustee and
the Security Trustee under the Administrative Agency Agreement. The initial
Administrative Agent is Phoenix American Financial Services, Inc. Upon notice
from the Security Trustee to the Operating Bank (with a copy to the Trustee)
that no Person is then acting as the Administrative Agent or that the
Administrative Agent is no longer authorized to perform the Bank Account
Managerial Services under the Administrative Agency Agreement (in each case
acting through a Responsible Officer), each reference in this Indenture to the
Administrative Agent shall be, until a successor Administrative Agent is
appointed in accordance with the Administrative Agency Agreement to perform the
Bank Account Managerial Services, to the Security Trustee.
"Affiliate" has the meaning given to such term in Section
5.02(b) hereof.
"Agent Members" has the meaning given to such term in Section
2.12 hereof.
3
"Agreed Currency" has the meaning given to such term in
Section 12.07(a) hereof.
"Agreed Value Payment" means a payment to be made by or on
behalf of a Lessee under a Lease upon or following a Total Loss of an Aircraft
with respect to such Total Loss.
"Aircraft" means the Initial Aircraft and the Additional
Aircraft.
"Aircraft Agreement" has the meaning given to such term in
Section 5.02(g) hereof.
"Aircraft Purchase Account" has the meaning given to such term
in Section 3.01(a) hereof.
"Aircraft Purchase Price" has the meaning, with regard to each
Aircraft, given to such term in the Acquisition Agreement pursuant to which such
Aircraft is purchased by an Issuer Group Member.
"Aircraft Sale" means any sale or other disposition of any
Aircraft, including by reason of such Aircraft suffering a Total Loss, but not
including a sale which is part of a Leveraged Lease Transaction.
"Allowed Restructuring" has the meaning given to such term in
Section 5.02(e) hereof.
"Annual Report" has the meaning given to such term in Section
2.15(a) hereof.
"Applicable Aviation Authority" means, in relation to any
Aircraft, each governmental or regulatory authority that has responsibility for
the supervision of civil aviation and/or the registration and operations of
civil aircraft in the State of Registration of such Aircraft.
"Applicable Law" means, with respect to any Person, all laws,
rules, regulations and orders of governmental regulatory authorities applicable
to such Person, including, without limitation, the regulations of each
Applicable Aviation Authority applicable to such Person or the Aircraft owned or
operated by it or as to which it has a contractual responsibility.
"Applicable Percentage" means as of the Calculation Date next
preceding any Redemption Date, any subclass of the Initial Notes that are Fixed
Rate Notes a fraction the numerator of which is the excess, if any, of (i) the
portion of the Outstanding Principal Balance of the Note being redeemed over
(ii) the excess, if any, of (A) the Outstanding Principal Balance of such Note
as of such Calculation Date (after giving effect to any reductions therein that
would have been made on such Payment Date in the absence of any such Redemption)
over (B) the Assumed Principal Balance of such Note as of such Calculation Date
and the denominator of which is the Assumed Principal Balance of such Note as of
such Calculation Date.
"Appraisal" means a desktop appraisal of the Base Value of an
Aircraft made pursuant to Section 5.03(c) hereof.
4
"Appraiser" has the meaning set forth in Section 5.03(c)
hereof.
"Asset Purchase Agreement" means the Asset Purchase Agreement
dated as of June 26, 2001 between the Sellers and the Bridge Note Issuer.
"Assumed Portfolio Value" means, with respect of any Payment
Date, the sum of the products of (a) the Initial Appraised Value of each
Aircraft in the Portfolio on the Calculation Date preceding such Payment Date
and (b) the quotient obtained by dividing the Depreciation Factor applicable to
such Aircraft on such Calculation Date by the Depreciation Factor applicable to
such Aircraft on the relevant Closing Date.
"Assumed Principal Balance" means, as of the Calculation Date
next preceding any Redemption Date, the sum of the Assumed Principal Payments.
"Assumed Principal Payments" means, as of the Calculation Date
next preceding any Redemption Date, with respect to each subclass of the Initial
Notes that are Fixed Rate Notes, each of the principal payment amounts for such
Notes set forth opposite a date in Schedule 4 hereto falling after such
Redemption Date and ending on the Expected Final Payment Date for such Note or
any other specified date.
"Automatic" means Automatic Lift I LP, a Delaware limited
liability partnership.
"Authorized Agent" means, with respect to the Notes of any
subclass, any authorized Paying Agent or Registrar for the Notes of such
subclass.
"Available Collections" means, as of any Calculation Date,
amounts on deposit in the Collections Account. The Available Collections with
respect to any payment to be made therefrom shall be determined after giving
effect to all payments, if any, having priority to such payment under Section
3.08 hereof.
"Bank Account Managerial Services" means the services
described in Section 2.04 of the Administrative Agency Agreement.
"Bankers Trust" means Bankers Trust Company, a New York
banking corporation currently located at Four Albany Street, New York, New York
10006.
"Base Value" means the value of an Aircraft in an open,
unrestricted, stable market environment with a reasonable balance of supply and
demand, and with full consideration of the Aircraft's "highest and best use",
presuming an arm's-length, cash transaction between willing, able and
knowledgeable parties, acting prudently, with an absence of duress and with a
reasonable period of time available for marketing, adjusted to account for the
maintenance status of such Aircraft (with such assumptions as to use since the
last reported status as may be reasonably stated in the Appraisal setting forth
such Base Value).
"Basic Terms Modification" has the meaning given to such term
in Section 9.01 hereof.
5
"Beneficial Interest Certificates" means all certificates
issued under the Trust Agreement, including the Initial Certificates and all
Additional Certificates, if any, so designated, in each case representing pari
passu percentage beneficial interests in the property of the Issuer arising out
of the Trust Agreement.
"Beneficial Interest Purchase Agreement" means the Beneficial
Interest Purchase Agreement dated as of the Initial Closing Date between
Automatic, the Bridge Note Issuer and the Note Issuer.
"Bridge Break Amount" means an amount equal to the net loss or
additional expense which a Holder of a Bridge Note incurred solely as a direct
result of any unscheduled payment of any principal for that Bridge Note on any
date other than a Payment Date or the Bridge Date (as reasonably determined and
documented in writing by the Holder of the Bridge Note).
"Bridge Date" means June 26, 2001.
"Bridge Note Issuer" has the meaning set forth in the preamble
hereof.
"Bridge Note Issuer Subsidiary" means each subsidiary of the
Bridge Note Issuer existing prior to the Effective Time and listed on Part A of
Schedule 2.
"Bridge Notes" means the Bridge Notes issued under the
Indenture substantially in the form of Exhibit M hereto, and all Notes, if any,
issued in replacement or substitution therefor.
"Bridge Note Account" has the meaning given to such term in
Section 3.14(a) hereof.
"Bridge Note Legend" means the legend initially set forth on
the Bridge Notes in the form set forth in Section 2.02(e) hereof.
"Bridge Note Rate" means the interest rate set forth in the
Bridge Notes.
"Business Day" means a day on which commercial banks and
foreign exchange markets are open in New York, New York and, with respect to the
determination or payment of interest on any Floating Rate Note, a day on which
U.S. dollar deposits may be dealt in on the London inter-bank market and, with
respect to payments to or withdrawals from the Non-Trustee Accounts, a day on
which the financial institution at which such account is located is open for
business.
"Calculation Date" means the fourth Business Day immediately
preceding a Payment Date.
"Capital Markets Advisor" means the Person acting, at the time
of determination, in the capacity of the capital markets advisor under the
Capital Markets Advisory Agreement. The initial Capital Markets Advisor is
Credit Suisse First Boston Corporation.
6
"Capital Markets Advisory Agreement" means the Capital Markets
Advisory Agreement dated as of the Initial Closing Date between the Capital
Markets Advisor and the Issuer.
"Cash Collateral Account" means an Eligible Credit Facility
established as an Account pursuant to Section 3.01(a) hereof. Each Cash
Collateral Account shall be designated with reference to the Obligations owed to
the class or subclass of Notes to which it relates. The Issuer shall not be
deemed a provider of a Credit Facility with respect to any Cash Collateral
Account.
"Certificateholder" means prior to the Effective Time,
Automatic and thereafter, the Person in whose name a Beneficial Interest
Certificate is registered from time to time in accordance with the provisions of
the Trust Agreement.
"Class A Notes" means, collectively, all Notes designated as a
subclass of Class A, including the Initial Notes so designated (consisting of
the Subclass A-1 Notes, the Subclass A-2 Notes and the Subclass A-3 Notes issued
as of the Initial Closing Date), all Additional Notes, if any, so designated
and, all Refinancing Notes, if any, so designated and all Exchange Notes, if
any, so designated.
"Class B Notes" means all Notes designated as a subclass of
Class B, including the Initial Notes so designated (consisting of the Subclass
B-1 Notes and Subclass B-2 Notes issued as of the Initial Closing Date), all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Exchange Notes, if any, so designated.
"Class C Notes" means all Notes designated as a subclass of
Class C, including the Initial Notes so designated (consisting of the Subclass
C-1 Notes and Subclass C-2 Notes issued as of the Initial Closing Date), all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Exchange Notes, if any, so designated.
"Class D Notes" means all Notes designated as a subclass of
Class D, including the Initial Notes so designated (consisting of the Subclass
D-1 Notes and Subclass D-2 Notes issued as of the Initial Closing Date), all
Additional Notes, if any, so designated and all Refinancing Notes, if any, so
designated.
"Class Percentage" means the Minimum Class Percentage or the
Scheduled Class Percentage, as the case may be.
"Clearstream" means Clearstream Banking, a societe anonyme.
"Closing Date" means in the case of (a) the Bridge Notes, the
Initial Securities and the Initial Aircraft, the Initial Closing Date, (b) any
Refinancing Notes or Additional Securities, the relevant date of issuance of
such Securities and (c) any Additional Aircraft, the date of issuance of the
Additional Securities issued to finance the acquisition of such Additional
Aircraft.
"Code" shall mean the Internal Revenue Code of 1986.
7
"Collateral" has the meaning given to such term in the
Security Trust Agreement.
"Collections" means without duplication (a) Rental Payments
and all other amounts received by any Issuer Group Member pursuant to any Lease
or Related Collateral Document, (b) amounts on deposit in the Collections
Account constituting Reserved Cash (including any amounts received under
Sections 5.02(f)(ii)(C)(z) and 5.02(f)(iv)(C) hereof) or transferred to the
Collections Account from any Cash Collateral Account, (c) amounts received in
respect of claims for damages or in respect of any breach of contract for
nonpayment of any of the foregoing, (d) amounts received by an Issuer Group
Member in connection with any Aircraft Sale or otherwise received under any
Aircraft Agreement, including sale proceeds, Total Loss Proceeds, Agreed Value
Payments, proceeds of Repossession Insurance, Requisition Compensation and all
Partial Loss Proceeds, less, in each case, any expenses payable by such Issuer
Group Member to any Person that is not an Issuer Group Member in connection
therewith, (e) amounts received by any Issuer Group Member from insurance with
respect to any Aircraft, (f) any amounts transferred from a Lessee Funded
Account into the Collections Account in accordance with Section 3.07 hereof, (g)
any Swap Receipts, (h) the proceeds of any Investments of the funds in the
Accounts (except to the extent that any such proceeds are required to be paid
over to any Lessee under a Lease), (i) any amounts transferred from the Aircraft
Purchase Account into the Collections Account in accordance with Section 3.04(g)
hereof, (j) any amounts received by an Issuer Group Member under an Acquisition
Agreement, including any loss proceeds and other amounts under the second
sentence of Section 4.2, Section 5.2 and/or Section 5.3 of the Asset Purchase
Agreement and any Non-Delivery Payments but excluding any Excluded Payments, (k)
any other amounts received by any Issuer Group Member (including any amounts
received from any other Issuer Group Member, whether by way of distribution,
dividend, repayment of a loan or otherwise, and any proceeds received in
connection with any Allowed Restructuring); provided that Collections shall not
include (i) Segregated Funds transferred to a Lessee Funded Account, (ii)
amounts deposited in the Defeasance/Redemption Account or the Refinancing
Account in connection with a Redemption, (iii) amounts received in connection
with a Refinancing (except as provided in clause (b) above) and (iv) amounts to
be paid to any Person not an Issuer Group Member or expenses in connection with
the receipt of any Collections or otherwise pursuant to any Related Document, in
each case subject to the restrictions set forth in this Indenture.
"Collections Account" has the meaning given to such term in
Section 3.01(a) hereof.
"Commission" means the U.S. Securities and Exchange
Commission.
"Concentration Default" has the meaning given to such term in
Section 5.02(g) hereof.
"Concentration Limits" has the meaning given to such term in
Section 5.03(a) hereof.
"Control" has the meaning given to such term in Section
5.02(b) hereof. "Controlled" and "Controlling" have meanings correlative to the
foregoing.
8
"Controlling Party" means, at any time of determination, the
Senior Trustee; provided, however, that, if and only if so provided in the
Controlling Trustees' Resolution providing for a Senior Eligible Credit
Facility, at any time from and including the date that is no earlier than 30
months from the earliest to occur of (a) the date on which the entire amount
available under such Senior Eligible Credit Facility shall have been drawn
(except as a result of any change in the rating of the provider thereof or such
additional circumstances as such Controlling Trustees' Resolution may specify)
and remain unreimbursed and (b) the date on which the Notes shall have been
Accelerated, the provider of such Senior Eligible Credit Facility shall have the
right to elect, by Written Notice to the Trustee, to become the Controlling
Party (in place of the Senior Trustee) thereafter but only for so long as any
Credit Facility Obligations due to such provider remain unpaid.
"Controlling Trustees" means prior to the Effective Time, the
Senior Trustee, and thereafter, has the meaning given to such term in the Trust
Agreement.
"Controlling Trustees' Resolution" means a copy of a
resolution certified by a Controlling Trustee as having been duly adopted by the
Controlling Trustees and being in full force and effect on the date of such
certification.
"Core Lease Provisions" has the meaning given to such term in
Section 5.03(f) hereof.
"Corporate Obligations" has the meaning given to such term in
Section 11.02 hereof.
"Corporate Trust Office" means, with respect to the Trustee
for each subclass of Notes, the office of such Trustee at which at any
particular time its corporate trust business shall be principally administered.
The initial Corporate Trust Office is Four Albany Street, New York, New York
10006, Attention: Corporate Trust and Agency Services--Structured Finance,
Facsimile No: 212-250-6439.
"Costs" means liabilities, obligations, damages, judgments,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel and costs of investigation).
"Covenant Defeasance" has the meaning given to such term in
Section 11.01 hereof.
"Credit Facility" means any Senior Eligible Credit Facility,
any Mezzanine Eligible Credit Facility, any Junior Eligible Credit Facility or
any Subordinate Eligible Credit Facility, as the case may be.
"Credit Facility Advance Obligations" means all Credit
Facility Obligations other than Credit Facility Expenses.
"Credit Facility Obligations" means all principal, interest,
fees and other amounts owing to the providers of Credit Facilities.
9
"Credit Facility Expenses" means all Credit Facility
Obligations stated pursuant to the terms of any other Credit Facility to
constitute Expenses.
"Default" means a condition, event or act that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default.
"Default Notice" means a notice given to the Issuer by Holders
representing 25% of the aggregate Outstanding Principal Balance of the Senior
Class, with a copy to the Trustee of each subclass of Notes and the
Administrative Agent, declaring all Outstanding principal of and accrued and
unpaid interest on the Notes to be immediately due and payable.
"Defeasance/Redemption Account" has the meaning given to such
term in Section 3.01(a) hereof.
"Definitive Notes" has the meaning given to such term in
Section 2.01(b) hereof.
"Depository" means The Depository Trust Company, its nominees
and its and their respective successors.
"Depreciation Factor" means (a) with respect to each Initial
Aircraft on any date of determination, if positive, the product of (1-kn) and
(1+g)n/12, where "n" equals the age of such Aircraft in months from the date of
its manufacture, "k" equals a fraction, the numerator of which is 0.9 and the
denominator of which is the Expected Useful Life of such Initial Aircraft
expressed in months, and "g" equals 0.02; provided that in the event such
Aircraft is converted to freighter service, the Depreciation Factor for such
Aircraft shall be the factor determined by the Controlling Trustees and (b) with
respect to each Additional Aircraft, the Depreciation Factor determined by the
Controlling Trustees in connection with the issuance of the Additional
Securities funding the acquisition of such Additional Aircraft.
"Developed Markets" has the meaning determined, from time to
time, in accordance with Note (3) to Exhibit E hereof.
"Direction" has the meaning given to such term in Section
1.04(c) hereof.
"DTC" means the Depository.
"Effective Time" means the time of issuance of the Initial
Notes under this Indenture being the time of authentication and delivery thereof
by the Trustee to the initial Holders thereof.
"Eligibility Requirements" has the meaning given to such term
in Section 2.03(b) hereof.
"Eligible Account" means (a) a trust account maintained on the
books and records of an Eligible Institution in the name of the Security Trustee
as a Securities Account under, and as defined in, the Security Trust Agreement;
provided that no Cash Collateral Account may be maintained with a liquidity
provider at any time at which the Issuer holds any participation in the
Liquidity Facility unless written confirmation shall have been received from
each Rating Agency
10
prior to such time to the effect that such maintenance of the Cash Collateral
Account with the Liquidity Provider will not result in a withdrawal or
downgrading of the ratings of the Notes or (b) an account maintained on the
books and records of an Eligible Institution in the name of an Issuer Group
Member as a Non-Trustee Account in compliance with the terms of the Security
Trust Agreement.
"Eligible Credit Facility" means (a) any credit agreement,
letter of credit, guarantee, credit or liquidity enhancement facility or other
credit facility provided by, or supported by a further such credit facility
provided by, an Eligible Provider in favor of any Issuer Group Member and
subjected to the lien of the Security Trust Agreement or (b) any Account
established for the purpose of providing like credit or liquidity support and
designated as an Eligible Credit Facility.
"Eligible Institution" means (a) Bankers Trust in its capacity
as the Operating Bank in respect of any Eligible Account, so long as it (i) has
either (A) a long-term unsecured debt rating of A (or the equivalent) or better
by Moody's and Fitch and (B) a short-term unsecured debt rating of A-1+ by
Standard & Poor's, P-1 by Moody's and, if rated by Fitch, F1 by Fitch and (ii)
can act as a securities intermediary under the New York Uniform Commercial Code;
and (b) any bank organized under the laws of the United States of America or any
state thereof, or the District of Columbia (or any branch of a foreign bank
licensed under any such laws) appointed as the Operating Bank in respect of any
Eligible Account, so long as it (i) has either (A) a long-term unsecured debt
rating of AA (or the equivalent) or better by each Rating Agency or (B) a
short-term unsecured debt rating of A-l+ by Standard & Poor's, P-1 by Moody's
and, if rated by Fitch, F1+ by Fitch and (ii) can act as a securities
intermediary under the New York Uniform Commercial Code, including a Person
providing a Credit Facility so long as such Person shall otherwise so qualify
and shall have waived all rights of set-off and counterclaim with respect to the
account to be maintained as an Eligible Account.
"Eligible Provider" means a Person whose short-term unsecured
debt is rated A-1+ by Standard & Poor's, P-1 by Moody's and, if rated by Fitch,
F1+ by Fitch or is otherwise designated as an Eligible Provider by the
Controlling Trustees.
"Encumbrance" has the meaning given to such term in Section
5.02(b) hereof.
"Engine" means each engine installed (or constituting a spare
for an engine installed) on any Aircraft, including any engine replacing a
previously installed engine under the relevant Lease, and any and all Parts
incorporated in, installed on or attached to any such engine.
"Escrow Agent" means Bankers Trust.
"Escrow Agreement" means the Escrow Agreement dated as of the
Initial Closing Date between the Escrow Agent, Credit Suisse First Boston
Corporation and the Issuer.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Event of Default" has the meaning, with respect to a class of
Notes, given to such term in Section 4.01 hereof.
11
"Excess Amortization Date" means, with respect to (a) the
Subclass A-1 Notes, July 15, 2003; (b) the Subclass A-2 Notes, July 15, 2004;
(c) the Subclass A-3 Notes, the Subclass B-1 Notes and the Subclass B-2 Notes,
July 15, 2001; (d) the Subclass C-1 Notes and the Subclass C-2 Notes, May 15,
2018; (e) the Subclass D-1 Notes and Subclass D-2 Notes, August 15, 2010; and
(f) any Refinancing Notes or Additional Notes, the Excess Amortization Date
established by or pursuant to a Controlling Trustees' Resolution or in any
indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes.
"Exchange Act" means the U.S. Securities Exchange Act of 1934.
"Exchange Notes" means, with respect to any class or subclass
of Registrable Notes, any notes of the Issuer containing terms identical to such
class or subclass of Registrable Notes (except to reflect the registration of
the Exchange Note under the Securities Act and that Registration Step-up
Interest shall not apply thereto) that are issued and exchanged for Registrable
Notes of such class or subclass beneficially owned by Qualifying Persons
pursuant to a Registration Rights Agreement and this Indenture.
"Exchange Offer" has the meaning given to such term in the
applicable Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning
given to such term in the applicable Registration Rights Agreement.
"Expected Final Payment Date" means with respect to (a) the
Subclass A-1 Notes, July 15, 2003; (b) the Subclass A-2 Notes, July 15, 2004;
(c) the Subclass A-3 Notes, August 15, 2010; (d) the Subclass B-1 Notes, May 15,
2018; (e) the Subclass B-2 Notes, May 15, 2018; (f) the Subclass C-1 Notes, May
15, 2018; (g) the Subclass C-2 Notes, May 15, 2018; (h) the Subclass D-1 Notes,
May 15, 2018; (i) the Subclass D-2 Notes, May 15, 2018 and (j) any Refinancing
Notes or Additional Notes, the Expected Final Payment Date, if any, established
by or pursuant to a Controlling Trustees' Resolution or in any indenture
supplemental hereto providing for the issuance of such Notes or specified in the
form of such Notes.
"Expected Useful Life" means, with respect to each Initial
Aircraft, 30 years and, with respect to any Additional Aircraft, the "Useful
Life" established by or pursuant to a Controlling Trustees' Resolution or in any
indenture supplemental hereto providing for the issuance of Additional
Securities to fund the acquisition of such Additional Aircraft.
"Expense Account" has the meaning given to such term in
Section 3.01(a) hereof.
"Expense Accruals" has the meaning given to such term in
Section 3.08(a) hereof.
"Expenses" means, collectively, any fees, costs or expenses
Incurred by an Issuer Group Member in the course of the business activities
permitted under Section 5.02(e) hereof, including, without limitation, any fees,
expenses and indemnification amounts of, or owing to, any Service Provider and
any Credit Facility Expenses, and (subject to a limit of $10,000 per annum per
Aircraft (or other amount approved by a Controlling Trustees' Resolution with a
Rating Agency Confirmation with respect thereto) with respect to each Issuer
Subsidiary entitled
12
thereto) the shortfall between Rental Payments received by or on behalf of such
Issuer Subsidiary in respect of a Lease of an Aircraft and the amount payable by
such Issuer Subsidiary, as head lease rent with respect of such Aircraft, to
another Issuer Group Member; provided, however, that, except as expressly
provided herein, Expenses shall not include any amount payable on the
Securities, under any Swap Agreement or under any Credit Facility (other than
Credit Facility Expenses).
"Extended Pool Factor" means, with respect to each subclass of
Notes, the "Extended Pool Factor" set forth in the appendix to such Notes, as
the same may be adjusted in accordance with Section 3.11 hereof.
"Extension Amount" has the meaning given to such term in
Section 3.09 hereof.
"Final Maturity Date" means with respect to (a) the Bridge
Notes, the earlier of the Initial Closing Date and July 15, 2002, (b) the
Initial Class A-3 Notes, July 15, 2016 and the other Initial Notes, July 15,
2031 and (c) any Refinancing Notes or Additional Notes, the date, if any,
specified in the form of such Notes.
"Financial Advisor" means the Person acting, at the time of
determination, as the financial advisor under the Financial Advisory Agreement.
The initial Financial Advisor is Credit Suisse First Boston Corporation.
"Financial Advisory Agreement" means the Financial Advisory
Agreement dated as of the Initial Closing Date between the Financial Advisor and
the Note Issuer.
"Fitch" means, Fitch, Inc.
"Fixed Rate Notes" means the Subclass B-2 Notes, the Subclass
C-2 Notes and the Subclass D-2 Notes constituting Initial Notes and any
Refinancing Notes or Additional Notes issued with a fixed rate of interest.
"Floating Rate Notes" means any Subclass A-1 Notes, Subclass
A-2 Notes, Subclass A-3 Notes, Subclass B-1 Notes, Subclass C-1 Notes and
Subclass D-1 Notes constituting Initial Notes and any Exchange Notes,
Refinancing Notes or Additional Notes issued with a floating or variable rate of
interest.
"Future Lease" means, with respect to each Aircraft, any
aircraft lease agreement as may be in effect at any time after the relevant
Closing Date between an Issuer Group Member or Leveraged Lease Lessee (as lessor
or vendor) and a Person not an Issuer Group Member (as lessee or purchaser), in
each case other than any Initial Lease, Additional Lease or Leveraged Lease;
provided that if, under any sub-leasing arrangement with respect to an Aircraft,
the lessor thereof agrees to receive payments or collateral directly from, or is
to make payments directly to, the sub-lessee (or, in the case of a Leveraged
Lease, the sub-sublessee), in any such case to the exclusion of the related
Lessee, then the relevant sub-lease (or, in the case of a Leveraged Lease, the
sub-sublessee) shall constitute the "Lease", and the sub-lessee shall constitute
the related "Lessee" with respect to such Aircraft, but only to the extent of
the provisions of such sub-lease agreement (or, in the case of a Leveraged
Lease, the relevant sub-sublease) relevant to such payments and collateral and
to the extent agreed by the relevant lessor.
13
"GECC" means General Electric Capital Corporation, a New York
corporation.
"Global Notes" means any Rule 144A Global Notes and Regulation
S Global Notes.
"Guarantee" has the meaning given to such term in Section
5.02(f) hereof.
"Holder" means any Person in whose name a Bridge Note, Class A
Note, Class B Note, Class C Note or Class D Note is registered from time to time
in the Register for such Notes or, with respect to any Global Note, the
Depository.
"Incur" has the meaning given to such term in Section 5.02(f)
hereof.
"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.
"Indenture" has the meaning set forth in the preamble hereof.
"Initial Aircraft" means each of the aircraft identified in
Schedule 1 hereto (including any related Engines and Parts and any Remaining
Aircraft) and any Substitute Aircraft, excluding any such aircraft sold or
disposed of by way of a completed Aircraft Sale and any Remaining Aircraft for
which a Substitute Aircraft is delivered.
"Initial Appraised Value" means (a) in the case of each
Initial Aircraft (other than a Substitute Aircraft), the average of the
appraisals by each of the Initial Appraisers of the Base Value of such Aircraft
as of December 30, 2000, (b) in the case of any Substitute Aircraft, the average
of the appraisals by each of the Initial Appraisers of the Base Value of such
Aircraft as of a date not more than six months prior to the date of the delivery
of such Aircraft and (c) in the case of any Additional Aircraft, the average of
the appraisals by each of the Appraisers of the Base Value of such Aircraft as
of a date not more than six months prior to the Closing Date for the issuance of
the relevant Additional Securities.
"Initial Appraisers" means Aircraft Information Services,
Inc., BK Associates, Inc. and Morten Beyer & Agnew, Inc.
14
"Initial Certificates" means the Beneficial Interest
Certificates issued on the Initial Closing Date.
"Initial Class A Notes" means the Subclass A-1 Notes, the
Subclass A-2 Notes and the Subclass A-3 Notes issued on the Initial Closing
Date.
"Initial Class B Notes" means the Subclass B-1 Notes and
Subclass B-1 Notes issued on the Initial Closing Date.
"Initial Class C Notes" means the Subclass C-1 Notes and
Subclass C-2 Notes issued on the Initial Closing Date.
"Initial Class D Notes" means the Subclass D-1 Notes and
Subclass D-2 Notes issued on the Initial Closing Date.
"Initial Closing Date" means June 26, 2001.
"Initial Lease" means, with respect to each Initial Aircraft,
each aircraft lease agreement, conditional sale agreement, hire purchase
agreement or other similar arrangement with respect to such Initial Aircraft
that is listed in Schedule 1 to the Asset Purchase Agreement or with respect to
any Substitute Aircraft described in the "Substitute Aircraft Supplement"
therefor, as such agreement or arrangement may be amended, modified, extended,
supplemented, assigned or novated from time to time.
"Initial Notes" means the Initial Class A Notes, the Initial
Class B Notes, the Initial Class C Notes and the Initial Class D Notes.
"Initial Outstanding Balance" means, with respect to any
subclass of Notes the initial Outstanding Principal Balance thereof on the date
of issuance of such Notes.
"Initial Securities" means the Initial Notes and the Initial
Certificates.
"Initial Swap Agreement" means the Master Agreement effective
as of June 26, 2001 between Credit Suisse First Boston International and the
Note Issuer.
"Insolvency Proceeding" means any proceeding of the type
referred to in clause (e) or (f) of Section 4.01 hereof in respect of the
Issuer.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Intercompany Loan" has the meaning given to such term in
Section 5.02(f) hereof.
"Interest Accrual Period" means, as to each subclass of Notes,
the period beginning on (and including) the relevant Closing Date and ending on
(but excluding) the first Payment Date thereafter and each successive period
beginning on (and including) a Payment Date and ending on (but excluding) the
next succeeding Payment Date; provided that the final
15
Interest Accrual Period with respect to any subclass of Notes shall end on but
exclude the date such subclass of Notes is repaid in full. Account balances with
respect to each Interest Accrual Period shall be determined by reference to the
balances of funds on deposit in the Accounts on the Calculation Date immediately
preceding each Payment Date.
"Interest Amount" means, with respect to each subclass of
Notes, on any Payment Date, (a) the amount of interest accrued and unpaid to
such Payment Date at the rate described in clause (a) of the definition of
"Stated Rate of Interest" with respect to such subclass of Notes on such Payment
Date, determined in accordance with the terms of such subclass of Notes, plus
(b) interest at the rate specified in clause (a) above on any Interest Amount
due but not paid on any prior Payment Date.
"Investment" has the meaning given to such term in Section
5.02(c) hereof.
"Investment Earnings" means investment earnings on funds on
deposit in any Account net of losses and investment expenses of the
Administrative Agent (or, prior to the Effective Time, the Trustee) in making
such investments.
"Issuer" means prior to the Effective Time, the Bridge Note
Issuer, and from and after the Effective Time, the Note Issuer.
"Issuer Cure Amount" has the meaning given to such term in
Section 3.13 hereof.
"Issuer Group" means prior to the Effective Time, the Bridge
Note Issuer and each Bridge Note Issuer Subsidiary, and from and after the
Effective Time, the Note Issuer and each Note Issuer Subsidiary.
"Issuer Group Member" means prior to the Effective Time, the
Bridge Note Issuer or a Bridge Note Issuer Subsidiary, and from and after the
Effective Time, the Note Issuer or a Note Issuer Subsidiary.
"Issuer Subsidiary" means prior to the Effective Time, a
Bridge Note Issuer Subsidiary, and from and after the Effective Time, a Note
Issuer Subsidiary.
"Junior Claim" means (a) with respect to Expenses, all other
Obligations and (b) with respect to any other Obligations, all Obligations as to
which the payment of such Obligation constitutes a Prior Ranking Amount.
"Junior Claimant" means the holder of a Junior Claim.
"Junior Eligible Credit Facility" means any Eligible Credit
Facility designated as a "Junior Eligible Credit Facility" by the Controlling
Trustees. A Junior Credit Facility shall provide by its terms that it is
entitled only to the priority of repayment accorded to a Junior Eligible Credit
Facilities under Section 3.08 hereof.
"Junior Note Blockage Amount" means, as of any Payment Date,
the lesser of (a) $72 million, as such amount may, from time to time, be changed
by a Written Notice from the Issuer to the Trustee and the Administrative Agent
accompanied by a Controlling Trustees'
16
Resolution adopting such change and a Rating Agency Confirmation with respect
thereto, and (b) the sum of the Mezzanine Note Blockage Amount and the
Outstanding Principal Balance (after giving effect to any reduction of the
Outstanding Principal Balance to be made on such Payment Date) of the Class C
Notes.
"Junior Representative" means, as applicable, the Issuer with
respect to any Junior Claim consisting of any of the Certificates, the Trustee
with respect to any Junior Claim consisting of any subclass of Notes of which it
is the Trustee and any other Person acting as the representative of one or more
Junior Claimants.
"Leases" means the Initial Leases, the Future Leases, any
Leveraged Lease and the Additional Leases.
"Legal Defeasance" has the meaning given to such term in
Section 11.01 hereof.
"Lessee" means each Person who is the lessee of an Aircraft
from time to time leased from an Issuer Group Member or leased from a Leveraged
Lease Lessor or Leveraged Lease Lessee.
"Leveraged Lease" has the meaning given to such term in the
definition of "Leveraged Lease Transaction" hereof.
"Leveraged Lease Lessee" has the meaning given to such term in
the definition of "Leveraged Lease Transaction" hereof.
"Leveraged Lease Lessor" has the meaning given to such term in
the definition of "Leveraged Lease Transaction" hereof.
"Leveraged Lease Transaction" means a transaction of the
following type:
(i) a net lease (a "LEVERAGED LEASE") of one or more
Aircraft between an Issuer Group Member acting as lessor (a "LEVERAGED LEASE
LESSOR") and a Delaware business trust, limited liability corporation or other
special purpose corporation (any such entity, a "LEVERAGED LEASE LESSEE") which
will engage in no activity other than the relevant Leveraged Lease Transaction
and matters reasonably incidental thereto;
(ii) the term of each Leveraged Lease are as set
forth in a Controlling Trustee's Resolution therefor, which shall state that
such terms are not materially adverse to the interests of the Noteholders;
(iii) each Leveraged Lease will contain covenants by
the Leveraged Lease Lessee equivalent to those which apply to any Issuer Group
Member under Section 5.03 hereof and such other terms as required under Section
5.03(f) hereof;
(iv) concurrently with the execution and delivery of
the Leveraged Lease of any Aircraft, the operating lease, if any, to which such
Aircraft is then subject shall be novated to the relevant Leveraged Lease
Lessee, the operating Lessee shall consent to such novation and the Leveraged
Lease Lessee shall assign to the relevant Leveraged Lease Lessor all
17
of the Leveraged Lease Lessee's right, title and interest in and to such novated
operating lease to secure its obligations under the Leveraged Lease of such
Aircraft;
(v) each Leveraged Lease Lessor shall assign to the
Security Trustee as further security for the Secured Obligations under the
Security Trust Agreement all of such Leveraged Lease Lessor's right, title and
interest in and to each Leveraged Lease to which it is a party and any and all
security therefore including each related operating lease and all reserves
established therefore;
(vi) each Leveraged Lease Lessee shall become a
party to the Servicing Agreement and agree to be bound by the terms and
provisions thereof as fully and with the same force and effect as if it were an
Issuer Group Member;
(vii) at the expiry of each Leveraged Lease, the
relevant Leveraged Lease Lessee shall assign to the related Leveraged Lease
Lessor all of such Leveraged Lease Lessee's right, title and interest in and to
any operating lease to which it is a party;
(viii) in connection with the consummation of each
Leveraged Lease Transaction, and subject to obtaining Rating Agency Confirmation
therefor, the parties hereto shall be entitled to make such amendment (other
than a Basic Terms Modification requiring Holder approval under Section 9.01
hereof) to this Indenture, the Security Trust Agreement, the Servicing Agreement
and the other Related Documents as the Controlling Trustees shall approve and
such amendments shall not require any Holder approval therefor under Section
9.01 hereof; and
(ix) from and after the consummation of each
Leveraged Lease Transaction with respect to any Aircraft, any Concentration
Limit with respect to such Aircraft shall be measured by reference to the
operating lease, if any, to which such Aircraft is subject and related operating
Lessee rather than such Leveraged Lease and related Leveraged Lease Lessee.
"Lessee Funded Account" has the meaning given to such term in
Section 3.01(a) hereof.
"LIBOR" means the London interbank offered rate for one month
U.S. dollar deposits, determined pursuant to the Reference Agency Agreement, or
such other interest rate so denominated, with respect to any Bridge Notes,
Additional Notes or Refinancing Notes, in an indenture supplemental hereto for
any such Notes or in the form thereof.
"Listing Agent" means Kredietbank S.A. Luxembourg.
"Luxembourg Paying Agent" means Kredietbank S.A. Luxembourg.
"Maturity Step-Up Interest" means with respect to (a) any
Subclass A-1 Notes and Subclass A-2 Notes not repaid on or before the Expected
Final Payment Date thereof, interest, at a rate of 0.5% per annum, and (b) any
Refinancing Notes or Additional Notes that by their terms provide that they are
entitled to Maturity Step-Up Interest at any time, interest, at a rate
established by or pursuant to a Controlling Trustees' Resolution or in any
indenture supplemental
18
hereto providing for the issuance of such Notes or specified in the form of such
Notes, which shall accrue in addition to the Stated Rate of Interest on the
Outstanding Principal Balance of such Notes.
"Mezzanine Eligible Credit Facility" means any Eligible Credit
Facility designated as a "Mezzanine Eligible Credit Facility" by the Controlling
Trustees. A Mezzanine Eligible Credit Facility shall provide by its terms that
it is entitled only to the priority of repayment accorded to Mezzanine Eligible
Credit Facilities under Section 3.08 hereof.
"Mezzanine Note Blockage Amount" means, as of any Payment
Date, the lesser of (a) $53 million, as such amount may, from time to time, be
changed by a Written Notice from the Issuer to the Trustee and the
Administrative Agent accompanied by a Controlling Trustees' Resolution adopting
such change and a Rating Agency Confirmation with respect thereto, and (b) the
sum of the Senior Note Blockage Amount and the Outstanding Principal Balance
(after giving effect to any reduction of the Outstanding Principal Balance to be
made on such Payment Date) of the Class B Notes.
"Minimum Class Percentage" means, with respect to any class of
Notes on any Payment Date, the "Minimum Class Percentage" set forth in Schedule
3 to this Indenture for such Payment Date, as such percentage shall be adjusted
from time to time in accordance with Section 3.11 hereof.
"Minimum Principal Payment Amount" means, with respect to any
class of Notes on any Payment Date, the difference, if positive, between the
aggregate Outstanding Principal Balance of such class of Notes and the Minimum
Target Principal Balance of such class of Notes on such Payment Date.
"Minimum Target Principal Balance" means, with respect to any
class of Notes on any Payment Date, the product of (a) the Minimum Class
Percentage for such class of Notes on such Payment Date and (b) the Assumed
Portfolio Value in respect of such Payment Date; provided that, if on any
Payment Date the Outstanding Principal Balance of Class A Notes is greater than
the Adjusted Portfolio Value in respect of such Payment Date, then the "Minimum
Target Principal Balance" of Class A Notes shall be equal to the Scheduled
Target Principal Balance of Class A Notes.
"Modification Payment" has the meaning given to such term in
Section 5.02(i) hereof.
"Monthly Report" has the meaning given to such term in Section
2.15(a) hereof.
"Moody's" means Moody's Investors Service, Inc.
"Net Sale Proceeds" has the meaning given to such term in
Section 5.02(g) hereof.
"Non-Delivery Payments" means any amounts received by the
Issuer pursuant to the first sentence of Section 4.2 of the Asset Purchase
Agreement or a comparable provision in any other Acquisition Agreement.
19
"Non-Trustee Accounts" has the meaning given to such term in
Section 3.01(f) hereof.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Account" has the meaning given to such term in Section
3.01(a) hereof.
"Note Issuer" has the meaning set forth in the preamble
hereof.
"Note Issuer Subsidiary" means each subsidiary of the Note
Issuer (including each trust of which the Note Issuer is the holder of the
beneficial interest) listed on Part B of Schedule 2 to this Indenture and from
and after the Effective Time any other subsidiary (including any such trust) of
the Note Issuer.
"Note Target Price" has the meaning given to such term in
Section 5.02(g) hereof.
"Notes" means, prior to the Effective Time, the Bridge Notes
and thereafter the Initial Notes, all Exchange Notes, if any, all Additional
Notes, if any, all Refinancing Notes, if any, and all Notes, if any, issued in
replacement or substitution of a Note.
"Notices" has the meaning given to such term in Section 12.05
hereof.
"Obligations" means the Secured Obligations and the payments
to be made to the Issuer under Section 3.08 hereof in respect of the Beneficial
Interest Certificates.
"Officer's Certificate" means a certificate signed by, with
respect to the Issuer, the Owner Trustee or any Controlling Trustee and, with
respect to any other Person, any authorized officer, director, trustee or
equivalent representative.
"Operating Bank" means the Person acting, at the time of
determination, as the Operating Bank under the Security Trust Agreement. The
initial Operating Bank is Bankers Trust.
"Opinion of Counsel" means a written opinion signed by legal
counsel, who may be an employee of or counsel to the Issuer, that meets the
requirements of Section 1.03 hereof.
"Optional Redemption" means a Redemption of Notes pursuant to
Section 3.10(a) hereof.
"Other Accruals" has the meaning given to such term in Section
3.08(a) hereof.
"Outstanding" means (a) with respect to the Notes, of any
class or subclass at any time, all Notes of such class or subclass theretofore
authenticated and delivered by the Trustee except (i) any such Notes cancelled
by, or delivered for cancellation to, the Trustee, (ii) any such Notes, or
portions thereof, for the payment of principal of and accrued and unpaid
interest on which moneys have been deposited in the applicable Note Account or
distributed to Holders by the Trustee and any such Notes, or portions thereof,
for the payment or redemption of which
20
moneys in the necessary amount have been deposited in the Defeasance/Redemption
Account; provided that if such Notes are to be redeemed prior to the maturity
thereof in accordance with the requirements of Section 3.10(a) or 3.10(b)
hereof, notice of such redemption shall have been given as provided in Section
3.10(c) hereof, or provision satisfactory to the Trustee shall have been made
for giving such notice, and (iii) any such Notes in exchange or substitution for
which other Notes, as the case may be, have been authenticated and delivered, or
which have been paid pursuant to the terms of this Indenture (unless proof
satisfactory to the Trustee is presented that any of such Notes is held by a
Person in whose hands such Note is a legal, valid and binding obligation of the
Issuer); (b) with respect to the Certificates, all Certificates issued, and not
cancelled, under the terms of the Trust Agreement; and (c) when used with
respect to any evidence of indebtedness other than any Notes means, at any time,
any principal amount thereof then unpaid and outstanding (whether or not due or
payable).
"Outstanding Principal Balance" means, with respect to any
Notes, the total principal amount evidenced by such Notes unpaid and outstanding
at any time as determined in the report to be delivered pursuant to Section 3.06
hereof or, with respect to the Bridge Notes, as determined by the Trustee.
"Ownership Interest" has the meaning given to such term in
Section 5.02(b) hereof.
"Owner Trustee" means the Person acting, at the time of
determination, as the owner trustee under the Trust Agreement. The initial Owner
Trustee is Wilmington Trust Company.
"Owner Trustee Account" has the meaning given to such term in
Section 3.01(a) hereof.
"Partial Loss" means, with respect to any Aircraft, any event
or occurrence of loss, damage, destruction or the like which is not a Total
Loss.
"Partial Loss Proceeds" means, with respect to any Aircraft,
the total proceeds of the insurance or reinsurance (other than in respect of
liability insurance) paid in respect of any Partial Loss to any Issuer Group
Member.
"Parts" means any part, component, appliance, accessory,
instrument or other item of equipment (other than any Engine) installed in or
attached to (or constituting a spare for any such item installed in or attached
to) any Aircraft (other than any Engine).
"Paying Agent" has the meaning given to such term in Section
2.03 hereof.
"Payment Date" means the 15th day of each month, commencing on
August 15, 2001; provided that if any Payment Date would otherwise fall on a day
that is not a Business Day, such Payment Date shall be the first following day
that is a Business Day.
"Permanent Regulation S Global Note" has the meaning given to
such term in Section 2.01 hereof.
21
"Permitted Account Investments" means, in each case (except
with regard to clause (f) hereof), book-entry securities, negotiable instruments
or securities in bearer or registered form that evidence:
(a) direct obligations of, and obligations fully Guaranteed as
to timely payment by, the United States of America (having original maturities
of no more than 365 days, or such lesser time as is required for the
distribution of funds);
(b) demand deposits, time deposits or certificates of deposit
of the Operating Bank or of depository institutions or trust companies organized
under the laws of the United States of America or any state thereof, or the
District of Columbia (or any domestic branch of a foreign bank) (i) having
original maturities of no more than 365 days, or such lesser time as is required
for the distribution of funds; provided that at the time of Investment or
contractual commitment to invest therein, the short-term debt rating of such
depository institution or trust company shall be at least "A-1+" by Standard &
Poor's, "P-1" by Moody's and, if rated by Fitch, F1+ by Fitch or (ii) having
maturities of more than 365 days and, at the time of the Investment or
contractual commitment to invest therein, a rating of "AA" by Standard & Poor's
and "Aa2" by Moody's and, if rated by Fitch, AA by Fitch;
(c) corporate or municipal debt obligations (i) having
remaining maturities of no more than 365 days, or such lesser time as is
required for the distribution of funds, having, at the time of the Investment or
contractual commitment to invest therein, a rating of at least "A-1+" or "AA" by
Standard & Poor's and "P-1" or "Aa2" by Moody's and, if rated by Fitch, F1+ or
AA by Fitch or (ii) having maturities of more than 365 days and, at the time of
the Investment or contractual commitment to invest therein, a rating of "AA" by
Standard & Poor's, "Aa2" by Moody's and, if rated by Fitch, F1+ or AA by Fitch;
(d) Investments in money market funds (including funds in
respect of which the Trustee or any of its Affiliates is investment manager or
advisor) having a rating of at least "AA" by Standard & Poor's, "Aa2" by Moody's
and, if rated by Fitch, AA by Fitch;
(e) notes or bankers' acceptances (having original maturities
of no more than 365 days, or such lesser time as is required for the
distribution of funds) issued by any depository institution or trust company
referred to in (b) above; or
(f) any other Investments approved pursuant to a Rating Agency
Confirmation; provided, however, that no Investment shall be made in any
obligations of any depository institution or trust company which has a
contractual right to set off and apply any deposits held, and other indebtedness
owing, by any Issuer Group Member to or for the credit or the account of such
bank.
"Permitted Accruals" means Expense Accruals and Other
Accruals.
"Permitted Additional Aircraft Acquisition" has the meaning
given to such term in Section 5.02(h) hereof.
"Permitted Encumbrance" has the meaning given to such term in
Section 5.02(b) hereof.
22
"Person" means any natural person, firm, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any political subdivision
thereof or any other legal entity, including public bodies.
"Pledged Beneficial Interest" has the meaning given to such
term in the Security Trust Agreement.
"Pledged Debt" has the meaning given to such term in the
Security Trust Agreement.
"Pledged Stock" has the meaning given to such term in the
Security Trust Agreement.
"Pool Factor" means, with respect to each subclass of Notes on
any Payment Date, the "Pool Factor" for such Payment Date set forth in the
appendix to such Notes as the same may be adjusted in accordance with Section
3.11 hereof.
"Portfolio" means, at any time, all Aircraft owned by the
Issuer Group.
"Precedent Lease" has the meaning given to such term in
Section 5.03(f) hereof.
"Primary Expenses" means all Expenses other than Modification
Payments and Refinancing Expenses.
"Prior Ranking Amounts" has the meaning assigned to such term
in Section 3.08 hereof.
"Private Placement Legend" means the legend initially set
forth on the Notes in the form set forth in Section 2.02(a) hereof.
"Prohibited Countries" has the meaning determined, from time
to time, in accordance with Section 5.03(a) hereof.
"Projected Principal Payment Amounts" means, as of the
Calculation Date next preceding any Redemption Date, the Applicable Percentage
of the Assumed Principal Payments of each subclass of the Initial Notes that are
Fixed Rate Notes.
"Purchase Option" means a contractual option granted by the
lessor or owner under an Aircraft Agreement (including pursuant to a conditional
sale agreement) as to the purchase of the applicable Aircraft.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Qualifying Person" means, with respect to any exchange offer
effected pursuant to a Registration Rights Agreement with respect to Registrable
Notes of any class or subclass, any Person that is acquiring Exchange Notes in
its ordinary course of business and is not (a) a person participating in the
distribution of Exchange Notes in exchange for such Registrable Notes or (b) an
affiliate (as defined in Rule 144 under the Securities Act) of the Issuer.
23
"Quarterly Report" has the meaning given to such term in
Section 2.15(a) hereof.
"Rating Agency" means each of Moody's, Standard & Poor's,
Fitch and any other nationally recognized rating agency designated by the
Issuer; provided that such organizations shall only be deemed to be a Rating
Agency for purposes of this Indenture with respect to the Notes they are then
rating.
"Rating Agency Confirmation" means a prior written
confirmation from each Rating Agency received by each of the Issuer and the
Trustee that a specified action or event shall not result in the downgrade,
qualification or withdrawal of such Rating Agency's then current credit rating,
if any, of any subclass of Notes then Outstanding.
"Received Currency" has the meaning given to such term in
Section 12.07(a) hereof.
"Receiver" means any Person or Persons appointed as (and any
additional Person or Persons appointed or substituted as) administrative
receiver, receiver, manager or receiver and manager.
"Record Date" means, with respect to each Payment Date, the
close of business on the day that is 15 days prior to such Payment Date or, if
15 days has not passed since the Initial Closing Date, the Initial Closing Date,
in any event whether or not such day is a Business Day.
"Redemption" has the meaning given to such term in Section
3.10(c) hereof.
"Redemption Date" means the date, which shall in each case be
a Payment Date, on which Notes of any subclass are redeemed pursuant to Section
3.10 hereof.
"Redemption Premium" means (a) in respect of any Initial Note
being redeemed in an Optional Redemption on any date, the Redemption Premium
indicated for such Initial Note with respect to such date in the table below:
24
REDEMPTION DATE CLASS A-1 CLASS A-2 CLASS A-3 CLASS B-1 CLASS C-1 CLASS D
--------------- --------- --------- --------- --------- --------- -------
After the Closing Date 101.00% 101.00% 101.50% 102.00% 103.00% 105.00%
On or after July 15, 2002 100.50% 100.50% 101.00% 101.75% 102.50% 105.00%
On or after July 15, 2003 100.00% 100.00% 100.75% 101.50% 102.00% 105.00%
On or after July 15, 2004 100.00% 100.00% 100.50% 101.25% 101.75% 105.00%
On or after July 15, 2005 100.00% 100.00% 100.25% 101.00% 101.50% 105.00%
On or after July 15, 2006 100.00% 100.00% 100.00% 100.75% 101.25% 104.00%
On or after July 15, 2007 100.00% 100.00% 100.00% 100.50% 101.00% 103.00%
On or after July 15, 2008 100.00% 100.00% 100.00% 100.25% 100.50% 102.00%
On or after July 15, 2009 100.00% 100.00% 100.00% 100.00% 100.25% 101.00%
On or after July 15, 2010 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
On or after July 15, 2011 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
"Redemption Price" means an amount (determined as of the
Calculation Date for the Redemption Date for any Redemption pursuant to Section
3.10(a) hereof) equal to:
(a) with respect to any Initial Class A Notes, Initial
Subclass B-1 Notes, Initial Subclass C-1 Notes and Initial Subclass C-2 Notes
(or any Exchange Notes therefor) being redeemed and except as otherwise provided
in clause (d) below, the product of the applicable Redemption Premium times the
portion of the Outstanding Principal Balance being redeemed;
(b) with respect to any Initial Subclass B-2 Notes or Initial
Subclass C-2 Notes (or any Exchange Notes therefor) being redeemed and except as
otherwise provided in clause (d) below, the greater of (i) the Projected
Principal Payment Amounts for such Notes and the Interest Amount thereon to and
including the Expected Final Payment Date for such Notes discounted to present
value at a discount rate equal to the applicable Treasury Rate plus in the case
of the Subclass B-2 Notes, 0.75% and in the case of the Subclass C-2 Notes,
1.00% plus the difference between the portion of the Outstanding Principal
Balance being redeemed and the sum of the Projected Principal Payment Amounts
and (ii) the portion of the Outstanding Principal Balance being redeemed;
(c) with respect to any Initial Subclass D-2 Notes (or any
Exchange Notes therefor) being redeemed and except as otherwise provided in
clause (d) below, (i) prior to July 15, 2006, the greater of (A) the sum of (x)
the Projected Principal Payment Amounts and the scheduled Interest Amount
thereon to but not including July 15, 2006, plus (y) the product of the
applicable Redemption Premium and the sum of the Projected Principal Payment
Amounts of such Notes falling due on July 15, 2006 and each Payment Date
thereafter discounted as of July 15, 2006 to present value at a discount rate
equal to the applicable Treasury Yield plus 0.75% plus the difference between
the portion of the Outstanding Principal Balance being redeemed and the sum of
the Projected Principal Payment Amounts and (B) the portion of the Outstanding
Principal Balance being redeemed or (ii) on or after July 15, 2006, the product
of the applicable Redemption Premium times the Outstanding Principal Balance
being redeemed;
25
(d) with respect to any Notes being redeemed under Section
3.10(a) hereof after the giving of a Default Notice or the Acceleration of any
of the Notes, the then Outstanding Principal Balance thereof; and
(e) with respect to any Notes other than the Initial Notes and
the Bridge Note, as provided in the Controlling Trustees' Resolution providing
for the issuance of such Notes.
"Reference Agency Agreement" means the Reference Agency
Agreement dated as of the Initial Closing Date, between the Note Issuer, the
Reference Agent and the Administrative Agent pursuant to which LIBOR is
determined from time to time.
"Reference Agent" means the Person acting, at the time of
determination, in the capacity of the Reference Agent under the Reference Agency
Agreement. The initial Reference Agent is Bankers Trust.
"Reference Date" means, with respect to each Interest Accrual
Period, the day that is two Business Days prior to the commencement of such
Interest Accrual Period.
"Refinancing" has the meaning given to such term in Section
2.10 hereof.
"Refinancing Account" has the meaning given to such term in
Section 3.01(a) hereof.
"Refinancing Expenses" means all out-of-pocket costs and
expenses Incurred in connection with an offering and issuance of Refinancing
Notes.
"Refinancing Notes" means any subclass of Notes issued by the
Issuer under this Indenture at any time and from time to time after the date
hereof, in a Refinancing under Section 2.10 hereof.
"Register" has the meaning given to such term in Section 2.03
hereof.
"Registrable Notes" means (a) the Initial Class A Notes, the
Initial Class B Notes, the Initial Class C Notes, and (b) any Refinancing Notes
therefor and any Additional Notes designated as Registrable Notes by the
Controlling Trustees' Resolution therefor.
"Registrar" has the meaning given to such term in Section 2.03
hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Initial Closing Date between the Note Issuer and
Credit Suisse First Boston Corporation and any other agreement entered into
between the Note Issuer and a purchaser of Registrable Notes providing for the
registration of the issuance of Exchange Notes in exchange for such Registrable
Notes under the Securities Act.
"Registration Statement" means the Registration Statement as
defined or described in a Registration Rights Agreement.
26
"Registration Step-Up Interest" has the meaning given to such
term in the definition of the term "Stated Rate of Interest".
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" has the meaning given to such term
in Section 2.01 hereof.
"Regulation S Global Note Exchange Date" means the earliest
permitted date of exchange of any Temporary Regulation S Global Note for any
Permanent Regulation S Global Note, which date shall be forty days after the
Initial Closing Date, in the case of the Initial Notes, and, in the case of any
Additional Issuance, the date established by or pursuant to a Controlling
Trustees' Resolution or in any indenture supplemental hereto providing for such
Additional Issuance, in each case in accordance with Regulation S.
"Related Collateral Document" means any letter of credit,
third-party or bank guarantee or cash collateral provided by or on behalf of a
Lessee to secure such Lessee's obligations under a Lease.
"Related Documents" means the Administrative Agency Agreement,
each Credit Facility, this Indenture, the Securities, the Reference Agency
Agreement, the Security Documents, the Servicing Agreement, the Financial
Advisory Agreement, the Capital Markets Advisory Agreement, the Asset Purchase
Agreement and any other Acquisition Agreement, the Beneficial Interest Purchase
Agreement, the Registration Rights Agreement, any Swap Agreements and any Swap
Guarantees.
"Relevant Appraisal" means, with respect to any date of
determination, the most recent Appraisal preceding such date of determination.
"Relevant Information" means any information provided to the
Administrative Agent by any Service Provider or any other service provider
retained from time to time by an Issuer Group Member pursuant to the Related
Documents.
"Remaining Aircraft" has the meaning given to such term in the
Asset Purchase Agreement.
"Renewal Lease" has the meaning given to such term in Section
5.03(f) hereof.
"Rental Account" has the meaning given to such term in Section
3.01(a) hereof.
"Rental Payments" means all rental payments and other amounts
equivalent to a rental payment payable by or on behalf of a Lessee under a
Lease, including Purchase Option Payments.
"Repossession Guidelines" has the meaning given to such term
in Section 5.03(a) hereof.
27
"Repossession Insurance" has the meaning given to such term in
Section 5.03(h) hereof.
"Required Amount" means, with respect to any Credit Facility,
such amount as is determined pursuant to the Controlling Trustees' Resolution
with respect to such Credit Facility.
"Required Expense Amount" means, with respect to each Payment
Date, the amount of Expenses of the Issuer Group due and payable on the
Calculation Date relating to such Payment Date or reasonably anticipated to
become due and payable before the next succeeding Payment Date to the extent
such Expenses consist of (a) Primary Expenses and (b) any Modification Payments
or Refinancing Expenses in respect of which a Permitted Accrual was previously
effected by a deposit in the Expense Account (whether or not any such deposit
has been previously used to pay any other Primary Expense but excluding any
portion of such deposit previously used to pay any Modification Payments or
Refinancing Expenses) in each case after giving effect to any withdrawal from
any Lessee Funded Account or any drawing upon a Related Collateral Document that
is then available for the payment of any such Expense.
"Requisition Compensation" means all monies or other
compensation receivable by any Issuer Group Member from any government, whether
civil, military or de facto, or public or local authority in relation to an
Aircraft in the event of its requisition for title, confiscation, restraint,
detention, forfeiture or compulsory acquisition or seizure or requisition for
hire by or under the order of any government or public or local authority.
"Reserved Cash" means amounts held in the Collections Account,
at any time of determination, in respect of the Senior Note Blockage Amount, the
Mezzanine Note Blockage Amount, the Junior Note Blockage Amount and the
Subordinate Note Blockage Amount.
"Responsible Officer" means (a) with respect to the Trustee,
any officer within the Corporate Trust Office, including any Vice President,
Managing Director, Principal, Assistant Vice President, director, associate,
Secretary, Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge and familiarity
with the particular subject, (b) with respect to the Issuer, any Controlling
Trustee and (c) with respect to any Person providing a Credit Facility and the
Administrative Agent, any authorized officer of such Person.
"Restricted Note" means any Note bearing the Private Placement
Legend.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Note" has the meaning given to such term in
Section 2.01 hereof.
"Scheduled Class Percentage" means, with respect to any class
of Notes on any Payment Date, the "Scheduled Class Percentage" set forth in
Schedule 3 to this Indenture for such Payment Date, as such percentage shall be
adjusted from time to time in accordance with Section 3.11 hereof.
28
"Scheduled Principal Payment Amount" means, with respect to
any class of Notes on any Payment Date, the difference, if positive, between the
aggregate Outstanding Principal Balance of such class of Notes (after giving
effect to any payment of the Minimum Principal Payment Amount for such class of
Notes) and the Scheduled Target Principal Balance of such class of Notes on such
Payment Date.
"Scheduled Target Principal Balance" means, with respect to
(a) the Class A Notes on any Payment Date, the product of (i) of the Scheduled
Class Percentage for the Class A Notes on such Payment Date and (ii) the lesser
of (A) the Assumed Portfolio Value in respect of such Payment Date and (B) 110%
of the Adjusted Portfolio Value in respect of such Payment Date, (b) the Class B
Notes, the Class C Notes and the Class D Notes on any Payment Date, the product
of the Scheduled Class Percentage for such class of Notes on such Payment Date
and the Assumed Portfolio Value in respect of such Payment Date.
"Secured Obligations" has the meaning given to such term in
the Security Trust Agreement.
"Secured Parties" has the meaning given to such term in the
Security Trust Agreement.
"Securities" means the Initial Securities, all Additional
Securities, if any, all Refinancing Securities, if any, and all Exchange Notes,
if any.
"Securities Act" means the Securities Act of 1933.
"Security Documents" means the Security Trust Agreement and
any document executed pursuant thereto, or otherwise, for the purpose of
granting a security interest in any Collateral to the Security Trustee for the
benefit of the Secured Parties or for the purpose of perfecting such security
interest.
"Security Interests" means the security interests granted or
expressed to be granted in the Collateral pursuant to the Security Trust
Agreement.
"Security Trust Agreement" means the Security Trust Agreement
dated as of the Initial Closing Date, between the Issuer, each other party
thereto and the Security Trustee.
"Security Trustee" means the Person appointed, at the time of
determination, as the trustee for the benefit of the Secured Parties pursuant to
Section 5.01 of the Security Trust Agreement. The initial Security Trustee is
Bankers Trust.
"Segregated Funds" means, with respect to each Lease, (a) all
security deposits provided for under such Lease that have been received from the
relevant Lessee or pursuant to the relevant Acquisition Agreement with respect
to such Lease and (b) all other funds, including any maintenance reserves,
received from the relevant Lessee or pursuant to the relevant Acquisition
Agreement with respect to such Lease and not permitted, pursuant to the terms of
such Lease, to be commingled with the funds of the Issuer Group.
29
"Sellers" means GECC and any Affiliates thereof that are
sellers of aircraft to an Issuer Group Member on or after the Bridge Date.
"Senior Claim" means, with respect to any Obligations (other
than Expenses), all other Obligations the payment of which constitutes a Prior
Ranking Amount with respect thereto.
"Senior Claimant" means the holder of a Senior Claim.
"Senior Class" means (i) prior to the Effective Time, the
Bridge Notes and (ii) at any time thereafter, (a) so long as any Class A Notes
are Outstanding, the Class A Notes, (b) after the Class A Notes have been repaid
in full and so long as any Class B Notes are Outstanding, the Class B Notes, (c)
after the Class A Notes and Class B Notes have been repaid in full and so long
as any Class C Notes are Outstanding, the Class C Notes and (d) after the Class
A Notes, Class B Notes and Class C Notes have been paid in full and so long as
any Class D Notes are Outstanding, the Class D Notes.
"Senior Eligible Credit Facility" means any Eligible Credit
Facility, other than a Mezzanine Eligible Credit Facility, a Junior Eligible
Credit Facility or a Subordinated Eligible Credit Facility. A Senior Eligible
Credit Facility shall provide by its terms that it is entitled only to the
priority of repayment accorded to Senior Eligible Credit Facilities under
Section 3.08 hereof.
"Senior Note Blockage Amount" means, as of any Payment Date,
$33 million, as such amount may, from time to time, be changed by a Written
Notice from the Issuer to the Trustee and the Administrative Agent accompanied
by a Controlling Trustees' Resolution adopting such change and a Rating Agency
Confirmation with respect thereto, provided that from and after the Payment Date
on which the Outstanding Principal Balance of the Class A Notes (after giving
effect to any reduction of the Outstanding Principal Balance to be made on such
Payment Date) has been reduced to $33 million or less, the Senior Note Blockage
Amount shall be the Outstanding Principal Balance of the Class A Notes.
"Senior Swap Payment" means, on any Payment Date, a net
payment to a Swap Provider by any Issuer Group Member, other than any
Subordinated Swap Payment.
"Senior Trustee" means the Trustee of the Senior Class;
provided that if the same Person shall not be the Trustee of each of the
subclasses of the Senior Class, then the Senior Trustee shall be the Trustee of
the subclass of such Notes with the lowest numerical designation then
Outstanding. If as a result of the foregoing, the Senior Trustee and the
Operating Bank are not the same Person, the Senior Trustee shall assume the
obligations of the Operating Bank under, and become a party to, the Security
Trust Agreement.
"Service Provider" means each of the Operating Bank, the Owner
Trustee, the Servicer, the Trustee, the Security Trustee, any Authorized Agent,
the Administrative Agent, the Reference Agent, the Financial Advisor and the
Capital Markets Advisor.
"Servicer" means the Person acting, at the time of
determination, in the capacity of the servicer under the Servicing Agreement.
The initial Servicer is GE Capital Aviation Services, Limited, an Irish company.
30
"Servicer's Pro Forma Lease" has the meaning given to such
term in Section 5.03(f) hereof.
"Servicing Agreement" means the Servicing Agreement dated as
of the Initial Closing Date between the Servicer and the Issuer.
"Shelf Registration" has the meaning given to such term in the
applicable Registration Rights Agreement.
"Shelf Registration Statement" has the meaning given to such
term in the applicable Registration Rights Agreement.
"Significant Subsidiary" means at any time and from time to
time any subsidiary (including any trust of which the Issuer is the beneficiary)
of the Issuer other than any subsidiary that owns or leases Aircraft having an
aggregate Base Value of less than 10% of the Adjusted Portfolio Value at such
time.
"Standard & Poor's" means Standard & Poor's Ratings Group, a
division of The McGraw-Hill Companies, Inc.
"State of Registration" means, in relation to an Aircraft at
any time, the country or state on whose national register such Aircraft is
registered at that time under the laws of such country or state in accordance
with the applicable provisions of any Lease relating to such Aircraft or, in the
absence of any such provisions, Applicable Law.
"Stated Rate of Interest" means, with respect to each subclass
of Notes (a) the interest rate set forth in such Notes plus (b) Maturity Step-Up
Interest, if any, thereon plus (c) (i) with respect to Initial Notes that are
Registrable Notes, if a Registration Default (as defined and determined under
Section 5 of the Registration Rights Agreement relating to such Initial Notes)
shall have occurred and be continuing, 0.5% per annum until such Registration
Default shall no longer be deemed to be continuing (as determined under Section
5 of such Registration Rights Agreement), or (ii) with respect to any
Refinancing Notes or Additional Notes that are Registrable Notes, an exchange
offer of Exchange Notes for such Refinancing Notes or Additional Notes is not
commenced or a Shelf Registration Statement for the resale of such Refinancing
Notes or Additional Notes is not declared effective by the Commission, on or
before the date specified in the Registration Rights Agreement, if any, relating
to such Refinancing Notes or Additional Notes that are also Registrable Notes,
plus such additional rate specified in such Registration Rights Agreement until
such date as is so specified (the additional interest resulting from any such
increase pursuant to clause (i) or (ii), "REGISTRATION STEP-UP INTEREST").
"Subclass A-1 Notes" means the Initial Notes that are
designated Subclass A-1 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass A-2 Notes" means the Initial Notes that are
designated Subclass A-2 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all
31
Refinancing Notes, if any, so designated and all Notes, if any, issued in
replacement or substitution therefor.
"Subclass A-3 Notes" means the Initial Notes that are
designated Subclass A-3 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass B-1 Notes" means the Initial Notes that are
designated Subclass B-1 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass B-2 Notes" means the Initial Notes that are
designated Subclass B-2 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass C-1 Notes" means the Initial Notes that are
designated Subclass C-1 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass C-2 Notes" means the Initial Notes that are
designated Subclass C-2 Notes, all Exchange Notes, if any, so designated, all
Additional Notes, if any, so designated, all Refinancing Notes, if any, so
designated and all Notes, if any, issued in replacement or substitution
therefor.
"Subclass D-1 Notes" means the Initial Notes that are
designated Subclass D-1 Notes all Additional Notes, if any, so designated, all
Refinancing Notes, if any, so designated and all Notes, if any, issued in
replacement or substitution therefor.
"Subclass D-2 Notes" means the Initial Notes that are
designated Subclass D-2 Notes all Additional Notes, if any, so designated, all
Refinancing Notes, if any, so designated and all Notes, if any, issued in
replacement or substitution therefor.
"Subordinated Claim" has the meaning given to such term in
Section 10.01 hereof.
"Subordinate Eligible Credit Facility" means (a) any Eligible
Credit Facility designated as a "Subordinate Eligible Credit Facility" by the
Controlling Trustees or (b) any Eligible Credit Facility not designated by the
Controlling Trustees as a Senior Eligible Credit Facility, a Mezzanine Eligible
Credit Facility or a Junior Eligible Credit Facility. A Subordinate Eligible
Credit Facility described in clause (a) of the preceding sentence shall provide
by its terms that it is entitled only to the priority of repayment accorded to
Subordinate Eligible Credit Facilities under Section 3.08 hereof.
32
"Subordinate Note Blockage Amount" means, as of any Payment
Date, the lesser of (a) $83 million, as such amount may, from time to time, be
changed by a Written Notice from the Issuer to the Trustee and the
Administrative Agent accompanied by a Controlling Trustees' Resolution adopting
such change and a Rating Agency Confirmation with respect thereto, and (b) the
sum of the Junior Note Blockage Amount and the Outstanding Principal Balance
(after giving effect to any reduction of the Outstanding Principal Balance to be
made on such Payment Date) of the Class D Notes.
"Subordinated Swap Payments" has the meaning given to such
term in Section 3.08 hereof.
"Substitute Aircraft" has the meaning given to such term in
the Asset Purchase Agreement.
"Swap Agreement" means any interest rate or currency swap,
cap, floor, Swaption, or other interest rate or currency hedging agreement
between the Note Issuer and any Swap Provider existing on the Initial Closing
Date (including the Initial Swap Agreement) or entered into in accordance with
Section 5.02(e)(iv) hereof.
"Swap Breakage Costs" means any amounts payable by any Issuer
Group Member to a Swap Provider as a result of any early termination (however
described or defined therein) of any Swap Agreement.
"Swap Provider" means the counterparty to any Issuer Group
Member under any Swap Agreement.
"Swap Receipt" means a net payment to be made by a Swap
Provider into the Collections Account under a Swap Agreement and includes any
such payment made by a guarantor under any related Swap Guarantee or any
termination payment received from any counterparty to a Swap Agreement.
"Swaption" means any option agreement with respect to a Swap
Agreement.
"Target Principal Balance" means, with respect to the Subclass
B-2 Notes, the Subclass C-2 Notes and the Subclass D-2 Notes on any Payment
Date, each of the Minimum Target Principal Balance and the Scheduled Target
Principal Balance on such Payment Date.
"Taxes" mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs Incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority, including, without
limitation: taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth and similar charges; taxes or other charges in the
nature of excise, withholding, ad valorem, stamp, transfer, value added, taxes
on goods and services, gains taxes, license, registration and documentation
fees, customs duties, tariffs, and similar charges.
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"Temporary Regulation S Global Note" has the meaning given to
such term in Section 2.01 hereof.
"Third Party Event" has the meaning given to such term in
Section 5.03(b) hereof.
"Total Loss" means, with respect to any Aircraft (a) if the
same is subject to a Lease, a Casualty Occurrence or Event of Loss (each as
defined in such Lease) or the like (however so defined); or (b) if the same is
not subject to a Lease, (i) its actual, constructive, compromised, arranged or
agreed total loss, (ii) its destruction, damage beyond repair or being rendered
permanently unfit for normal use for any reason whatsoever, (iii) its
requisition for title, confiscation, restraint, detention, forfeiture or any
compulsory acquisition or seizure or requisition for hire (other than a
requisition for hire for a temporary period not exceeding 180 days) by or under
the order of any government (whether civil, military or de facto) or public or
local authority or (iv) its hijacking, theft or disappearance, resulting in loss
of possession by the owner or operator thereof for a period of 30 consecutive
days or longer. A Total Loss with respect to any Aircraft shall be deemed to
occur on the date on which such Total Loss is deemed pursuant to the relevant
Lease to have occurred or, if such Lease does not so deem or the relevant
Aircraft is not subject to a Lease, (A) in the case of an actual total loss or
destruction, damage beyond repair or being rendered permanently unfit, the date
on which such loss, destruction, damage or rendering occurs (or, if the date of
loss or destruction is not known, the date on which the relevant Aircraft was
last heard of); (B) in the case of a constructive, compromised, arranged or
agreed total loss, the earlier of (1) the date 30 days after the date on which
notice claiming such total loss is issued to the insurers or brokers and (2) the
date on which such loss is agreed or compromised by the insurers; (C) in the
case of requisition for title, confiscation, restraint, detention, forfeiture,
compulsory acquisition or seizure, the date on which the same takes effect; (D)
in the case of a requisition for hire, the expiration of a period of 180 days
from the date on which such requisition commenced (or, if earlier, the date upon
which insurers make payment on the basis of a Total Loss); or (E) in the case of
clause (iv) above, the final day of the period of 30 consecutive days referred
to therein.
"Total Loss Proceeds" means, in relation to an Aircraft, the
total net proceeds of the insurance and reinsurance paid in respect of a Total
Loss thereof and includes, in the case of a Total Loss of an airframe which does
not involve the Total Loss of all Engines or Parts installed thereon at the time
when such Total Loss occurred, the net sale proceeds of any such surviving
Engines or Parts.
"Transfer Restricted Securities" has the meaning given to such
term in the applicable Registration Rights Agreement.
"Treasury Yield" means, with respect to any Redemption with
respect to each subclass of Initial Notes that are Fixed Rate Notes and (unless
an alternative calculation is provided by the terms thereof) each subclass of
Notes that are Fixed Rate Notes on any Payment Date, the interest rate
(expressed as a semiannual decimal and, in the case of United States Treasury
bills, converted to a bond equivalent yield) determined on the fourth Business
Day prior to such Payment Date to be the per annum rate equal to the semiannual
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such class and trading in the public securities markets either (i)
as determined by interpolation between the most recent
34
weekly average yield to maturity for two series of United States Treasury
securities trading in the public securities markets, (A) one maturing as close
as possible to, but earlier than, the Average Life Date of such class and (B)
the other maturing as close as possible to, but later than, the Average Life
Date of such class in each case as published in the most recent H.15 (519) or
(ii) if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such class is reported in the most recent
H.15 (519), such weekly average yield to maturity as published in such H.15
(519).
For the purposes of this definition,
"H.15 (519)" means the weekly statistical release designated
as such, or any successor publication, published by the Board of Governors of
the Federal Reserve System, and the most recent H.15 (519) is the H.15 (519)
published prior to the close of business on the fourth Business Day prior to the
applicable Payment Date.
"Average Life Date" means, with respect to any subclass of
Notes, the date which follows the applicable Payment Date by a period equal to
the Remaining Weighted Average Life of such subclass.
"Remaining Weighted Average Life" means, with respect to any
subclass of Notes on any Payment Date, (a) the sum of the products of (i) the
portion of each Projected Principal Payment Amount allocable to such subclass in
accordance with Section 3.09 hereof on each subsequent Payment Date (each, a
"Subsequent Date") and (ii) the number of days remaining until such Subsequent
Date divided by (b) the Outstanding Principal Balance of such subclass on such
Payment Date.
"Trust Agreement" means the Trust Agreement dated as of June
13, 2001 between the Certificateholders of the Initial Certificates and the
Owner Trustee.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 (15 U.S. Code Section 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06 hereof.
"Trustee" means, with respect to each subclass of Notes the
Person appointed, at the time of determination, as the trustee of such subclass
of Notes in accordance with this Indenture. The initial Trustee for each
subclass of Notes is Bankers Trust.
"Unrestricted Note" means any Note not bearing the Private
Placement Legend.
"U.S. GAAP" means generally accepted accounting principles in
the United States.
"U.S. Government Obligations" has the meaning given to such
term in Section 11.02 hereof.
"Written Notice" means, with reference to the Issuer, the
Trustee, the Administrative Agent or the provider of any Credit Facility, a
written instrument executed by a Responsible Officer of such Person (or in the
case of the Issuer, of the Owner Trustee).
35
Section 1.02 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) A term has the meaning assigned to it and an accounting
term not otherwise defined has the meaning assigned to it in accordance with
U.S. GAAP.
(b) The terms "herein", "hereof" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
(c) Unless otherwise indicated in context, all references to
Articles, Sections, Schedules or Exhibits refer to an Article or Section of, or
a Schedule or Exhibit to, this Indenture.
(d) Words of the masculine, feminine or neuter gender shall
mean and include the correlative words of other genders, and words in the
singular shall include the- plural, and vice versa.
(e) The terms "include", "including" and similar terms shall
be construed as if followed by the phrase "without limitation".
(f) Unless otherwise indicated, references to a subclass of
Notes shall be to the Subclass A-1 Notes, the Subclass A-2 Notes, the Subclass
A-3 Notes, the Subclass B-1 Notes, the Subclass C-1 Notes, the Subclass D-1
Notes, or to a subclass of Refinancing Notes or Additional Notes, as applicable;
and references to a class of Notes shall be to the Class A Notes, Class B Notes,
Class C Notes, the Class D Notes and the Beneficial Interests or to a class of
Refinancing Notes or Additional Notes, as applicable.
(g) References in this Indenture to an agreement or other
document (including this Indenture) include references to such agreement or
document as amended, replaced or otherwise modified (without, however, limiting
the effect of the provisions of this Indenture with regard to any such
amendment, replacement or modification), and the provisions of this Indenture
apply to successive events and transactions. References to any Person shall
include such Person's successors in interest and permitted assigns.
(h) References in this Indenture to any statute or other
legislative provision shall include any statutory or legislative modification or
re-enactment thereof, or any substitution therefor, and references to any
governmental Person shall include reference to any governmental Person
succeeding to the relevant functions of such Person.
(i) References in this Indenture to the Notes of any class or
subclass include the conditions applicable to the Notes of such class or
subclass; and any reference to any amount of money due or payable by reference
to the Notes of any class or subclass shall include any sum covenanted to be
paid by the Issuer under this Indenture.
(j) References in this Indenture to any action, remedy or
method of judicial proceeding for the enforcement of the rights of creditors or
of security shall be deemed to include, in respect of any jurisdiction other
than the State of New York, references to such action, remedy or method of
judicial proceeding for the enforcement of the rights of creditors or
36
of security available or appropriate in such jurisdiction as shall most nearly
approximate such action, remedy or method of judicial proceeding described or
referred to in this Indenture.
(k) Where any payment is to be made, funds applied or any
calculation is to be made hereunder on a day which is not a Business Day, unless
any Related Document otherwise provides, such payment shall be made, funds
applied and calculation made on the next succeeding Business Day, and payments
shall be adjusted accordingly; provided, however, that in the case of Floating
Rate Notes or the Bridge Notes, no Additional Interest shall be due in respect
of such delay.
(l) Where the Servicer or any replacement servicer are
performing or may perform lease management and/or remarketing services pursuant
to a Related Document in relation to one or more Aircraft at the same time, a
reference in this Indenture to the "Servicer" shall be construed as a reference
to each of the Servicer or replacement servicer and the rights and obligations
of the parties hereto shall be construed accordingly.
Section 1.03 COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Issuer to the Trustee to take any action under any provision
of this Indenture, the Issuer shall furnish to the Trustee an Officer's
Certificate stating that, in the opinion of the signers thereof, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture or any indenture
supplemental hereto shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions in this
Indenture relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.04 ACTS OF HOLDERS. (a) Any direction, consent, waiver or
other action provided by this Indenture in respect of the Notes of any subclass
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such
37
instrument or instruments are delivered to the Trustee, to each Rating Agency
where it is hereby expressly required pursuant to this Indenture and to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose under this Indenture and conclusive in favor of the Trustee or the
Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or such other officer and where such execution
is by an officer of a corporation or association, trustee of a trust or member
of a partnership, on behalf of such corporation, association, trust or
partnership, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) In determining whether the Holders have given any
direction, consent, request, demand, authorization, notice, waiver or other Act
(a "DIRECTION"), under this Indenture, Notes owned by the Issuer or any
Affiliate of any such Person shall be disregarded and deemed not to be
Outstanding for purposes of any such determination. In determining whether the
Trustee shall be protected in relying upon any such Direction, only Notes which
a Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Notwithstanding the foregoing, (i) if any such Person owns 100% of
the Notes of any subclass Outstanding, such Notes shall not be so disregarded as
aforesaid, and (ii) if any amount of Notes of such subclass so owned by any such
Person have been pledged in good faith, such Notes shall not be disregarded as
aforesaid if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer or any Affiliate (including any Certificateholders) of any such
Person.
(d) The Issuer may at its option, by delivery of Officers'
Certificates to the Trustee, set a record date other than the Record Date to
determine the Holders in respect of the Notes of any subclass entitled to give
any Direction in respect of such Notes. Notwithstanding Section 316(c) of the
Trust Indenture Act, such record date shall be the record date specified in such
Officer's Certificate which shall be a date not more than 30 days prior to the
first solicitation of Holders in connection therewith. If such a record date is
fixed, such Direction may be given before or after such record date, but only
the Holders of record of the applicable subclass at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Outstanding Notes of such
subclass have authorized or agreed or consented to such Direction, and for that
purpose the Outstanding Notes of such subclass shall be computed as of such
record date; provided that no such Direction by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than one year after the record date.
38
(e) Any Direction or other action by the Holder of any Note
shall bind the Holder of every Note issued upon the transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such action is
made upon such Note.
Section 1.05 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
ARTICLE II
THE NOTES
Section 2.01 AUTHORIZED AMOUNT; TERMS; FORM; EXECUTION AND DELIVERY.
(a) The Outstanding Principal Balance of any subclass of Notes which may be
authenticated and delivered from time to time under this Indenture shall not
exceed the initial Outstanding Principal Balance set forth for such subclass of
Notes in the definition thereof or, with respect to any subclass of Refinancing
Notes or Additional Notes, authorized in a Controlling Trustees' Resolution;
provided that at no time may the Outstanding Principal Balance of any subclass
of Refinancing Notes exceed the Redemption Price of the subclass of Notes being
refinanced thereby plus Refinancing Expenses relating thereto and any amount to
be deposited in any Cash Collateral Account for such Refinancing Notes and/or as
Reserved Cash in the Collections Account; and provided, further, that any
Additional Notes shall be issued in accordance with Section 2.11 hereof. All
Notes of any class or subclass need not be issued at the same time and any class
or subclass of Notes may be reopened, without the consent of any Holder, for
issuances of Additional Notes or Refinancing Notes of such class or subclass,
subject in all cases to Sections 2.10, 2.11, 3.09, 3.11 and 5.02 hereof and any
other applicable provision of this Indenture.
The Bridge Notes shall be issued in a single class and in the
aggregate principal amount of $1,310,512,575.50 commencing with the execution
and delivery of this Indenture. Interest shall accrue at the Bridge Note Rate
and shall be computed in the manner set forth in the applicable Bridge Note.
39
The Initial Notes issuable hereunder on the Initial Closing
Date shall be issued in six subclasses. The Initial Notes shall be designated
the Subclass A-1 Notes, the Subclass A-2 Notes, Subclass A-3 Notes, the Subclass
B-1 Notes, the Subclass B-2 Notes, the Subclass C-1 Notes, the Subclass C-2
Notes, the Subclass D-1 Notes and the Subclass D-2 Notes. The proceeds of the
Initial Notes shall be applied by the Trustee to the extent required, to repay
in full the Bridge Notes together with accrued and unpaid interest thereon, all
as more fully provided in Section 3.14(f).
Interest shall accrue on any subclass of the Floating Rate
Notes from the relevant Closing Date and shall be computed for each Interest
Accrual Period on the basis of a 360-day year and the actual number of days
elapsed in such Interest Accrual Period on the Outstanding Principal Balance of
such Note. Interest shall accrue on any subclass of the Fixed Rate Notes from
the relevant Closing Date and shall be computed for each Interest Accrual Period
on the basis of a 360-day year and one-twelfth of an annual interest payment on
the Outstanding Principal Balance and, in the case of the first Interest Accrual
Period and any incomplete Interest Accrual Period, on the basis of a 360-day
year consisting of twelve 30-day months and the actual number of days elapsed in
such Interest Accrual Period.
Any amount of premium or interest on any subclass of Notes not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest (other than the portion thereof included in the Interest Amount for
such subclass of Notes, "ADDITIONAL INTEREST") at an interest rate per annum
equal to the Stated Rate of Interest for such Notes from the date when due until
such amount is paid or duly provided for, payable on the next succeeding Payment
Date, subject to the availability of the Available Collections therefor after
making payments entitled to priority under Section 3.08 hereof or in the case of
the Bridge Notes, subject to the availability of the amounts on deposit in the
Bridge Note Account therefor after making payments entitled to priority under
Section 3.14 hereof.
(b) There shall be issued and delivered and authenticated on
the relevant Closing Date, to each of the Holders, Notes in the principal
amounts and maturities and bearing the interest rates, in each case in
registered form and substantially in the form set forth in the applicable
exhibit to this Indenture or in any indenture supplemental hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements printed,
lithographed or engraved thereon, as may be required to comply with the rules of
any securities exchange on which such Notes may be listed or to conform to any
usage in respect thereof, or as may, consistently herewith, be prescribed by the
Trustee or by the Owner Trustee executing such Notes, such determination by the
Owner Trustee to be evidenced by his execution of the Notes.
Definitive Notes of each subclass shall be printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Notes may be listed, all as determined by the Owner
Trustee executing such Notes, as evidenced by its execution of such Notes.
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Each subclass of Registrable Notes offered and sold in
reliance on Rule 144A shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth
in the applicable exhibit to this Indenture or in any indenture supplemental
hereto (each, a "RULE 144A GLOBAL NOTE"), registered in the name of the nominee
of the Depository, deposited with the Trustee, as custodian for the Depository,
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of each Rule 144A Global Note may from
time to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository or its nominee, in accordance with the
instructions given by the Holder thereof, as hereinafter provided.
Each subclass of Registrable Notes offered and sold in
offshore transactions in reliance on Regulation S shall be issued initially in
the form of one or more temporary global Notes in registered form substantially
in the form set forth in the applicable exhibit to this Indenture or in any
indenture supplemental hereto (each, a "TEMPORARY REGULATION S GLOBAL NOTE"),
registered in the name of the nominee of the Depository, deposited with the
Trustee, as custodian for the Depository, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided. At any time following the
applicable Regulation S Global Note Exchange Date, upon receipt by the Trustee
and the Issuer of a certificate substantially in the form of Exhibit H hereto,
executed by Euroclear or Clearstream, as the case may be, together with copies
of certificates from Euroclear and Clearstream certifying that they have
received certification of non-United States beneficial ownership of a Temporary
Regulation S Global Note (or portion thereof) with respect to a subclass of
Notes to be exchanged, one or more permanent global Notes for such subclass of
Notes in registered form substantially in the form set forth in the applicable
exhibit to this Indenture or in any indenture supplemental hereto (each, a
"PERMANENT REGULATION S GLOBAL NOTE"; and together with each Temporary
Regulation S Global Note, the "REGULATION S GLOBAL NOTES") duly executed by the
Issuer and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depository, and the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of such Temporary Regulation S Global Note in an amount equal to the
principal amount of the beneficial interest in such Temporary Regulation S
Global Note exchanged. Until the Regulation S Global Note Exchange Date with
respect to any Temporary Regulation S Global Note, interests in such Temporary
Regulation S Global Note may be held only through Agent Members acting for and
on behalf of Euroclear and Clearstream.
Registrable Notes offered and sold in reliance on Section 4(2)
of the Securities Act (other than in reliance on Rule 144A), the Bridge Notes
and the Class D Notes shall be issued initially in the form of permanent
certificated Notes in registered form in substantially the form set forth in the
applicable exhibit to this Indenture (collectively with the definitive, fully
registered Notes issued pursuant to Section 2.12(b) hereof, the "DEFINITIVE
NOTES").
(c) On the date of any Refinancing, the Issuer shall issue and
deliver as provided in Section 2.10 hereof an aggregate principal amount of
Refinancing Notes having the maturities and bearing the interest rates and such
other terms authorized by one or more Controlling Trustees' Resolutions or in
any indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes, in each case in accordance with such
Section 2.10.
41
(d) On the date of the issuance, if any, of any Additional
Notes, the Issuer shall issue and deliver, as provided in Sections 2.11 and
5.02(f) hereof, an aggregate principal amount of Additional Notes having the
maturities and bearing the interest rates and such other terms authorized by one
or more Controlling Trustees' Resolutions or in any indenture supplemental
hereto providing for the issuance of such Notes or specified in the form of such
Notes, in each case in accordance with such Section 2.11.
(e) The Notes shall be executed on behalf of the Issuer by the
manual or facsimile signature of the Owner Trustee.
(f) Each Note bearing the manual or facsimile signatures of
any individual who was at the time such Note was executed an Authorized Officer
of the Owner Trustee shall bind the Issuer, notwithstanding that any such
individual has ceased to hold such office prior to the authentication and
delivery of such Notes or any payment thereon.
(g) At any time and from time to time after the execution of
any Notes, the Issuer may deliver such Notes to the Trustee for authentication
and, subject to the provisions of clause (h) below, the Trustee shall
authenticate such Notes by manual or facsimile signature upon receipt by it of
written orders of the Issuer. The Notes shall be authenticated on behalf of the
Trustee by any Responsible Officer of the Trustee.
(h) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless it shall have been
executed on behalf of the Issuer as provided in clause (e) above and
authenticated by or on behalf of the Trustee as provided in clause (g) above.
Such signatures shall be conclusive evidence that such Note has been duly
executed and authenticated under this Indenture. Each Note shall be dated the
date of its authentication.
Section 2.02 RESTRICTIVE LEGENDS. (a) Except as specified in Section
2.13(f) hereof, each Rule 144A Global Note, each Regulation S Global Note and
each Definitive Note (other than a Bridge Note) (and all Notes issued in
exchange therefor or upon registration of transfer or substitution thereof)
shall bear the following legend on the face thereof:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE
INVESTMENT FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
42
RULE 144A, (II) IF OTHER THAN A CLASS D NOTE, OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(b) Each Global Note, whether or not an Exchange Note, shall
also bear the following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH SECTION
2.13 OF THE INDENTURE.
(c) Each Temporary Regulation S Global Note shall bear the
following legend on the face thereof:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE
MEANING OF THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS
SUBJECT TO RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF
AND ON THE PAYMENT OF INTEREST THEREON AS SPECIFIED IN THE
TRUST INDENTURE.
(d) Each Registrable Note offered and sold in reliance on
Section 4(2) of the Securities Act (other than in reliance on Rule 144A), shall
also bear the following legend on the face thereof:
43
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS
(e) Each Class D Note shall bear the following legend on the
face thereof:
THIS NOTE IS SUBJECT TO ADDITIONAL RESTRICTIONS ON THE TRANSFER
THEREOF SET FORTH IN SECTION 2.13(h) OF THE INDENTURE, INCLUDING A
LIMIT ON THE NUMBER OF DIRECT OR INDIRECT HOLDERS THEREOF A
PROHIBITION ON TRANSFERS TO NON-U.S. PERSONS AND DELIVERY BY
THE TRANSFEREE OF CERTAIN CERTIFICATIONS TO THE TRUSTEE.
(f) Each Bridge Note shall bear the following legend on the
face thereof:
THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM.
Section 2.03 REGISTRAR AND PAYING AGENT. (a) With respect to each
subclass of Notes, there shall at all times be maintained an office or agency in
the location set forth in Section 12.05 hereof where Notes of such subclass may
be presented or surrendered for registration of transfer or for exchange (each,
a "REGISTRAR"), and for payment thereof (each, a "PAYING AGENT") and where
notices and demands in respect of the payment of such Notes may be served. For
so long as any Notes are listed on the Luxembourg Stock Exchange, the Issuer
shall appoint and maintain a Paying Agent and a Registrar in Luxembourg. The
Issuer shall cause each Registrar to keep a register of such subclass of Notes
for which it is acting as Registrar and of their transfer and exchange (the
"Register"). Written notice of the location of each such other office or agency
and of any change of location thereof shall be given by the Trustee to the
Issuer and the Holders of such subclass. In the event that no such office or
agency shall be maintained or no such notice of location or of change of
location shall be given, presentations and demands may be made and notices may
be served at the Corporate Trust Office of the Trustee.
(b) Each Authorized Agent shall be a bank or trust company,
shall be a corporation organized and doing business under the laws of the United
States or any state or territory thereof or of the District of Columbia, with a
combined capital and surplus of at least $75,000,000 (or having a combined
capital and surplus in excess of $5,000,000 and the obligations of which,
whether now in existence or hereafter Incurred, are fully and unconditionally
Guaranteed by a corporation organized and doing business under the laws of the
United States, any state or territory thereof or of the District of Columbia and
having a combined capital and surplus of at least $75,000,000) and shall be
authorized under the laws of the United States or any state or territory thereof
to exercise corporate trust powers, subject to supervision by Federal or state
authorities (such requirements, the "ELIGIBILITY REQUIREMENTS"). The Trustee
shall initially be a Paying Agent and Registrar hereunder with respect to the
Notes of each subclass. Each Registrar other than the Trustee shall furnish to
the Trustee, at stated intervals of
44
not more than six months, and at such other times as the Trustee may request in
writing, a copy of the Register maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any Authorized
Agent shall be a party, or any corporation succeeding to the corporate trust
business of any Authorized Agent, shall be the successor of such Authorized
Agent hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
(d) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee and the Issuer. The Issuer may, and
at the request of the Trustee shall, at any time terminate the agency of any
Authorized Agent by giving written notice of termination to such Authorized
Agent and to the Trustee. Upon the resignation or termination of an Authorized
Agent or if at any time any such Authorized Agent shall cease to be eligible
under this Section (when, in either case, no other Authorized Agent performing
the functions of such Authorized Agent shall have been appointed by the
Trustee), the Issuer shall promptly appoint one or more qualified successor
Authorized Agents, reasonably satisfactory to the Trustee, to perform the
functions of the Authorized Agent which has resigned or whose agency has been
terminated or who shall have ceased to be eligible under this Section. The
Issuer shall give written notice of any such appointment made by it to the
Trustee; and in each case the Trustee shall mail notice of such appointment to
all Holders of the related subclass as their names and addresses appear on the
Register for such subclass.
(e) The Issuer agrees to pay, or cause to be paid, from time
to time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses to be agreed to pursuant to separate
agreements with each such Authorized Agent.
Section 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. The Trustee shall
require each Paying Agent other than the Trustee to agree in writing that all
moneys deposited with any Paying Agent for the purpose of any payment on the
Notes shall be deposited and held in trust for the benefit of the Holders (with
regard to payments on the Notes) and the Owner Trustee (with regard to
distributions on or with respect to the Certificates) entitled to such payment,
subject to the provisions of this Section. Moneys so deposited and held in trust
shall constitute a separate trust fund for the benefit of the Holders or the
Owner Trustee, as applicable, with respect to which such money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Section 2.05 METHOD OF PAYMENT. (a) On each Payment Date occurring
after the Effective Time, the Trustee shall, or shall instruct a Paying Agent
to, pay, to the extent of the Available Collections therefor transferred to a
Note Account, to the Holders all principal or
45
Redemption Price of, and interest on the Notes of each subclass (other than
payments received following an Event of Default in respect of any subclass of
Notes) and to the Owner Trustee Account all sums on or in respect of the
Certificates to which it is entitled in accordance with the provisions hereof;
provided, that in the event and to the extent receipt of any payment is not
confirmed by the Trustee or Paying Agent by 1:00 p.m. (New York time) on such
Payment Date or any Business Day thereafter, distribution thereof shall be made
on the Business Day following the Business Day such payment is received; and
provided further, that payment on a Temporary Regulation S Global Note shall be
made to the Holder thereof only in conformity with Section 2.05(c) hereof. Each
payment on any Payment Date other than the Final Maturity Date with respect to
any subclass of Notes shall be made by the Trustee or Paying Agent to the
Holders as of the Record Date for such Payment Date. The final payment with
respect to any Note, however, shall be made only upon presentation and surrender
of such Note by the Holder or its agent at the Corporate Trust Office or agency
of the Trustee or Paying Agent specified in the notice given by the Trustee or
Paying Agent with respect to such final payment. The Trustee or Paying Agent
shall mail such notice of the final payment of each Note to the Holder thereof,
specifying the date and amount of such final payment, no later than five
Business Days prior to such final payment.
(b) At such time, if any, as the Notes of any subclass are
issued in the form of Definitive Notes, payments on a Payment Date shall be made
by check mailed to each Holder of a Definitive Note on the applicable Record
Date at its address appearing on the Register maintained with respect to such
subclass. Alternatively, upon application in writing to the Trustee, not later
than the applicable Record Date, by a Holder of one or more Definitive Notes of
such subclass having an aggregate principal amount of not less than $1,000,000,
any such payments shall be made by wire transfer to an account designated by
such Holder at a financial institution in New York, New York; provided that the
final payment for each subclass of Notes shall be made only upon presentation
and surrender of the Definitive Notes of such subclass by the Holder or its
agent at the Corporate Trust Office or agency of the Trustee or Paying Agent
specified in the notice of such final payment given by the Trustee or Paying
Agent. The Trustee or Paying Agent shall mail such notice of the final payment
of such subclass to each of the Holders of such subclass, specifying the date
and amount of such final payment no later than five Business Days prior to such
final payment.
(c) The beneficial owner of a Temporary Regulation S Global
Note of any subclass may arrange to receive interest installments through
Euroclear or Clearstream on such Temporary Regulation S Global Note only after
delivery by such beneficial owner to Euroclear or Clearstream, as the case may
be, of a written certification, substantially in the form of Exhibit L-1 hereto,
and upon delivery of Euroclear or Clearstream, as the case may be, to the Paying
Agent of a certification or certifications substantially in the form of Exhibit
L-2 hereto. No interest shall be paid to any beneficial owner and no interest
shall be paid to Euroclear or Clearstream on such beneficial owner's interest in
a Temporary Regulation S Global Note unless Euroclear or Clearstream, as the
case may be, has provided such a certification to the Paying Agent with respect
to such interest.
(d) On each Payment Date occurring prior to the Effective
Time, principal, interest and other amounts due hereunder or under the Bridge
Notes shall be payable in immediately available funds prior to 11:00 a.m. (New
York time) on such Payment Date, to the
46
Trustee at the Bridge Note Account, and, except as otherwise provided herein,
the Trustee shall pay all such amounts so received by it to such account or
accounts at such institutions as the Holders of the Bridge Notes shall have
designated to the Trustee in writing, in immediately available funds prior to
1:00 p.m. (New York time), on the due date thereof.
Section 2.06 MINIMUM DENOMINATION. Each subclass of Registrable Notes
shall be issued in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof. Each subclass of Class D Notes shall be issued in
minimum denominations of $1,000,000 and integral multiples of $100,000 in excess
thereof. The Bridge Notes shall be issued in minimum denominations of
$1,000,000.
Section 2.07 TRANSFER AND EXCHANGE; CANCELLATION. The Notes are
issuable only in registered form. A Holder may transfer a Note only by written
application to the Registrar stating the name of the proposed transferee and
otherwise complying with the terms of this Indenture. No such transfer shall be
effective until, and such transferee shall succeed to the rights of a Holder
only upon, final acceptance and registration of the transfer by the Registrar in
the Register.
Prior to the due presentment for registration of transfer of a
Note, the Issuer and the Trustee may deem and treat the applicable registered
Holder as the absolute owner and Holder of such Note for the purpose of
receiving payment of all amounts payable with respect to such Note and for all
other purposes and shall not be affected by any notice to the contrary. The
Registrar (if different from the Trustee) shall promptly notify the Trustee and
the Trustee shall promptly notify the Issuer of each request for a registration
of transfer of a Note by furnishing the Issuer a copy of such request.
Furthermore, any Holder of a Global Note shall, by acceptance
of such Global Note, agree that, subject to Section 2.12(b) hereof, transfers of
beneficial interests in such Global Note may be effected only through a
book-entry system maintained by the Holder of such Global Note (or its agent)
and that ownership of a beneficial interest in such Note shall be required to be
reflected in a book-entry. When Notes are presented to the Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations (including an exchange of
Registrable Notes for Exchange Notes), the Registrar shall register the transfer
or make the exchange as requested if the requirements for such transactions are
met (including, in the case of a transfer, that such Notes are duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder); provided that no
exchanges of Registrable Notes for Exchange Notes shall occur until a
Registration Statement shall have been declared effective by the Commission. To
permit registrations of transfers and exchanges, the Issuer shall execute and
the Trustee shall authenticate Notes at the Issuer's request. Except as set
forth in Sections 2.08 and 2.09 hereof, no service charge shall be made for any
registration of transfer or exchange or redemption of the Notes.
The Issuer shall not be required to exchange or register the
transfer of any Notes as above provided during the 15-day period preceding the
Final Maturity Date of any such Notes or during a 15-day period preceding the
first mailing of any notice of Redemption or Refinancing
47
of Notes to be redeemed or refinanced. The Issuer shall not be required to
exchange or register the transfer of any Notes that have been selected, called
or are being called for Redemption or Refinancing except, in the case of any
Notes where notice has been given that such Notes are to be redeemed in part,
the portion thereof not so to be redeemed.
The Issuer at any time may deliver Notes to the Trustee for
cancellation. The Trustee and no one else shall cancel and destroy in accordance
with its customary practices in effect from time to time (subject to the record
retention requirements of the Exchange Act) any such Notes, together with any
other Notes surrendered to it for registration of transfer, exchange or payment.
The Issuer may not issue new Notes (other than Refinancing Notes issued in
connection with any Refinancing) to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.
Section 2.08 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If any Note
shall become mutilated, destroyed, lost or stolen, the Issuer shall, upon the
written request of the Holder thereof and presentation of the Note or
satisfactory evidence of destruction, loss or theft thereof to the Trustee or
Registrar, issue, and the Trustee shall authenticate and the Trustee or
Registrar shall deliver in exchange therefor or in replacement thereof, a new
Note of the same subclass, payable to such Holder in the same principal amount,
of the same maturity, with the same payment schedule, bearing the same interest
rate and dated the date of its authentication. If the Note being replaced has
become mutilated, such Note shall be surrendered to the Trustee or a Registrar
and forwarded to the Issuer by the Trustee or such Registrar. If the Note being
replaced has been destroyed, lost or stolen, the Holder thereof shall furnish to
the Issuer, the Trustee or a Registrar (i) such security or indemnity as may be
required by them to save the Issuer, the Trustee and such Registrar harmless and
(ii) evidence satisfactory to the Issuer, the Trustee and such Registrar of the
destruction, loss or theft of such Note and of the ownership thereof. The
Holders will be required to pay any tax or other governmental charge imposed in
connection with such exchange or replacement and any other expenses (including
the fees and expenses of the Trustee and any Registrar) connected therewith.
Section 2.09 PAYMENTS OF TRANSFER TAXES. Upon the transfer of any Note
or Notes pursuant to Section 2.07 hereof, the Issuer or the Trustee may require
from the party requesting such new Note or Notes payment of a sum to reimburse
the Issuer or the Trustee for, or to provide funds for the payment of, any
transfer tax or similar governmental charge payable in connection therewith.
Section 2.10 REFINANCING OF NOTES. (a) Subject to paragraphs (b) and
(c) below and Section 5.02(f)(ii) hereof, the Issuer may issue Refinancing Notes
pursuant to this Indenture for the purpose of refinancing the Outstanding
Principal Balance of any subclass of Notes (including refinancings of
Refinancing Notes). Each refinancing of any subclass of Notes with the proceeds
of an offering of Refinancing Notes (a "REFINANCING") shall be authorized
pursuant to one or more Controlling Trustees' Resolutions and shall be effected
only following a Rating Agency Confirmation. Each Refinancing Note shall
constitute a "Note" for all purposes under this Indenture, and shall have the
class or subclass designation and such further designations added or
incorporated in such title as specified in the related Controlling Trustees'
Resolutions, in any indenture supplemental hereto providing for the issuance of
such Notes or specified in the form
48
of such Notes, as the case may be. The issuance of the Initial Notes and the use
of proceeds thereof to redeem the Bridge Notes shall not be a Refinancing or
subject to this Section 2.10.
(b) A Refinancing of any subclass of Notes in whole or in part
may occur on any Payment Date after the Initial Closing Date and shall be
effected as an Optional Redemption pursuant to Section 3.10 hereof. On the date
of any Refinancing, the Issuer shall issue and sell an aggregate principal
amount of Refinancing Notes not to exceed the Redemption Price of the Notes
being refinanced thereby plus the Refinancing Expenses relating thereto and any
amount to be deposited in any Cash Collateral Account for such Refinancing Notes
and/or as Reserved Cash in the Collections Account. The proceeds of each sale of
Refinancing Notes shall be used to make the deposit required by Section 3.10(d)
hereof, to pay such Refinancing Expenses and to fund such Cash Collateral
Account and/or Reserved Cash.
(c) Each Refinancing Note shall contain such terms as may be
established in or pursuant to the related Controlling Trustees' Resolution
(subject to Section 2.01 hereof), in any indenture supplemental hereto providing
for the issuance of such Notes or specified in the form of such Notes to the
extent permitted below, and shall have the same ranking pursuant to Section 3.08
hereof with respect to all other Obligations as the Notes of the class to which
such Refinancing Notes belong (and, with respect to other subclasses of such
class, as provided in Section 3.09 hereof). No less than seven Business Days,
prior to any Refinancing, any or all of the following, as applicable, with
respect to the related issue of each subclass of Refinancing Notes shall have
been determined by the Issuer and set forth in such Controlling Trustees'
Resolutions, in any indenture supplemental hereto or specified in the form of
such Notes, as the case may be:
(i) the Notes to be refinanced by such Refinancing Notes;
(ii) the aggregate principal amount of such Refinancing Notes
that may be issued;
(iii) the proposed date of such Refinancing;
(iv) the Expected Final Payment Date and the Final Maturity
Date of such Refinancing Notes;
(v) whether such Refinancing Notes are to have the benefit of
any Credit Facility and, if so, the amount and other terms thereof and/or any
increase in Reserved Cash;
(vi) the rate at which such Refinancing Notes shall bear
interest or the method by which such rate shall be determined;
(vii) if other than denominations of $100,000 or higher
integral multiples of $1,000 (with respect to Registrable Notes) or $1,000,000
or higher integral multiples of $100,000 (with respect to Class D Notes), the
denomination or denominations in which such Refinancing Notes shall be issuable;
(viii) whether such Refinancing Notes are to be issuable
initially in temporary or permanent global form and, if so, whether beneficial
owners of interests in any such permanent global Refinancing Note may exchange
such interests for Refinancing Notes of the same class or
49
subclass and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 2.07 hereof, and the circumstances under which and
the place or places where any such exchanges may be made and the identity of any
initial depository therefor;
(ix) any adjustments to be made, consistent with Sections 3.09
and 3.11 hereof, to the Assumed Principal Payments and/or applicable Class
Percentages, Pool Factors or Extended Pool Factors as a result of the issuance
of such Refinancing Notes;
(x) the class and subclass of Notes to which such Refinancing
Notes belong; and
(xi) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to such Refinancing Notes
(which terms shall comply with Applicable Law and not be inconsistent with the
requirements or restrictions of this Indenture, including Section 5.02(f)(ii)
hereof).
If any of the terms of any issue of Refinancing Notes are
established by action taken pursuant to one or more Controlling Trustees'
Resolutions, such Controlling Trustees' Resolutions shall be delivered to the
Trustee setting forth the terms of such Refinancing Notes.
Section 2.11 ADDITIONAL SECURITIES. (a) Subject to paragraph (b) below
and Section 5.02(f)(iv) hereof without limiting the provisions of Section
5.02(l)(ii)(A) and (C) hereof, as applicable, the Issuer may issue Additional
Notes pursuant to this Indenture or Additional Certificates pursuant to the
Trust Agreement the proceeds of which in each case shall be used to acquire
Additional Aircraft, make payments into a Cash Collateral Account or the
Collections Account as Reserved Cash or pay expenses related thereto (each, an
"ADDITIONAL ISSUANCE"). Each issuance of Additional Securities shall be
authorized pursuant to one or more Controlling Trustees' Resolutions and shall
be effected only following a Rating Agency Confirmation. Each Additional
Security shall constitute a "Security" for all purposes under this Indenture,
and (in the case of the Additional Notes) shall have such subclass and such
further designations added or incorporated in such title as specified in the
related Controlling Trustees' Resolutions, in any indenture supplemental hereto
providing for the issuance of such Notes or specified in the form of such Notes,
as the case may be.
(b) Each Additional Note shall contain such terms as may be
established in or pursuant to the related Controlling Trustees' Resolutions
(subject to Section 2.01 hereof), in any indenture supplemental hereto providing
for the issuance of such Notes or specified in the form of such Notes to the
extent permitted below, and shall have the same ranking pursuant to Section 3.08
hereof with respect to all other Obligations as the Notes of the class to which
such Additional Notes belong (and, with respect to other subclasses of such
class, as provided in Section 3.09 hereof). No less than seven Business Days
prior to any issuance, any or all of the following, as applicable, with respect
to the related Additional Issuance shall have been determined by the Issuer and
set forth in such Controlling Trustees' Resolutions, in any indenture
supplemental hereto or specified in the form of such Securities, as the case may
be:
(i) the subclass of Additional Notes or the Additional
Certificates to be issued; and
50
(ii) with respect to each such subclass of Additional Notes or
the Additional Certificates:
(A) the aggregate principal amount of any such
Additional Notes which may be issued or the capital contributions to be made in
respect of any such Additional Certificates;
(B) the proposed date of such Additional Issuance;
(C) the Expected Final Payment Date and the Final
Maturity Date of any such Additional Notes;
(D) whether any such Additional Notes are to have
the benefit of any Credit Facility and/or any increase in Reserved Cash and, if
so, the amount and terms thereof;
(E) the rate at which any such Additional Notes shall
bear interest or the method by which such rate shall
be determined;
(F) if other than denominations of $100,000 or
higher integral multiples of $1,000 (with respect to Registrable Notes) or
$1,000,000 or higher integral multiples of $100,000 (with respect to Class D
Notes), the denomination or denominations in which any such Additional Notes
shall be issuable;
(G) whether any such Additional Notes are to be
issuable initially in temporary or permanent global form and, if so, whether
beneficial owners of interests in any such permanent global Additional Note may
exchange such interests for Additional Notes of the same class or subclass and
of like tenor and of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner provided
in Section 2.07 hereof, and the circumstances under which and the place or
places where any such exchanges may be made and the identity of any initial
depository therefor;
(H) any adjustments to be made, consistent with
Sections 3.09 and 3.11 hereof, to the Assumed Principal Payments and/or
applicable Class Percentages, Pool Factors or Extended Pool Factors as result of
the issuance of any such Additional Notes; and
(I) any other terms, conditions, rights and
preferences (or limitations on such rights and preferences) relating to any such
Additional Notes (which terms shall comply with Applicable Law and not be
inconsistent with the requirements or restrictions of this Indenture, including
Sections 5.02(f) and 12.13 hereof).
If any of the terms of any issue of any such Additional Notes
are established by action taken pursuant to one or more Controlling Trustees'
Resolutions, such Controlling Trustees' Resolutions shall be delivered to the
Trustee setting forth the terms of such Additional Notes.
Section 2.12 BOOK-ENTRY PROVISIONS. (a) Global Notes of each subclass
initially shall (i) be registered in the name of the Depository for such Notes
or in the name of the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for the Depository and (iii) if not
51
registered under the Securities Act, bear the Private Placement Legend as set
forth in Section 2.02(a) hereof or the Bridge Note Legend as set forth in
Section 2.02(e) hereof.
Members of, or participants in, the Depository ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depository, or the Trustee as its custodian, or
under such Global Note, and the Depository may be treated by the Issuer, the
Trustee and any agent of the Issuer or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever.
Whenever notice or other communication to the Holders of any
subclass of Global Notes is required under this Indenture, unless and until
Definitive Notes shall have been issued pursuant to Section 2.12(b) below, the
Trustee shall give all such notices and communications specified herein to be
given to Holders of such subclass of Global Notes to the Depository.
Notwithstanding the foregoing, nothing herein shall prevent
the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Global Note. Neither the Issuer nor the Trustee shall be liable
for any delay by the Depository in identifying the beneficial owners of the
Global Notes, and the Issuer and the Trustee may conclusively rely on, and shall
be fully protected in relying on, instructions from the Depository for all
purposes (including with respect to the registration and delivery, and the
respective principal amounts, of any Global Notes to be issued).
(b) Transfers of a Global Note shall be limited to transfers
of such Global Note in whole, but not in part, to the Depository, its successors
or their respective nominees. Interests of beneficial owners in a Global Note
may be transferred in accordance with the rules and procedures of the Depository
and the provisions of Section 2.13 hereof. Definitive Notes shall be issued to
the individual beneficial owners or their nominees in exchange for their
beneficial interests in a Rule 144A Global Note or a Regulation S Global Note,
respectively, with respect to any subclass of Notes only if (i) the Issuer
advises the Trustee in writing that the Depository is no longer willing or able
to properly discharge its responsibilities as depositary with respect to the
Notes and the Issuer is unable to appoint a qualified successor within 90 days
of such notice, (ii) the Issuer, at its option, elects to terminate the
book-entry system through the Depository (but if the Issuer does so, the Issuer
shall find another clearing system that is recognized by, and operates in
accordance with the rules of, the Luxembourg Stock Exchange as long as any class
of Notes is listed on the Luxembourg Stock Exchange) or (iii) after the
occurrence of an Event of Default with respect to any class of Notes, Holders of
a subclass within such class representing an aggregate of not less than 51% of
the aggregate Outstanding Principal Balance of Notes of such subclass advise the
Issuer, the Trustee and the Depository through the Agent Members in writing that
the continuation of a book-entry system through the Depository (or a successor
thereto) is no longer in the best interests of the Holders of such subclass.
Upon the occurrence of any event described in the immediately preceding
sentence, the Trustee shall notify all Holders of each affected subclass,
through the Depository, of the occurrence of such event and of the availability
of Definitive Notes of such subclass; provided, however, that in no event shall
the Temporary Regulation S Global Note be exchanged for Definitive Notes prior
to the later of (x) the Regulation S Global Note Exchange Date and (y) the date
of receipt by the Issuer of any
52
certificates determined by it to be required pursuant to Rule 903 under the
Securities Act. Upon surrender to the Trustee of the Global Notes of such
subclass held by the Depository, accompanied by registration instructions from
the Depository for registration of Definitive Notes in the names of Holders of
such subclass, the Issuer shall issue and the Trustee shall authenticate and
deliver the Definitive Notes of such subclass to the beneficial owners of such
subclass or their nominees in accordance with the instructions of the
Depository.
None of the Issuer, the Registrar, the Paying Agent or the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
registration instructions. Upon the issuance of Definitive Notes of such
subclass, the Trustee shall recognize the Persons in whose name the Definitive
Notes are registered in the Register as Holders hereunder. Neither the Issuer
nor the Trustee shall be liable if the Trustee or the Issuer is unable to locate
a qualified successor Depository.
Definitive Notes of any subclass will be freely transferable
and exchangeable for Definitive Notes of the same subclass at the office of the
Trustee or the office of a Registrar upon compliance with the requirements set
forth herein. In the case of a transfer of only part of a holding of Definitive
Notes, a new Definitive Note shall be issued to the transferee in respect of the
part transferred and a new Definitive Note in respect of the balance of the
holding not transferred shall be issued to the transferor and may be obtained at
the office of the applicable Registrar.
(c) Any beneficial interest in one of the Global Notes as to
any subclass that is transferred to a Person who takes delivery in the form of
an interest in another Global Note with respect to such subclass will, upon
transfer, cease to be an interest in such Global Note and become an interest in
such other Global Note and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to beneficial
interests in such other Global Note for as long as it remains such an interest.
(d) Any Definitive Note delivered in exchange for an interest
in a Rule 144A Global Note pursuant to paragraph (b) of this Section 2.12 shall,
except as otherwise provided by paragraph (f) of Section 2.13 hereof, bear the
Private Placement Legend applicable to a Rule 144A Global Note set forth in
Section 2.02 hereof.
(e) Any Definitive Note delivered in exchange for an interest
in a Regulation S Global Note pursuant to paragraph (b) of this Section shall,
except as otherwise provided by paragraph (f) of Section 2.13 hereof, bear the
Private Placement Legend applicable to a Regulation S Global Note set forth in
Section 2.02 hereof.
(f) Any Exchange Note exchanged for a Restricted Note held by
a Qualifying Person pursuant to an effective registration statement under the
Securities Act pursuant to the Registration Rights Agreement shall not bear the
Private Placement Legend.
Section 2.13 SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS.
Except in the case of an initial transfer of the Restricted Notes, the
Restricted Notes may not be transferred to any Institutional Accredited Investor
which is not a QIB (excluding Non-U.S. persons). The
53
following provisions shall apply with respect to the registration of such
initial transfer of a Restricted Note (other than a Temporary Regulation S
Global Note) to any Institutional Accredited Investor which is not a QIB
(excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer if the proposed
transferee has delivered to the Registrar (A) a certificate substantially in the
form of Exhibit J hereto and (B) an Opinion of Counsel acceptable to the Issuer
that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Rule 144A Global Note, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (i) and (y) instructions
given in accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the Rule 144A Global Note in an amount equal to the
principal amount of the beneficial interest in the Rule 144A Global Note to be
transferred, and the Issuer shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Notes of like tenor and amount.
(b) TRANSFERS TO QIBS. The following provisions shall apply
with respect to the registration of any proposed transfer of an interest in a
Restricted Note (other than a Temporary Regulation S Global Note) to a QIB
(excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) Definitive
Notes, the Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the form of
Note stating, or has otherwise advised the Issuer and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Issuer and the Registrar in writing, that
it is purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
are QIBs within the meaning of Rule 144A, are aware that the sale to it is being
made in reliance on Rule 144A and acknowledge that they have received such
information regarding the Issuer as they have requested pursuant to Rule 144A or
have determined not to request such information and that they are aware that the
transferor is relying upon their foregoing representations in order to claim the
exemption from registration provided by Rule 144A or (y) an interest in a Rule
144A Global Note, the transfer of such interest may be effected only through the
book-entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Note to be transferred is a Definitive Note and a Registrable Note, upon receipt
by the Registrar of the documents referred to in Clause (i) and instructions
given in accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the beneficial interest in the Rule 144A Global Note in an
amount equal to the principal amount of the Definitive Note to be transferred,
and the Trustee shall cancel the Definitive Note so transferred.
54
(c) TRANSFERS OF INTERESTS IN A TEMPORARY REGULATION S GLOBAL
NOTE. The following provisions shall apply with respect to registration of any
proposed transfer of interests in a Temporary Regulation S Global Note:
(i) The Registrar shall register the transfer of any interest
in a Temporary Regulation S Global Note (x) if the transfer occurs following the
Regulation S Global Note Exchange Date, if the proposed transferee is a Non-U.S.
Person and the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit I hereto or (y) if the proposed transferee
is a QIB and the proposed transferor has checked the box provided for on the
form of Note stating, or has otherwise advised the Issuer and the Registrar in
writing, that the sale has been made in compliance with the provisions of Rule
144A to a transferee who has signed the certification provided for on the form
of Note stating, or has otherwise advised the Issuer and the Registrar in
writing, that it is purchasing the Note for its own account or an account with
respect to which it exercises sole investment discretion and that it and any
such account are QIBs within the meaning of Rule 144A, are aware that the sale
to them is being made in reliance on Rule 144A and acknowledge that they have
received such information regarding the Issuer as they have requested pursuant
to Rule 144A or have determined not to request such information and that they
are aware that the transferor is relying upon their foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member that
provides the documents referred to in clause (i)(y) above, upon receipt by the
Registrar of such documents and instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of the
beneficial interest in the Rule 144A Global Note of the relevant subclass, in an
amount equal to the principal amount of the Temporary Regulation S Global Note
of such subclass to be transferred, and the Trustee shall decrease the amount of
the Temporary Regulation S Global Note of such subclass.
(d) TRANSFERS OF INTERESTS IN A PERMANENT REGULATION S GLOBAL
OR DEFINITIVE NOTES ISSUED IN EXCHANGE FOR AN INTEREST IN A PERMANENT REGULATION
S GLOBAL NOTE. The Registrar shall register any transfer of interests in a
Permanent Regulation S Global Note or Definitive Notes issued in exchange for an
interest in a Permanent Regulation S Global Note in accordance with Section
2.12(b) hereof to U.S. Persons or to Non-U.S. Persons without requiring any
additional certification.
(e) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Restricted Note to a
Non-U.S. Person at any time:
(i) Prior to the applicable Regulation S Global Note Exchange
Date, the Registrar shall register any proposed transfer of a Restricted Note
(except for a Regulation S Global Note) to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit I hereto from the proposed
transferor.
(ii) On and after the applicable Regulation S Global Note
Exchange Date, the Registrar shall register any proposed transfer of a
Restricted Note to any Non-U.S. Person if the
55
Note to be transferred is a Definitive Note or an interest in a Rule 144A Global
Note, upon receipt of a certificate substantially in the form of Exhibit I from
the proposed transferor.
(iii) (A) If the proposed transferor is an Agent Member
holding a beneficial interest in a Rule 144A Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depository's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and a decrease in
the principal amount of such Rule 144A Global Note in an amount equal to the
principal amount of the beneficial interest in such Rule 144A Global Note to be
transferred, and (B) if the proposed transferee is an Agent Member and the Note
to be transferred is a Registrable Note, upon receipt by the Registrar of
instructions given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Regulation S Global Note of the relevant
subclass in an amount equal to the principal amount of the beneficial interest
in such Rule 144A Global Note or Definitive Note to be transferred, and the
Trustee shall cancel the Definitive Note or decrease the amount of the Rule 144A
Global Note, if any, so transferred.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend, as
applicable. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend, as applicable, unless (i) such Note so delivered is a
Permanent Regulation S Global Note issued in exchange for a Temporary Regulation
S Global Note in accordance with Section 2.02(b) hereof, (ii) such Note so
delivered is an Exchange Note issued in accordance with Section 2.12(f) hereof,
(iii) such Note so delivered is a Permanent Regulation S Global Note issued upon
registration of transfer of a Restricted Note in accordance with Section
2.13(e)(ii) hereof, or (iv) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(g) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees by
its acceptance of the Notes to furnish the Trustee the certifications and legal
opinions described herein to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Trustee shall not be
required to determine (but may rely on a determination made by the Issuer with
respect to) the sufficiency of any such legal opinions.
(h) TRANSFER OF CLASS D NOTES. Notwithstanding any other
provision of Section 2.13 hereof, (i) no transfer of a Class D Note shall be
permitted hereunder or recognized by the Trustee if the Administrative Agent has
determined (and so advised the Trustee in writing) that (A) assuming the Class D
Notes were to be treated as equity interests in the Issuer,
56
such transfer (1) would cause the Issuer to lose the benefits of the safe harbor
from publicly traded partnership taxable as a corporation for federal income tax
purposes status provided by Treasury Regulation Section 1.7704-1 or any other
available exemption from such status or (2) would result in a termination of the
Issuer as a partnership pursuant to Section 708 of the Internal Revenue Code of
1986, as amended (the "CODE"), or any successor provision thereto, or (B) such
transfer would result in there being more than 90 Holders of the Class D Notes
or more than 100 holders of the equity of the Issuer, in either case determined
as if the Holders of the Class D Notes were partners, and the "anti-avoidance"
rule of Treasury Regulation 1.7704-1(h)(3) (or any successor provision thereto)
applied and (ii) no transfer of a Class D Note, directly or indirectly through
one or more tiers of flow-through entities, to a "tax-exempt entity" (directly
or indirectly through one or more tiers of flow-through entities) within the
meaning of Code Section 168(h)(2) or to a Person that is not a "United States
person" within the meaning of Code Section 7701(a)(30) or any successor
provision thereto will be permitted or recognized. Each such transferee of a
Class D Note shall be required to furnish to the Trustee certifications,
included in the form of transfer notice in the form set forth in Exhibit D
hereof, to the effect that (A) it and, if it is a flow-through entity, its
immediate equity holders and equity holders holding through tiers of
flow-through entities are not tax-exempt entities and (B) it is a United States
person.
The Initial Notes shall be issued pursuant to an exemption
from registration under the Securities Act, subject to the rights with respect
to the Class A Notes, Class B Notes and Class C Notes set forth in the
Registration Rights Agreement. The Note Issuer agrees that it will not at any
time (x) apply to list, list or list upon notice of issuance, (y) consent to or
authorize an application for the listing or the listing of, or (z) enable or
authorize the trading of any Class D Note or Notes on an established securities
market, including (aa) a national securities exchange registered under the
Exchange Act or exempted from registration because of the limited volume of
transactions; (bb) a foreign securities exchange that, under the law of the
jurisdiction where it is organized, satisfies regulatory requirements that are
analogous to the regulatory requirements under the Exchange Act applicable to
exchanges described in subclause (aa); (cc) a regional or local exchange; or
(dd) an over-the-counter market, as the term "established securities market" and
the terms in subclauses (aa), (bb), (cc) and (dd) are defined for purposes of
Section 7704 of the Code.
The Trustee shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.12 hereof or this
Section 2.13 in accordance with applicable law. The Issuer shall have the right
to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable Written
Notice to the Trustee during the term of this Agreement and for a period of
three months thereafter.
Section 2.14 TEMPORARY DEFINITIVE NOTES. Pending the preparation of
Definitive Notes of any subclass, the Issuer may execute and the Trustee may
authenticate and deliver temporary Definitive Notes of such subclass which are
printed, lithographed, typewritten or otherwise produced, in any denomination,
containing substantially the same terms and provisions as are set forth in the
applicable exhibit hereto or in any indenture supplemental hereto, except for
such appropriate insertions, omissions, substitutions and other variations
relating to their temporary
57
nature as the Owner Trustee executing such temporary Definitive Notes may
determine, as evidenced by his execution of such temporary Definitive Notes.
If temporary Definitive Notes of any subclass are issued, the
Issuer will cause Definitive Notes of such subclass to be prepared without
unreasonable delay. After the preparation of Definitive Notes of such subclass,
the temporary Definitive Notes shall be exchangeable for Definitive Notes upon
surrender of such temporary Definitive Notes at the Corporate Trust Office of
the Trustee, without charge to the Holder thereof. Upon surrender for
cancellation of any one or more temporary Definitive Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor
Definitive Notes of like subclass, in authorized denominations and in the same
aggregate principal amounts. Until so exchanged, such temporary Definitive Notes
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
Section 2.15 STATEMENTS TO HOLDERS AND THE OWNER TRUSTEE. (a) On the second
Business Day before each Payment Date, the Administrative Agent shall deliver to
the Trustee and the Owner Trustee, and the Trustee shall (or shall instruct any
Paying Agent to) promptly thereafter distribute to each Holder of record with
respect to such Payment Date and each Rating Agency, a report, substantially in
the form attached as Exhibit G hereto prepared by the Administrative Agent and
setting forth the information described therein after giving effect to such
payment (each, a "MONTHLY REPORT"). Each Monthly Report provided to the Trustee,
the Owner Trustee and each Rating Agency for each May 15, August 15 and November
15 shall be accompanied by (i) a statement setting forth an analysis of the
Collections Account activity for the preceding fiscal quarter ended March 31,
June 30 and September 30, respectively, (ii) a discussion and analysis of such
activity and of any significant developments affecting the Issuer Group in such
quarter and (iii) an updated description of the Aircraft then in the Portfolio
and the related Lessees (each, a "QUARTERLY REPORT"). Each Monthly Report
provided to the Trustee, the Owner Trustee and each Rating Agency for each April
15 shall be accompanied by (x) a statement setting forth an analysis of the
Collections Account activity for the preceding fiscal year ended December 31,
(y) a discussion and analysis of such activity and of any significant
developments affecting the Issuer Group in such year and (z) updated information
with respect to the Aircraft then in the Portfolio (each, an "ANNUAL REPORT").
The Trustee shall deliver a copy of each Quarterly Report and Annual Report to
any Holder or other Secured Party who requests a copy thereof.
(b) After the end of each calendar year but not later than the
latest date permitted by law, the Administrative Agent shall deliver to the
Trustee and the Owner Trustee, and the Trustee shall (or shall instruct any
Paying Agent to) furnish to each Person who at any time during such calendar
year was a Holder of record of any subclass of Notes) a statement prepared by
the Administrative Agent containing the sum of the amounts determined pursuant
to Exhibit G hereto with respect to the subclass of Notes (or with respect to
the statement provided to the Owner Trustee, the Beneficial Interest
Certificates) for such calendar year or, in the event such Person was a Holder
of record of any subclass during only a portion of such calendar year, for the
applicable portion of such calendar year, and such other items as are readily
available to the Administrative Agent and which a Holder or the Owner Trustee
shall reasonably request as necessary for the purpose of such Holder's or the
Owner Trustee's or a Certificateholder's, as applicable, preparation of its U.S.
federal income or other tax returns. So long as any of the
58
Notes are registered in the name of the initial Depository or its nominee, such
report and such other items will be prepared on the basis of such information
supplied to the Administrative Agent by the initial Depository and the Agent
Members, and will be delivered by the Trustee, when received from the
Administrative Agent, to the Owner Trustee and the Depository to be available
for forwarding by the Owner Trustee and the Depository to the applicable
beneficial owners in the manner described above. In the event that any such
information has been provided by any Paying Agent directly to such Person
through other tax-related reports or otherwise, the Trustee in its capacity as
Paying Agent shall not be obligated to comply with such request for information.
(c) A copy of each report described in Section 2.15(a) shall
be concurrently delivered by the Administrative Agent to the Listing Agent, on
behalf of the Luxembourg Stock Exchange, each Rating Agency, the Servicer, the
Financial Advisor and the Capital Markets Advisor.
(d) At such time, if any, as the Notes of any subclass are
issued in the form of Definitive Notes, the Trustee shall prepare and deliver
the information described in this Section 2.15(b) to each Holder of record of a
Definitive Note of such subclass for the relevant period of beneficial ownership
of such Definitive Note as appears on the records of the Trustee.
(e) Following each Payment Date and any other date specified
herein for distribution of any Payments with respect to the Notes and prior to a
Refinancing or Redemption, the Trustee shall cause notice thereof to be given
(i) by publication in the LUXEMBURGER WORT or, if such newspaper shall cease to
be published or timely publication therein shall not be practicable, in such
English language newspaper or newspapers as the Trustee shall approve having a
general circulation in Europe, (ii) by either of (A) the information contained
in such notice appearing on the relevant page of the Reuters Screen or such
other medium for the electronic display of data as may be approved by the
Trustee and notified to Holders or (B) publication in the FINANCIAL TIMES and
THE WALL STREET JOURNAL (NATIONAL EDITION) or, if either newspaper shall cease
to be published or timely publication therein shall not be practicable, in such
English language newspaper or newspapers as the Trustee shall approve having a
general circulation in Europe and the United States and (iii) until such time as
any Definitive Notes are issued in exchange for any class or subclass of the
Registrable Notes and, so long as such Notes of any subclass are registered with
the Depository, Euroclear and/or Clearstream, and so long as such Notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange so permit
as advised by the Listing Agent, delivery of the relevant notice to the
Depository, Euroclear and/or Clearstream for communication by them to Holders of
such subclass. Notwithstanding the above, any notice to the Holders of any class
or subclass of Floating Rate Notes specifying an interest rate for such Notes,
any Payment Date or any principal payment shall be validly given by delivery of
the relevant notice to the Depository, Euroclear and/or Clearstream for
communication by them to such Holders, without the need for publication in the
LUXEMBURGER WORT, and shall be promptly delivered to the Listing Agent and made
available at the offices of the Luxembourg Paying Agent and the Luxembourg Stock
Exchange (other than notices required to be delivered by the Administrative
Agent under the Related Documents). Any notice specifying (a) an increase in the
interest rate of any class of Notes due to Maturity Step-Up Interest or
Registration Step-Up Interest or (b) redemption of principal of any Notes must
be published in the LUXEMBURGER WORT or another daily newspaper
59
of general circulation in Luxembourg for so long as any class of Notes is listed
on the Luxembourg Stock Exchange. Any such notice shall be deemed to have been
given on the first day on which any of such conditions shall have been met.
(f) Notices referred to in this Section 2.15 to Holders of the
Class D Notes generally will only be made by the Trustee directly to the
registered holders thereof by any of the methods referred to in Section 12.05
hereof.
(g) The Trustee shall be at liberty to sanction some other
method of giving notice to the Holders of any subclass if, in its opinion, such
other method is reasonable, having regard to the number and identity of the
Holders of such subclass and/or to market practice then prevailing, is in the
best interests of the Holders of such subclass and will comply with the rules of
the Luxembourg Stock Exchange as confirmed by the Listing Agent or such other
stock exchange (if any) on which the Notes of such subclass are then listed, and
any such notice shall be deemed to have been given on such date as the Trustee
may approve; provided that notice of such method is given to the Holders of such
subclass in such manner as the Trustee shall require.
Notwithstanding the above, any notice specifying the rate,
amount or Payment Date in respect of the Notes of any subclass bearing interest
at a floating rate or in respect of any repayment of principal on any Notes
shall, for so long as such Notes are listed on the Luxembourg Stock Exchange and
so long as the rules of the Luxembourg Stock Exchange so require, be given to
the Listing Agent; provided that such requirement shall be satisfied until such
time as any Definitive Notes of such subclass are issued to all Holders and so
long as the Notes of such subclass are held on behalf of DTC, Clearstream and
Euroclear by (i) delivery of the relevant notice to DTC, Clearstream and
Euroclear for communication by them to the Holders of such subclass without need
for publication in the LUXEMBURGER WORT and (ii) delivery of the notice to the
Luxembourg Stock Exchange and the Paying Agent in Luxembourg; provided further,
that any notice specifying (a) an increase in the rate of interest of any
subclass of Notes due to Maturity Step-Up Interest or Registration Step-Up
Interest or (b) redemption of principal of any Notes must be published in the
LUXEMBURGER WORT or another daily newspaper of general circulation in
Luxembourg. Any such notice shall be deemed to have been given on the first day
on which any of such conditions shall have been met.
Section 2.16 CUSIP, CINS AND ISIN NUMBERS. The Issuer in issuing the
Notes may use "CUSIP", "CINS", "ISIN" or other identification numbers (if then
generally in use), and if so, the Trustee shall use CUSIP numbers, CINS numbers,
ISIN numbers or other identification numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes; provided further, that failure to
use "CUSIP", "CINS", "ISIN" or other identification numbers in any notice of
redemption or exchange shall not affect the validity or sufficiency of such
notice.
Section 2.17 HOLDER REPRESENTATIONS AND COVENANTS. Each Holder and
beneficial owner of a Note, by the purchase of such Note or beneficial interest
therein, covenants and agrees that it will treat such Note as indebtedness for
all purposes and will not take any action contrary to such
60
characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith. Each Holder of a Class D Note, by
purchase of such Note, represents and warrants to each other Holder and to the
Issuer that (a) (i) it is not a pass-through entity within the meaning of
Treasury Regulation Section 1.7704-1(h)(3) or (ii) a substantial percentage of
the value of beneficial interests in such Holder is not attributable (directly
or indirectly) to its interest in the Class D Notes or (iii) the beneficial
interests in the Holder are held by a single person that is not itself a
flow-through entity within the meaning of Treasury Regulation Section
1.7704-1(h)(3) (as applicable), (b) it is not a "tax-exempt entity" within the
meaning of Code Section 168(h)(2) and (c) it is a "United States person" within
the meaning of Code Section 7701(a)(30).
Section 2.18 BRIDGE NOTE TRANSFER PROVISIONS. Notwithstanding anything
to the contrary herein, the terms and provisions of Section 2.12, 2.13, 2.14 and
2.15 shall not apply prior to the Effective Time and in respect of the issuance
of the Bridge Notes. Upon the transfer, exchange or replacement of Bridge Notes
bearing the Bridge Note Legend, the Registrar shall deliver only Bridge Notes
that bear the Bridge Note Legend. By its acceptance of any Bridge Note bearing
the Bridge Note Legend, each Holder of such Bridge Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Bridge Note Legend and agrees that it will transfer such Bridge Note only as
provided in this Indenture. The Registrar shall not register a transfer of any
Bridge Note unless such transfer complies with the restrictions on transfer of
such Note set forth in this Indenture. In connection with any transfer of Bridge
Notes, each Holder agrees by its acceptance of the Bridge Notes to furnish the
Trustee the certifications and legal opinions described herein to confirm that
such transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Trustee shall not be required to determine (but may rely on a determination
made by the Issuer with respect to) the sufficiency of any such legal opinion.
ARTICLE III
ACCOUNTS; PRIORITY OF PAYMENTS
Section 3.01 ACCOUNTS. (a) ESTABLISHMENT OF ACCOUNTS. The
Administrative Agent, acting on behalf of the Security Trustee, shall direct the
Operating Bank in writing to establish and maintain on its books and records in
the name of the Security Trustee (i) a collections account (the "COLLECTIONS
ACCOUNT"), one or more lessee funded accounts as provided in the Administrative
Agency Agreement (each, a "LESSEE FUNDED ACCOUNT"), an expense account (the
"EXPENSE ACCOUNT"), one note account for each subclass of the Initial Notes
(each, a "NOTE ACCOUNT") and an Owner Trustee's account (the "OWNER TRUSTEE
ACCOUNT"), in each case on or before the Initial Closing Date and (ii) one or
more rental accounts (each, a "RENTAL ACCOUNT") and any additional Lessee Funded
Accounts, in each case provided for in the Administrative Agency Agreement, any
additional Note Accounts, an aircraft purchase account (the "AIRCRAFT PURCHASE
ACCOUNT"), a defeasance/redemption account (the "DEFEASANCE/REDEMPTION
ACCOUNT"), a refinancing account (the "REFINANCING ACCOUNT") and any other
Account (including, any Cash Collateral Account) the establishment of which is
set forth in a Controlling Trustees' Resolution delivered to the Trustee, the
Security Trustee and the Administrative Agent, in each case at such time as is
set forth in this Section 3.01 or in such Controlling Trustees' Resolution. Each
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Account shall be established and maintained as an Eligible Account in accordance
with the terms of the Security Trust Agreement so as to create, perfect and
establish the priority of the security interest of the Security Trustee in such
Account and all cash, Investments and other property therein under the Security
Trust Agreement and otherwise to effectuate the Security Trust Agreement. Each
new Account established pursuant to Section 2.04 of the Administrative Agency
Agreement shall, when so established, be the Account of such name and purposes
for all purposes of this Indenture.
(b) WITHDRAWALS AND TRANSFERS GENERALLY. Any provision of this
Indenture relating to the withdrawal from, or any transfer to or from, any
Account by the Administrative Agent shall mean any such withdrawal or transfer
effected by the Operating Bank at the written direction of the Administrative
Agent (such direction to be provided to the Operating Bank by 1 P.M. (New York
City time) on the date of such transfer or withdrawal) given in accordance with
the terms of this Indenture, the Administrative Agency Agreement and the
Security Trust Agreement. No withdrawal from or transfer from or to any Account
shall be made except in accordance with the terms of this Indenture, the
Security Trust Agreement and the Administrative Agency Agreement or by any
Person other than the Administrative Agent (or, upon the written direction of
the Administrative Agent, the Operating Bank) or, in the case of the Note
Accounts, the Trustee (in which respect the Trustee agrees it is acting as the
agent of the Security Trustee).
(c) COLLECTIONS ACCOUNT. All Collections shall be, when
received, deposited in the Collections Account, and all cash, Investment and
other property in the Collections Account shall be transferred from, or retained
as Reserved Cash in, the Collections Account in accordance with the terms of
this Indenture.
(d) LESSEE FUNDED ACCOUNT. Any Segregated Funds received from
time to time from any Lessee or pursuant to any Acquisition Agreement shall be
transferred by the Operating Bank at the written direction of the Administrative
Agent from the Collections Account into the related Lessee Funded Account. The
Administrative Agent shall not make any withdrawal from, or transfer from or to,
any Lessee Funded Account in respect of (i) any portion of the Segregated Funds
therein consisting of a security deposit except, upon the termination of the
related Lease, as provided in such Lease or (ii) any Segregated Funds that is
contrary to the requirements of the respective Leases as to Segregated Funds and
the requirements of the Security Trust Agreement (including the agreement of the
Security Trustee that it designate on its account records that it holds its
interest in each Lessee Funded Account for the benefit of the respective Lessee
in respect of whom such Segregated Funds are held). Without limiting the
foregoing, no cash, Investment and other property in a Lessee Funded Account may
be used to make payments, other than as permitted under Section 3.07 hereof, in
respect of the Securities at any time, including after the delivery of a Default
Notice. Any Segregated Funds relating to an expired Lease that remain in a
Lessee Funded Account after expiration or termination of such Lease and that are
not due and owing to the relevant Lessee under such expired or terminated Lease
shall, if so required under the terms of a subsequent Lease, if any, relating to
such Aircraft, be credited in a Lessee Funded Account for the benefit of the
next Lessee of the relevant Aircraft to the extent required under the terms of
such subsequent Lease and, to the extent not so required, transferred to the
Collections Account. When and as provided in the Administrative Agency Agreement
the
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Administrative Agent shall cause to be established such additional Lessee Funded
Accounts as are provided for in accordance with Section 3.01(a)(ii) hereof.
(e) EXPENSE ACCOUNT. On each Payment Date, such amounts as are
provided in Section 3.08 hereof in respect of the Required Expense Amount,
Expense Accruals and Other Accruals shall be deposited into the Expense Account
from the Collections Account. Expenses shall be paid from the Expenses Account
as provided in Section 3.04 hereof.
(f) RENTAL ACCOUNTS. All Rental Payments and other amounts
received pursuant to any Related Collateral Document shall be deposited into
such Rental Account (including any Non-Trustee Account) as the Administrative
Agent may determine or as provided for in the Administrative Agency Agreement.
Except with respect to amounts, if any, that for local tax or other regulatory
or legal reasons must be retained on deposit or as to the transfer of which the
Administrative Agent determines there is any substantial uncertainty, all
amounts so deposited shall, within one Business Day of their receipt, be
transferred by the Administrative Agent to the Collections Account. If the
Administrative Agent determines that, for any tax or other regulatory or legal
reason, any such Collections may not be deposited into an account in the name of
the Security Trustee, then, notwithstanding the requirements of Section 3.01(a)
hereof, the relevant Issuer Group Member may establish one or more Rental
Accounts ( a "NON-TRUSTEE ACCOUNT") for such Collections in its own name (but
subject to the direction and control of the Administrative Agent on behalf of
the Security Trustee) at any Eligible Institution provided that the Lessor under
the relevant Lease is or becomes a party to a Security Document with respect to
such Account.
(g) REFINANCING ACCOUNT. Upon notice to it of a Refinancing,
the Administrative Agent shall cause the Operating Bank to establish and
maintain a Refinancing Account pursuant to Section 3.01(a) hereof in the name of
the Security Trustee for the benefit of the Holders of the subclass of Notes, if
any, to be refinanced. All net cash proceeds of such Refinancing shall be
deposited in the Refinancing Account and shall be held in such Account until
such proceeds are applied to pay the Redemption Price of and all accrued and
unpaid interest on such Notes until such Notes are cancelled by the Trustee and
Refinancing Expenses with respect thereto (except to the extent the Controlling
Trustees have determined, as evidenced by a Controlling Trustees' Resolution, to
pay the same from funds available therefor as Permitted Accruals in the Expense
Account) and as otherwise provided in Section 5.02(f)(ii)(C).
(h) DEFEASANCE/REDEMPTION ACCOUNT. Upon notice to it that any
subclass of Notes is to be redeemed pursuant to Section 3.10 hereof (other than
in a Refinancing) or defeased under Article XI hereof, the Administrative Agent
shall cause the Operating Bank to establish and maintain a Defeasance/Redemption
Account pursuant to Section 3.01(a) hereof in the name of the Security Trustee
for the benefit of the Holders of such subclass. All amounts received for the
purpose of any such redemption or defeasance shall be deposited in the
Defeasance/Redemption Account.
(i) AIRCRAFT PURCHASE ACCOUNT. All proceeds of the issuance of
the Initial Securities, after any other deposits out of such proceeds to any
other Account pursuant to Section 3.03 hereof, shall be distributed in
accordance with Section 3.14(f) of this Indenture. All proceeds of any
Additional Securities shall, after making any other deposits out of such
proceeds
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pursuant to Section 3.03 hereof or otherwise required by the terms of an
indenture supplement hereto, a supplement to the Trust Agreement or a
Controlling Trustees' Resolution relating to such Additional Securities, be
deposited in the Aircraft Purchase Account and shall be held in such Account and
invested in Permitted Account Investments until applied for the purchase of
Additional Aircraft in accordance with the relevant Acquisition Agreement. The
Issuer shall notify the Security Trustee and the Administrative Agent of the
satisfaction or waiver (specifying which) of all conditions for the payment of
the Aircraft Purchase Price of any Aircraft, and no amounts may be paid to the
Sellers (with respect of the Initial Aircraft) or withdrawn or transferred from
the Aircraft Purchase Account (with respect of Additional Aircraft), in either
event as the Aircraft Purchase Price of any Aircraft until receipt of such
notice as to such Aircraft.
(j) NOTE ACCOUNT. Upon the issuance of Notes of any subclass
for which a Note Account was not previously established, the Administrative
Agent shall cause the Operating Bank to establish and maintain a Note Account
for such subclass in accordance with Section 3.01(a) hereof in the name of the
Security Trustee for the benefit of the Holders of the Notes of such subclass.
Upon the transfer of any amounts to the Note Account for any subclass of Notes
in accordance with Section 3.08 hereof, the Trustee on the same day shall pay
all such amounts to the Holders of such subclass of Notes as of the related
Record Date in accordance with the terms of this Indenture.
(k) OWNER TRUSTEE ACCOUNT. All amounts transferred to the
Owner Trustee Account in accordance with Section 3.08 hereof shall be paid to
Owner Trustee in accordance with the terms of this Indenture for further
application by the Owner Trustee in accordance with the terms of the Trust
Agreement.
(l) CASH COLLATERAL ACCOUNTS. Upon receipt by the
Administrative Agent and the Trustee of a Controlling Trustees' Resolution
providing for the establishment of a Cash Collateral Account as a Senior
Eligible Credit Facility, a Mezzanine Eligible Credit Facility, a Junior
Eligible Credit Facility or a Subordinated Eligible Credit Facility for one or
more subclasses of Notes or in respect of any other Obligation, the
Administrative Agent shall, by Written Notice, cause the Operating Bank to
establish (within three Business Days of the giving of such Written Notice) and
maintain such Cash Collateral Account pursuant to Section 3.01(a) hereof in the
name of the Security Trustee for the benefit of the Holders of the Notes of each
such subclass and/or the Secured Parties holding such other Obligation. All
amounts provided in connection with any such Controlling Trustees' Resolution
for deposit in such Account and all amounts to be deposited in such Account
under Section 3.08 hereof as a Senior Eligible Credit Facility, a Secondary
Eligible Facility or a Junior Eligible Credit Facility or a Subordinated Credit
Facility (as applicable) shall be held in such Cash Collateral Account for
application, and all replenishment shall be made, in accordance with the terms
of the Controlling Trustees' Resolution relating to such Credit Facility, which
Controlling Trustees' Resolution shall include the basis of any replenishment of
the Cash Collateral Account.
Section 3.02 INVESTMENTS OF CASH. For so long as any Notes remain
Outstanding, the Administrative Agent, on behalf of the Security Trustee, shall,
or shall direct the Operating Bank in writing to, invest and reinvest, at the
written direction of the Controlling Trustees, the funds on deposit in the
Accounts in Permitted Account Investments; provided, however, that following
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the giving of a Default Notice or during the continuance of an Acceleration
Default, the Administrative Agent shall invest such amount at the written
direction of the Security Trustee in Permitted Account Investments described in
clause (d) of the definition thereof (but in the case of a Lessee Funded Account
only to the extent any such investment credited to such Lessee Funded Account is
permitted by the Leases pursuant to which such funds were received) from the
time of receipt thereof until such time as such amounts are required to be
distributed pursuant to the terms of this Indenture. The Administrative Agent
shall make such investments and reinvestments in accordance with the terms of
the following provisions:
(a) the Permitted Account Investments shall have maturities
and other terms such that sufficient funds shall be available to make required
payments pursuant to this Indenture (i) before the next Payment Date after which
such investment is made, in the case of investments of funds on deposit in the
Collections Account and the Expense Account, or (ii) in accordance with the
requirements of the relevant Leases or Aircraft Agreements, in the case of
investments of funds on deposit in the Lessee Funded Accounts; provided that an
investment maturing within one year of the date of investment shall nevertheless
be a Permitted Account Investment if it has been acquired with funds which are
not reasonably anticipated, at the discretion of the Administrative Agent, to be
required to be paid to any other Person or otherwise transferred from the
applicable Account prior to such maturity;
(b) if any funds to be invested are not received in the
Accounts by 1:00 p.m., New York City time, on any Business Day, such funds
shall, if possible, be invested in overnight Permitted Account Investments
described in clause (d) of the definition thereof; provided that neither the
Trustee nor the Security Trustee shall be liable for any losses Incurred in
respect of the failure to invest funds not thereby received; and
(c) if required by the terms of a Lease, any investments of
funds on deposit in a Lessee Funded Account or the Collections Account shall be
made on behalf of the relevant Lessee in such investments as may be required
thereunder.
Section 3.03 CLOSING DATE DEPOSITS, WITHDRAWALS AND TRANSFERS. The
Administrative Agent shall, on each Closing Date, upon the Operating Bank's
receipt thereof, make, or direct the Operating Bank in writing to make, the
following transfers to the Accounts (or, in the case of clause (g) below,
Automatic):
(a) deposit in the relevant Lessee Funded Account the amount
of the initial Segregated Funds, if any, received or deemed to have been
received pursuant to the terms of the relevant Acquisition Agreements;
(b) deposit in any Cash Collateral Account then to be
established an amount equal to the Required Amount for such Account;
(c) deposit to the Collections Account, in the case of each
Closing Date, an amount equal to the Subordinate Note Blockage Amount MINUS the
then aggregate amount available under all Credit Facilities (after giving effect
to any deposits made thereto on such Closing Date);
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(d) deposit in the Expense Account an amount equal to the
Required Expense Amount for the relevant initial Interest Accrual Period, as
specified in a Written Notice of the Administrative Agent to the Trustee;
(e) in the case of any Closing Dates other than the Initial
Closing Date, if applicable, an amount equal to the remaining proceeds of any
Additional Securities issued to acquire the Additional Aircraft to the
Collections Account;
(f) on the Initial Closing Date, prepay the Bridge Notes in
full, together with all amounts due and payable to the Holders of the Bridge
Notes hereunder and under the Bridge Notes;
(g) on the Initial Closing Date, deposit in the Collections
Account the amounts received by the Bridge Note Issuer from the Sellers pursuant
to Section 5.1(a) and (b) of the Asset Purchase Agreement except to the extent
any such sums referred to in such Section 5.01 constitute Segregated Funds, in
which case such amounts shall be deposited in a Lessee Rental Account; and
(h) on the Initial Closing Date, pay to Automatic an amount
equal to the Purchase Price (as defined in the Beneficial Interest Purchase
Agreement).
Section 3.04 INTERIM DEPOSITS, TRANSFERS AND WITHDRAWALS. On any
Business Day the Administrative Agent may make, or direct the Operating Bank in
writing to make, without duplication, the following deposits, transfers and
withdrawals for the following purposes, in each case after Written Notice from
the Administrative Agent to the Trustee, identifying the basis for such deposit,
transfer or withdrawal in reasonable detail:
(a) withdraw from a Lessee Funded Account to the extent that
funds on deposit therein or available thereunder may be withdrawn or drawn
pursuant to the terms of the related Lease for payment thereof, to discharge any
Expense then due and payable and pay such amount to the appropriate payees
thereof;
(b) withdraw from the Expense Account (to the extent of funds
on deposit therein) such amount as is needed to discharge (i) any Primary
Expenses and (ii) any Modification Payments or Refinancing Expenses in respect
of which a Permitted Accrual was previously effected by a deposit in the Expense
Account (whether or not any such deposit has been previously used to pay any
other Primary Expense but excluding any portion of such deposit previously used
to pay any Modification Payments or Refinancing Expenses) then due and payable
and pay such amount to the appropriate payees thereof;
(c) transfer from the Collections Account from time to time
(but in no event on less than one Business Day's prior written notice to the
Trustee (unless such one Business Day's notice requirement is waived by the
Trustee)), other amounts, including amounts constituting the Reserved Cash, from
the Collections Account to the Expense Account, in each case only to the extent
that such funds are to be applied to Primary Expenses that become due and
payable during such Interest Accrual Period and for the payment of which there
are insufficient funds in the Expense Account; provided that no such transfer
from the Collections Account in respect of Primary Expenses shall be made prior
to the next succeeding Payment Date if, in the reasonable
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judgment of the Administrative Agent, such transfer would have a material
adverse effect on the ability of the Issuer to make payments of accrued and
unpaid interest on the Senior Class then Outstanding on the next Payment Date
therefor in accordance with Section 3.08 hereof;
(d) withdraw Segregated Funds from a Lessee Funded Account or
draw under or cause to be drawn under any applicable Related Collateral
Document, in any case to the extent required by or necessary in connection with
a Lease or any documents related thereto and the Related Collateral Documents,
for deposit in the Collections Account to satisfy any default in Rental Payments
under any related Lease;
(e) transfer any Segregated Funds from the Collections Account
to a Lessee Funded Account in accordance with the terms of any Lease;
(f) withdraw from the Aircraft Purchase Account an amount
equal to the Aircraft Purchase Price of any Additional Aircraft, to the extent
necessary to effect payment therefor; and
(g) in the case of any Additional Securities, on such date as
shall be set forth in a Controlling Trustees' Resolution, transfer any balance
in the Aircraft Purchase Account to the Collections Account for application in
accordance with Section 3.08(a).
Section 3.05 INTERIM DEPOSITS AND WITHDRAWALS FOR AIRCRAFT SALES. The
Administrative Agent shall cause the Operating Bank to deposit any and all
proceeds received in respect of any Aircraft Sale by any Issuer Group Member
(including any loss proceeds and any other amounts under the second sentence of
Section 4.2, Section 5.2 and Section 5.3 of the Aircraft Purchase Agreement) and
all receipts of Non-Delivery Payments in the Collections Account (other than in
connection with any sale of all or substantially all of the assets of the Issuer
Group, in which case the Administrative Agent shall deposit any and all proceeds
of any thereof into the Defeasance/Redemption Account in connection with the
redemption of each subclass of the Notes). Any funds then on deposit in a Lessee
Funded Account related to the Aircraft subject to such sale or other disposition
shall be applied on a basis consistent with the terms of the Lease related to
such Aircraft, if any, or as otherwise provided by the relevant agreements
related to such sale or other disposition.
Section 3.06 CALCULATION DATE CALCULATIONS. (a) CALCULATION OF REQUIRED
AMOUNTS. The Administrative Agent shall determine, as soon as practicable after
each Calculation Date, but in no event later than two Business Days preceding
the immediately succeeding Payment Date, based on information known to the
Administrative Agent or Relevant Information provided to the Administrative
Agent, the Collections received during the period commencing on the day next
following the preceding Calculation Date and ending on such Calculation Date and
calculate the following amounts:
(i) the balance of funds on deposit in the Accounts on the
Calculation Date, the Reserved Cash on such Calculation Date and the amount
available under all Credit Facilities on such Calculation Date;
(ii) the Required Expense Amount and any amount to be
deposited in respect of Expense Accruals and Other Accruals as of such
Calculation Date as set forth in a the Monthly Report prepared by the
Administrative Agent and provided to the Operating Bank;
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(iii) the Available Collections on such Calculation Date
(separately listing any Senior Swap Payments, Subordinated Swap Payments and
Swap Breakage Costs);
(iv) the net Segregated Funds available to be transferred into
the Collections Account on such Calculation Date;
(v) any amounts to be retained in the Collections Account on
the Payment Date immediately following such Calculation Date under clauses (iv),
(viii), (xii) and (xviii) of Section 3.08(a) hereof;
(vi) any amounts to be transferred in respect of Credit
Facilities under clauses (iii), (viii), (xi) and (xvii) of Section 3.08(a)
hereof or clauses (ii), (v), (vii) and (ix) of Section 3.08(b) hereof; and
(vii) any other information, determinations and calculations
reasonably required in order to give effect to the terms of this Indenture and
the Related Documents.
(b) CALCULATION OF INTEREST AMOUNTS. The Administrative Agent
shall, not later than five Business Days prior to each Payment Date, make the
following calculations or determinations with respect to Interest Amounts due on
such Payment Date:
(i) based on Relevant Information provided to it by the
Reference Agent, the applicable interest rate on each subclass of Floating Rate
Notes based on LIBOR determined on the Reference Date for the relevant Interest
Accrual Period;
(ii) the Interest Amount (calculating separately any
Registration Step-Up Interest and Maturity Step-Up Interest included therein)
and any Additional Interest in respect of each class or subclass of Floating
Rate Notes on such Payment Date; and
(iii) the Interest Amount (calculating separately any
Registration Step-Up Interest and Maturity Step-Up Interest included therein)
and any Additional Interest in respect of each class or subclass of Fixed Rate
Notes on such Payment Date.
(c) CALCULATION OF PRINCIPAL PAYMENT AMOUNTS. The
Administrative Agent shall, not later than five Business Days prior to each
Payment Date, calculate or determine the following with respect to principal
payments due on such Payment Date:
(i) the Outstanding Principal Balance of each class and
subclass of the Notes on such Payment Date immediately prior to any principal
payment on such date;
(ii) the Adjusted Portfolio Value and the Assumed Portfolio
Value on such Payment Date;
(iii) the Minimum Target Principal Balance for each class of
Notes Outstanding and the Minimum Principal Payment Amount on such Payment Date
with respect to each class of Notes;
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(iv) the Scheduled Target Principal Balance for each class of
Notes Outstanding and the Scheduled Principal Payment Amount on such Payment
Date with respect to each class of Notes; and
(v) the amount of any additional principal to be paid with
respect to each class or subclass of Notes.
(d) CALCULATION OF REFINANCING AMOUNTS. The Administrative
Agent shall, not later than five Business Days prior to each Payment Date on
which a Refinancing or Redemption of any class or subclass of Notes is scheduled
to occur, perform the calculations necessary to determine the Redemption Price
of and the accrued and unpaid interest on such Notes.
(e) APPLICATION OF THE AVAILABLE COLLECTIONS. The
Administrative Agent shall, not later than 1:00 p.m. New York City time on the
Business Day prior to each Payment Date, determine the amounts to be applied on
such Payment Date to make each of the payments contemplated by Section 3.08(a)
or 3.08(b) hereof, as applicable, setting forth separately, the amount to be
applied on such Payment Date pursuant to each clause of Section 3.08(a) or
3.08(b) hereof, as applicable, including, where applicable, the allocation of
principal of the Notes in accordance with Section 3.09 hereof.
Section 3.07 PAYMENT DATE FIRST STEP WITHDRAWALS AND TRANSFERS. Two
Business Days prior to each Payment Date, the Administrative Agent shall make or
direct the Operating Bank in writing to make (such direction to be communicated
in computer file format or in such other form as the Administrative Agent, the
Operating Bank, the Trustee and the Security Trustee agree, provided that, in
the case of communication in computer file format or any other form other than a
written tangible form, a written tangible form thereof shall promptly thereafter
be sent to the Operating Bank), on such Payment Date, the following withdrawals
from and transfers among the Accounts:
(a) transfer the net proceeds of any Refinancing of any Notes
from the Refinancing Account to any Cash Collateral Account established for the
related Refinancing Notes (up to the Required Amount therefor in accordance with
Section 3.03 hereof) and/or as Reserved Cash to the Collections Account (in
accordance with Section 3.03 hereof) and the balance to the applicable Note
Accounts, in each case in accordance with Sections 2.10(b) and 5.02(f) hereof;
(b) transfer any amounts on deposit in the
Defeasance/Redemption Account in respect of any Redemption that is not a
Refinancing to the applicable Note Accounts.
(c) transfer from each Lessee Funded Account to the
Collections Account any available Segregated Funds that are no longer required
to be maintained in a segregated account under the applicable Leases;
(d) transfer from the Collections Account to the relevant
Lessee Funded Accounts the amount of any Segregated Funds then on deposit in the
Collections Account;
(e) transfer from any Account (other than the Collections
Account) to the Collections Account the amount of earnings (net of losses and
investment expenses), if any, on
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investments of funds on deposit therein during the preceding Interest Accrual
Period, except that earnings on any portion of the funds on deposit in any
Account required under the terms of the related Lease to be repaid to the
related Lessee shall be retained therein; and
(f) after the giving of a Default Notice, during the
continuation of an Acceleration Default or following the Interest Accrual Period
in which an Aircraft Sale occurs with respect to the last remaining Aircraft,
transfer any amounts remaining in the relevant Lessee Funded Account (other than
amounts required to be maintained in such account pursuant to the terms of the
related Lease or Aircraft Agreement) into the Collections Account.
Section 3.08 PAYMENT DATE SECOND STEP WITHDRAWALS. (a) On each Payment
Date, after the withdrawals and transfers provided for in Section 3.07 hereof
have been made, the Administrative Agent shall distribute from (or retain in
the Collections Account, if so indicated in the relevant clause below), or
direct the Operating Bank in writing to do same (such direction to be
communicated in computer file format or in such other form as the
Administrative Agent, the Operating Bank, the Trustee and the Security Trustee
agree, provided that, in the case of communication in computer file format or
any other form other than a written tangible form, a written tangible form
thereof shall promptly thereafter be sent to the Operating Bank) at least
two Business Days prior to such Payment Date the amounts set forth below in
the order of priority set forth below but, in each case, only to the extent
that all amounts then required to be paid (or retained in the Collections
Account, as applicable) ranking prior thereto ("PRIOR RANKING Amounts") have
been paid (or retained in the Collections Account, as applicable) in full. All
payments of Available Collections to be made to or for the account of Holders
of any subclass of Notes or to the Owner Trustee, for the account of the
Certificateholders, pursuant to this Section 3.08 shall be made through a
direct transfer of funds to the applicable Note Account with respect to such
subclass of Notes or the Owner Trustee Account with respect to the
Certificateholders.
(i) to the Expense Account an amount such that the amounts on
deposit therein is at least equal to the Required Expense Amount;
(ii) in no order of priority inter se, but PRO RATA, (A) to
the Note Accounts for each subclass of Class A Notes, the Interest Amount on
such subclass of Class A Notes in no order of priority inter se, but pro rata
according to the amount of accrued and unpaid interest on such subclass of Class
A Notes; and (B) pro rata, to any Swap Provider, an amount equal to any Senior
Swap Payment due from any Issuer Group Member pursuant to any Swap Agreement;
(iii) in no order of priority inter se, but PRO RATA, to any
Persons providing any Senior Eligible Credit Facilities, any Credit Facility
Advance Obligations payable to such Persons under the terms of their respective
Senior Credit Eligible Credit Facilities and, to the extent any such Credit
Facility consists of a Cash Collateral Account, such amount so that the amount
on deposit in each such Account is equal to the Required Amount therefor;
(iv) to the Collections Account, an amount so that the
Reserved Cash on deposit therein is equal to the positive difference, if any,
between (A) the Senior Note Blockage Amount and (B) the aggregate amounts
available for drawing under any Senior Eligible Credit Facilities (after giving
effect to any transfer under clause (iii) above);
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(v) to the Note Accounts for each subclass of Class A Notes,
in the order of priority by subclass set forth in Section 3.09 hereof, an amount
equal to the Minimum Principal Payment Amount of the Class A Notes;
(vi) to the Note Accounts for each subclass of Class B Notes,
the Interest Amount on such subclass of Class B Notes in no order of priority
inter se, but pro rata according to the amount of accrued and unpaid interest on
such subclass of Class B Notes;
(vii) in no order of priority inter se, but PRO RATA, to any
Persons providing any Mezzanine Eligible Credit Facilities, any Credit Facility
Advance Obligations payable to such Persons under the terms of their respective
Mezzanine Eligible Credit Facilities and, to the extent any such Credit Facility
consists of a Cash Collateral Account, such amount so that the amount on deposit
in each such Account is equal to the Required Amount therefor;
(viii) to the Collections Account an amount so that the
Reserved Cash on deposit therein (after giving effect to the transfer under
clause (iv) above) is equal to the positive difference, if any, between (A) the
Mezzanine Note Blockage Amount and (B) the aggregate amounts available for
drawing under any Senior Eligible Credit Facilities and any Mezzanine Eligible
Credit Facilities (after giving effect to any transfers under clauses (iii) and
(vii) above);
(ix) to the Note Accounts for each subclass of Class B Notes,
in the order of priority by subclass set forth in Section 3.09 hereof, an amount
equal to the Minimum Principal Payment Amount of the Class B Notes;
(x) to the Note Accounts for each subclass of Class C Notes,
the Interest Amount on such subclass of Class C Notes in no order of priority
inter se, but pro rata according to the amount of accrued and unpaid interest on
such subclass of Class C Notes;
(xi) in no order of priority inter se, but PRO RATA, to any
Persons providing any Junior Eligible Credit Facilities, any Credit Facility
Advance Obligations payable to such Persons under the terms of their respective
Junior Eligible Credit Facilities and, to the extent any such Credit Facility
consists of a Cash Collateral Account, such amount so that the amount on deposit
in each such Account is equal to the Required Amount therefor;
(xii) to the Collections Account an amount so that the
Reserved Cash on deposit therein (after giving effect to the transfers clauses
(iv) and (viii) above) is equal to the positive difference, if any, between (A)
the Junior Note Blockage Amount less and (B) amounts available for drawing under
any Senior Eligible Credit Facilities, Mezzanine Eligible Credit Facilities or
Junior Eligible Credit Facilities (after giving effect to any transfers under
clauses (iii), (vii) and (xi) above);
(xiii) to the Note Accounts for each subclass of Class C
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Minimum Principal Amount of the Class C Notes;
(xiv) to the Note Accounts for each subclass of Class D Notes,
the Interest Amount on such subclass of Class D Notes in no order of priority
inter se, but pro rata according to the amount of accrued and unpaid interest on
such subclass of Class D Notes;
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(xv) in no order of priority inter se, but PRO RATA, to any
Persons providing any Subordinate Eligible Credit Facilities, any Credit
Facility Advance Obligations payable to such Persons under the terms of their
respective Subordinate Eligible Credit Facilities and, to the extent any such
Credit Facility consists of a Cash Collateral Account, such amount so that the
amount on deposit in each such account is equal to the Required Amount therefor;
(xvi) to the Collections Account an amount so that the
Reserved Cash on deposit therein (after giving effect to any transfer under
clauses (iv), (viii), and (xii) above) is equal to the positive difference, if
any, between (A) the aggregate Subordinate Note Blockage Amount and (B) amounts
available for drawing under Credit Facilities after giving effect to any
transfers under clauses (iii), (vii), (xi) and (xvii) above;
(xvii) to the Note Accounts for each subclass of Class D
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Minimum Principal Payment Amount of the Class D Notes;
(xviii) to the Expense Account, such amount as an accrual (the
"EXPENSE ACCRUAL") for Primary Expenses that are anticipated to become due and
payable during the period from and after the next succeeding Payment Date to the
fifth Payment Date thereafter for which the Administrative Agent reasonably
determines there should be an accrual.
(xix) to the Note Accounts for each subclass of Notes entitled
thereto, an amount equal to all accrued and unpaid Maturity Step-Up Interest,
Registration Step-Up Interest and Additional Interest, if any, in order of
seniority (by alphabetical designation) of each class and, as to the subclasses
of each class, in no order of priority inter se, but pro rata according to the
amount of such accrued and unpaid Maturity Step-Up Interest, Registration
Step-Up Interest and Additional Interest;
(xx) to the Note Accounts for each subclass of Class A Notes,
in the order of priority by subclass set forth in Section 3.09 hereof, an amount
equal to the Scheduled Principal Payment Amount of the Class A Notes;
(xxi) to the Note Accounts for each subclass of Class B Notes,
in the order of priority by subclass set forth in Section 3.09 hereof, an amount
equal to the Scheduled Principal Payment Amount of the Class B Notes;
(xxii) to the Note Accounts for each subclass of Class C
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Scheduled Principal Payment Amount of the Class C Notes;
(xxiii) to the Note Accounts for each subclass of Class D
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Scheduled Principal Payment Amount of the Class D Notes;
(xxiv) to the Owner Trustee's Account, the amount of any
unreimbursed Issuer Cure Amounts for distribution by the Owner Trustee in
accordance with the Trust Agreement;
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(xxv) to the Expense Account, such amount as an accrual (the
"OTHER ACCRUALS") in respect of any Modification Payments or Refinancing
Payments as the Administrative Agent shall determine;
(xxvi) to the Note Accounts for each subclass of Class A
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Outstanding Principal Balance of each such subclass;
(xxvii) to the Note Accounts for each subclass of Class B
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Outstanding Principal Balance of each such subclass;
(xxviii) to the Note Accounts for each subclass of Class C
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Outstanding Principal Balance of each such subclass;
(xxix) to the Note Accounts for each subclass of Class D
Notes, in the order of priority by subclass set forth in Section 3.09 hereof, an
amount equal to the Outstanding Principal Balance of each such subclass;
(xxx) payments to Swap Providers, pro rata inter se, which are
subordinated in accordance with the relevant Swap Agreement (the "SUBORDINATED
SWAP PAYMENTS");
(xxxi) to the Servicer, the Additional Servicer Amounts then
due; and
(xxxi) to the Owner Trustee Account for distribution by the
Owner Trustee under and in accordance with the Trust Agreement, all remaining
amounts.
For the avoidance of doubt, no transfer shall be made pursuant
to any clause of this Section 3.08(a) following clause (iv), (viii), (xii) or
(xv), respectively, except from the amount by which the Available Collections
exceeds the amount to be retained as Reserved Cash pursuant to such clause.
(b) Anything to the contrary contained in Section 3.08(a)
hereof notwithstanding, following delivery to the Issuer or the Administrative
Agent of a Default Notice or during the continuance of an Acceleration Default,
the allocation of payments described in Section 3.08(a) hereof shall not apply
and the Administrative Agent shall direct the Operating Bank in writing (such
direction to be communicated in computer file format or in such other form as
the Administrative Agent, the Operating Bank, the Trustee and the Security
Trustee agree, provided that, in the case of communication in computer file
format or any other form other than a written tangible form, a written tangible
form thereof shall promptly thereafter be sent to the Operating Bank) to cause
all amounts on deposit in the Collections Account and the Expense Account to be
applied in the following order of priority:
(i) to the Expense Account, an amount such that the amount on
deposit therein is equal to the Required Expense Amount;
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(ii) in no order of priority inter se, but pro rata, to any
Persons providing any Senior Eligible Credit Facilities, pro rata inter se, any
Credit Facility Advance Obligations payable to such Persons under the terms of
their respective Senior Credit Eligible Credit Facilities other than a Cash
Collateral Account;
(iii) in no order of priority inter se, but pro rata, (A) to
the Note Accounts for each subclass of Class A Notes, the Interest Amount on,
and the Outstanding Principal Balance of, such subclass of Class A Notes in no
order of priority inter se but pro rata according to the amount of the principal
of such subclass of Notes and (B) pro rata to any Swap Provider, such amounts as
are required to make any Senior Swap Payments due to such Swap Provider pursuant
to any Swap Agreement;
(iv) to the Note Accounts for the Holders of Class A Notes,
all Maturity Step-Up Interest, Registration Step-Up Interest and Additional
Interest, if any, pro rata according to the aggregate amount thereof accrued and
unpaid on such Notes;
(v) in no order of priority inter se, but pro rata, to any
Persons providing any Mezzanine Eligible Credit Facilities, pro rata inter se,
any Credit Facility Advance Obligations payable to such Persons under the terms
of their respective Secondary Credit Eligible Credit Facilities other than a
Cash Collateral Account;
(vi) to the Note Accounts for each subclass of Class B Notes,
all accrued and unpaid interest (including Maturity Step-Up Interest,
Registration Step-Up Interest and Additional Interest, if any) on, and the
Outstanding Principal Balance of, such subclass of Class B Notes, in no order of
priority inter se but pro rata according to the aggregate amount thereof with
respect to such Notes;
(vii) in no order of priority inter se, but pro rata, to any
Persons providing any Junior Eligible Credit Facilities, pro rata inter se, any
Credit Facility Advance Obligations payable to such Persons under the terms of
their respective Junior Eligible Credit Facilities other than a Cash Collateral
Account;
(viii) to the Note Accounts for each subclass of Class C
Notes, all accrued and unpaid interest (including Maturity Step-Up Interest,
Registration Step-Up Interest and Additional Interest, if any) on, and the
Outstanding Principal Balance of, such subclass of Class C Notes, in no order of
priority inter se but pro rata according to the aggregate amount thereof with
respect to such Notes;
(ix) in no order of priority inter se, but pro rata, to any
Persons providing any Subordinate Eligible Credit Facilities, pro rata inter se,
any Credit Facility Advance Obligations payable to such Persons under the terms
of their respective Subordinate Eligible Credit Facilities other than a Cash
Collateral Account;
(x) to the Note Accounts for each subclass of Class D Notes,
all accrued and unpaid interest (including Maturity Step-Up Interest,
Registration Step-Up Interest and Additional Interest, if any) on, and the
Outstanding Principal Balance of, such subclass of Class D Notes, in no order of
priority inter se but pro rata according to the aggregate amount thereof with
respect to such Notes;
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(xi) to any Swap Provider, pro rata inter se, such amounts as
are required to make any Subordinated Swap Payments due to such Swap Provider;
and
(xii) to the Owner Trustee Account for distribution by the
Owner Trustee under and in accordance with the Trust Agreement, all remaining
amounts.
Section 3.09 ALLOCATIONS OF PRINCIPAL PAYMENTS AMONG SUBCLASSES OF THE
NOTES. To the extent that any payment of principal pursuant to Section 3.08(a)
hereof is allocable to any class of Notes on any Payment Date, such payment will
be applied to repay all Notes in such class in the following order of priority:
(i) First, to each subclass, in order of the earliest issued subclass, the
difference, if positive, between the Outstanding Principal Balance of each such
subclass and the product of the applicable Extended Pool Factor on such Payment
Date and the initial principal balance of each such subclass (any such
difference, the "EXTENSION Amount"); provided that in the case of two or more
subclasses issued on the same date, the Available Collections will be applied to
each such subclass pro rata according to the amount of, but not to exceed, the
Extension Amount of such subclass; (ii) Second, to each subclass, in no order of
priority inter se, but pro rata according to the amount of, but not to exceed,
the difference, if positive, between the Outstanding Principal Balance of each
such subclass (after giving effect to any payment under clause (i) above) and
the product of the applicable Pool Factor on such Payment Date and the initial
principal balance of each such subclass; (iii) Third, to each subclass with an
Expected Final Payment Date on or before such Payment Date, in order of the
earliest issued subclass; provided that in the case of two or more subclasses
issued on the same date, the Available Collections will be applied to such
subclasses in order of the subclass with the earliest Expected Final Payment
Date and, with respect to any two or more subclasses having the same Expected
Final Payment Date, the Available Collections will be applied to such subclasses
pro rata according to the Outstanding Principal Balance of each such subclass
(after giving effect to any payment under clauses (i) and (ii) above) on such
Payment Date; (iv) Fourth, to each subclass with an Excess Amortization Date on
or before such Payment Date, in no order of priority inter se, but pro rata
according to the Outstanding Principal Balance of each such subclass (after
giving effect to any payment under clauses (i), (ii) and (iii) above) on such
Payment Date; and (v) Fifth, to each subclass in order of the earliest Expected
Final Payment Date, provided, in the case of two or more subclasses having the
same Expected Final Payment Date, in no order of priority inter se, but pro
rata, according to the Outstanding Principal Balance of each such subclass
(after giving effect to any payment under clauses (i), (ii), (iii) and (iv)
above) on such Payment Date.
Section 3.10 CERTAIN REDEMPTIONS; CERTAIN PREMIUMS. (a) OPTIONAL
REDEMPTION.
(i) Subject to the provisions of Section 3.10(c) hereof, on
any Payment Date the Issuer may elect to redeem (including in connection with
any Refinancing) any subclass of the Notes in whole or in part, out of amounts
available in the Defeasance/Redemption Account or, in the case of a Refinancing,
the Refinancing Account, for such purpose, if any, other than any funds
constituting part of the Available Collections, at the Redemption Price plus any
accrued and unpaid interest (after giving effect to any payment thereof on such
Redemption Date under Section 3.08 hereof) on the Notes to be redeemed to the
Redemption Date; provided that after the giving of a Default Notice or the
Acceleration of any Notes, the Notes may be redeemed only in whole but not in
part pursuant to this Section 3.10(a); and provided further that Written
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Notice of any such Redemption shall be given by the Issuer (or the
Administrative Agent on its behalf) to the Trustee and, for so long as any Notes
are listed on the Luxembourg Stock Exchange, to the Listing Agent and the
Luxembourg Stock Exchange not less than thirty days and not more than forty-five
days prior to such Redemption Date.
(ii) Subject to the provisions of Section 3.10(c) hereof, in
connection with a Leveraged Lease Transaction permitted under Section 5.02(e),
the Issuer may elect to redeem the Class D Notes in whole or in part, out of
amounts available in the Redemption Account for such purpose, if any, other than
any funds constituting part of the Available Collections, at the Redemption
Price plus any accrued and unpaid interest on the Notes to be redeemed to the
Redemption Date; provided that Written Notice of any such Redemption shall be
given by the Issuer (or the Administrative Agent on its behalf) to the Trustee
and, for so long as any Notes are listed on the Luxembourg Stock Exchange, to
the Listing Agent an the Luxembourg Stock Exchange not less than ten days and
not more than 30 days prior to such Redemption Date.
(b) REDEMPTION FOR TAXATION REASONS. Subject to the
provisions of Section 3.10(c) hereof, if, at any time,
(i) the Issuer is, or on the next succeeding Payment Date will
be, required to make any withholding or deduction under the laws or regulations
of any applicable tax authority with respect to any payment on any subclass of
Notes; or
(ii) the Issuer is or will be subject to any circumstance
(whether by reason of any law, regulation, regulatory requirement or
double-taxation convention, or the interpretation or application thereof, or
otherwise) that has resulted or will result in the imposition of a tax (whether
by direct assessment or by withholding at source) or other similar imposition by
any jurisdiction that would (A) materially increase the cost to the Issuer of
making payments in respect of any subclass of Notes or of complying with its
obligations under or in connection with the Notes; (B) materially increase the
operating or administrative expenses of the Issuer; or (C) otherwise obligate
the Issuer or any of its subsidiaries to make any material payment on, or
calculated by reference to, the amount of any sum received or receivable by the
Issuer, or by the Administrative Agent on behalf of the Issuer Group as
contemplated by the Administrative Agency Agreement;
then the Issuer shall inform the Trustee in writing at such time of any such
requirement or imposition and shall use its best efforts to avoid the effect of
the same; provided that no actions shall be taken by the Issuer to avoid such
effects without a Rating Agency Confirmation. If, after using its reasonable
best efforts to avoid the adverse effects described above, any Issuer Group
Member has not avoided such effects, the Issuer may, at its election, redeem the
Notes on any Payment Date, in whole, at the Outstanding Principal Balance
thereof plus accrued and unpaid interest (after giving effect to any payment
thereof on such Redemption Date under Section 3.08 hereof) thereon to such
Payment Date but without premium; provided, however, that any such Redemptions
may not occur more than 30 days prior to such time as the requirement or
imposition described in (i) or (ii) above is to become effective; and provided
further that Written Notice of any such Redemption shall be given by the Issuer
(or the Administrative Agent on its behalf) to the Trustee and, for so long as
any Notes are listed on the Luxembourg Stock Exchange, to the Listing Agent and
the Luxembourg Stock Exchange not less
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than thirty days and not more than forty-five business days prior to the
Redemption Date for such Redemption.
(c) METHOD OF REDEMPTION. Upon receipt of notice from the
Issuer or the Administrative Agent under Section 3.10(a) or 3.10(b) hereof, the
Trustee shall give Written Notice in respect of any such redemption of any
subclass of Notes under Section 3.10(a) or 3.10(b) hereof (a "REDEMPTION") to
each Holder of Notes, at least 20 days before the Redemption Date for such
Redemption. Except in the case of a Refinancing, the Trustee shall not deliver
any notice under this Section 3.10(c) unless and until the Trustee shall have
received certification that all conditions precedent to such Redemption have
been satisfied and evidence satisfactory to it that the amounts required to be
deposited pursuant to Section 3.10(d) hereof are, or will on or before the
Redemption Date be, deposited in the Defeasance/Redemption Account. Each notice
in respect of a Redemption given pursuant to this Section 3.10(c) shall state
(i) the applicable Redemption Date, (ii) the Trustee's arrangements for making
payments in respect of such Redemption, (iii) the Redemption Price or the
Outstanding Principal Balance of each subclass of Notes to be redeemed, (iv) in
the case of a Redemption of the Notes of any subclass in whole, that Notes of
each subclass to be redeemed must be surrendered to the Trustee to collect the
Redemption Price plus accrued and unpaid interest on such Notes and (v) in the
case of a Redemption of the Notes of any subclass in whole, that, unless the
Issuer defaults in the payment of the Redemption Price and any accrued and
unpaid interest thereon, interest on the subclass of Notes called for Redemption
shall cease to accrue on and after the Redemption Date.
(d) DEPOSIT OF REDEMPTION AMOUNT. On or before 10:00 a.m. (New
York City time) on the twentieth day preceding any Redemption Date in respect of
a Redemption under Section 3.10(a) hereof, the Issuer shall, to the extent an
amount equal to the Redemption Price of Notes to be redeemed and all accrued and
unpaid interest and accrued and unpaid Sale Premium (after giving effect to any
payment thereof on such Redemption Date under Section 3.08 hereof) as of the
Redemption Date is not then held on deposit therein, deposit or cause to be
deposited in the Defeasance/Redemption Account or, in the case of a Refinancing,
the Refinancing Account, an amount in immediately available funds equal to such
amount. On or before 10:00 a.m. (New York City time) on the twentieth day
preceding any Redemption Date in respect of a Redemption under Section 3.10(b)
hereof, the Issuer shall, to the extent an amount equal to the Outstanding
Principal Balance of Notes to be redeemed and all accrued and unpaid interest
and accrued and unpaid Sale Premium (after giving effect to any payment thereof
on such Redemption Date under Section 3.08 hereof) as of the Redemption Date is
not then held on deposit therein, deposit or cause to be deposited in the
Defeasance/Redemption Account or, in case of a Refinancing, the Refinancing
Account, an amount in immediately available funds equal to such amount.
(e) NOTES PAYABLE ON REDEMPTION DATE. After notice has been
given under Section 3.10(c) hereof, the Outstanding Principal Balance of the
Notes to be redeemed on such Redemption Date shall become due and payable at the
Corporate Trust Office of the Trustee, and from and after such Redemption Date
(unless there shall be a default in the payment of the applicable amount to be
redeemed) such principal amount shall cease to bear interest. Upon surrender of
any Note for redemption in accordance with such notice, the Redemption Price or
the Outstanding Principal Balance (as applicable) of such Note, together with
accrued and unpaid interest on such Note shall be paid as provided for in this
Section 3.10. If any Note to be redeemed shall not be so paid upon surrender
thereof for redemption, the amount in respect
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thereof shall continue to bear interest until paid from the Redemption Date at
the interest rate applicable to such Note.
Section 3.11 ADJUSTMENT OF CERTAIN PERCENTAGES, FACTORS AND BALANCES.
Upon each acquisition of any Additional Aircraft or the issuance of any
Refinancing Notes, subject to Sections 5.02(f) and 5.02(h) hereof (as
applicable), the Class Percentages for any class of Notes and related Pool
Factors and Extended Pool Factors for any subclass of Notes may be adjusted to
take into account such Permitted Additional Aircraft Acquisition or the issuance
of such Refinancing Notes in the manner specified in the Controlling Trustees'
Resolution providing for such action; provided, that no Pool Factor or Extended
Pool Factor for any subclass of Notes may be adjusted so as to change the
original Average Life of the affected subclass of Notes or alter the rate at
which such subclass of Notes was originally scheduled to amortize. The
Administrative Agent shall include such adjusted Class Percentages, Pool
Factors, Extended Pool Factors and Target Principal Balances in each Quarterly
Report and Annual Report.
Section 3.12 CREDIT FACILITIES. Notwithstanding Section 3.08 hereof,
Article X hereof, or anything else to the contrary contained in the Indenture or
the Security Trust Agreement, all amounts available in any Cash Collateral
Account or drawn against any other Credit Facility shall be paid to Holders of
the subclass of Notes (and holders of other obligations) for whose benefit such
Credit Facility is stated to be established except to the extent otherwise
provided in the Controlling Trustees' Resolutions providing for such Credit
Facility.
Section 3.13 ISSUER CURE AMOUNT. In the event that the amounts
available for distribution under Section 3.08 hereof and from any Credit
Facility are insufficient to pay in full the interest due on any class of Notes
on any Payment Date, the Issuer may, out of funds provided to it by one or more
Certificateholders (and not out of any amounts in the Collections Account or any
other Account or any other Collateral), pay such shortfall with respect to such
class of Notes on such Payment Date by giving Written Notice of its intention to
do so (specifying the amount thereof) to the Administrative Agent and the
Trustee at least one Business Day prior to such Payment Date by transferring
funds in such amount (the "ISSUER CURE AMOUNTS") to the Trustee on such Payment
Date for deposit into the applicable Note Account. All Issuer Cure Amounts so
deposited shall be paid out of such Note Account to the relevant Holders
notwithstanding Section 3.08 hereof, Article X hereof or anything else to the
contrary contained in this Indenture or the Security Trust Agreement.
Section 3.14 BRIDGE NOTES. Notwithstanding anything to the contrary
herein, the terms and provisions of Sections 3.01 through and including Section
3.13 shall only apply as and with effect from the Effective Time. Prior to the
Effective Time and as with respect to the Bridge Notes, the following shall
apply:
(a) BRIDGE NOTE ACCOUNT. Upon the execution and delivery of
this Indenture, the Trustee shall direct the Operating Bank to establish and
maintain on its books and records in the name of the Security Trustee, a Bridge
Note Account. The Bridge Note Account shall be established and maintained as an
Eligible Account in accordance with the Security Trust Agreement so as to
create, perfect and establish the priority of the security interest of the
Security Trustee in such Account and all cash, Investments and other property
therein under the Security Trust Agreement. Prior to the Effective Time, all
Collections shall be, when received,
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deposited in the Bridge Note Account. For so long as any Bridge Notes remain
outstanding, the Trustee shall, or shall direct the Operating Bank in writing
to, invest and reinvest, at the written direction of the Holders of the Bridge
Notes, the funds on deposit in the Bridge Note Account in Permitted Account
Investments.
(b) AIRCRAFT PURCHASE AND RENTALS. Proceeds from the issuance
of the Bridge Notes shall be placed in the Bridge Note Account and prior to the
Effective Time, the Trustee shall direct the Operating Bank to use such proceeds
to directly pay the Sellers in accordance with Section 4.2, 5.1 and 5.2 of the
Asset Purchase Agreement. Prior to the Effective Time, all Rental Payments and
other amounts received pursuant to any Related Collateral Document shall be
deposited in the Bridge Note Account.
(c) DISTRIBUTION. Except as provided in Section 3.14(e)
hereof, on each Payment Date occurring prior to the Effective Time, the
Operating Bank shall distribute any funds in the Bridge Note Account in the
following order of priority: (i) FIRST, for the payment of any fees, costs or
expenses Incurred by the Bridge Note Issuer in the course of activities
permitted under Section 5.02(e) hereof, including without limitation, any fees,
expenses and indemnification amounts of, or owing to, the Trustee, the Operating
Bank and the Servicer; (ii) SECOND, so much of such payment as shall be required
to pay in full the aggregate amount of the payment of principal, the Bridge
Break Amount, if any, and interest then due in respect in respect of the Bridge
Notes shall be distributed to the Holders of the Bridge Notes ratably, without
priority of one Bridge Note over another, in the proportion that the amount of
the payments then due under the Bridge Notes bears to the aggregate amount of
the payments then due under all such Bridge Notes; and (iii) THIRD, the balance,
if any, to the Bridge Note Issuer.
(d) TOTAL LOSS PROCEEDS. Any Total Loss Proceeds received by
the Trustee shall be applied towards the prepayment of the Bridge Notes and
distributed in the manner and in the priority as set forth in Section 3.14(e)
hereof.
(e) ACCELERATION. Anything to the contrary contained in
Section 3.14(c) hereof notwithstanding, following delivery to the Bridge Note
Issuer of a Default Notice or during the continuance of an Acceleration Default,
the allocation of payments described in Section 3.14(c) hereof shall not apply
and the Operating Bank shall distribute amounts on deposit in the Bridge Note
Account in the following order to priority: (i) FIRST, for the payment of any
fees, expenses and indemnification amounts of, or owing to, the Trustee, the
Operating Bank and the Servicer; (ii) SECOND, so much of such payment as shall
be required to pay in full the aggregate unpaid principal amount of the Bridge
Notes, plus the Bridge Break Amount, if any, and all accrued but unpaid interest
thereon to the date of distribution and all amounts due hereunder and under the
Bridge Notes and if the aggregate amount shall be insufficient to pay all
amounts in full as aforesaid, then they shall be distributed to the Holders of
the Bridge Notes ratably, without priority of one Bridge Note over another, in
the proportion that the amount of the payments due under the Bridge Notes bears
to the aggregate amount of the payments due under all such Bridge Notes; and
(iii) THIRD, the balance, if any, to the Bridge Note Issuer.
(f) EFFECTIVE TIME. Upon the occurrence of the Effective Time
and confirmation by the Escrow Agent that proceeds from the issuance of the
Initial Securities have
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been deposited into the Escrow Account and that the Escrow Agent has received
from the Holders of the Bridge Notes the Bridge Notes surrendered for
cancellation, the Trustee shall pay the Bridge Notes in full in accordance with
Section 3.03 hereof.
(g) CANCELLATION AND DISCHARGE. Upon surrender of the Bridge
Notes to the Escrow Agent for cancellation and the payment in full of the Bridge
Notes in accordance with Section 3.03 hereof, no Holder of a Bridge Note shall,
as such, have any further interest hereunder or under any Related Document.
ARTICLE IV
DEFAULT AND REMEDIES
Section 4.01 EVENTS OF DEFAULT. Each of the following events shall
constitute an "Event of Default" hereunder with respect to any subclass of
Notes, and each such Event of Default shall be deemed to exist and continue so
long as, but only so long as, it shall not have been remedied:
(a) failure to pay when due interest (other than any Maturity
Step-Up Interest, Registration Step-Up Interest or Additional Interest) on any
Note of such subclass, and the continuance of such default unremedied for a
period of five Business Days after the same shall have become due and payable;
(b) failure to pay when due principal of any Note of such
subclass on or prior to the applicable Final Maturity Date;
(c) failure to pay any amount (other than interest) when due
and payable in connection with any Note of such subclass, to the extent that
there are, on any Payment Date, amounts available for such payment in the
Collections Account (or in the case of the Bridge Notes, the Bridge Note
Account) or Cash Collateral Account, and the continuance of such default for a
period of five or more Business Days after such Payment Date;
(d) failure by the Issuer to comply with any of the covenants,
obligations, conditions or provisions binding on it under this Indenture or any
of the Notes (other than a payment default for which provision is made in clause
(a), (b) or (c) of this Section 4.01), if such failure or such breach materially
adversely affects the Holders of such subclass of Notes and continues for a
period of 30 days (or, if such failure or breach is capable of remedy within 90
days of the date of the written notice referred to below and the Administrative
Agent has promptly provided the Trustee with a certificate stating that the
Issuer has commenced, or will promptly commence, and diligently pursue all
reasonable efforts to remedy such failure or breach, so long as the Issuer or
any Issuer Subsidiary is diligently pursuing such remedy but in any event no
longer than 90 days) after written notice thereof has been given to the Issuer
by the Controlling Party or by the Holders of at least 25% of the aggregate
Outstanding Principal Balance of the Notes of the Senior Class;
(e) a court having jurisdiction in the premises enters a
decree or order for (i) relief in respect of the Issuer or any Significant
Subsidiary of the Issuer under any Applicable Law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization,
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examination, relief of debtors or other similar law now or hereafter in effect;
(ii) appointment of a receiver, liquidator, examiner, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or any Significant
Subsidiary of the Issuer; or (iii) the winding up or liquidation of the affairs
of the Issuer or any Significant Subsidiary of the Issuer and, in each case,
such decree or order shall remain unstayed or such writ or other process shall
not have been stayed or dismissed within 90 days from entry thereof;
(f) the Issuer or any Significant Subsidiary of the Issuer (i)
commences a voluntary case under any Applicable Law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization, examination,
relief of debtors or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in any involuntary case under any such law;
(ii) consents to the appointment of or taking possession by a receiver,
liquidator, examiner, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or any Significant Subsidiary of the Issuer or for all or
substantially all of the property and assets of the Issuer or any Significant
Subsidiary of the Issuer; or (iii) effects any general assignment for the
benefit of creditors;
(g) a judgment or order for the payment of money in excess of
5% of the aggregate Adjusted Portfolio Value shall be rendered against the
Issuer or any Issuer Subsidiary or any other member of the Issuer Group and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however, that
any such judgment or order shall not be an Event of Default under this Section
4.01(g) if and for so long as (i) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and the
insurer covering payment thereof and (ii) such insurer, which shall be rated at
least "A" by A.M. Best Company or any similar successor entity, has been
notified of, and has not disputed the claim made for payment of, the amount of
such judgment or order; or
(h) the constitutional documents creating the Issuer cease to
be in full force and effect without replacement documents having the same terms
being in full force and effect.
Section 4.02 ACCELERATION, RESCISSION AND ANNULMENT. (a) If an Event of
Default with respect to the Senior Class (other than an Event of Default under
clause (e) or (f) of Section 4.01 hereof) occurs and is continuing, the
Controlling Party may, and (if the Controlling Party is the Senior Trustee) upon
the written direction of Holders of at least 25% of the aggregate Outstanding
Principal Balance of the Senior Class, shall, give a Default Notice to the
Issuer, the Administrative Agent, the Security Trustee and the Trustee declaring
the Outstanding Principal Balance of the Notes and all accrued and unpaid
interest thereon to be due and payable. Upon delivery of a Default Notice, such
Outstanding Principal Balance and all accrued and unpaid interest thereon shall
be due and payable. At any time after the Controlling Party has declared the
Outstanding Principal Balance of the Notes to be due and payable and prior to
the exercise of any other remedies pursuant to this Article IV, the Controlling
Party may (and if the Controlling Party is the Senior Trustee, upon the written
direction of Holders of a majority of the aggregate Outstanding Principal
Balance of the Senior Class, shall) by Written Notice to the Issuer, the Senior
Trustee (if not the Controlling Party), the Administrative Agent, the Security
Trustee and the Trustee, subject to Section 4.05(a) hereof, rescind and annul
such declaration and thereby
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annul its consequences if: (i) there has been paid to or deposited with the
Senior Trustee an amount sufficient to pay all overdue installments of interest
on the Notes, and the principal or Redemption Price of the Notes that would have
become due otherwise than by such declaration of acceleration, (ii) the
rescission would not conflict with any judgment or decree and (iii) all other
Defaults and Events of Default, other than nonpayment of interest and principal
on the Notes that have become due solely because of such acceleration, have been
cured or waived. If an Event of Default under clause (e) or (f) of Section 4.01
hereof occurs, the Outstanding Principal Balance of the Notes and all accrued
and unpaid interest thereon shall automatically become due and payable without
any further action by any party.
(b) Notwithstanding Sections 4.02 and 4.03 hereof, after the
occurrence and during the continuation of an Event of Default, no Holders of any
class of Notes other than the Senior Class may give or direct the giving of a
Default Notice or exercise or direct the exercise of any remedy in respect of
such Event of Default, and no Person other than the Controlling Party may give a
Default Notice or exercise any such remedy.
(c) The Trustee shall provide each Rating Agency with a copy
of any Default Notice it receives pursuant to this Indenture.
Section 4.03 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Senior Trustee (at the direction of the Controlling Party if it
is not the Controlling Party) may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal or Redemption Price of,
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Senior Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
Section 4.04 LIMITATION ON SUITS. Without limiting the provisions of
Section 4.09 hereof and the final sentence of Section 12.04 hereof, no Holder
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, the Security Trust Agreement or the Notes, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder holds Notes of the Senior Class and has
previously given written notice to the Senior Trustee of a continuing Event of
Default;
(b) the Holders of a majority the aggregate Outstanding
Principal Balance of the Senior Class make a written request to the Senior
Trustee to pursue a remedy hereunder;
(c) such Holder or Holders offer to the Senior Trustee an
indemnity reasonably satisfactory to the Senior Trustee against any costs,
expenses and liabilities to be Incurred in complying with such request;
(d) the Senior Trustee does not comply with such request
within 60 days after receipt of the request and the offer of indemnity;
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(e) during such 60-day period, Holders of a majority of the
Outstanding Principal Balance of the Senior Class do not give the Senior Trustee
a revocation or direction inconsistent with such request; and
(f) the provider of any Senior Eligible Credit Facility shall
not have elected to become the Controlling Party.
No one or more Holders may use this Indenture to affect,
disturb or prejudice the rights of another Holder or to obtain or seek to obtain
any preference or priority not otherwise created by this Indenture and the terms
of the Notes over any other Holder or to enforce any right under this Indenture,
except in the manner herein provided.
Section 4.05 WAIVER OF EXISTING DEFAULTS. (a) The Controlling Party or
(if the Controlling Party is the Senior Trustee) a majority of the Outstanding
Principal Balance of the Senior Class by notice to the Senior Trustee may waive
any existing Default hereunder and its consequences, except a Default: (i) in
the deposit or distribution of any payment required to be made on any Notes,
(ii) in the payment of the interest on, principal of or premium, if any, with
respect to any Note or (iii) in respect of a covenant or provision hereof which
under Article IX hereof cannot be modified or amended without the consent of the
Holder of each Note affected thereby. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture, but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon. Each such notice of waiver shall also be given to each Rating Agency.
(b) Any written waiver of a Default or an Event of Default
given by Holders to the Trustee and the Issuer in accordance with the terms of
this Indenture shall be binding upon the Trustee and the other parties hereto.
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence which gave rise to the
Default or Event of Default so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.
Section 4.06 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder of Notes of the Senior Class has instituted any proceeding to enforce any
right or remedy under this Indenture, and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
such Holder, then in every such case the Issuer, the Trustee and the Holders
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding has been instituted.
Section 4.07 REMEDIES CUMULATIVE. Each and every right, power and
remedy herein given to the Trustee (or the Controlling Party) specifically or
otherwise in this Indenture shall be cumulative and shall be in addition to
every other right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Trustee (or the Controlling Party), and the exercise or the
beginning of the exercise of any power or remedy
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shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any other right, power or remedy. No delay or omission by the
Trustee (or the Controlling Party) in the exercise of any right, remedy or power
or in the pursuance of any remedy shall impair any such right, power or remedy
or be construed to be a waiver of any Default on the part of the Issuer or to be
an acquiescence therein.
Section 4.08 AUTHORITY OF COURTS NOT REQUIRED. The parties hereto agree
that, to the greatest extent permitted by law, the Trustee shall not be obliged
or required to seek or obtain the authority of, or any judgment or order of, the
courts of any jurisdiction in order to exercise any of its rights, powers and
remedies under this Indenture, and the parties hereby waive any such requirement
to the greatest extent permitted by law.
Section 4.09 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal or Redemption Price of, or Interest on its Note on or after the
respective due dates therefor expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 4.10 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of any Holder allowed
in any judicial proceedings relating to any Issuer on the Notes, its creditors
or its property.
Section 4.11 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder by its acceptance thereof shall be deemed to have agreed,
that in any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defense made by the party litigant. This Section
4.11 does not apply to a suit instituted by the Trustee, a suit instituted by
any Holder for the enforcement of the payment of principal or Redemption Price
of, or interest on its Note on or after the respective due dates expressed in
such Note, or a suit by a Holder or Holders of more than 10% of the Outstanding
Principal Balance of any class or subclass of the Notes.
Section 4.12 CONTROL BY HOLDERS. Subject to Sections 4.02 and 4.04
hereof and to the rights of the Controlling Party hereunder, the Holders holding
Notes of any class or subclass of not less than a majority of the Outstanding
Principal Balance of Notes of such class or subclass shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee for such class under this Indenture; provided that, for such class (a)
such direction shall not be in conflict with any rule of law or with this
Indenture and would not involve the Trustee in personal liability or expense;
and (b) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01 REPRESENTATIONS AND WARRANTIES. The Issuer represents and
warrants to the Trustee as follows:
(a) DUE ORGANIZATION. The Issuer is a business trust duly
created under the laws of Delaware, and each Issuer Subsidiary is a business
trust duly created, a limited liability company duly formed or a corporation
duly incorporated in its respective jurisdiction of incorporation, in each case
with full power and authority to conduct its business; and none of the Issuer or
any Issuer Subsidiary is in liquidation, bankruptcy or suspension of payments.
(b) SPECIAL PURPOSE STATUS. The Issuer has not engaged in any
activities since its organization (other than those incidental to its
organization and other appropriate trust steps and arrangements for the payment
of fees to, and director's and officer's insurance for, the Controlling
Trustees, the authorization and the issuance of the Bridge Notes, the Initial
Securities, the execution of the Related Documents to which it is a party and
the activities referred to in or contemplated by such agreements), and the
Issuer has not paid any dividends or other distributions since its organization.
(c) NON-CONTRAVENTION. The purchase of the Bridge Note Issuer
pursuant to the Beneficial Interest Purchase Agreement, the purchase of the
Initial Aircraft and interests in the Initial Leases pursuant to the Asset
Purchase Agreement, the creation of the Initial Securities, the issuance,
execution and delivery by the Issuer of, and the compliance by the Issuer with
the terms of the Bridge Notes and the Initial Securities, and the execution and
delivery by each Issuer Group Member of, and compliance by it with the terms of
each of the Related Documents to which it is a party:
(i) do not and will not at the Initial Closing Date or any
Payment Date conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, the constitutional documents of
the Issuer or the constituent documents of any Issuer Subsidiary or with any
existing law, rule or regulation applying to or affecting the Issuer or any
Issuer Subsidiary or any judgment, order or decree of any government,
governmental body or court having jurisdiction over the Issuer or any Issuer
Subsidiary; and
(ii) do not and will not at the Initial Closing Date or any
Payment Date constitute a default under, any deed, indenture, agreement or other
instrument or obligation to which the Issuer or any Issuer Subsidiary is a party
or by which any of them or any part of their undertaking, assets, property or
revenues are bound.
(d) DUE AUTHORIZATION. The purchase of the Bridge Note Issuer,
the purchase of the Initial Aircraft and interests in the Initial Lease, the
creation, execution and issuance of the Bridge Notes and the Initial Securities,
the execution and issue or delivery by the Issuer and each Issuer Subsidiary of
the Related Documents executed by it and the performance by each of them of
their obligations hereunder and thereunder and the arrangements contemplated
hereby and thereby to be performed by each of them have been duly authorized by
each of them.
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(e) VALIDITY AND ENFORCEABILITY. This Indenture constitutes,
and the Related Documents to which it is a party, when executed and delivered
and, in the case of the Initial Notes, when issued and authenticated, will
constitute valid, legally binding and (subject to general equitable principles,
insolvency, liquidation, reorganization and other laws of general application
relating to creditors' rights or claims or to laws of prescription or the
concepts of materiality, reasonableness, good faith and fair dealing)
enforceable obligations of the Issuer and each Issuer Subsidiary executing the
same. The Initial Certificates, when issued under the Trust Agreement, will
constitute validly issued interests to the trust estate under the Trust
Agreement.
(f) NO DEFAULTS. There exists no Event of Default nor any
event which, had the Initial Notes already been issued, would constitute a
Default or an Event of Default.
(g) NO ENCUMBRANCES. Subject to the Security Interests created
in favor of the Security Trustee and except for Permitted Encumbrances, there
exists no Encumbrance over the assets or undertaking of the Issuer or any Issuer
Subsidiary which ranks prior to or pari passu with the obligation to make
payments on the Bridge Notes and the Initial Notes.
(h) NO CONSENTS. All consents, approvals, authorizations or
other orders of all regulatory authorities required (excluding any required by
the other parties to the Related Documents) for or in connection with the
execution and performance of the Related Documents by the Issuer and each Issuer
Subsidiary and the issue and performance of the Bridge Notes and the Initial
Securities and the offering of the Bridge Notes and the Initial Securities by
the Issuer has been obtained and are in full force and effect and not contingent
upon fulfillment of any condition.
(i) NO LITIGATION. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Issuer, threatened
against or affecting, the Issuer or any Issuer Subsidiary before any court or
arbitrator or any governmental body, agency or official which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Indenture (including the Exhibits and
Schedules attached hereto) and the Related Documents.
(j) EMPLOYEES, SUBSIDIARIES. The Issuer and each Issuer
Subsidiary have no employees. Set forth in Schedule 2 hereto is a true and
complete list, as of the date hereof, of all Issuer Subsidiaries, together with
their jurisdictions of organization.
(k) OWNERSHIP. The Issuer or an Issuer Subsidiary is the
beneficial owner of the Pledged Stock, the Pledged Debt, the Pledged Beneficial
Interest and the Non-Trustee Accounts, free from all Encumbrances and claims
whatsoever other than Permitted Encumbrances.
(l) NO FILINGS. Under the laws of the States of Delaware and
New York and the Federal laws of the United States of America in force at the
date hereof, it is not necessary or desirable that this Indenture or any Related
Document to which an Issuer Subsidiary is a party (other than evidences of the
Security Interests) be filed, recorded or enrolled (other than the filing of the
Trust Agreement in Delaware) with any court or other authority in any such
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jurisdictions or that any stamp, registration or similar tax be paid on or in
relation to this Indenture or any of the other Related Documents.
(m) OWNERSHIP LIMITATION. For United States federal income tax
purposes, the Issuer is a "partnership" within the meaning of Section 7701(a)(2)
of the Code and each partner in the Issuer is a "United States person" within
the meaning of Section 7701(a)(30) of the Code. Determined as if the
"anti-avoidance" rule of United States Treasury Regulation 1.7704-1(h)(3) or any
successor provision applied, there are not more than ten (10) partners for tax
purposes in the Issuer.
(n) OTHER REPRESENTATIONS. The representations and warranties
made by the Issuer and each Issuer Subsidiary in any of the other Related
Documents are true and accurate.
Section 5.02 GENERAL COVENANTS. The Issuer covenants with the Trustee
as follows:
(a) NO RELEASE OF OBLIGATIONS. The Issuer shall not take, or
knowingly permit any Issuer Subsidiary to take, any action which would amend,
terminate (other than any termination in connection with the replacement of such
agreement with an agreement on terms substantially no less favorable to the
Issuer Group than the agreement being terminated) or discharge or prejudice the
validity or effectiveness of this Indenture (other than as permitted herein),
the Security Trust Agreement, the Asset Purchase Agreement, the Administrative
Agency Agreement, the Financial Advisory Agreement, the Capital Markets Advisory
Agreement, the Registration Rights Agreement or the Servicing Agreement or
permit any party to any such document to be released from such obligations,
except, in each case, as permitted or contemplated by the terms of such
document, and provided that such actions may be taken or permitted, and such
releases may be permitted, if the Issuer shall have first obtained an
authorizing resolution of the Controlling Trustees determining that such action,
permitted action or release does not materially adversely affect the interests
of the Holders and having given notice thereof to the Rating Agencies; and
provided further that, in any case (i) the Issuer shall not take any action
which would result in any amendment or modification to the conflicts standard or
duty of care in such agreements and (ii) there must be at all times, after the
Effective Time, an administrative agent with respect to the Issuer Group
Services (as defined in the Administrative Agency Agreement), a financial
advisor and a servicer (provided that, if the Servicer terminates the Servicing
Agreement pursuant to Section 10.02(a) thereof, this Section 5.02(a) shall not
be violated if the Issuer uses its best efforts to obtain a successor servicer).
(b) LIMITATION ON ENCUMBRANCES. The Issuer shall not, and
shall not permit any Issuer Subsidiary to, create, Incur, assume or suffer to
exist any mortgage, pledge, lien, encumbrance, charge or security interest (in
each case, an "ENCUMBRANCE"), including, without limitation, any conditional
sale, any sale with recourse against the Seller or any Affiliate of the Seller,
or any agreement to give any security interest over or with respect to any of
the Issuer's or any Issuer Subsidiary's 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
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("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 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), (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,
(v) any Encumbrance in connection with any transfer of title to or Lease of an
Aircraft (A) to or in favor of a trust or an entity for the purpose of the
registering the Aircraft under the laws of an applicable jurisdiction so long
as, however, the Issuer or any Issuer Subsidiary retains the beneficial or
economic ownership of the Aircraft or (B) from such trust or entity to the
Issuer or an Issuer Subsidiary and (vi) any lien created in favor of the issuer
of a surety bond, letter of credit or similar instrument to be obtained by the
Issuer or any Issuer Subsidiary in connection with the repossession of an
Aircraft or other enforcement action under a Lease.
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.
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(c) LIMITATION ON RESTRICTED PAYMENTS. The Issuer shall not,
and shall not permit any Issuer Subsidiary to (i) declare or pay any dividend or
make any distribution on its Ownership Interest held by Persons other than the
Issuer or any Issuer Subsidiary; provided that the Issuer may, subject to the
provisions set forth in Article III hereof, make the payments to or for the
account of the Certificateholders provided for therein; (ii) purchase, redeem,
retire or otherwise acquire for value any shares of Ownership Interest of the
Issuer or any Issuer Subsidiary held by or on behalf of Persons other than the
Issuer or any Issuer Subsidiary other than as provided in Sections 2.11 and
5.02(l)(ii)(B) hereof; (iii) make any payment of principal, interest or premium,
if any, on the Notes or make any voluntary or optional repurchase, defeasance or
other acquisition or retirement for value of Indebtedness of the Issuer or such
Issuer Subsidiary that is not owed to the Issuer or such Issuer Subsidiary other
than in accordance with Articles II, III and XI hereof; provided that the Issuer
or any of its Affiliates may repurchase, defease or otherwise acquire or retire
any of the Notes other than from the Available Collections so long as any new
notes of the Issuer issued in connection with such transaction rank pari passu
with the Notes being repurchased, defeased, acquired or retired and the
Controlling Trustees shall determine that such action does not materially
adversely affect the Holders and shall have obtained a Rating Agency
Confirmation or (iv) make any Investments (other than Permitted Account
Investments, Allowed Restructurings, Investments permitted under Section 5.02(e)
hereof and Investments in any Issuer Group Member pursuant to the Asset Purchase
Agreement or a Permitted Additional Aircraft Acquisition; provided that written
notification of the organization or acquisition of each such Issuer Group Member
shall have been given to each Rating Agency).
The term "Investment" for purposes of the above restriction
means any loan or advance to a Person, any purchase or other acquisition of any
beneficial interest, capital stock, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such Person or any
other Investment in such Person. For the avoidance of doubt, "Investment" shall
not include any obligation of a purchaser of an Aircraft to make deferred or
installment payments pursuant to any Aircraft Agreement specified in (iii) or
(iv) of the second paragraph of Section 5.02(g) hereof so long as the Issuer
Group retains a security interest in the relevant Aircraft until all such
obligations are discharged.
(d) LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS.
The Issuer shall not, and shall not permit any Issuer Subsidiary to, create or
otherwise suffer to exist any consensual encumbrance or restriction of any kind
on the ability of any Issuer Subsidiary to (i) declare or pay dividends or make
any other distributions permitted by Applicable Law, or purchase, redeem or
otherwise acquire for value, the Ownership Interest of the Issuer or such Issuer
Subsidiary, as the case may be; (ii) pay any Indebtedness owed to the Issuer or
such Issuer Subsidiary; (iii) make loans or advances to the Issuer or such
Issuer Subsidiary; or (iv) transfer any of its property or assets to the Issuer
or any other Issuer Subsidiary.
The foregoing provisions shall not restrict any consensual
encumbrances or other restrictions: (i) existing on the Initial Closing Date or,
in the case of any Aircraft, the date of acquisition of such Aircraft, under any
Related Document, and any amendments, extensions, refinancings, renewals or
replacements of such documents; provided that such consensual
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encumbrances and restrictions in any such amendments, extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those previously in effect and being amended, extended, refinanced,
renewed or replaced; or (ii) in the case of clause (iv) of the preceding
paragraph, (A) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset or (B) existing by virtue of any transfer
of, agreement to transfer, option or right with respect to, or consensual
encumbrance on, any property or assets of the Issuer or any Issuer Subsidiary
not otherwise prohibited by this Indenture. Nothing contained in this covenant
shall prevent the Issuer or any Issuer Subsidiary from creating, Incurring,
assuming or suffering to exist any Encumbrances not otherwise prohibited under
this Indenture.
(e) LIMITATION ON ENGAGING IN BUSINESS ACTIVITIES. The Issuer
shall not, and shall not permit any Issuer Subsidiary to, engage in any business
or activity other than:
(i) purchasing or otherwise acquiring (subject to Section
5.02(h) hereof), owning, holding, converting, maintaining, modifying, managing,
operating, leasing, re-leasing and, subject to the limitations set forth in
Section 5.02(g) hereof, selling or otherwise disposing of the Aircraft and
entering into all contracts and engaging in all related activities incidental
thereto, including from time to time accepting, exchanging, holding or
permitting any Issuer Subsidiary to accept, exchange, sell or hold promissory
notes, contingent payment obligations or equity interests, of Lessees or their
Affiliates issued in connection with the bankruptcy, reorganization or other
similar process, or in settlement of delinquent obligations or obligations
anticipated to be delinquent, of such Lessees or their respective Affiliates in
the ordinary course of business (an "ALLOWED RESTRUCTURING");
(ii) providing loans to, guaranteeing or otherwise supporting
the obligations and liabilities of any Issuer Group Member, in each case on such
terms and in such manner as the Controlling Trustees see fit and (whether or not
the Issuer or any Issuer Subsidiary derives a benefit therefrom) so long as such
loans, guarantees or other supports are provided in connection with the purposes
set forth in clause (i) of this Section 5.02(e); provided that written
notification shall have been given to each Rating Agency of such loan, guarantee
or other support;
(iii) financing or refinancing the business activities
described in clause (i) of this covenant through the offer, sale and issuance of
any securities of the Issuer upon such terms and conditions as the Controlling
Trustees see fit, for cash or in payment or in partial payment for any property
purchased or otherwise acquired by any Issuer Group Member;
(iv) engaging in currency and interest rate exchange
transactions for the purposes of avoiding, reducing, minimizing, hedging against
or otherwise managing the risk of any loss, cost, expense or liability arising,
or which may arise, directly or indirectly, from any change or changes in any
interest rate or currency exchange rate or in the price or value of any of the
Issuer's or any Issuer Subsidiary's property or assets, within limits and with
providers specified by the Controlling Trustees' Resolution providing therefor
from time to time and submitted to the Rating Agencies, including dealings,
whether involving purchases, sales or otherwise, in foreign currency, spot and
forward interest rate exchange contracts, forward interest rate agreements,
caps, floors and collars, futures, options, swaps and any other currency,
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interest rate and other similar hedging arrangements and such other instruments
as are similar to, or derivatives of, any of the foregoing;
(v) (A) establishing, promoting and aiding in promoting,
constituting, forming or organizing companies, trusts, syndicates, partnerships
or other entities of all kinds in any part of the world for the purposes set
forth in clause (i) above; provided that written notification shall have been
given to each Rating Agency that such company, trust, syndicate or partnership
is set up in compliance with this Indenture, (B) acquiring, holding and
disposing of shares, securities and other interests in any such trust, company,
syndicate, partnership or other entity and (C) disposing of shares, securities
and other interests in, or causing the dissolution of, any existing subsidiary;
provided that any such disposition which results in the disposition of an
Aircraft meets the requirements set forth in Section 5.02(g) hereof;
(vi) taking out, acquiring, surrendering and assigning
policies of insurance and assurances with any insurance company or companies
which the Issuer or any Issuer Subsidiary may think fit and to pay the premiums
thereon; and
(vii) entering into a Leveraged Lease Transaction provided
that (A) the Issuer receives a Rating Agency Confirmation therefor prior to
entering into such transaction, (B) all costs and expenses incidental to the
consummation of such transaction borne by any party hereto shall be for the
account and paid in full on or before the consummation thereof by one or more
transferees of the Beneficial Interest Certificates of the Issuer effected in
connection therewith and in no event from monies from any Issuer Group Member,
(C) any redemption of Class D Notes effected in connection with such transaction
shall be in accordance with the provisions of Section 3.10(a)(ii) hereof, (D)
the consummation of the Leveraged Lease Transaction, and any associated
redemption of Class D Notes effected in connection with such Leveraged Lease
Transaction, does not materially adversely affect the Holders and (E) such
transaction may not be entered into prior to the completion of the Exchange
Offer.
(f) LIMITATION ON INDEBTEDNESS. The Issuer shall not, and
shall not permit any Issuer Subsidiary to, incur, create, issue, assume,
guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, whether present or
future (in any such case, to "INCUR"), Indebtedness.
Notwithstanding the foregoing, the Issuer and any Issuer
Subsidiary may Incur each and all of the following:
(i) Indebtedness in respect of any Bridge Notes and Initial
Notes issued on the Initial Closing Date;
(ii) Indebtedness in respect of any Refinancing Notes or other
Indebtedness described in the proviso to Section 5.02(c)(iii) hereof; provided
that (A) such Refinancing Notes or other Indebtedness receive ratings from the
Rating Agencies at the close of such Refinancing or repurchase equal to or
higher than those of the subclass being refinanced or repurchased (determined at
the date of Incurrence), (B) taking into account such Refinancing or repurchase,
a Rating Agency Confirmation is obtained prior to such Refinancing or repurchase
with respect to each subclass of Notes Outstanding at such time and (C) the net
proceeds of any such
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Refinancing or other Indebtedness shall be applied only (x) to repay the
Redemption Price of the subclass of Notes being so refinanced or repurchased
plus the Refinancing Expenses relating thereto, (y) to fund any Cash Collateral
Account established for the related Refinancing Notes (up to the Required Amount
therefor) and (z) for deposit into the Collections Account as Reserved Cash
(including in connection with an increase in any Blockage Amount effected under
this Indenture in connection with the issuance of such Refinancing Notes);
(iii) Indebtedness in respect of guarantees by any Issuer Group
Member or any other Issuer Group Member (other than the Guarantee described in
(v) below), provided that no such Indebtedness shall be Incurred if it would
materially adversely affect the Holders;
(iv) Indebtedness in respect of any Additional Notes the net
proceeds of which are applied (A) to finance a Permitted Additional Aircraft
Acquisition, (B) to fund any Cash Collateral Account established for such
Additional Notes (up to the Required Amount therefor), (C) for deposit into the
Collections Account as Reserved Cash (including in connection with an increase
in any Blockage Amount effected under this Indenture in connection with the
issuance of such Additional Notes) and (D) to fund expenses related thereto;
provided that (x) a Rating Agency Confirmation is obtained prior to the
Incurrence of such Indebtedness with respect to all of the Notes Outstanding at
such time and (y) the net proceeds of such Indebtedness shall be applied only
for the purposes specified above in this clause (iv) and (z) such Additional
Notes will be cross-collateralized with all Secured Obligations by the
Collateral under the Security Trust Agreement;
(v) obligations to each Seller under each Acquisition
Agreement and any related lease assignment and assumption agreements and
obligations to Lessees and others under the documents related thereto, including
any Indebtedness owed to any Lessee under any such agreement or the Lease with
respect to maintenance contributions, redelivery condition adjustment payments
or any other obligation of the Issuer or any Issuer Subsidiary to a Lessee;
(vi) Indebtedness under any agreements between the Issuer or
any Issuer Subsidiary and any other Issuer Group Member (each, an "INTERCOMPANY
LOAN"); provided that such Indebtedness shall be evidenced by promissory notes
and written notification shall have been given to each Rating Agency of the
Incurrence of such Indebtedness on behalf of the Issuer;
(vii) Indebtedness of the Issuer under any Credit Facility,
provided that a Rating Agency Confirmation is obtained prior to entering into
such new Credit Facility;
(viii) Indebtedness required in connection with repossession
of an Aircraft or any Engine;
(ix) Indebtedness in favor of the issuer of a surety both,
letter of credit or similar instrument to be obtained by Issuer or any Issuer
Subsidiary in connection with the repossession of an Aircraft or other
enforcement action under a Lease; and
(x) Indebtedness of the Issuer or any Issuer Subsidiary under
or in connection with any Leveraged Lease Transaction as permitted by Section
5.02(e)(vii) hereof.
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For the purposes of this Indenture, "GUARANTEE" means any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation of such other Person or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" when used as a verb has a corresponding meaning.
(g) LIMITATION ON AIRCRAFT DISPOSITIONS. The Issuer shall not,
and shall not permit any Issuer Subsidiary to, sell, transfer or otherwise
dispose of any Aircraft or any interest therein other than as provided in
Section 4(e) of Schedule 2.02(a) of the Servicing Agreement.
Notwithstanding the foregoing, the Issuer and any Issuer
Subsidiary shall, after the Effective Time, be permitted to sell, transfer or
otherwise dispose of, directly or indirectly, (a) any Engine or Part purchased
on the date such Aircraft is acquired or (b) one or more Aircraft or an interest
therein (i) pursuant to a Purchase Option or other agreements of a similar
character existing on the Initial Closing Date or, with respect to any
Substitute Aircraft or Additional Aircraft, on the Closing Date therefor, (ii)
within or among the Issuer and the Issuer Subsidiaries without limitation, and
among the Issuer and/or any Issuer Subsidiary and any other Issuer Group Member;
provided that no such sale, transfer or disposition shall be made other than to
the Issuer or any Issuer Subsidiary if such sale, transfer or other disposition
would materially adversely affect the Holders; provided, further, that written
notification shall have been given to each Rating Agency of such sale, transfer
or disposition, (iii) pursuant to any Aircraft Agreement; provided that such
sale does not result in a Concentration Default and the net present value of the
cash Net Sale Proceeds is not less than the Note Target Price, (iv) pursuant to
receipt of insurance proceeds in connection with an event of loss, (v) pursuant
to an Aircraft Agreement the net present value of the cash Net Sale Proceeds of
which is less than the Note Target Price, provided that (with respect to this
clause (v)), (x) in any one calendar year such sales do not exceed 10% of the
Adjusted Portfolio Value as determined by the most recent Appraisal obtained for
such calendar year, (y) a Controlling Trustees' Resolution delivered to the
Trustee confirms that such sales would not materially adversely affect the
Holders and (z) Rating Agency Confirmation is obtained or such sales do not
result in a Concentration Default, (vi) in connection with a transfer of title
or another interest in an Aircraft (A) to or in favor of a trust or another
entity for the purposes of registering the Aircraft under the laws of an
applicable jurisdiction where the Issuer or an Issuer Subsidiary retains the
beneficial or economic ownership of the Aircraft or (B) from such trust or
entity to the Issuer or an Issuer Subsidiary, or (vii) pursuant to a Leveraged
Lease Transaction as permitted under Section 5.02(e)(vii) hereof.
For the purpose of this Section 5.02(g), the net present value
of the cash Net Sale Proceeds of any sale, transfer or other disposition of any
Aircraft means the present value of all payments received or to be received by
the Issuer or any Issuer Subsidiary from the date of execution or option
granting date, as the case may be, of the relevant Aircraft Agreement through
and including the date of transfer of title to such Aircraft, discounted back to
the date of execution or option granting date, as the case may be, of such
Aircraft Agreement at the
weighted average cost of funds of the Issuer (based on the cost of funds
represented by the Notes and taking into account any Swap Agreements).
The "NOTE TARGET PRICE" means, in respect of any Aircraft, an
amount equal to 103% of the aggregate Outstanding Principal Balance of the
Notes, together with any accrued but unpaid interest thereon and any related
Swap Breakage Costs, allocable to such Aircraft on the date of the sale
agreement or Purchase Option granting date, as the case may be. On any date, the
Outstanding Principal Balance of 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.
"AIRCRAFT AGREEMENT" means any lease, sublease, conditional
sale agreement, finance leases, hire purchase agreement or other agreement
(other than an agreement relating to maintenance, modification or repairs) or
any purchase option granted to a Person (other than a Purchase Option granted to
an Issuer Group Member) to purchase an Aircraft, in each case pursuant to which
any Person acquires or is entitled to acquire legal title, or the economic
benefits of ownership of, such Aircraft.
"NET SALE PROCEEDS" means, with respect to any sale or other
disposition of any assets, the aggregate amount of cash received or to be
received from time to time (whether as initial or deferred consideration) by or
on behalf of the seller in connection with such transaction after deducting
therefrom (without duplication) (a) reasonable and customary brokerage
commissions and other similar fees and commissions (including fees received by
the Servicer under the Servicing Agreement) and (b) the amount of taxes payable
in connection with or as a result of such transaction, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an Affiliate of the
seller and are properly attributable to such transaction or to the asset that is
the subject thereof.
"CONCENTRATION DEFAULT" means an Event of Default under
Section 5.03(a) hereof which would arise if effect were given to any sale,
transfer or other disposition or any purchase or other acquisition pursuant to
an Aircraft Agreement as of the date of such Aircraft Agreement regardless of
whether such sale, transfer or other disposition or purchase or other
acquisition is scheduled or expected to occur after the date of such Aircraft
Agreement.
(h) LIMITATION ON AIRCRAFT ACQUISITIONS. The Issuer shall not,
and shall not permit any Issuer Subsidiary to, purchase or otherwise acquire any
Aircraft other than the Initial Aircraft or any interest therein.
Notwithstanding the foregoing, the Issuer may, and may permit
any Issuer Subsidiary to, (A) purchase or otherwise acquire, directly or
indirectly, Additional Aircraft from time to time (a "PERMITTED ADDITIONAL
AIRCRAFT ACQUISITION"); provided that (i) no Event of Default shall have
occurred and be continuing, (ii) the acquisition does not result in a
Concentration Default and (iii) after giving effect to such acquisition, no more
than 90% by appraised Base Value of the Portfolio consists of Stage 3 narrowbody
aircraft, no more than
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60% by appraised Base Value of the Portfolio consists of Stage 3 widebody
aircraft and no more than 15% by appraised Base Value of the Portfolio consists
of regional jets and none of the Aircraft are turboprop aircraft, without Rating
Agency Confirmation, and (B) purchase or otherwise acquire, directly or
indirectly, (x) Remaining Aircraft pursuant to the Asset Purchase Agreement or
(y) Substitute Aircraft.
(i) LIMITATION ON MODIFICATION PAYMENTS AND CAPITAL
EXPENDITURES. The Issuer shall not, and shall not permit any Issuer Subsidiary
to, make any capital expenditures for the purpose of effecting any optional
improvement or modification of any Aircraft, 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.
(j) LIMITATION ON CONSOLIDATION, MERGER AND TRANSFER OF
ASSETS. The Issuer shall not, and shall not permit any Issuer Subsidiary to,
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of its property and assets (as an entirety or substantially an
entirety in one transaction or in a series of related transactions other than as
contemplated by the Beneficial Interest Purchase Agreement) to, any other
Person, or permit any other Person to merge with or into the Issuer or any
Issuer Subsidiary, unless (i) the resulting entity is a special purpose entity,
the charter of which is substantially similar to the Trust Agreement or the
equivalent charter document of such Issuer Subsidiary, as the case may be, and,
after such consolidation, merger, sale, conveyance, transfer, lease or other
disposition, (A) payments from such resulting entity to the Holders do not give
rise to any withholding tax payments less favorable to the Holders than the
amount of any withholding tax payments which would have been required had such
event not occurred and (B) such entity is not subject to taxation as a
corporation or an association or a publicly traded partnership taxable as a
corporation, (ii) in the case of any consolidation, merger or transfer by the
Issuer, the Certificates shall remain outstanding or new Ownership Interest
shall be issued in exchange therefor having substantially the same terms and
conditions as the exchanged Certificates and the surviving successor or
transferee entity shall expressly assume all of the obligations of the Issuer
under this
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Indenture, the Notes and each other Related Document to which the Issuer is then
a party, (iii) Rating Agency Confirmation is obtained with respect to such
merger, sale, conveyance, transfer, lease or disposition, (iv) immediately after
giving effect to such transaction, no Event of Default shall have occurred and
be continuing, (v) such transaction does not result in recognition of gain or
loss by the Certificateholders for U.S. Federal income tax purposes and (vi) the
Issuer delivers to the Trustee an Officer's Certificate and an Opinion of
Counsel, in each case stating that such consolidation, merger or transfer and
such supplemental indenture comply with the above criteria and, if applicable,
Section 5.02(g) hereof and that all conditions precedent provided for herein
relating to such transaction have been complied with; provided that this
covenant shall not apply to any such consolidation, merger, sale, conveyance,
transfer, lease or disposition (a) within and among the Issuer Group if such
consolidation, merger, sale, conveyance, transfer, lease or disposition, as the
case may be, would not materially adversely affect the Holders and written
notification is given to each Rating Agency by the Issuer or its agent, (b)
complying with the terms of Section 5.02(g) hereof or (c) effected as part of a
single transaction providing for the redemption or defeasance of Notes in
accordance with Section 3.10 or Article XI hereof, respectively.
(k) LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Issuer
shall not, and shall not permit any Issuer Subsidiary, directly or indirectly,
to enter into, renew or extend any transaction (including, without limitation,
the purchase, sale, lease or exchange of property or assets, or the rendering of
any service) with any Affiliate of the Issuer or any Issuer Subsidiary, except
upon fair and reasonable terms no less favorable to the Issuer or such Issuer
Subsidiary than could be obtained, at the time of such transaction or at the
time of the execution of the agreement providing therefor, in a comparable
arm's-length transaction with a Person that is not such an Affiliate.
The foregoing limitation does not limit, and shall not apply
to: (i) any transaction in connection with the establishment of the Issuer
Group, its acquisition of the Initial Aircraft or pursuant to the terms of the
Related Documents; (ii) any transaction within and among the Issuer or any
Issuer Subsidiary and any other Issuer Group Member; provided that no such
transaction, other than among the Issuer and any Issuer Subsidiaries, shall be
consummated if such transaction would materially adversely affect any Holders;
(iii) the payment of reasonable and customary fees to, and the provision of
reasonable and customary liability insurance in respect of, the Controlling
Trustees; (iv) any payments on or with respect to the Notes or Certificates in
accordance with this Indenture and the Trust Agreement; (v) any Permitted
Additional Aircraft Acquisition or any transaction complying with Section
5.02(g) hereof; (vi) any payments of the types referred to in clause (i) or (ii)
of Section 5.02(c) hereof and not prohibited thereunder; (vii) sale of the
Issuer or any Issuer Subsidiaries as part of a single transaction providing for
the redemption or defeasance of Notes in accordance with Section 3.10 or Article
XI hereof, respectively; or (viii) any Leveraged Lease Transaction as permitted
under Section 5.02(e)(vii) hereof.
(l) LIMITATION ON THE ISSUANCE, DELIVERY AND SALE OF EQUITY
INTERESTS. The Issuer shall not (i) issue, deliver or sell any shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting, other than beneficial interests, shares, participations or
other equivalents existing on the Initial Closing Date) in equity, or (ii) sell,
or permit any Issuer Subsidiary, directly or indirectly, to issue, deliver or
sell, any shares, interests,
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participations or other equivalents in equity (however designated, whether
voting or non-voting, other than beneficial interests, shares, participations or
other equivalents existing on the Initial Closing Date), except (A) the
issuance, sale, delivery, transfer or pledge of Ownership Interest in any Issuer
Group Member to or for the benefit of any other Issuer Group Member or as
contemplated by the Beneficial Interest Purchase Agreement, (B) issuances or
sales of any Additional Certificates the proceeds of which are applied to
finance a Permitted Additional Aircraft Acquisition provided that (x) a Rating
Agency Confirmation is obtained prior to such issuance with respect to all of
the Notes Outstanding at such time and (y) the net proceeds of such issuance
shall be used only to finance such Permitted Additional Aircraft Acquisition
and/or the purpose to which the proceeds of Additional Notes may be applied in
accordance with the provisions of Section 2.11 hereof; (C) issuances or sales of
shares of Ownership Interest of foreign Issuer Subsidiaries to nationals in the
jurisdiction of incorporation or organization of such Issuer Subsidiary, as the
case may be, to the extent required by applicable law or necessary in the
determination of the Controlling Trustees to avoid adverse tax consequences or
to facilitate the registration or leasing of Aircraft, (D) the pledge of the
Pledged Stock and Pledged Beneficial Interest pursuant to the Security Trust
Agreement, (E) the sale of any Ownership Interest of an Issuer Subsidiary in
order to effect the sale of all Aircraft owned by such Issuer Subsidiary in
compliance with Section 5.02(g) hereof; and (F) the issuance of Additional
Certificates to the Certificateholders (or their nominees) to the extent such
Certificateholder provides funds to the Issuer with which to effect a
Redemption, fund an Issuer Cure Amount or discharge the Notes upon their
Acceleration.
(m) BANKRUPTCY AND INSOLVENCY; CORPORATE GOVERNANCE. The
Issuer (i) shall promptly provide the Trustee and the Rating Agencies with
written notice of the institution of any proceeding by or against the Issuer or
any Issuer Subsidiary, as the case may be, seeking to adjudicate any of them a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of their debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property; (ii) shall not take any action to waive, repeal, amend, vary,
supplement or otherwise modify its charter documents that would adversely affect
the rights, privileges or preferences of any holder of the Notes, as determined
by the Controlling Trustees (including, but not limited to, allowing any
transfer inconsistent with Section 3.09(a), (b), (c)(ii), (c)(iv) or (d) of the
Trust Agreement); and (iii) shall not, without an affirmative unanimous written
resolution of the Controlling Trustees, take any action to waive, repeal, amend,
vary, supplement or otherwise modify the provisions of the Trust Agreement which
requires a unanimous resolution of the Controlling Trustees, or limits the
actions of beneficial interest holders, with respect to voluntary insolvency
proceedings or consents to involuntary insolvency proceedings.
(n) PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. The
Issuer shall duly and punctually pay the principal, premium, if any, and
interest on the Notes in accordance with the terms of this Indenture and the
Notes.
(o) LIMITATION ON EMPLOYEES. The Issuer shall not, and shall
not permit any Issuer Subsidiary to, employ or maintain any employees other than
as required by any provisions
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of local law; provided that trustees and directors shall not be deemed to be
employees for purposes of this Section 5.02(o).
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, any Issuer Subsidiary or Leveraged Lease Lessee 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 or Leveraged Lease Lessee 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 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 of any Aircraft under any operating
Lease except as provided, mutatis mutandis, in clauses (ii)(A) and (ii)(B)
above.
Notwithstanding the foregoing, no breach of this Section
5.03(b) shall be deemed to have occurred by virtue of any act or omission of a
Lessee or sub-lessee, or of any Person which has possession of the Aircraft or
any Engine for the purpose of repairs, maintenance,
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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 July 1 of each year,
commencing in 2002, 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, or,
in the case of an Aircraft subject to a Leveraged Lease, not subject to an
operating lease, maintain, and cause each Issuer Subsidiary or Leveraged Lease
Lessee to maintain, such Aircraft in a state of repair and condition consistent
with the reasonable commercial practice of leading international aircraft
operating lessors with respect to aircraft not under lease. Notwithstanding the
foregoing, no breach of this Section 5.03(d) shall be deemed to have occurred by
virtue of any Third Party Event; provided that (i) neither the Issuer nor any
Issuer Subsidiary consents or has consented to such Third Party Event; and (ii)
the Issuer or such Issuer Subsidiary which is the lessor or owner of such
Aircraft promptly and diligently takes such commercially reasonable actions as a
leading international aircraft operating lessor would reasonably take in respect
of such Third Party Event, including as deemed appropriate, seeking to compel
such Lessee or other relevant Person to remedy such Third Party Event or seeking
to repossess the relevant Aircraft or Engine.
(e) NOTIFICATION OF TRUSTEE AND ADMINISTRATIVE AGENT. The
Issuer shall notify the Trustee and Administrative Agent in writing as soon as
the Issuer or any Issuer Subsidiary becomes aware of any loss, theft, damage or
destruction to any Initial Aircraft, Additional Aircraft or Engine if the
potential cost of repair or replacement of such asset (without regard to any
insurance claim related thereto) may exceed $2,000,000.
(f) LEASES. The Issuer shall (i) adopt and shall cause the
Servicer to utilize the pro forma lease in the form provided to the Issuer on
the Initial Closing Date as such pro forma lease agreement or agreements may be
revised for purposes of the Issuer Group specifically or
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generally from time to time by the Servicer (the "SERVICER'S PRO FORMA LEASE"),
for use by the Servicer on behalf of the Issuer, any Issuer Subsidiary or
Leveraged Lease Lessee 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 (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 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.
Notwithstanding the foregoing, if the Issuer is permitted to
enter into a Leveraged Lease Transaction in accordance with Section 5.02(e)
hereof, the applicable Leveraged Lease may be in such form as approved by the
Rating Agencies in connection with the Rating Agency Confirmation for such
transaction.
(g) OPINIONS. The Issuer shall not enter into, and shall not
permit any Issuer Subsidiary or Leveraged Lease Lessee 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 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.
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(h) INSURANCE. The Issuer shall maintain or cause, directly or
indirectly through the Issuer Subsidiaries or the Leveraged Lease Lessee, 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
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 or Leveraged Lease Lessee to, include in each Lease between the
Issuer or such Issuer Subsidiary or Leveraged Lease Lessee 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
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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.
Section 5.04 COMPLIANCE THROUGH AGENTS. The Issuer shall be entitled to
delegate the performance of any of its covenants hereunder to one or more
Service Providers pursuant to one or more Related Documents entered into in
accordance with the terms of this Indenture so long as each such Related
Document is subject to the Lien of the Security Trust Agreement. Nothing in this
Section 5.04 is intended to, or shall, relieve the Issuer from any liability or
consequences hereunder arising from the failure of the Issuer or any such
Service Provider to perform any such covenant strictly in accordance with the
terms of this Indenture.
ARTICLE VI
THE TRUSTEE
Section 6.01 ACCEPTANCE OF TRUSTS AND DUTIES. The duties and
responsibilities of the Trustee shall be as provided by the TIA and as set forth
herein. The Trustee accepts the trusts hereby created and applicable to it and
agrees to perform the same but only upon the terms of this Indenture and the TIA
and agrees to receive and disburse all moneys received by it in accordance with
the terms hereof. The Trustee in its individual capacity shall not be answerable
or accountable under any circumstances, except for its own willful misconduct or
negligence or breach of any of its representations or warranties set forth
herein and the Trustee shall not be liable for any action or inaction of the
Issuer or any other parties to any of the Related Documents. Any amounts
received by the Trustee under this Indenture, including, without limitation, the
fees and out-of-pocket expenses of the Trustee shall be Expenses of the Issuer.
Section 6.02 ABSENCE OF DUTIES. Except in accordance with written
instructions or requests furnished pursuant to Sections 5.02 and 5.03 hereof,
the Trustee shall have no duty to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of any Lessee.
Section 6.03 REPRESENTATIONS OR WARRANTIES. The Trustee does not make
and shall not be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Indenture, the Securities or any
other document or instrument or as to the correctness of any statement contained
in any thereof, except that the Trustee in its individual capacity hereby
represents and warrants (i) that each such specified document to which it is a
party has been or will be duly executed and delivered by one of its officers who
is and will be duly authorized to execute and deliver such document on its
behalf, and (ii) this Indenture is the legal, valid and binding obligation of
Bankers Trust, enforceable against Bankers Trust in accordance with its terms,
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
Section 6.04 RELIANCE; AGENTS; ADVICE OF COUNSEL. The Trustee shall
Incur no liability to anyone acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Trustee shall have no obligation to
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confirm the veracity of the content of any such item provided to it (absent
manifest error). The Trustee may accept a copy of a resolution of, in the case
of the Issuer, the Controlling Trustees and, in the case of any other party to
any Related Document, the governing body of such Person, certified in an
accompanying Officer's Certificate as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been duly adopted and that the
same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described herein, the Trustee shall
be entitled to receive and may for all purposes hereof conclusively rely on a
certificate, signed by an officer of any duly authorized Person, as to such fact
or matter, and such certificate shall constitute full protection to the Trustee
for any action taken or omitted to be taken by it in good faith in reliance
thereon. The Trustee shall furnish to the Administrative Agent upon written
request such information and copies of such documents as the Trustee may have
and as are necessary for the Administrative Agent to perform its duties under
Articles II and III hereof. The Trustee shall assume, and shall be fully
protected in assuming, that the Issuer is authorized by its constitutional
documents to enter into this Indenture and to take all action permitted to be
taken by it pursuant to the provisions hereof, and shall not inquire into the
authorization of the Issuer with respect thereto.
The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance with
the direction of the Holders, in accordance with Section 4.12 hereof relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.
The Trustee may consult with counsel as to any matter relating
to this Indenture and any Opinion of Counsel or any advice of such counsel shall
be full and complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel.
The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
may be Incurred therein or thereby.
The Trustee shall not be required to expend or risk its own
funds or otherwise Incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Indenture shall in any event
require the Trustee to
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perform, or be responsible or liable for the manner of performance of, any
obligations of the Issuer or the Administrative Agent under this Indenture or
any of the Related Documents.
The Trustee shall not be liable for any Costs or Taxes (except
for Taxes relating to any compensation, fees or commissions of any entity acting
in its capacity as Trustee hereunder) or in connection with the selection of
Permitted Account Investments or for any investment losses resulting from
Permitted Account Investments.
When the Trustee Incurs expenses or renders services in
connection with an Event of Default specified in Section 4.01(e) or 4.01(f)
hereof, such expenses (including the fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors' rights
generally.
The Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Trustee obtains actual knowledge of
such event or the Trustee receives written notice of such event from the Issuer,
the Administrative Agent or Holders owning Notes aggregating not less than 10%
of the outstanding principal amount of the Notes.
The Trustee shall have no duty to monitor the performance of
the Issuer, the Administrative Agent or any other party to the Related
Documents, nor shall it have any liability in connection with the malfeasance or
nonfeasance by such parties. The Trustee shall have no liability in connection
with the appointment of the Administrative Agent or compliance by the Issuer,
the Administrative Agent or any lessee under a Lease with statutory or
regulatory requirements related to any Aircraft or any Lease. The Trustee shall
have no obligation, or liability in respect thereto, to verify or recalculate
any of the determinations made by the Administrative Agent pursuant to the
Related Documents. The Trustee shall not make or be deemed to have made any
representations or warranties with respect to any Aircraft or any Lease or the
validity or sufficiency of any assignment or other disposition of any Aircraft
or any Lease.
Section 6.05 NOT RESPONSIBLE IN INDIVIDUAL CAPACITY. The Trustee acts
hereunder solely as trustee unless otherwise expressly provided; and all
Persons, other than the Holders to the extent expressly provided in this
Indenture, having any claim against the Trustee by reason of the transactions
contemplated hereby shall look, subject to the lien and priorities of payment as
herein provided, only to the property of the Issuer for payment or satisfaction
thereof.
Section 6.06 NO COMPENSATION FROM HOLDERS. The Trustee agrees that it
shall have no right against the Holders or, except as provided in Article III
hereof, the property of the Issuer, for any fee as compensation for its services
hereunder.
Section 6.07 NOTICE OF DEFAULTS. As promptly as practicable after, and
in any event within 30 days after, the occurrence of any Default hereunder, the
Trustee shall transmit by mail to the Issuer and the Holders holding Notes of
the related subclass, notice of such Default hereunder actually known to a
Responsible Officer of the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default on the payment
of interest on, or principal or Redemption Price of any Note, the Trustee shall
be fully protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the
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Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the related class.
Section 6.08 MAY HOLD SECURITIES. The Trustee, any Paying Agent, the
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 310(b) and 311 of the Trust Indenture Act, may
otherwise deal with the Issuer with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.
Section 6.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at
all times be a Trustee which shall be eligible to act as a trustee under Section
310(a) of the Trust Indenture Act and shall meet the Eligibility Requirements.
If such corporation publishes reports of conditions at least annually, pursuant
to law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section 6.09, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.09 to act as Trustee, the
Trustee shall resign immediately as Trustee in the manner and with the effect
specified in Section 7.01 hereof.
Section 6.10 DISQUALIFICATION OF TRUSTEE. The Trustee shall be subject
to the provisions of Section 310(b) of the Trust Indenture Act during the period
of time provided for therein. If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 310(b) of the
Trust Indenture Act.
Section 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
Section 6.12 REPORTS BY THE ISSUER. The Issuer shall:
(a) file with the Trustee, within 30 days after the Issuer is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer is required to file with the Commission
pursuant to section 13 or section 15(d) of the Exchange Act; or, if the Issuer
is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee all Monthly Reports, Quarterly
Reports and Annual Reports;
(b) file with the Trustee and the Commission, in accordance
with the rules and regulations prescribed by the Commission, such additional
information, documents and reports with respect to compliance by the Issuer with
the conditions and covenants provided for in this
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Indenture, as may be required by such rules and regulations, including, in the
case of annual reports, if required by such rules and regulations, certificates
or opinions of independent public accountants;
(c) transmit to all Holders, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Issuer pursuant
to subsections (a) and (b) of this Section 6.12 as may be required by rules and
regulations prescribed by the Commission; and
(d) furnish to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal accounting officer or principal financial officer of the
Administrative Agent, as applicable, as to his or her knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture (it being
understood that for purposes of this paragraph (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture).
Section 6.13 HOLDER LISTS. The Issuer will furnish or cause to be
furnished to the Trustee with respect to the Notes of each class:
(a) semi-annually, not later than 15 days after such
semi-annual dates as may be specified by the Trustee, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders as
of such Regular Record Date or semi-annual date, as the case may be, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, excluding from any such list names and addresses
received by the Trustee in its capacity as Registrar.
Section 6.14 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 6.13 hereof and the names
and addresses of Holders received by the Trustee in its capacity as Registrar.
The Trustee may destroy any list furnished to it as provided in Section 6.13
hereof upon receipt of a new list so furnished.
(b) If three or more Holders of Notes of any series
(hereinafter referred to as "APPLICANTS") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Note of such series for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Notes of such series or with the Holders of
all Notes with respect to their rights under this Indenture or under such Notes
and is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either
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(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 6.14(a) hereof, or
(ii) inform such applicants as to the approximate number of
Holders of Notes of such series or all Notes, as the case may be, whose names
and addresses appear in the information preserved at the time by the Trustee in
accordance with Section 6.14(a) hereof, and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Note of such series or to all Holders, as
the case may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 6.14(a) hereof, a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
in connection with such mailing.
(c) Every Holder of Notes, by receiving and holding the same,
agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section 6.14(b)
hereof, regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 6.14(b) hereof.
Section 6.15 REPORTS BY TRUSTEE. (a) The term "reporting date" as used
in this Section 6.15 means February 28. Within 60 days after the reporting date
in each year, beginning in 2002, the Trustee shall transmit by mail to all
Holders, as their names and addresses appear in the Register, a brief report
dated as of such reporting date with respect to any of the events specified in
Section 313 of the TIA which may have occurred during the 12 months preceding
the date of such report (but if no such event has occurred within such period no
report need be transmitted).
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange,
except with respect to the Luxembourg Stock Exchange, the Listing Agent, upon
which the Notes are listed, with the Commission and with the Issuer. The Issuer
will notify the Trustee in writing when any Notes are listed on any stock
exchange.
ARTICLE VII
SUCCESSOR TRUSTEES
Section 7.01 RESIGNATION AND REMOVAL OF TRUSTEE. The Trustee may resign
as to all or any of the subclasses of the Notes at any time without cause by
giving at least 90 days' prior written notice to the Issuer, the Administrative
Agent and the Holders. Holders of a majority of the Outstanding Principal
Balance of any subclass of the Notes may at any time remove the
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Trustee as to such subclass without cause by an instrument in writing delivered
to the Issuer, the Administrative Agent, the Security Trustee, the Senior
Trustee and the Trustee being removed. In addition, the Issuer may remove the
Trustee as to any of the subclasses of the Notes if: (i) such Trustee fails to
comply with Section 310 of the TIA after written request therefor by the Issuer
or the Holder of the related subclass who has been a bona fide Holder for at
least six months, (ii) such Trustee fails to comply with Section 7.02(c) hereof,
(iii) such Trustee is adjudged a bankrupt or an insolvent, (iv) a receiver or
public officer takes charge of such Trustee or its property or (v) such Trustee
becomes incapable of acting. References to the Trustee in this Indenture include
any successor Trustee as to all or any of the subclasses of the Notes appointed
in accordance with this Article VII.
Section 7.02 APPOINTMENT OF SUCCESSOR. (a) In the case of the
resignation or removal of the Trustee as to any subclass of the Notes under
Section 7.01 hereof, the Issuer shall promptly appoint a successor Trustee as to
such subclass; provided that a majority of the Outstanding Principal Balance of
such subclass of the Notes may appoint, within one year after such resignation
or removal, a successor Trustee as to such subclass which may be other than the
successor Trustee appointed by the Issuer, and such successor Trustee appointed
by the Issuer shall be superseded by the successor Trustee so appointed by the
Holders. If a successor Trustee as to any subclass of the Notes shall not have
been appointed and accepted its appointment hereunder within 60 days after the
Trustee gives notice of resignation as to such subclass, the retiring Trustee,
the Issuer, the Administrative Agent or a majority of the Outstanding Principal
Balance of such subclass of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee as to such subclass. Any
successor Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Trustee appointed as provided in the
first sentence of this paragraph within one year from the date of the
appointment by such court.
(b) Any successor Trustee as to any subclass of the Notes,
however appointed, shall execute and deliver to the Issuer, the Administrative
Agent and the predecessor Trustee as to such subclass an instrument accepting
such appointment, and thereupon such successor Trustee, without further act,
shall become vested with all the estates, properties, rights, powers, duties and
trusts of such predecessor Trustee hereunder in the trusts hereunder applicable
to it with like effect as if originally named the Trustee as to such subclass
herein; provided that, upon the written request of such successor Trustee, such
predecessor Trustee shall, upon payment of all amounts due and owing to it,
execute and deliver an instrument transferring to such successor Trustee, upon
the trusts herein expressed applicable to it, all the estates, properties,
rights, powers and trusts of such predecessor Trustee, and such predecessor
Trustee shall duly assign, transfer, deliver and pay over to such successor
Trustee all moneys or other property then held by such predecessor Trustee
hereunder solely for the benefit of such subclass of the Notes.
(c) If a successor Trustee is appointed with respect to one or
more (but not all) subclasses of the Notes, the Issuer, the predecessor Trustee
and each successor Trustee with respect to each subclass of Notes shall execute
and deliver an indenture supplemental hereto which shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the predecessor Trustee with respect to the
subclasses of Notes as to which the predecessor Trustee is not retiring shall
continue to be vested in the predecessor Trustee, and shall add to or change any
of the provisions of this Indenture as shall be
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necessary to provide for or facilitate the administration of the Notes hereunder
by more than one Trustee.
(d) Each Trustee shall be an Eligible Institution and shall
meet the Eligibility Requirements, if there be such an institution willing, able
and legally qualified to perform the duties of a Trustee hereunder; provided
that the Rating Agencies shall receive notice of any replacement Trustee.
(e) Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation to which substantially all the business of the Trustee
may be transferred, shall, subject to the terms of paragraph (c) of this
Section, be the Trustee under this Indenture without further act.
ARTICLE VIII
INDEMNITY
Section 8.01 INDEMNITY. The Issuer shall indemnify the Trustee (and its
officers, directors, employees and agents) for, and hold it harmless against,
any loss, liability or expense Incurred by it without negligence or bad faith on
its part in connection with the acceptance or administration of this Indenture
and its duties under this Indenture, the Notes and the other Related Documents,
including the costs and expenses of defending itself against any claim or
liability and of complying with any process served upon it or any of its
officers in connection with the exercise or performance of any of its powers or
duties and hold it harmless against, any loss, liability or reasonable expense
Incurred without negligence or bad faith on its part, arising out of or in
connection with actions taken or omitted to be taken in reliance on any
Officer's Certificate furnished hereunder, or the failure to furnish any such
Officers' Certificate required to be furnished hereunder. The Trustee shall
notify the Issuer and the Rating Agencies promptly of any claim asserted against
the Trustee for which it may seek indemnity; provided, however, that failure to
provide such notice shall not invalidate any right to indemnity hereunder. The
Issuer shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Issuer shall pay reasonable fees
and expenses of such counsel. The Issuer need not pay for any settlements made
without its consent; provided that such consent shall not be unreasonably
withheld or delayed. The Issuer need not reimburse any expense or indemnity
against any loss or liability Incurred by the Trustee through negligence or bad
faith. The provisions of this Section 8.01 and Section 8.02 hereof shall survive
the termination of this Indenture or the earlier resignation or removal of the
Trustee.
Section 8.02 HOLDERS' INDEMNITY. The Trustee shall be entitled to be
indemnified (except with respect to losses, damages or obligations arising from
the Trustee's negligence or bad faith) by the Holders of any subclass of the
Notes before proceeding to exercise any right or power under this Indenture or
the Administrative Agency Agreement at the request or direction of such Holders.
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ARTICLE IX
MODIFICATION
Section 9.01 MODIFICATION WITH CONSENT OF HOLDERS. With the consent of
Holders of a majority of the Outstanding Principal Balance of the Notes on the
date of any vote of such Holders (voting as a single class), the Issuer, when
authorized by a Controlling Trustees' Resolution, may amend or modify this
Indenture or the Notes provided that, without the consent of each provider of a
Credit Facility, no such amendment may modify the provisions of this Indenture
relating to such Person's Credit Facility or, to the extent affecting such
Person's Credit Facility, Credit Facilities generally; provided further that,
without the consent of each Swap Provider, each provider of a Credit Facility
and each Holder of any Notes, in each instance affected thereby, no such
amendment may, except as otherwise provided in Section 3.11 hereof, modify the
provisions of this Indenture or the Notes setting forth the frequency or the
currency of payment of, the maturity of, or the method of calculation of the
amount of, any interest, principal or Redemption Price payable in respect of any
subclass of Notes, or reduce the percentage of the aggregate Outstanding
Principal Balance of any subclass of Notes required to approve any amendment or
waiver of this Section 9.01 or, except as otherwise provided in Section 3.09
hereof, alter the manner or priority of payment of such subclass of Notes (each,
a "BASIC TERMS MODIFICATION").
It shall not be necessary for the consent of the Holders under
this Section 9.01 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof. Any such modification approved by the required Holders of any class or
subclass of Notes will be binding on the Holders of the relevant class or
subclass of Notes and each party to this Indenture.
The Issuer shall give each Rating Agency prior notice of any
amendment under this Section 9.01 and any amendments of the constitutive
documents by the Issuer or any Issuer Subsidiaries, and, after an amendment
under this Section 9.01 becomes effective, the Issuer shall mail to the Holders
and the Rating Agencies a notice briefly describing such amendment. Any failure
of the Issuer to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment.
After an amendment under this Section 9.01 becomes effective,
it shall bind every Holder whether or not notation thereof is made on any Note
held by such Holder.
Section 9.02 MODIFICATION WITHOUT CONSENT OF HOLDERS. Subject to
Section 9.01 hereof, the Trustee may agree with the Issuer, without the consent
of any Holder, (a) to any modification (other than a Basic Terms Modification)
of, or the waiver or authorization of any breach or prospective breach of, any
provision of any Related Document or of the relevant subclass of Notes to
correct a manifest error or an error which is of a formal, minor or technical
nature, (b) to modify the provisions of this Indenture or the Administrative
Agency Agreement relating to the timing of movement of Rental Payments or other
monies received or Expenses Incurred among the Accounts by the Administrative
Agent, (c) to add or reflect any Credit Facility, (d) to any amendment (other
than a Basic Terms Modification) of an immaterial nature necessary to facilitate
the issuance of Refinancing Notes and/or Additional Notes and related
acquisition of
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Additional Aircraft (all in a manner consistent with the provisions of this
Indenture) or (e) to comply with the requirements of the Commission in
connection with the qualification of this Indenture under the TIA. Any such
modification shall be notified to the Holders as soon as practicable thereafter
and shall be binding on all the Holders. Notwithstanding anything to the
contrary herein, so long as the Bridge Notes are outstanding, the Trustee shall
not agree to any modification of, or the waiver or authorization of any breach
or prospective breach of, any provision of this Indenture or any Related
Document without the consent of the Holders of the Bridge Notes.
Section 9.03 SUBORDINATION AND PRIORITY OF PAYMENTS. The subordination
provisions contained in Section 3.08, Section 3.09 and Article X hereof may not
be amended or modified without the consent of each Swap Provider, each provider
of a Credit Facility, each Holder of the subclass of Notes affected thereby and
each Holder of any subclass of Notes ranking senior thereto. In no event shall
the provisions set forth in Section 3.08 hereof relating to the priority of the
Expenses, Swap Payments and payments under all Credit Facilities be amended or
modified.
Section 9.04 EXECUTION OF AMENDMENTS BY TRUSTEE. In executing, or
accepting the additional trusts created by, any amendment or modification to
this Indenture permitted by this Article or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties,
immunities or indemnities under this Indenture or otherwise.
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every indenture
supplemental hereto pursuant to this Article IX shall conform to the
requirements of the Trust Indenture Act as then in effect.
ARTICLE X
SUBORDINATION
Section 10.01 SUBORDINATION OF THE SECURITIES AND OTHER SUBORDINATED
OBLIGATIONS. (a) The Issuer (on behalf of itself and the Certificateholders),
each Holder (by its acceptance of its Note) and each other Secured Party (by its
acceptance of the benefits of the Security Trust Agreement) agree that (i) the
Securities and the other Obligations shall be subject to the provisions of this
Article X and, in the case of the Secured Obligations, to the provisions of
Article VII of the Security Trust Agreement and (ii) each Junior Claimant (and
each Junior Representative of any thereof) agree for the benefit of each Senior
Claimant (and the Controlling Party and the Trustee acting therefor) that each
Junior Claim shall be subordinated fully in right of payment to each Senior
Claim as provided in Section 3.08 hereof, Section 3.09 hereof (if applicable),
this Article X and Article VII of the Security Trust Agreement.
(b) For the purposes of this Agreement, no Senior Claims shall
be deemed to have been paid in full until and unless the Senior Claimant (or the
Trustee therefor) of such Senior Claims shall have received payment in full in
cash of such Senior Claims.
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(c) All payments or distributions upon or with respect to any
Obligations that are received by any Junior Claimant (or any Junior
Representative thereof) contrary to the provisions of this Indenture or in
excess of the amounts to which such Junior Claimant is entitled under Section
3.08 hereof shall be received for the benefit of the Senior Claimant, shall be
segregated from other funds and property held by such Junior Claimant (or any
Junior Representative therefor) and shall be forthwith paid over to the Trustee
in the same form as so received (with any necessary indorsement) to be applied
(in the case of cash) to or held as collateral (in the case of non-cash property
or securities) for the payment or prepayment of the Senior Claims in accordance
with the terms hereof.
(d) Notwithstanding anything contained herein to the contrary,
payments from any property (or the proceeds thereof) (i) deposited in any Cash
Collateral Account or drawn under any Credit Facility (as provided in Section
3.12 hereof), (ii) deposited in any Note Account as Issuer Cure Amounts (as
provided in Section 3.11 hereof) or (iii) deposited in the Defeasance/Redemption
Account (or, in the case of a Refinancing, the Refinancing Account) in respect
of a Redemption under Section 3.10 hereof or in respect of the defeasance of
Notes pursuant to Article XI hereof shall not be subordinated to the prior
payment of any Senior Claimants in respect of any Senior Claims or subject to
any other restrictions set forth in this Article X and Article VII of the
Security Trust Agreement, and none of the Holders shall be obligated to pay over
any payments from any such property to the Security Trustee or any other
creditor of any of the Grantors.
(e) The Senior Representative is hereby authorized to demand
specific performance of the provisions of this Article X at any time when any
Junior Claimant (or any Junior Representative thereof) shall have failed to
comply with any of such provisions applicable to them. The Junior Claimants (and
each Junior Representative of any thereof) hereby irrevocably waive any defense
based on the adequacy of a remedy at law that might be asserted as a bar to such
remedy of specific performance.
Section 10.02 RIGHTS OF SUBROGATION. The Junior Claimants (and each
Junior Representative of any thereof) agree that no payment or distributions to
any Senior Claimant (or the Trustee therefor) pursuant to the provisions of this
Indenture shall entitle any Junior Claimant (or any Junior Representative
thereof) to exercise any rights of subrogation in respect thereof until all
Obligations constituting Senior Claims with respect to such Person shall have
been paid in full.
Section 10.03 FURTHER ASSURANCES OF JUNIOR REPRESENTATIVES. Each of the
Junior Representatives shall, at the expense of the Issuer, at any time and from
time to time promptly execute and deliver all further instruments and documents,
and take all further action, that the Controlling Party may reasonably request,
in order to effectuate the provisions of this Article X.
Section 10.04 ENFORCEMENT. Each Junior Claimant (and the Junior
Representative therefor) agree that the provisions of this Article X shall be
enforceable against them under all circumstances, including without limitation
in any proceeding referred to in Sections 4.01(e) and 4.01(f) hereof.
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Section 10.05 CONTINUED EFFECTIVENESS. The provisions of this Article X
shall continue to be effective or shall be revived or reinstated, as the case
may be, if at any time any payment of any of the Senior Claims is rescinded or
must otherwise be returned by any Senior Claimant upon the insolvency,
bankruptcy or reorganization of any Issuer Group Member, or otherwise, all as
though such payment had not been made.
Section 10.06 SENIOR CLAIMS AND JUNIOR CLAIMS UNIMPAIRED. Nothing in
this Article X shall impair, as between the Issuer and any Senior Claimant or
any Junior Claimant, the obligations of the Issuer to such Person, including
without limitation the Senior Claims and the Junior Claims; provided that it is
understood that the enforcement of rights and remedies shall be subject to the
terms of this Indenture and the Security Trust Agreement.
ARTICLE XI
DISCHARGE OF INDENTURE; DEFEASANCE
Section 11.01 DISCHARGE OF LIABILITY ON THE NOTES; DEFEASANCE. (a) When
(i) the Issuer delivers to the Trustee all Outstanding Notes (other than Notes
replaced pursuant to Section 2.08 hereof) for cancellation or (ii) all
Outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Section 3.10(c)
hereof and the Issuer irrevocably deposits in the Defeasance/Redemption Account
funds sufficient to pay at maturity or upon redemption all Outstanding Notes,
including interest thereon to maturity or the Redemption Date (other than Notes
replaced pursuant to Section 2.08 hereof), and if in either case the Issuer pays
all other sums payable hereunder by the Issuer, then this Indenture shall,
subject to Section 11.01(c) hereof, cease to be of further effect. The Trustee
shall acknowledge satisfaction and discharge of this Indenture on demand of the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel, at the
cost and expense of the Issuer, to the effect that any conditions precedent to a
discharge of this Indenture have been met.
(b) Subject to Sections 11.01(c) and 11.02 hereof, the Issuer
at any time may terminate (i) all its obligations under the Notes and this
Indenture ("LEGAL DEFEASANCE" option) or (ii) its obligations under Sections
4.01 (other than with respect to a failure to comply with Sections 4.01(a),
4.01(b), 4.01(c), 4.01(e) (only with respect to the Issuer) and 4.01(f) (only
with respect to the Issuer)), 5.02 and 5.03 hereof ("COVENANT DEFEASANCE"
option). The Issuer may exercise its Legal Defeasance option notwithstanding its
prior exercise of its Covenant Defeasance option.
If the Issuer exercises its Legal Defeasance option, payment
of any Notes subject to such Legal Defeasance may not be accelerated because of
an Event of Default. If the Issuer exercises its Covenant Defeasance option,
payment of the Notes may not be accelerated because of an Event of Default
(other than with respect to a failure to comply with Sections 4.01(a), 4.01(b),
4.01(c), 4.01(e) (other than with respect to the Issuer), 4.01(f) (other than
with respect to the Issuer)) and 5.02(n) hereof.
Upon satisfaction of the conditions set forth herein and upon
request of the Issuer, the Trustee shall acknowledge in writing the discharge of
those obligations that the Issuer terminates.
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(c) Notwithstanding clauses (a) and (b) above, the Issuer's
obligations in Sections 2.01, 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09,
5.02(n), Article VI, Sections 8.01, 11.04, 11.05 and 11.06 hereof shall survive
until all the Notes have been paid in full. Thereafter, the Issuer's obligations
in Sections 8.01, 11.04 and 11.05 hereof shall survive.
Section 11.02 CONDITIONS TO DEFEASANCE. The Issuer may exercise its
Legal Defeasance option or its Covenant Defeasance option only if:
(a) the Issuer irrevocably deposits in trust in the
Defeasance/Redemption Account any one or any combination of (i) money, (ii)
obligations of, and supported by the full faith and credit of, the U.S.
Government ("U.S. GOVERNMENT OBLIGATIONS") or (iii) obligations of corporate
issuers ("CORPORATE OBLIGATIONS") (provided that any such Corporate Obligations
are rated AA+, or the equivalent, or higher, by the Rating Agencies at such time
and shall not have a maturity of longer than three years from the date of
defeasance) for the payment of all principal or Redemption Price, Sale Premium,
if any, and interest (A) on the Notes or any class or subclass of Notes being
defeased, in the case of Legal Defeasance, or (B) on all of the Notes in the
case of Covenant Defeasance, in either case, to maturity or redemption, as the
case may be;
(b) the Issuer delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their opinion
that the payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations or the Corporate Obligations plus any
deposited money without investment will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest when due (i) on each
class or subclass of Notes being defeased, in the case of Legal Defeasance, or
(ii) on all of the Notes in the case of Covenant Defeasance, in either case, to
maturity or redemption, as the case may be;
(c) 91 days pass after the deposit described in clause (a)
above is made and during the 91-day period no Event of Default specified in
Section 4.01(e) or (g) hereof with respect to the Issuer occurs which is
continuing at the end of the period;
(d) the deposit described in clause (a) above does not
constitute a default under any other agreement binding on the Issuer;
(e) the Issuer delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit described in clause (a)
does not constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940, as amended;
(f) in the case of the Legal Defeasance option, the Issuer
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from, or there has been published by, the U.S. Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such opinion of counsel shall confirm that
neither the Holders nor the Certificateholders will recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Legal Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
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(g) in the case of the Covenant Defeasance option, the Issuer
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Covenant Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred;
(h) if the related Notes are then listed on any securities
exchange, the Issuer delivers to the Trustee an Opinion of Counsel to the effect
that such deposit, defeasance and discharge will not cause such Notes to be
delisted;
(i) a Rating Agency Confirmation is obtained relating to the
defeasance contemplated by this Section 11.02; and
(j) the Issuer delivers to the Trustee an Opinion of Counsel
and an Officer's Certificate that all conditions precedent to such defeasance
has been satisfied.
Section 11.03 APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust in the Defeasance/Redemption Account money, U.S. Government Obligations or
Corporate Obligations deposited with it pursuant to this Article XI. It shall
apply the deposited money and the money from U.S. Government Obligations or
Corporate Obligations in accordance with this Indenture to the payment of
principal, premium, if any, and interest on the class or subclass of Notes.
Money and securities so held in trust are not subject to Article X hereof or to
Article VIII of the Security Agreement.
Section 11.04 REPAYMENT TO ISSUER. The Trustee shall promptly turn over
to the Issuer upon written request any excess money or securities held by it at
any time after application of the appropriate defeasance option.
Subject to any applicable abandoned property law, the Trustee
shall pay to the Issuer upon written request any money held by it for the
payment of principal or interest that remains unclaimed for two years and,
thereafter, Holders entitled to the money must look to the Issuer for payment as
general creditors.
Section 11.05 INDEMNITY FOR GOVERNMENT OBLIGATIONS AND CORPORATE
OBLIGATIONS. The Issuer shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or Corporate Obligations, or the principal and interest
received on such U.S. Government Obligations or Corporate Obligations.
Section 11.06 REINSTATEMENT. If the Trustee is unable to apply any
money or U.S. Government Obligations or Corporate Obligations in accordance with
this Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuer's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article XI until such time as the Trustee is permitted
to apply all such money, U.S. Government Obligations or Corporate Obligations in
accordance with this Article XI; provided, however, that, if the Issuer has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
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of the Holders of such Notes to receive such payment from the money, U.S.
Government Obligations or Corporate Obligations held by the Trustee.
ARTICLE XII
MISCELLANEOUS
Section 12.01 RIGHT OF TRUSTEE TO PERFORM. If the Issuer for any reason
fails to observe or punctually to perform any of its obligations to the Trustee,
whether under this Indenture or any of the other Related Documents or otherwise,
the Trustee shall have power (but shall have no obligation), on behalf of or in
the name of the Issuer or otherwise, to perform such obligations and to take any
steps which the Trustee may, in its absolute discretion, consider appropriate
with a view to remedying, or mitigating the consequences of, such failure by the
Issuer; provided that no exercise or failure to exercise this power by the
Trustee shall in any way prejudice the Trustee's other rights under this
Indenture or any of the other Related Documents.
Section 12.02 WAIVER. Any waiver by any party of any provision of this
Indenture or any right, remedy or option hereunder shall only prevent and estop
such party from thereafter enforcing such provision, right, remedy or option if
such waiver is given in writing and only as to the specific instance and for the
specific purpose for which such waiver was given. The failure or refusal of any
party hereto to insist in any one or more instances, or in a course of dealing,
upon the strict performance of any of the terms or provisions of this Indenture
by any party hereto or the partial exercise of any right, remedy or option
hereunder shall not be construed as a waiver or relinquishment of any such term
or provision, but the same shall continue in full force and effect. No failure
on the part of the Trustee to exercise, and no delay on its part in exercising,
any right or remedy under this Indenture will operate as a waiver thereof, nor
will any single or partial exercise of any right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies provided in this Indenture are cumulative and not exclusive
of any rights or remedies provided by law.
Section 12.03 SEVERABILITY. In the event that any provision of this
Indenture or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Indenture shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Indenture, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of this Indenture. The parties hereto further agree
that the holding by any court of competent jurisdiction that any remedy pursued
by the Trustee hereunder is unavailable or unenforceable shall not affect in any
way the ability of the Trustee to pursue any other remedy available to it.
Section 12.04 RESTRICTIONS ON EXERCISE OF CERTAIN RIGHTS. The Trustee
and, during the continuance of a payment Default with respect to the Senior
Class, the Senior Trustee, in its capacity as trustee of such class and except
as otherwise provided in Section 4.04 hereof, may sue for recovery or take any
other steps for the purpose of recovering any of the obligations hereunder or
any other debts or liabilities whatsoever owing to it by the Issuer. Each of the
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Holders shall at all times be deemed to have agreed by virtue of the acceptance
of the Notes that only the Trustee and, during the continuance of a payment
Default with respect to the Senior Class, the Senior Trustee, in its capacity as
trustee of such class and except as provided in Section 4.04 hereof, may take
any steps for the purpose of procuring the appointment of an administrative
receiver, examiner, receiver or similar officer or the making of an
administration order or for instituting any bankruptcy, reorganization,
arrangement, insolvency, winding up, liquidation, composition, examination or
any like proceedings under the laws of Delaware.
Section 12.05 NOTICES. All notices, demands, certificates, requests,
directions, instructions and communications hereunder ("NOTICES") shall be in
writing and shall be effective (a) upon receipt when sent through the mails,
registered or certified mail, return receipt requested, postage prepaid, with
such receipt to be effective the date of delivery indicated on the return
receipt, or (b) one Business Day after delivery to an overnight courier, or (c)
on the date personally delivered to an authorized officer of the party to which
sent, or (d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
if to the Issuer, to:
Lease Investment Flight Trust
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Fax (302) 651-8882
with copies to:
Phoenix American Financial Services, Inc.
2401 Kerner Boulevard
San Rafael, CA 94901
Attention: Financial Services Division
Fax: (415) 485-4522
and
Automatic Lift I L.P.
Grand Bay Plaza
2665 South Bayshore Drive
Suite 1006
Coconut Grove, Florida 33133
Attention: Wayne Lippman
Fax: (305) 458-7757
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if to the Bridge Note Issuer prior to the Effective Time, to:
LIFT Trust-Sub 1
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Fax: (302) 651-8882
if to the Administrative Agent, to:
Phoenix American Financial Services, Inc.
2401 Kerner Boulevard
San Rafael, CA 94901
Attention: Financial Services Division
Fax: (415) 485-4522
if to the Trustee, the Registrar, Bankers Trust or the Paying
Agent, to:
Bankers Trust Company
Four Albany Street
New York, NY 10006
Structured Finance Team
Attention: Corporate Trust and Agency Services
Fax (212) 250-6439
For so long as the Notes are listed on the Luxembourg Stock
Exchange, if to the Listing Agent, Luxembourg Paying Agent and Registrar, to:
Kredietbank S.A. Luxembourgeoise
43, Boulevard Royal
L-2955
Luxembourg
Attention:
Fax: 352-4797-73951
A copy of each notice given hereunder to any party hereto
shall also be given to each of the other parties hereto. Each party hereto may,
by notice given in accordance herewith to each of the other parties hereto,
designate any further or different address to which subsequent Notices shall be
sent.
Section 12.06 ASSIGNMENTS; THIRD PARTY BENEFICIARY. This Indenture shall be a
continuing obligation of the Issuer and shall (i) be binding upon the Issuer and
its successors and assigns and (ii) inure to the benefit of and be enforceable
by the Trustee, and by its successors, transferees and assigns. The Issuer may
not assign any of its obligations under this Indenture, or delegate any of its
duties hereunder. Each Swap Provider and each provider of a Credit Facility
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shall be a third party beneficiary of Sections 3.08 and 9.03 hereof. In
addition, each Certificateholder shall be a third party beneficiary of Article
III hereof.
Section 12.07 CURRENCY CONVERSION. (a) If any amount is received or
recovered by the Administrative Agent or the Trustee in respect of this
Indenture or any part thereof (whether as a result of the enforcement of the
security created under the Security Trust Agreement or pursuant to this
Indenture or any judgment or order of any court or in the liquidation or
dissolution of the Issuer or by way of damages for any breach of any obligation
to make any payment under or in respect of the Issuer's obligations hereunder or
any part thereof or otherwise) in a currency (the "RECEIVED CURRENCY") other
than the currency in which such amount was expressed to be payable (the "AGREED
CURRENCY"), then the amount in the Received Currency actually received or
recovered by the Trustee or the Administrative Agent shall, to the fullest
extent permitted by Applicable Law, only constitute a discharge to the Issuer to
the extent of the amount of the Agreed Currency which the Administrative Agent
or the Trustee was or would have been able in accordance with its normal
procedures to purchase on the date of actual receipt or recovery (or, if that is
not practicable, on the next date on which it is so practicable), and, if the
amount of the Agreed Currency which the Administrative Agent or Trustee is or
would have been so able to purchase is less than the amount of the Agreed
Currency which was originally payable by the Issuer, the Issuer shall pay to the
Administrative Agent such amount as the Administrative Agent shall determine to
be necessary to indemnify the Trustee and the Administrative Agent against any
Loss sustained by it as a result (including the cost of making any such purchase
and any premiums, commissions or other charges paid or Incurred in connection
therewith) and so that such indemnity, to the fullest extent permitted by
Applicable Law, (i) shall constitute a separate and independent obligation of
the Issuer distinct from its obligation to discharge the amount which was
originally payable by the Issuer and (ii) shall give rise to a separate and
independent cause of action and apply irrespective of any indulgence granted by
the Administrative Agent or the Trustee and continue in full force and effect
notwithstanding any judgment, order, claim or proof for a liquidated amount in
respect of the amount originally payable by the Issuer or any judgment or order
and no proof or evidence of any actual loss shall be required.
(b) For the purpose of or pending the discharge of any of the
moneys and liabilities hereby secured the Administrative Agent may convert any
moneys received, recovered or realized by the Administrative Agent under this
Indenture (including the proceeds of any previous conversion under this Section
12.07) from their existing currency of denomination into the currency of
denomination (if different) of such moneys and liabilities and any conversion
from one currency to another for the purposes of any of the foregoing shall be
made at the Trustee's then prevailing spot selling rate at its office by which
such conversion is made. If not otherwise required to be applied in the Received
Currency, the Administrative Agent, acting on behalf of the Security Trustee,
shall promptly convert any moneys in such Received Currency other than U.S.
dollars into U.S. dollars. Each previous reference in this section to a currency
extends to funds of that currency and funds of one currency may be converted
into different funds of the same currency.
Section 12.08 APPLICATION TO COURT. The Senior Trustee may at any time
after the service of a Default Notice apply to any court of competent
jurisdiction for an order that the terms of this Indenture be carried into
execution under the direction of such court and for the appointment of a
119
Receiver of the Collateral or any part thereof and for any other order in
relation to the administration of this Indenture as the Senior Trustee shall
deem fit and it may assent to or approve any application to any court of
competent jurisdiction made at the instigation of any of the Holders and shall
be indemnified by the Issuer against all costs, charges and expenses Incurred by
it in relation to any such application or proceedings.
Section 12.09 GOVERNING LAW. THIS INDENTURE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 12.10 JURISDICTION. (a) Each of the parties hereto agrees that
the United States federal and New York State courts located in The City of New
York shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Indenture and, for such purposes, submits to the jurisdiction of such
courts. Each of the parties hereto waives any objection which it might now or
hereafter have to the United States federal or New York State courts located in
The City of New York being nominated as the forum to hear and determine any
suit, action or proceeding, and to settle any disputes, which may arise out of
or in connection with this Indenture and agrees not to claim that any such court
is not a convenient or appropriate forum. Each of the parties hereto agrees that
the process by which any suit, action or proceeding is begun may be served on it
by being delivered in connection with any suit, action or proceeding in The City
of New York to Corporation Service Company, 2 World Trade Center, New York, New
York 10048, and each of the parties hereby appoints Corporation Service Company,
its designee, appointee and agent to receive, accept and acknowledge for and on
its behalf such service of legal process, with the exception of the Trustee, who
hereby consents to receive any such service of process directly at the address
set forth in Section 12.05 herein.
(b) The submission to the jurisdiction of the courts referred
to in Section 12.10(a) hereof shall not (and shall not be construed so as to)
limit the right of the Trustee to take proceedings against the Issuer in any
other court of competent jurisdiction nor shall the taking of proceedings in any
one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
(c) Each of the parties hereto hereby consents generally in
respect of any legal action or proceeding arising out of or in connection with
this Indenture to the giving of any relief or the issue of any process in
connection with such action or proceeding, including the making, enforcement or
execution against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such action or
proceeding.
Section 12.11 COUNTERPARTS. This Indenture may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 12.12 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only,
120
are not to be considered a part hereof and shall in no way modify or restrict
any of the terms and provisions hereof.
Section 12.13 TRUST INDENTURE ACT. Prior to the effectiveness of the
Registration Statement, this Indenture shall be incorporated and be governed by
the provisions of the Trust Indenture Act that are required to be part of and to
govern indentures qualified under the Trust Indenture Act. After the
effectiveness of the Registration Statement, this Indenture shall be subject to
the provisions of the Trust Indenture Act that are required to be a part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
LEASE INVESTMENT FLIGHT TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By /s/ KATHLEEN A. PEDELINI
-------------------------------------------------
Name: Kathleen A. Pedelini
Title: Administrative Account Manager
LIFT TRUST-SUB 1
By Wilmington Trust Company, not in its
individual capacity but solely as the Owner
Trustee
By /s/ KATHLEEN A. PEDELINI
-------------------------------------------------
Name: Kathleen A. Pedelini
Title: Administrative Account Manager
BANKERS TRUST COMPANY
By /s/ EILEEN M. HUGHES
----------------------------------------
Name: Eileen M. Hughes
Title: Vice President
PHOENIX AMERICAN FINANCIAL SERVICES, INC.,
as the Administrative Agent
By /s/ JOSEPH HORGAN
-------------------------------------------------
Name: Joseph Horgan
Title: AVP
Schedule 1
Initial Aircraft
<Table>
<Caption>
--------------------------------------------------------------------------------
TYPE OF AIRCRAFT MANUFACTURER'S SERIAL NUMBER
---------------- ----------------------------
--------------------------------------------------------------------------------
B767-300ER 29618
--------------------------------------------------------------------------------
B767-300ER 30108
--------------------------------------------------------------------------------
B767-300ER 30112
--------------------------------------------------------------------------------
B737-300 28672
--------------------------------------------------------------------------------
B737-300 28673
--------------------------------------------------------------------------------
B737-300 28569
--------------------------------------------------------------------------------
B737-300 23384
--------------------------------------------------------------------------------
B737-400 24469
--------------------------------------------------------------------------------
MD82 49513
--------------------------------------------------------------------------------
MD82 49515
--------------------------------------------------------------------------------
MD82 49511
--------------------------------------------------------------------------------
A320-200 1093
--------------------------------------------------------------------------------
A320-200 1108
--------------------------------------------------------------------------------
B737-300 23376
--------------------------------------------------------------------------------
B737-300 29338
--------------------------------------------------------------------------------
B737-400 24512
--------------------------------------------------------------------------------
B737-300 28602
--------------------------------------------------------------------------------
B737-300 28606
--------------------------------------------------------------------------------
A320-200 879
--------------------------------------------------------------------------------
MD82 49419
--------------------------------------------------------------------------------
MD11F 48523
--------------------------------------------------------------------------------
B737-700 28609
--------------------------------------------------------------------------------
B747-400 28427
--------------------------------------------------------------------------------
MD82 53147
--------------------------------------------------------------------------------
B737-800 28591
--------------------------------------------------------------------------------
B737-800 28628
--------------------------------------------------------------------------------
B737-500 28565
--------------------------------------------------------------------------------
B737-800 28592
--------------------------------------------------------------------------------
B737-300 28570
--------------------------------------------------------------------------------
MD82 49501
--------------------------------------------------------------------------------
MD82 49509
--------------------------------------------------------------------------------
MD82 49519
--------------------------------------------------------------------------------
MD83 49578
--------------------------------------------------------------------------------
MD82 49507
--------------------------------------------------------------------------------
B767-300ER 26208
--------------------------------------------------------------------------------
B737-300 28671
--------------------------------------------------------------------------------
B737-700 28584
--------------------------------------------------------------------------------
A320-200 1152
--------------------------------------------------------------------------------
B767-300ER 30110
--------------------------------------------------------------------------------
</Table>
SCHEDULE 2
PART A
BRIDGE NOTE ISSUER SUBSIDIARIES
ENTITY JURISDICTION OF ORGANIZATION
LIFT CEA China, LLC Delaware
LIFT Canada, LLC Delaware
LIFT GF UK, LLC Delaware
LIFT Arizona, LLC Delaware
LIFT Missouri, LLC Delaware
LIFT A2K UK, LLC Delaware
MD82 Aircraft Leasing I Corporation Delaware
MD82 Aircraft Leasing II Corporation Delaware
MD82 Aircraft Leasing III Corporation Delaware
A320 Aircraft Leasing X Corp. Delaware
A320 Aircraft Leasing IX Corp. Delaware
PART B
NOTE ISSUER SUBSIDIARIES
ENTITY JURISDICTION OF ORGANIZATION
------ ----------------------------
LIFT Trust-Sub 1 Delaware
LIFT CEA China, LLC Delaware
LIFT Canada, LLC Delaware
LIFT GF UK, LLC Delaware
LIFT Arizona, LLC Delaware
LIFT Missouri, LLC Delaware
LIFT A2K UK, LLC Delaware
MD82 Aircraft Leasing I Corporation Delaware
MD82 Aircraft Leasing II Corporation Delaware
MD82 Aircraft Leasing III Corporation Delaware
A320 Aircraft Leasing X Corp. Delaware
A320 Aircraft Leasing IX Corp. Delaware
<Page>
SCHEDULE 3
CLASS A CLASS PERCENTAGES
<Table>
<Caption>
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
Closing Date......... 69.933% 69.933% June 15, 2006........ 63.914% 62.444% June 15, 2011....... 54.900% 49.296%
July 15, 2001........ 69.642% 69.627% July 15, 2006........ 63.826% 62.318% July 15, 2011....... 54.745% 49.029%
August 15, 2001...... 69.539% 69.510% August 15, 2006...... 63.695% 62.145% August 15, 2011..... 54.549% 48.711%
September 15, 2001... 69.362% 69.317% September 15, 2006... 63.563% 61.970% September 15, 2011.. 54.351% 48.388%
October 15, 2001..... 69.309% 69.251% October 15, 2006..... 63.472% 61.840% October 15, 2011.... 54.189% 48.110%
November 15, 2001.... 69.219% 69.146% November 15, 2006.... 63.337% 61.662% November 15, 2011... 54.017% 47.818%
December 15, 2001.... 69.055% 68.966% December 15, 2006.... 63.200% 61.481% December 15, 2011... 53.820% 47.495%
January 15, 2002..... 69.013% 68.911% January 15, 2007..... 63.106% 61.348% January 15, 2012.... 53.628% 47.177%
February 15, 2002.... 68.920% 68.804% February 15, 2007.... 62.968% 61.165% February 15, 2012... 53.434% 46.854%
March 15, 2002....... 68.747% 68.615% March 15, 2007....... 62.824% 60.976% March 15, 2012...... 53.223% 46.513%
April 15, 2002....... 68.696% 68.550% April 15, 2007....... 62.727% 60.838% April 15, 2012...... 53.024% 46.182%
May 15, 2002......... 68.581% 68.420% May 15, 2007......... 62.584% 60.648% May 15, 2012........ 52.815% 45.839%
June 15, 2002........ 68.392% 68.213% June 15, 2007........ 62.440% 60.458% June 15, 2012....... 52.610% 45.500%
July 15, 2002........ 68.351% 68.158% July 15, 2007........ 62.342% 60.313% July 15, 2012....... 52.401% 45.149%
August 15, 2002...... 68.269% 68.059% August 15, 2007...... 62.200% 60.119% August 15, 2012..... 52.195% 44.801%
September 15, 2002... 68.122% 67.893% September 15, 2007... 62.056% 59.923% September 15, 2012.. 51.987% 44.449%
October 15, 2002..... 68.084% 67.840% October 15, 2007..... 61.954% 59.773% October 15, 2012.... 51.770% 44.085%
November 15, 2002.... 68.010% 67.750% November 15, 2007.... 61.808% 59.574% November 15, 2012... 51.556% 43.723%
December 15, 2002.... 67.871% 67.592% December 15, 2007.... 61.658% 59.369% December 15, 2012... 51.333% 43.350%
January 15, 2003..... 67.838% 67.545% January 15, 2008..... 61.552% 59.214% January 15, 2013.... 51.114% 42.979%
February 15, 2003.... 67.769% 67.458% February 15, 2008.... 61.401% 59.006% February 15, 2013... 50.891% 42.603%
March 15, 2003....... 67.639% 67.311% March 15, 2008....... 61.244% 58.794% March 15, 2013...... 50.646% 42.202%
April 15, 2003....... 67.591% 67.246% April 15, 2008....... 61.133% 58.631% April 15, 2013...... 50.419% 41.816%
May 15, 2003......... 67.491% 67.129% May 15, 2008......... 60.973% 58.415% May 15, 2013........ 50.181% 41.420%
June 15, 2003........ 67.350% 66.968% June 15, 2008........ 60.814% 58.197% June 15, 2013....... 49.949% 41.026%
July 15, 2003........ 67.390% 66.995% July 15, 2008........ 60.701% 58.027% July 15, 2013....... 49.712% 40.621%
August 15, 2003...... 67.294% 66.877% August 15, 2008...... 60.543% 57.805% August 15, 2013..... 49.479% 40.217%
September 15, 2003... 67.183% 66.743% September 15, 2008... 60.384% 57.581% September 15, 2013.. 49.242% 39.808%
October 15, 2003..... 67.117% 66.657% October 15, 2008..... 60.267% 57.404% October 15, 2013.... 48.996% 39.387%
November 15, 2003.... 67.015% 66.533% November 15, 2008.... 60.104% 57.175% November 15, 2013... 48.755% 38.969%
December 15, 2003.... 66.911% 66.406% December 15, 2008.... 59.939% 56.943% December 15, 2013... 48.504% 38.540%
January 15, 2004..... 66.849% 66.324% January 15, 2009..... 59.818% 56.761% January 15, 2014.... 48.259% 38.114%
February 15, 2004.... 66.745% 66.196% February 15, 2009.... 59.651% 56.525% February 15, 2014... 48.010% 37.682%
March 15, 2004....... 66.636% 66.065% March 15, 2009....... 59.478% 56.284% March 15, 2014...... 47.740% 37.227%
April 15, 2004....... 66.572% 65.979% April 15, 2009....... 59.352% 56.095% April 15, 2014...... 47.484% 36.783%
May 15, 2004......... 66.455% 65.839% May 15, 2009......... 59.178% 55.851% May 15, 2014........ 47.218% 36.328%
June 15, 2004........ 66.339% 65.698% June 15, 2009........ 59.004% 55.605% June 15, 2014....... 46.955% 35.872%
July 15, 2004........ 66.330% 65.668% July 15, 2009........ 58.878% 55.407% July 15, 2014....... 46.688% 35.404%
August 15, 2004...... 66.219% 65.526% August 15, 2009...... 58.707% 55.157% August 15, 2014..... 46.425% 34.937%
September 15, 2004... 66.106% 65.382% September 15, 2009... 58.535% 54.904% September 15, 2014.. 46.158% 34.464%
October 15, 2004..... 66.033% 65.282% October 15, 2009..... 58.404% 54.698% October 15, 2014.... 45.881% 33.980%
November 15, 2004.... 65.925% 65.143% November 15, 2009.... 58.229% 54.441% November 15, 2014... 45.606% 33.493%
December 15, 2004.... 65.815% 65.001% December 15, 2009.... 58.050% 54.178% December 15, 2014... 45.322% 32.995%
January 15, 2005..... 65.747% 64.906% January 15, 2010..... 57.917% 53.968% January 15, 2015.... 45.041% 32.498%
February 15, 2005.... 65.637% 64.763% February 15, 2010.... 57.737% 53.703% February 15, 2015... 44.757% 31.994%
March 15, 2005....... 65.521% 64.616% March 15, 2010....... 57.545% 53.426% March 15, 2015...... 44.451% 31.468%
April 15, 2005....... 65.458% 64.525% April 15, 2010....... 57.407% 53.208% April 15, 2015...... 44.158% 30.949%
May 15, 2005......... 65.336% 64.370% May 15, 2010......... 57.218% 52.932% May 15, 2015........ 43.857% 30.420%
June 15, 2005........ 65.215% 64.215% June 15, 2010........ 57.031% 52.656% June 15, 2015....... 43.556% 29.888%
<Page>
<Caption>
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
July 15, 2005........ 65.138% 64.105% July 15, 2010........ 56.892% 52.426% July 15, 2015....... 43.271% 29.344%
August 15, 2005...... 65.020% 63.947% August 15, 2010...... 56.711% 52.145% August 15, 2015..... 42.986% 28.797%
September 15, 2005... 64.901% 63.788% September 15, 2010... 56.528% 51.861% September 15, 2015.. 42.697% 28.241%
October 15, 2005..... 64.821% 63.673% October 15, 2010..... 56.384% 51.623% October 15, 2015.... 42.398% 27.673%
November 15, 2005.... 64.702% 63.514% November 15, 2010.... 56.198% 51.333% November 15, 2015... 42.101% 27.102%
December 15, 2005.... 64.580% 63.352% December 15, 2010.... 56.004% 51.035% December 15, 2015... 41.793% 26.517%
January 15, 2006..... 64.501% 63.236% January 15, 2011..... 55.860% 50.793% January 15, 2016.... 41.486% 25.929%
February 15, 2006.... 64.378% 63.072% February 15, 2011.... 55.668% 50.495% February 15, 2016... 41.175% 25.332%
March 15, 2006....... 64.250% 62.903% March 15, 2011....... 55.455% 50.173% March 15, 2016...... 40.849% 24.718%
April 15, 2006....... 64.168% 62.783% April 15, 2011....... 55.305% 49.923% April 15, 2016...... 40.529% 24.104%
May 15, 2006......... 64.041% 62.614% May 15, 2011......... 55.100% 49.608% May 15, 2016........ 40.199% 23.478%
June 15, 2016........ 39.870% 22.847% June 15, 2021........ 19.969% 0.000% July 15, 2026....... 0.000% 0.000%
July 15, 2016........ 39.567% 22.205% July 15, 2021........ 19.460% 0.000% August 15, 2026..... 0.000% 0.000%
August 15, 2016...... 39.263% 21.557% August 15, 2021...... 18.944% 0.000% September 15, 2026.. 0.000% 0.000%
September 15, 2016... 38.955% 20.898% September 15, 2021... 18.417% 0.000% October 15, 2026.... 0.000% 0.000%
October 15, 2016..... 38.637% 20.227% October 15, 2021..... 17.878% 0.000% November 15, 2026... 0.000% 0.000%
November 15, 2016.... 38.319% 19.548% November 15, 2021.... 17.329% 0.000% December 15, 2026... 0.000% 0.000%
December 15, 2016.... 38.157% 18.945% December 15, 2021.... 16.767% 0.000% January 15, 2027.... 0.000% 0.000%
January 15, 2017..... 37.832% 18.252% January 15, 2022..... 16.199% 0.000% February 15, 2027... 0.000% 0.000%
February 15, 2017.... 37.501% 17.547% February 15, 2022.... 15.618% 0.000% March 15, 2027...... 0.000% 0.000%
March 15, 2017....... 37.151% 16.823% March 15, 2022....... 15.021% 0.000% April 15, 2027...... 0.000% 0.000%
April 15, 2017....... 36.809% 16.097% April 15, 2022....... 14.415% 0.000% May 15, 2027........ 0.000% 0.000%
May 15, 2017......... 36.457% 15.356% May 15, 2022......... 13.795% 0.000% June 15, 2027....... 0.000% 0.000%
June 15, 2017........ 36.103% 14.606% June 15, 2022........ 13.163% 0.000% July 15, 2027....... 0.000% 0.000%
July 15, 2017........ 35.785% 13.841% July 15, 2022........ 12.515% 0.000% August 15, 2027..... 0.000% 0.000%
August 15, 2017...... 35.465% 13.067% August 15, 2022...... 11.855% 0.000% September 15, 2027.. 0.000% 0.000%
September 15, 2017... 35.452% 12.405% September 15, 2022... 11.180% 0.000% October 15, 2027.... 0.000% 0.000%
October 15, 2017..... 35.124% 11.617% October 15, 2022..... 10.805% 0.000% November 15, 2027... 0.000% 0.000%
November 15, 2017.... 35.122% 10.938% November 15, 2022.... 10.119% 0.000% December 15, 2027... 0.000% 0.000%
December 15, 2017.... 34.790% 10.138% December 15, 2022.... 9.420% 0.000% January 15, 2028.... 0.000% 0.000%
January 15, 2018..... 34.456% 9.327% January 15, 2023..... 8.708% 0.000% February 15, 2028... 0.000% 0.000%
February 15, 2018.... 34.116% 8.504% February 15, 2023.... 7.980% 0.000% March 15, 2028...... 0.000% 0.000%
March 15, 2018....... 33.760% 7.663% March 15, 2023....... 7.250% 0.000% April 15, 2028...... 0.000% 0.000%
April 15, 2018....... 33.587% 6.866% April 15, 2023....... 6.505% 0.000% May 15, 2028........ 0.000% 0.000%
May 15, 2018......... 33.238% 6.021% May 15, 2023......... 5.753% 0.000% June 15, 2028....... 0.000% 0.000%
June 15, 2018........ 32.903% 5.186% June 15, 2023........ 4.984% 0.000% July 15, 2028....... 0.000% 0.000%
July 15, 2018........ 32.602% 4.343% July 15, 2023........ 4.196% 0.000% August 15, 2028..... 0.000% 0.000%
August 15, 2018...... 32.299% 3.488% August 15, 2023...... 3.389% 0.000% September 15, 2028.. 0.000% 0.000%
September 15, 2018... 31.991% 2.618% September 15, 2023... 2.600% 0.000% October 15, 2028.... 0.000% 0.000%
October 15, 2018..... 31.676% 1.737% October 15, 2023..... 1.761% 0.000% November 15, 2028... 0.000% 0.000%
November 15, 2018.... 31.359% 0.843% November 15, 2023.... 0.900% 0.000% December 15, 2028... 0.000% 0.000%
December 15, 2018.... 31.034% 0.000% December 15, 2023.... 0.016% 0.000% January 15, 2029.... 0.000% 0.000%
January 15, 2019..... 30.705% 0.000% January 15, 2024..... 0.000% 0.000% February 15, 2029... 0.000% 0.000%
February 15, 2019.... 30.371% 0.000% February 15, 2024.... 0.000% 0.000% March 15, 2029...... 0.000% 0.000%
March 15, 2019....... 30.021% 0.000% March 15, 2024....... 0.000% 0.000% April 15, 2029...... 0.000% 0.000%
April 15, 2019....... 29.675% 0.000% April 15, 2024....... 0.000% 0.000% May 15, 2029........ 0.000% 0.000%
May 15, 2019......... 29.318% 0.000% May 15, 2024......... 0.000% 0.000% June 15, 2029....... 0.000% 0.000%
June 15, 2019........ 28.959% 0.000% June 15, 2024........ 0.000% 0.000% July 15, 2029....... 0.000% 0.000%
July 15, 2019........ 28.589% 0.000% July 15, 2024........ 0.000% 0.000% August 15, 2029..... 0.000% 0.000%
August 15, 2019...... 28.407% 0.000% August 15, 2024...... 0.000% 0.000% September 15, 2029.. 0.000% 0.000%
September 15, 2019... 28.194% 0.000% September 15, 2024... 0.000% 0.000% October 15, 2029.... 0.000% 0.000%
October 15, 2019..... 28.003% 0.000% October 15, 2024..... 0.000% 0.000% November 15, 2029... 0.000% 0.000%
November 15, 2019.... 27.629% 0.000% November 15, 2024.... 0.000% 0.000% December 15, 2029... 0.000% 0.000%
December 15, 2019.... 27.245% 0.000% December 15, 2024.... 0.000% 0.000% January 15, 2030.... 0.000% 0.000%
<Page>
<Caption>
CLASS A CLASS A CLASS A CLASS A CLASS A CLASS A
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
January 15, 2020..... 26.856% 0.000% January 15, 2025..... 0.000% 0.000% February 15, 2030... 0.000% 0.000%
February 15, 2020.... 26.460% 0.000% February 15, 2025.... 0.000% 0.000% March 15, 2030...... 0.000% 0.000%
March 15, 2020....... 26.052% 0.000% March 15, 2025....... 0.000% 0.000% April 15, 2030...... 0.000% 0.000%
April 15, 2020....... 25.793% 0.000% April 15, 2025....... 0.000% 0.000% May 15, 2030........ 0.000% 0.000%
May 15, 2020......... 25.539% 0.000% May 15, 2025......... 0.000% 0.000% June 15, 2030....... 0.000% 0.000%
June 15, 2020........ 25.133% 0.000% June 15, 2025........ 0.000% 0.000% July 15, 2030....... 0.000% 0.000%
July 15, 2020........ 24.717% 0.000% July 15, 2025........ 0.000% 0.000% August 15, 2030..... 0.000% 0.000%
August 15, 2020...... 24.296% 0.000% August 15, 2025...... 0.000% 0.000% September 15, 2030.. 0.000% 0.000%
September 15, 2020... 23.866% 0.000% September 15, 2025... 0.000% 0.000% October 15, 2030.... 0.000% 0.000%
October 15, 2020..... 23.426% 0.000% October 15, 2025..... 0.000% 0.000% November 15, 2030... 0.000% 0.000%
November 15, 2020.... 23.124% 0.000% November 15, 2025.... 0.000% 0.000% December 15, 2030... 0.000% 0.000%
December 15, 2020.... 22.672% 0.000% December 15, 2025.... 0.000% 0.000% January 15, 2031.... 0.000% 0.000%
January 15, 2021..... 22.366% 0.000% January 15, 2026..... 0.000% 0.000% February 15, 2031... 0.000% 0.000%
February 15, 2021.... 21.906% 0.000% February 15, 2026.... 0.000% 0.000% March 15, 2031...... 0.000% 0.000%
March 15, 2021....... 21.431% 0.000% March 15, 2026....... 0.000% 0.000% April 15, 2031...... 0.000% 0.000%
April 15, 2021....... 20.954% 0.000% April 15, 2026....... 0.000% 0.000% May 15, 2031........ 0.000% 0.000%
May 15, 2021......... 20.465% 0.000% May 15, 2026......... 0.000% 0.000% June 15, 2031....... 0.000% 0.000%
June 15, 2026........ 0.000% 0.000% July 15, 2031....... 0.000% 0.000%
</Table>
<Page>
CLASS B CLASS PERCENTAGES
<Table>
<Caption>
CLASS B CLASS B CLASS B CLASS B CLASS B CLASS B
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
Closing Date......... 9.217% 9.217% June 15, 2006........ 8.293% 8.230% June 15, 2011....... 6.691% 6.497%
July 15, 2001........ 9.178% 9.177% July 15, 2006........ 8.277% 8.213% July 15, 2011....... 6.662% 6.462%
August 15, 2001...... 9.165% 9.161% August 15, 2006...... 8.256% 8.191% August 15, 2011..... 6.627% 6.420%
September 15, 2001... 9.141% 9.136% September 15, 2006... 8.234% 8.167% September 15, 2011.. 6.591% 6.377%
October 15, 2001..... 9.134% 9.127% October 15, 2006..... 8.218% 8.150% October 15, 2011.... 6.561% 6.341%
November 15, 2001.... 9.122% 9.113% November 15, 2006.... 8.195% 8.127% November 15, 2011... 6.530% 6.302%
December 15, 2001.... 9.101% 9.090% December 15, 2006.... 8.173% 8.103% December 15, 2011... 6.494% 6.260%
January 15, 2002..... 9.095% 9.082% January 15, 2007..... 8.156% 8.085% January 15, 2012.... 6.460% 6.218%
February 15, 2002.... 9.083% 9.068% February 15, 2007.... 8.134% 8.061% February 15, 2012... 6.425% 6.175%
March 15, 2002....... 9.060% 9.043% March 15, 2007....... 8.110% 8.037% March 15, 2012...... 6.388% 6.130%
April 15, 2002....... 9.053% 9.035% April 15, 2007....... 8.093% 8.018% April 15, 2012...... 6.352% 6.087%
May 15, 2002......... 9.038% 9.018% May 15, 2007......... 8.069% 7.993% May 15, 2012........ 6.315% 6.042%
June 15, 2002........ 9.013% 8.990% June 15, 2007........ 8.046% 7.968% June 15, 2012....... 6.279% 5.997%
July 15, 2002........ 9.007% 8.983% July 15, 2007........ 8.029% 7.949% July 15, 2012....... 6.241% 5.951%
August 15, 2002...... 8.995% 8.970% August 15, 2007...... 8.005% 7.924% August 15, 2012..... 6.204% 5.905%
September 15, 2002... 8.976% 8.948% September 15, 2007... 7.981% 7.898% September 15, 2012.. 6.167% 5.858%
October 15, 2002..... 8.970% 8.941% October 15, 2007..... 7.963% 7.878% October 15, 2012.... 6.128% 5.810%
November 15, 2002.... 8.960% 8.929% November 15, 2007.... 7.939% 7.852% November 15, 2012... 6.090% 5.763%
December 15, 2002.... 8.941% 8.908% December 15, 2007.... 7.914% 7.825% December 15, 2012... 6.051% 5.713%
January 15, 2003..... 8.936% 8.902% January 15, 2008..... 7.896% 7.804% January 15, 2013.... 6.012% 5.664%
February 15, 2003.... 8.927% 8.891% February 15, 2008.... 7.871% 7.777% February 15, 2013... 5.973% 5.615%
March 15, 2003....... 8.909% 8.871% March 15, 2008....... 7.845% 7.749% March 15, 2013...... 5.931% 5.562%
April 15, 2003....... 8.902% 8.863% April 15, 2008....... 7.826% 7.727% April 15, 2013...... 5.891% 5.511%
May 15, 2003......... 8.889% 8.847% May 15, 2008......... 7.799% 7.699% May 15, 2013........ 5.850% 5.459%
June 15, 2003........ 8.870% 8.826% June 15, 2008........ 7.773% 7.670% June 15, 2013....... 5.809% 5.407%
July 15, 2003........ 8.874% 8.830% July 15, 2008........ 7.753% 7.648% July 15, 2013....... 5.768% 5.354%
August 15, 2003...... 8.860% 8.814% August 15, 2008...... 7.726% 7.619% August 15, 2013..... 5.727% 5.301%
September 15, 2003... 8.844% 8.797% September 15, 2008... 7.699% 7.589% September 15, 2013.. 5.686% 5.247%
October 15, 2003..... 8.834% 8.785% October 15, 2008..... 7.678% 7.566% October 15, 2013.... 5.643% 5.191%
November 15, 2003.... 8.819% 8.769% November 15, 2008.... 7.650% 7.536% November 15, 2013... 5.602% 5.136%
December 15, 2003.... 8.804% 8.752% December 15, 2008.... 7.622% 7.505% December 15, 2013... 5.559% 5.080%
January 15, 2004..... 8.795% 8.741% January 15, 2009..... 7.601% 7.481% January 15, 2014.... 5.517% 5.023%
February 15, 2004.... 8.780% 8.724% February 15, 2009.... 7.573% 7.450% February 15, 2014... 5.474% 4.966%
March 15, 2004....... 8.764% 8.707% March 15, 2009....... 7.544% 7.418% March 15, 2014...... 5.428% 4.906%
April 15, 2004....... 8.754% 8.696% April 15, 2009....... 7.522% 7.393% April 15, 2014...... 5.385% 4.848%
May 15, 2004......... 8.737% 8.677% May 15, 2009......... 7.492% 7.361% May 15, 2014........ 5.340% 4.788%
June 15, 2004........ 8.720% 8.659% June 15, 2009........ 7.463% 7.329% June 15, 2014....... 5.296% 4.728%
July 15, 2004........ 8.717% 8.655% July 15, 2009........ 7.439% 7.302% July 15, 2014....... 5.251% 4.666%
August 15, 2004...... 8.698% 8.636% August 15, 2009...... 7.407% 7.269% August 15, 2014..... 5.206% 4.605%
September 15, 2004... 8.679% 8.617% September 15, 2009... 7.376% 7.236% September 15, 2014.. 5.161% 4.542%
October 15, 2004..... 8.665% 8.604% October 15, 2009..... 7.351% 7.209% October 15, 2014.... 5.115% 4.478%
November 15, 2004.... 8.647% 8.586% November 15, 2009.... 7.319% 7.175% November 15, 2014... 5.069% 4.414%
December 15, 2004.... 8.628% 8.567% December 15, 2009.... 7.286% 7.141% December 15, 2014... 5.022% 4.349%
January 15, 2005..... 8.616% 8.554% January 15, 2010..... 7.260% 7.113% January 15, 2015.... 4.975% 4.283%
February 15, 2005.... 8.597% 8.536% February 15, 2010.... 7.228% 7.078% February 15, 2015... 4.929% 4.217%
March 15, 2005....... 8.577% 8.516% March 15, 2010....... 7.193% 7.041% March 15, 2015...... 4.879% 4.147%
April 15, 2005....... 8.565% 8.504% April 15, 2010....... 7.167% 7.013% April 15, 2015...... 4.831% 4.079%
May 15, 2005......... 8.545% 8.484% May 15, 2010......... 7.133% 6.976% May 15, 2015........ 4.782% 4.009%
June 15, 2005........ 8.524% 8.463% June 15, 2010........ 7.099% 6.940% June 15, 2015....... 4.734% 3.939%
July 15, 2005........ 8.510% 8.449% July 15, 2010........ 7.071% 6.910% July 15, 2015....... 4.684% 3.867%
<Page>
<Caption>
CLASS B CLASS B CLASS B CLASS B CLASS B CLASS B
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
August 15, 2005...... 8.489% 8.428% August 15, 2010...... 7.037% 6.873% August 15, 2015..... 4.635% 3.795%
September 15, 2005... 8.468% 8.407% September 15, 2010... 7.002% 6.835% September 15, 2015.. 4.585% 3.722%
October 15, 2005..... 8.453% 8.392% October 15, 2010..... 6.973% 6.804% October 15, 2015.... 4.535% 3.647%
November 15, 2005.... 8.432% 8.371% November 15, 2010.... 6.937% 6.766% November 15, 2015... 4.484% 3.572%
December 15, 2005.... 8.411% 8.350% December 15, 2010.... 6.901% 6.726% December 15, 2015... 4.432% 3.495%
January 15, 2006..... 8.396% 8.334% January 15, 2011..... 6.872% 6.694% January 15, 2016.... 4.381% 3.417%
February 15, 2006.... 8.375% 8.313% February 15, 2011.... 6.836% 6.655% February 15, 2016... 4.329% 3.339%
March 15, 2006....... 8.353% 8.290% March 15, 2011....... 6.796% 6.613% March 15, 2016...... 4.275% 3.258%
April 15, 2006....... 8.337% 8.275% April 15, 2011....... 6.767% 6.580% April 15, 2016...... 4.223% 3.177%
May 15, 2006......... 8.315% 8.252% May 15, 2011......... 6.729% 6.538% May 15, 2016........ 4.169% 3.094%
June 15, 2016........ 4.116% 3.011% June 15, 2021........ 0.966% 0.000% July 15, 2026....... 0.000% 0.000%
July 15, 2016........ 4.060% 2.927% July 15, 2021........ 0.918% 0.000% August 15, 2026..... 0.000% 0.000%
August 15, 2016...... 4.005% 2.841% August 15, 2021...... 0.871% 0.000% September 15, 2026.. 0.000% 0.000%
September 15, 2016... 3.949% 2.754% September 15, 2021... 0.824% 0.000% October 15, 2026.... 0.000% 0.000%
October 15, 2016..... 3.893% 2.666% October 15, 2021..... 0.778% 0.000% November 15, 2026... 0.000% 0.000%
November 15, 2016.... 3.836% 2.576% November 15, 2021.... 0.732% 0.000% December 15, 2026... 0.000% 0.000%
December 15, 2016.... 3.796% 2.497% December 15, 2021.... 0.687% 0.000% January 15, 2027.... 0.000% 0.000%
January 15, 2017..... 3.739% 2.406% January 15, 2022..... 0.643% 0.000% February 15, 2027... 0.000% 0.000%
February 15, 2017.... 3.682% 2.313% February 15, 2022.... 0.599% 0.000% March 15, 2027...... 0.000% 0.000%
March 15, 2017....... 3.623% 2.217% March 15, 2022....... 0.556% 0.000% April 15, 2027...... 0.000% 0.000%
April 15, 2017....... 3.565% 2.121% April 15, 2022....... 0.514% 0.000% May 15, 2027........ 0.000% 0.000%
May 15, 2017......... 3.506% 2.024% May 15, 2022......... 0.472% 0.000% June 15, 2027....... 0.000% 0.000%
June 15, 2017........ 3.447% 1.925% June 15, 2022........ 0.432% 0.000% July 15, 2027....... 0.000% 0.000%
July 15, 2017........ 3.388% 1.824% July 15, 2022........ 0.392% 0.000% August 15, 2027..... 0.000% 0.000%
August 15, 2017...... 3.329% 1.722% August 15, 2022...... 0.354% 0.000% September 15, 2027.. 0.000% 0.000%
September 15, 2017... 3.300% 1.635% September 15, 2022... 0.316% 0.000% October 15, 2027.... 0.000% 0.000%
October 15, 2017..... 3.241% 1.531% October 15, 2022..... 0.290% 0.000% November 15, 2027... 0.000% 0.000%
November 15, 2017.... 3.213% 1.442% November 15, 2022.... 0.256% 0.000% December 15, 2027... 0.000% 0.000%
December 15, 2017.... 3.155% 1.336% December 15, 2022.... 0.224% 0.000% January 15, 2028.... 0.000% 0.000%
January 15, 2018..... 3.097% 1.229% January 15, 2023..... 0.193% 0.000% February 15, 2028... 0.000% 0.000%
February 15, 2018.... 3.039% 1.121% February 15, 2023.... 0.164% 0.000% March 15, 2028...... 0.000% 0.000%
March 15, 2018....... 2.979% 1.010% March 15, 2023....... 0.136% 0.000% April 15, 2028...... 0.000% 0.000%
April 15, 2018....... 2.936% 0.905% April 15, 2023....... 0.111% 0.000% May 15, 2028........ 0.000% 0.000%
May 15, 2018......... 2.879% 0.794% May 15, 2023......... 0.088% 0.000% June 15, 2028....... 0.000% 0.000%
June 15, 2018........ 2.823% 0.684% June 15, 2023........ 0.067% 0.000% July 15, 2028....... 0.000% 0.000%
July 15, 2018........ 2.767% 0.572% July 15, 2023........ 0.048% 0.000% August 15, 2028..... 0.000% 0.000%
August 15, 2018...... 2.711% 0.460% August 15, 2023...... 0.032% 0.000% September 15, 2028.. 0.000% 0.000%
September 15, 2018... 2.655% 0.345% September 15, 2023... 0.018% 0.000% October 15, 2028.... 0.000% 0.000%
October 15, 2018..... 2.599% 0.229% October 15, 2023..... 0.008% 0.000% November 15, 2028... 0.000% 0.000%
November 15, 2018.... 2.543% 0.111% November 15, 2023.... 0.001% 0.000% December 15, 2028... 0.000% 0.000%
December 15, 2018.... 2.486% 0.000% December 15, 2023.... 0.000% 0.000% January 15, 2029.... 0.000% 0.000%
January 15, 2019..... 2.430% 0.000% January 15, 2024..... 0.000% 0.000% February 15, 2029... 0.000% 0.000%
February 15, 2019.... 2.374% 0.000% February 15, 2024.... 0.000% 0.000% March 15, 2029...... 0.000% 0.000%
March 15, 2019....... 2.316% 0.000% March 15, 2024....... 0.000% 0.000% April 15, 2029...... 0.000% 0.000%
April 15, 2019....... 2.259% 0.000% April 15, 2024....... 0.000% 0.000% May 15, 2029........ 0.000% 0.000%
May 15, 2019......... 2.202% 0.000% May 15, 2024......... 0.000% 0.000% June 15, 2029....... 0.000% 0.000%
June 15, 2019........ 2.145% 0.000% June 15, 2024........ 0.000% 0.000% July 15, 2029....... 0.000% 0.000%
July 15, 2019........ 2.088% 0.000% July 15, 2024........ 0.000% 0.000% August 15, 2029..... 0.000% 0.000%
August 15, 2019...... 2.046% 0.000% August 15, 2024...... 0.000% 0.000% September 15, 2029.. 0.000% 0.000%
September 15, 2019... 2.002% 0.000% September 15, 2024... 0.000% 0.000% October 15, 2029.... 0.000% 0.000%
October 15, 2019..... 1.960% 0.000% October 15, 2024..... 0.000% 0.000% November 15, 2029... 0.000% 0.000%
November 15, 2019.... 1.906% 0.000% November 15, 2024.... 0.000% 0.000% December 15, 2029... 0.000% 0.000%
December 15, 2019.... 1.851% 0.000% December 15, 2024.... 0.000% 0.000% January 15, 2030.... 0.000% 0.000%
<Page>
<Caption>
CLASS B CLASS B CLASS B CLASS B CLASS B CLASS B
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
January 15, 2020..... 1.797% 0.000% January 15, 2025..... 0.000% 0.000% February 15, 2030... 0.000% 0.000%
February 15, 2020.... 1.743% 0.000% February 15, 2025.... 0.000% 0.000% March 15, 2030...... 0.000% 0.000%
March 15, 2020....... 1.688% 0.000% March 15, 2025....... 0.000% 0.000% April 15, 2030...... 0.000% 0.000%
April 15, 2020....... 1.644% 0.000% April 15, 2025....... 0.000% 0.000% May 15, 2030........ 0.000% 0.000%
May 15, 2020......... 1.601% 0.000% May 15, 2025......... 0.000% 0.000% June 15, 2030....... 0.000% 0.000%
June 15, 2020........ 1.550% 0.000% June 15, 2025........ 0.000% 0.000% July 15, 2030....... 0.000% 0.000%
July 15, 2020........ 1.498% 0.000% July 15, 2025........ 0.000% 0.000% August 15, 2030..... 0.000% 0.000%
August 15, 2020...... 1.446% 0.000% August 15, 2025...... 0.000% 0.000% September 15, 2030.. 0.000% 0.000%
September 15, 2020... 1.395% 0.000% September 15, 2025... 0.000% 0.000% October 15, 2030.... 0.000% 0.000%
October 15, 2020..... 1.344% 0.000% October 15, 2025..... 0.000% 0.000% November 15, 2030... 0.000% 0.000%
November 15, 2020.... 1.301% 0.000% November 15, 2025.... 0.000% 0.000% December 15, 2030... 0.000% 0.000%
December 15, 2020.... 1.251% 0.000% December 15, 2025.... 0.000% 0.000% January 15, 2031.... 0.000% 0.000%
January 15, 2021..... 1.209% 0.000% January 15, 2026..... 0.000% 0.000% February 15, 2031... 0.000% 0.000%
February 15, 2021.... 1.160% 0.000% February 15, 2026.... 0.000% 0.000% March 15, 2031...... 0.000% 0.000%
March 15, 2021....... 1.111% 0.000% March 15, 2026....... 0.000% 0.000% April 15, 2031...... 0.000% 0.000%
April 15, 2021....... 1.062% 0.000% April 15, 2026....... 0.000% 0.000% May 15, 2031........ 0.000% 0.000%
May 15, 2021......... 1.014% 0.000% May 15, 2026......... 0.000% 0.000% June 15, 2031....... 0.000% 0.000%
June 15, 2026........ 0.000% 0.000% July 15, 2031....... 0.000% 0.000%
</Table>
<Page>
CLASS C CLASS PERCENTAGES
<Table>
<Caption>
CLASS C CLASS C CLASS C CLASS C CLASS C CLASS C
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
Closing Date......... 9.088% 9.088% June 15, 2006........ 8.500% 8.450% June 15, 2011....... 6.836% 6.671%
July 15, 2001........ 9.094% 9.094% July 15, 2006........ 8.484% 8.433% July 15, 2011....... 6.806% 6.635%
August 15, 2001...... 9.106% 9.106% August 15, 2006...... 8.462% 8.410% August 15, 2011..... 6.770% 6.592%
September 15, 2001... 9.118% 9.118% September 15, 2006... 8.440% 8.386% September 15, 2011.. 6.733% 6.548%
October 15, 2001..... 9.130% 9.130% October 15, 2006..... 8.424% 8.368% October 15, 2011.... 6.703% 6.510%
November 15, 2001.... 9.143% 9.143% November 15, 2006.... 8.401% 8.344% November 15, 2011... 6.670% 6.471%
December 15, 2001.... 9.155% 9.155% December 15, 2006.... 8.378% 8.320% December 15, 2011... 6.634% 6.427%
January 15, 2002..... 9.167% 9.167% January 15, 2007..... 8.361% 8.302% January 15, 2012.... 6.599% 6.384%
February 15, 2002.... 9.180% 9.180% February 15, 2007.... 8.338% 8.277% February 15, 2012... 6.563% 6.340%
March 15, 2002....... 9.192% 9.192% March 15, 2007....... 8.314% 8.251% March 15, 2012...... 6.525% 6.294%
April 15, 2002....... 9.205% 9.205% April 15, 2007....... 8.297% 8.233% April 15, 2012...... 6.489% 6.249%
May 15, 2002......... 9.218% 9.218% May 15, 2007......... 8.273% 8.207% May 15, 2012........ 6.451% 6.203%
June 15, 2002........ 9.231% 9.231% June 15, 2007........ 8.249% 8.181% June 15, 2012....... 6.414% 6.157%
July 15, 2002........ 9.225% 9.223% July 15, 2007........ 8.231% 8.162% July 15, 2012....... 6.375% 6.110%
August 15, 2002...... 9.213% 9.210% August 15, 2007...... 8.206% 8.135% August 15, 2012..... 6.336% 6.063%
September 15, 2002... 9.193% 9.187% September 15, 2007... 8.182% 8.109% September 15, 2012.. 6.297% 6.015%
October 15, 2002..... 9.187% 9.180% October 15, 2007..... 8.163% 8.089% October 15, 2012.... 6.256% 5.966%
November 15, 2002.... 9.176% 9.168% November 15, 2007.... 8.138% 8.062% November 15, 2012... 6.216% 5.917%
December 15, 2002.... 9.157% 9.147% December 15, 2007.... 8.112% 8.034% December 15, 2012... 6.175% 5.866%
January 15, 2003..... 9.152% 9.140% January 15, 2008..... 8.093% 8.013% January 15, 2013.... 6.134% 5.816%
February 15, 2003.... 9.142% 9.129% February 15, 2008.... 8.067% 7.985% February 15, 2013... 6.093% 5.765%
March 15, 2003....... 9.124% 9.109% March 15, 2008....... 8.041% 7.956% March 15, 2013...... 6.048% 5.711%
April 15, 2003....... 9.117% 9.100% April 15, 2008....... 8.021% 7.934% April 15, 2013...... 6.007% 5.659%
May 15, 2003......... 9.103% 9.084% May 15, 2008......... 7.994% 7.905% May 15, 2013........ 5.963% 5.605%
June 15, 2003........ 9.083% 9.062% June 15, 2008........ 7.967% 7.875% June 15, 2013....... 5.921% 5.552%
July 15, 2003........ 9.088% 9.066% July 15, 2008........ 7.946% 7.852% July 15, 2013....... 5.878% 5.497%
August 15, 2003...... 9.074% 9.050% August 15, 2008...... 7.917% 7.822% August 15, 2013..... 5.835% 5.442%
September 15, 2003... 9.057% 9.032% September 15, 2008... 7.889% 7.792% September 15, 2013.. 5.792% 5.387%
October 15, 2003..... 9.047% 9.020% October 15, 2008..... 7.867% 7.768% October 15, 2013.... 5.747% 5.330%
November 15, 2003.... 9.032% 9.003% November 15, 2008.... 7.838% 7.737% November 15, 2013... 5.703% 5.273%
December 15, 2003.... 9.016% 8.986% December 15, 2008.... 7.809% 7.706% December 15, 2013... 5.658% 5.215%
January 15, 2004..... 9.007% 8.975% January 15, 2009..... 7.786% 7.681% January 15, 2014.... 5.614% 5.158%
February 15, 2004.... 8.991% 8.958% February 15, 2009.... 7.757% 7.649% February 15, 2014... 5.570% 5.099%
March 15, 2004....... 8.975% 8.940% March 15, 2009....... 7.726% 7.616% March 15, 2014...... 5.522% 5.038%
April 15, 2004....... 8.965% 8.928% April 15, 2009....... 7.703% 7.591% April 15, 2014...... 5.477% 4.978%
May 15, 2004......... 8.948% 8.909% May 15, 2009......... 7.672% 7.558% May 15, 2014........ 5.430% 4.916%
June 15, 2004........ 8.930% 8.890% June 15, 2009........ 7.641% 7.525% June 15, 2014....... 5.384% 4.854%
July 15, 2004........ 8.927% 8.886% July 15, 2009........ 7.616% 7.498% July 15, 2014....... 5.336% 4.791%
August 15, 2004...... 8.908% 8.867% August 15, 2009...... 7.583% 7.464% August 15, 2014..... 5.290% 4.728%
September 15, 2004... 8.889% 8.848% September 15, 2009... 7.549% 7.430% September 15, 2014.. 5.243% 4.664%
October 15, 2004..... 8.875% 8.834% October 15, 2009..... 7.523% 7.402% October 15, 2014.... 5.195% 4.598%
November 15, 2004.... 8.857% 8.815% November 15, 2009.... 7.489% 7.367% November 15, 2014... 5.147% 4.532%
December 15, 2004.... 8.838% 8.796% December 15, 2009.... 7.455% 7.331% December 15, 2014... 5.097% 4.465%
January 15, 2005..... 8.826% 8.783% January 15, 2010..... 7.428% 7.303% January 15, 2015.... 5.049% 4.398%
February 15, 2005.... 8.807% 8.764% February 15, 2010.... 7.393% 7.267% February 15, 2015... 5.000% 4.329%
March 15, 2005....... 8.787% 8.744% March 15, 2010....... 7.357% 7.230% March 15, 2015...... 4.948% 4.258%
April 15, 2005....... 8.775% 8.732% April 15, 2010....... 7.330% 7.200% April 15, 2015...... 4.899% 4.188%
May 15, 2005......... 8.755% 8.711% May 15, 2010......... 7.294% 7.163% May 15, 2015........ 4.848% 4.116%
June 15, 2005........ 8.734% 8.690% June 15, 2010........ 7.258% 7.125% June 15, 2015....... 4.797% 4.045%
July 15, 2005........ 8.720% 8.675% July 15, 2010........ 7.229% 7.094% July 15, 2015....... 4.746% 3.971%
August 15, 2005...... 8.699% 8.653% August 15, 2010...... 7.193% 7.056% August 15, 2015..... 4.695% 3.897%
<Page>
<Caption>
CLASS C CLASS C CLASS C CLASS C CLASS C CLASS C
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
September 15, 2005... 8.677% 8.632% September 15, 2010... 7.157% 7.018% September 15, 2015.. 4.644% 3.822%
October 15, 2005..... 8.662% 8.616% October 15, 2010..... 7.127% 6.986% October 15, 2015.... 4.591% 3.745%
November 15, 2005.... 8.641% 8.595% November 15, 2010.... 7.090% 6.947% November 15, 2015... 4.539% 3.667%
December 15, 2005.... 8.619% 8.573% December 15, 2010.... 7.053% 6.906% December 15, 2015... 4.486% 3.588%
January 15, 2006..... 8.605% 8.557% January 15, 2011..... 7.023% 6.873% January 15, 2016.... 4.433% 3.509%
February 15, 2006.... 8.583% 8.535% February 15, 2011.... 6.985% 6.833% February 15, 2016... 4.379% 3.428%
March 15, 2006....... 8.560% 8.512% March 15, 2011....... 6.944% 6.790% March 15, 2016...... 4.324% 3.345%
April 15, 2006....... 8.545% 8.496% April 15, 2011....... 6.914% 6.756% April 15, 2016...... 4.270% 3.262%
May 15, 2006......... 8.522% 8.473% May 15, 2011......... 6.874% 6.713% May 15, 2016........ 4.214% 3.177%
June 15, 2016........ 4.159% 3.092% June 15, 2021........ 0.918% 0.000% July 15, 2026....... 0.000% 0.000%
July 15, 2016........ 4.102% 3.005% July 15, 2021........ 0.871% 0.000% August 15, 2026..... 0.000% 0.000%
August 15, 2016...... 4.044% 2.917% August 15, 2021...... 0.824% 0.000% September 15, 2026.. 0.000% 0.000%
September 15, 2016... 3.987% 2.828% September 15, 2021... 0.778% 0.000% October 15, 2026.... 0.000% 0.000%
October 15, 2016..... 3.928% 2.737% October 15, 2021..... 0.732% 0.000% November 15, 2026... 0.000% 0.000%
November 15, 2016.... 3.870% 2.645% November 15, 2021.... 0.687% 0.000% December 15, 2026... 0.000% 0.000%
December 15, 2016.... 3.828% 2.564% December 15, 2021.... 0.643% 0.000% January 15, 2027.... 0.000% 0.000%
January 15, 2017..... 3.769% 2.470% January 15, 2022..... 0.600% 0.000% February 15, 2027... 0.000% 0.000%
February 15, 2017.... 3.710% 2.375% February 15, 2022.... 0.557% 0.000% March 15, 2027...... 0.000% 0.000%
March 15, 2017....... 3.649% 2.277% March 15, 2022....... 0.515% 0.000% April 15, 2027...... 0.000% 0.000%
April 15, 2017....... 3.589% 2.178% April 15, 2022....... 0.475% 0.000% May 15, 2027........ 0.000% 0.000%
May 15, 2017......... 3.528% 2.078% May 15, 2022......... 0.435% 0.000% June 15, 2027....... 0.000% 0.000%
June 15, 2017........ 3.468% 1.976% June 15, 2022........ 0.396% 0.000% July 15, 2027....... 0.000% 0.000%
July 15, 2017........ 3.407% 1.873% July 15, 2022........ 0.358% 0.000% August 15, 2027..... 0.000% 0.000%
August 15, 2017...... 3.346% 1.768% August 15, 2022...... 0.322% 0.000% September 15, 2027.. 0.000% 0.000%
September 15, 2017... 3.315% 1.679% September 15, 2022... 0.286% 0.000% October 15, 2027.... 0.000% 0.000%
October 15, 2017..... 3.255% 1.572% October 15, 2022..... 0.261% 0.000% November 15, 2027... 0.000% 0.000%
November 15, 2017.... 3.225% 1.480% November 15, 2022.... 0.229% 0.000% December 15, 2027... 0.000% 0.000%
December 15, 2017.... 3.165% 1.372% December 15, 2022.... 0.199% 0.000% January 15, 2028.... 0.000% 0.000%
January 15, 2018..... 3.106% 1.262% January 15, 2023..... 0.171% 0.000% February 15, 2028... 0.000% 0.000%
February 15, 2018.... 3.046% 1.151% February 15, 2023.... 0.144% 0.000% March 15, 2028...... 0.000% 0.000%
March 15, 2018....... 2.984% 1.037% March 15, 2023....... 0.119% 0.000% April 15, 2028...... 0.000% 0.000%
April 15, 2018....... 2.940% 0.929% April 15, 2023....... 0.096% 0.000% May 15, 2028........ 0.000% 0.000%
May 15, 2018......... 2.881% 0.815% May 15, 2023......... 0.075% 0.000% June 15, 2028....... 0.000% 0.000%
June 15, 2018........ 2.824% 0.702% June 15, 2023........ 0.056% 0.000% July 15, 2028....... 0.000% 0.000%
July 15, 2018........ 2.766% 0.588% July 15, 2023........ 0.040% 0.000% August 15, 2028..... 0.000% 0.000%
August 15, 2018...... 2.707% 0.472% August 15, 2023...... 0.026% 0.000% September 15, 2028.. 0.000% 0.000%
September 15, 2018... 2.648% 0.354% September 15, 2023... 0.014% 0.000% October 15, 2028.... 0.000% 0.000%
October 15, 2018..... 2.590% 0.235% October 15, 2023..... 0.006% 0.000% November 15, 2028... 0.000% 0.000%
November 15, 2018.... 2.531% 0.114% November 15, 2023.... 0.001% 0.000% December 15, 2028... 0.000% 0.000%
December 15, 2018.... 2.472% 0.000% December 15, 2023.... 0.000% 0.000% January 15, 2029.... 0.000% 0.000%
January 15, 2019..... 2.414% 0.000% January 15, 2024..... 0.000% 0.000% February 15, 2029... 0.000% 0.000%
February 15, 2019.... 2.355% 0.000% February 15, 2024.... 0.000% 0.000% March 15, 2029...... 0.000% 0.000%
March 15, 2019....... 2.295% 0.000% March 15, 2024....... 0.000% 0.000% April 15, 2029...... 0.000% 0.000%
April 15, 2019....... 2.236% 0.000% April 15, 2024....... 0.000% 0.000% May 15, 2029........ 0.000% 0.000%
May 15, 2019......... 2.177% 0.000% May 15, 2024......... 0.000% 0.000% June 15, 2029....... 0.000% 0.000%
June 15, 2019........ 2.118% 0.000% June 15, 2024........ 0.000% 0.000% July 15, 2029....... 0.000% 0.000%
July 15, 2019........ 2.059% 0.000% July 15, 2024........ 0.000% 0.000% August 15, 2029..... 0.000% 0.000%
August 15, 2019...... 2.015% 0.000% August 15, 2024...... 0.000% 0.000% September 15, 2029.. 0.000% 0.000%
September 15, 2019... 1.969% 0.000% September 15, 2024... 0.000% 0.000% October 15, 2029.... 0.000% 0.000%
October 15, 2019..... 1.925% 0.000% October 15, 2024..... 0.000% 0.000% November 15, 2029... 0.000% 0.000%
<Page>
<Caption>
CLASS C CLASS C CLASS C CLASS C CLASS C CLASS C
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
November 15, 2019.... 1.870% 0.000% November 15, 2024.... 0.000% 0.000% December 15, 2029... 0.000% 0.000%
December 15, 2019.... 1.814% 0.000% December 15, 2024.... 0.000% 0.000% January 15, 2030.... 0.000% 0.000%
January 15, 2020..... 1.758% 0.000% January 15, 2025..... 0.000% 0.000% February 15, 2030... 0.000% 0.000%
February 15, 2020.... 1.702% 0.000% February 15, 2025.... 0.000% 0.000% March 15, 2030...... 0.000% 0.000%
March 15, 2020....... 1.646% 0.000% March 15, 2025....... 0.000% 0.000% April 15, 2030...... 0.000% 0.000%
April 15, 2020....... 1.601% 0.000% April 15, 2025....... 0.000% 0.000% May 15, 2030........ 0.000% 0.000%
May 15, 2020......... 1.557% 0.000% May 15, 2025......... 0.000% 0.000% June 15, 2030....... 0.000% 0.000%
June 15, 2020........ 1.505% 0.000% June 15, 2025........ 0.000% 0.000% July 15, 2030....... 0.000% 0.000%
July 15, 2020........ 1.452% 0.000% July 15, 2025........ 0.000% 0.000% August 15, 2030..... 0.000% 0.000%
August 15, 2020...... 1.400% 0.000% August 15, 2025...... 0.000% 0.000% September 15, 2030.. 0.000% 0.000%
September 15, 2020... 1.348% 0.000% September 15, 2025... 0.000% 0.000% October 15, 2030.... 0.000% 0.000%
October 15, 2020..... 1.296% 0.000% October 15, 2025..... 0.000% 0.000% November 15, 2030... 0.000% 0.000%
November 15, 2020.... 1.253% 0.000% November 15, 2025.... 0.000% 0.000% December 15, 2030... 0.000% 0.000%
December 15, 2020.... 1.202% 0.000% December 15, 2025.... 0.000% 0.000% January 15, 2031.... 0.000% 0.000%
January 15, 2021..... 1.161% 0.000% January 15, 2026..... 0.000% 0.000% February 15, 2031... 0.000% 0.000%
February 15, 2021.... 1.112% 0.000% February 15, 2026.... 0.000% 0.000% March 15, 2031...... 0.000% 0.000%
March 15, 2021....... 1.062% 0.000% March 15, 2026....... 0.000% 0.000% April 15, 2031...... 0.000% 0.000%
April 15, 2021....... 1.014% 0.000% April 15, 2026....... 0.000% 0.000% May 15, 2031........ 0.000% 0.000%
May 15, 2021......... 0.965% 0.000% May 15, 2026......... 0.000% 0.000% June 15, 2031....... 0.000% 0.000%
June 15, 2026........ 0.000% 0.000% July 15, 2031....... 0.000% 0.000%
</Table>
<Page>
CLASS D CLASS PERCENTAGES
<Table>
<Caption>
CLASS D CLASS D CLASS D CLASS D CLASS D CLASS D
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
Closing Date......... 3.867% 3.867% June 15, 2006........ 3.641% 3.596% June 15, 2011....... 2.992% 2.839%
July 15, 2001........ 3.870% 3.870% July 15, 2006........ 3.635% 3.589% July 15, 2011....... 2.979% 2.823%
August 15, 2001...... 3.875% 3.875% August 15, 2006...... 3.626% 3.579% August 15, 2011..... 2.964% 2.805%
September 15, 2001... 3.880% 3.880% September 15, 2006... 3.617% 3.568% September 15, 2011.. 2.949% 2.786%
October 15, 2001..... 3.885% 3.885% October 15, 2006..... 3.611% 3.561% October 15, 2011.... 2.936% 2.770%
November 15, 2001.... 3.890% 3.890% November 15, 2006.... 3.602% 3.551% November 15, 2011... 2.923% 2.754%
December 15, 2001.... 3.896% 3.896% December 15, 2006.... 3.592% 3.540% December 15, 2011... 2.908% 2.735%
January 15, 2002..... 3.901% 3.901% January 15, 2007..... 3.586% 3.533% January 15, 2012.... 2.893% 2.717%
February 15, 2002.... 3.906% 3.906% February 15, 2007.... 3.576% 3.522% February 15, 2012... 2.878% 2.698%
March 15, 2002....... 3.912% 3.912% March 15, 2007....... 3.567% 3.511% March 15, 2012...... 2.862% 2.678%
April 15, 2002....... 3.917% 3.917% April 15, 2007....... 3.560% 3.503% April 15, 2012...... 2.847% 2.659%
May 15, 2002......... 3.922% 3.922% May 15, 2007......... 3.550% 3.492% May 15, 2012........ 2.831% 2.640%
June 15, 2002........ 3.928% 3.928% June 15, 2007........ 3.540% 3.481% June 15, 2012....... 2.815% 2.620%
July 15, 2002........ 3.925% 3.925% July 15, 2007........ 3.533% 3.473% July 15, 2012....... 2.799% 2.600%
August 15, 2002...... 3.920% 3.919% August 15, 2007...... 3.523% 3.462% August 15, 2012..... 2.783% 2.580%
September 15, 2002... 3.912% 3.910% September 15, 2007... 3.513% 3.451% September 15, 2012.. 2.767% 2.560%
October 15, 2002..... 3.909% 3.906% October 15, 2007..... 3.506% 3.442% October 15, 2012.... 2.750% 2.539%
November 15, 2002.... 3.905% 3.901% November 15, 2007.... 3.496% 3.430% November 15, 2012... 2.733% 2.518%
December 15, 2002.... 3.897% 3.892% December 15, 2007.... 3.485% 3.419% December 15, 2012... 2.716% 2.496%
January 15, 2003..... 3.895% 3.889% January 15, 2008..... 3.478% 3.410% January 15, 2013.... 2.699% 2.475%
February 15, 2003.... 3.890% 3.885% February 15, 2008.... 3.467% 3.398% February 15, 2013... 2.682% 2.453%
March 15, 2003....... 3.883% 3.876% March 15, 2008....... 3.456% 3.386% March 15, 2013...... 2.664% 2.430%
April 15, 2003....... 3.880% 3.872% April 15, 2008....... 3.448% 3.376% April 15, 2013...... 2.646% 2.408%
May 15, 2003......... 3.874% 3.866% May 15, 2008......... 3.437% 3.364% May 15, 2013........ 2.628% 2.385%
June 15, 2003........ 3.866% 3.856% June 15, 2008........ 3.426% 3.351% June 15, 2013....... 2.611% 2.362%
July 15, 2003........ 3.868% 3.858% July 15, 2008........ 3.418% 3.341% July 15, 2013....... 2.593% 2.339%
August 15, 2003...... 3.862% 3.851% August 15, 2008...... 3.407% 3.329% August 15, 2013..... 2.575% 2.316%
September 15, 2003... 3.855% 3.843% September 15, 2008... 3.395% 3.316% September 15, 2013.. 2.557% 2.292%
October 15, 2003..... 3.851% 3.838% October 15, 2008..... 3.387% 3.306% October 15, 2013.... 2.538% 2.268%
November 15, 2003.... 3.845% 3.831% November 15, 2008.... 3.375% 3.292% November 15, 2013... 2.520% 2.244%
December 15, 2003.... 3.838% 3.824% December 15, 2008.... 3.363% 3.279% December 15, 2013... 2.501% 2.219%
January 15, 2004..... 3.834% 3.819% January 15, 2009..... 3.355% 3.268% January 15, 2014.... 2.483% 2.195%
February 15, 2004.... 3.828% 3.812% February 15, 2009.... 3.343% 3.255% February 15, 2014... 2.464% 2.170%
March 15, 2004....... 3.821% 3.804% March 15, 2009....... 3.331% 3.241% March 15, 2014...... 2.444% 2.144%
April 15, 2004....... 3.817% 3.799% April 15, 2009....... 3.322% 3.230% April 15, 2014...... 2.425% 2.118%
May 15, 2004......... 3.810% 3.791% May 15, 2009......... 3.309% 3.216% May 15, 2014........ 2.406% 2.092%
June 15, 2004........ 3.803% 3.783% June 15, 2009........ 3.297% 3.202% June 15, 2014....... 2.386% 2.066%
July 15, 2004........ 3.802% 3.781% July 15, 2009........ 3.288% 3.191% July 15, 2014....... 2.365% 2.039%
August 15, 2004...... 3.795% 3.773% August 15, 2009...... 3.275% 3.176% August 15, 2014..... 2.345% 2.012%
September 15, 2004... 3.787% 3.765% September 15, 2009... 3.263% 3.162% September 15, 2014.. 2.325% 1.985%
October 15, 2004..... 3.783% 3.759% October 15, 2009..... 3.253% 3.150% October 15, 2014.... 2.303% 1.957%
November 15, 2004.... 3.776% 3.751% November 15, 2009.... 3.240% 3.135% November 15, 2014... 2.283% 1.929%
December 15, 2004.... 3.768% 3.743% December 15, 2009.... 3.227% 3.120% December 15, 2014... 2.261% 1.900%
January 15, 2005..... 3.764% 3.738% January 15, 2010..... 3.217% 3.108% January 15, 2015.... 2.240% 1.871%
February 15, 2005.... 3.757% 3.729% February 15, 2010.... 3.204% 3.092% February 15, 2015... 2.218% 1.842%
March 15, 2005....... 3.749% 3.721% March 15, 2010....... 3.190% 3.076% March 15, 2015...... 2.196% 1.812%
April 15, 2005....... 3.745% 3.716% April 15, 2010....... 3.180% 3.064% April 15, 2015...... 2.174% 1.782%
May 15, 2005......... 3.737% 3.707% May 15, 2010......... 3.166% 3.048% May 15, 2015........ 2.152% 1.752%
June 15, 2005........ 3.729% 3.698% June 15, 2010........ 3.153% 3.032% June 15, 2015....... 2.129% 1.721%
July 15, 2005........ 3.724% 3.691% July 15, 2010........ 3.142% 3.019% July 15, 2015....... 2.107% 1.690%
August 15, 2005...... 3.716% 3.682% August 15, 2010...... 3.128% 3.003% August 15, 2015..... 2.084% 1.658%
September 15, 2005... 3.708% 3.673% September 15, 2010... 3.114% 2.986% September 15, 2015.. 2.061% 1.626%
October 15, 2005..... 3.703% 3.667% October 15, 2010..... 3.103% 2.973% October 15, 2015.... 2.038% 1.594%
November 15, 2005.... 3.695% 3.657% November 15, 2010.... 3.089% 2.956% November 15, 2015... 2.015% 1.561%
December 15, 2005.... 3.686% 3.648% December 15, 2010.... 3.075% 2.939% December 15, 2015... 1.991% 1.527%
<Page>
<Caption>
CLASS D CLASS D CLASS D CLASS D CLASS D CLASS D
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
January 15, 2006..... 3.681% 3.641% January 15, 2011..... 3.063% 2.925% January 15, 2016.... 1.968% 1.493%
February 15, 2006.... 3.673% 3.632% February 15, 2011.... 3.049% 2.908% February 15, 2016... 1.944% 1.459%
March 15, 2006....... 3.664% 3.622% March 15, 2011....... 3.033% 2.889% March 15, 2016...... 1.919% 1.423%
April 15, 2006....... 3.658% 3.615% April 15, 2011....... 3.022% 2.875% April 15, 2016...... 1.895% 1.388%
May 15, 2006......... 3.650% 3.606% May 15, 2011......... 3.007% 2.857% May 15, 2016........ 1.871% 1.352%
June 15, 2016........ 1.846% 1.316% June 15, 2021........ 0.423% 0.000% July 15, 2026....... 0.000% 0.000%
July 15, 2016........ 1.821% 1.279% July 15, 2021........ 0.402% 0.000% August 15, 2026..... 0.000% 0.000%
August 15, 2016...... 1.795% 1.241% August 15, 2021...... 0.381% 0.000% September 15, 2026.. 0.000% 0.000%
September 15, 2016... 1.770% 1.203% September 15, 2021... 0.361% 0.000% October 15, 2026.... 0.000% 0.000%
October 15, 2016..... 1.744% 1.165% October 15, 2021..... 0.340% 0.000% November 15, 2026... 0.000% 0.000%
November 15, 2016.... 1.718% 1.126% November 15, 2021.... 0.320% 0.000% December 15, 2026... 0.000% 0.000%
December 15, 2016.... 1.699% 1.091% December 15, 2021.... 0.300% 0.000% January 15, 2027.... 0.000% 0.000%
January 15, 2017..... 1.673% 1.051% January 15, 2022..... 0.280% 0.000% February 15, 2027... 0.000% 0.000%
February 15, 2017.... 1.647% 1.010% February 15, 2022.... 0.261% 0.000% March 15, 2027...... 0.000% 0.000%
March 15, 2017....... 1.620% 0.969% March 15, 2022....... 0.242% 0.000% April 15, 2027...... 0.000% 0.000%
April 15, 2017....... 1.593% 0.927% April 15, 2022....... 0.224% 0.000% May 15, 2027........ 0.000% 0.000%
May 15, 2017......... 1.566% 0.884% May 15, 2022......... 0.205% 0.000% June 15, 2027....... 0.000% 0.000%
June 15, 2017........ 1.539% 0.841% June 15, 2022........ 0.188% 0.000% July 15, 2027....... 0.000% 0.000%
July 15, 2017........ 1.512% 0.797% July 15, 2022........ 0.170% 0.000% August 15, 2027..... 0.000% 0.000%
August 15, 2017...... 1.485% 0.752% August 15, 2022...... 0.153% 0.000% September 15, 2027.. 0.000% 0.000%
September 15, 2017... 1.472% 0.714% September 15, 2022... 0.137% 0.000% October 15, 2027.... 0.000% 0.000%
October 15, 2017..... 1.445% 0.669% October 15, 2022..... 0.125% 0.000% November 15, 2027... 0.000% 0.000%
November 15, 2017.... 1.432% 0.630% November 15, 2022.... 0.111% 0.000% December 15, 2027... 0.000% 0.000%
December 15, 2017.... 1.405% 0.584% December 15, 2022.... 0.097% 0.000% January 15, 2028.... 0.000% 0.000%
January 15, 2018..... 1.379% 0.537% January 15, 2023..... 0.083% 0.000% February 15, 2028... 0.000% 0.000%
February 15, 2018.... 1.352% 0.490% February 15, 2023.... 0.070% 0.000% March 15, 2028...... 0.000% 0.000%
March 15, 2018....... 1.325% 0.441% March 15, 2023....... 0.059% 0.000% April 15, 2028...... 0.000% 0.000%
April 15, 2018....... 1.305% 0.395% April 15, 2023....... 0.048% 0.000% May 15, 2028........ 0.000% 0.000%
May 15, 2018......... 1.279% 0.347% May 15, 2023......... 0.038% 0.000% June 15, 2028....... 0.000% 0.000%
June 15, 2018........ 1.254% 0.299% June 15, 2023........ 0.028% 0.000% July 15, 2028....... 0.000% 0.000%
July 15, 2018........ 1.229% 0.250% July 15, 2023........ 0.020% 0.000% August 15, 2028..... 0.000% 0.000%
August 15, 2018...... 1.203% 0.201% August 15, 2023...... 0.013% 0.000% September 15, 2028.. 0.000% 0.000%
September 15, 2018... 1.178% 0.151% September 15, 2023... 0.008% 0.000% October 15, 2028.... 0.000% 0.000%
October 15, 2018..... 1.153% 0.100% October 15, 2023..... 0.003% 0.000% November 15, 2028... 0.000% 0.000%
November 15, 2018.... 1.128% 0.049% November 15, 2023.... 0.000% 0.000% December 15, 2028... 0.000% 0.000%
December 15, 2018.... 1.102% 0.000% December 15, 2023.... 0.000% 0.000% January 15, 2029.... 0.000% 0.000%
January 15, 2019..... 1.077% 0.000% January 15, 2024..... 0.000% 0.000% February 15, 2029... 0.000% 0.000%
February 15, 2019.... 1.052% 0.000% February 15, 2024.... 0.000% 0.000% March 15, 2029...... 0.000% 0.000%
March 15, 2019....... 1.026% 0.000% March 15, 2024....... 0.000% 0.000% April 15, 2029...... 0.000% 0.000%
April 15, 2019....... 1.001% 0.000% April 15, 2024....... 0.000% 0.000% May 15, 2029........ 0.000% 0.000%
May 15, 2019......... 0.975% 0.000% May 15, 2024......... 0.000% 0.000% June 15, 2029....... 0.000% 0.000%
June 15, 2019........ 0.950% 0.000% June 15, 2024........ 0.000% 0.000% July 15, 2029....... 0.000% 0.000%
July 15, 2019........ 0.924% 0.000% July 15, 2024........ 0.000% 0.000% August 15, 2029..... 0.000% 0.000%
August 15, 2019...... 0.905% 0.000% August 15, 2024...... 0.000% 0.000% September 15, 2029.. 0.000% 0.000%
September 15, 2019... 0.885% 0.000% September 15, 2024... 0.000% 0.000% October 15, 2029.... 0.000% 0.000%
October 15, 2019..... 0.866% 0.000% October 15, 2024..... 0.000% 0.000% November 15, 2029... 0.000% 0.000%
November 15, 2019.... 0.842% 0.000% November 15, 2024.... 0.000% 0.000% December 15, 2029... 0.000% 0.000%
December 15, 2019.... 0.818% 0.000% December 15, 2024.... 0.000% 0.000% January 15, 2030.... 0.000% 0.000%
January 15, 2020..... 0.794% 0.000% January 15, 2025..... 0.000% 0.000% February 15, 2030... 0.000% 0.000%
February 15, 2020.... 0.769% 0.000% February 15, 2025.... 0.000% 0.000% March 15, 2030...... 0.000% 0.000%
March 15, 2020....... 0.745% 0.000% March 15, 2025....... 0.000% 0.000% April 15, 2030...... 0.000% 0.000%
April 15, 2020....... 0.725% 0.000% April 15, 2025....... 0.000% 0.000% May 15, 2030........ 0.000% 0.000%
May 15, 2020......... 0.706% 0.000% May 15, 2025......... 0.000% 0.000% June 15, 2030....... 0.000% 0.000%
June 15, 2020........ 0.683% 0.000% June 15, 2025........ 0.000% 0.000% July 15, 2030....... 0.000% 0.000%
July 15, 2020........ 0.660% 0.000% July 15, 2025........ 0.000% 0.000% August 15, 2030..... 0.000% 0.000%
<Page>
<Caption>
CLASS D CLASS D CLASS D CLASS D CLASS D CLASS D
MINIMUM SCHEDULED MINIMUM SCHEDULED MINIMUM SCHEDULED
PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS PAYMENT DATE CLASS CLASS
OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES OCCURRING IN PERCENTAGES PERCENTAGES
------------ ----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
August 15, 2020...... 0.637% 0.000% August 15, 2025...... 0.000% 0.000% September 15, 2030.. 0.000% 0.000%
September 15, 2020... 0.614% 0.000% September 15, 2025... 0.000% 0.000% October 15, 2030.... 0.000% 0.000%
October 15, 2020..... 0.591% 0.000% October 15, 2025..... 0.000% 0.000% November 15, 2030... 0.000% 0.000%
November 15, 2020.... 0.572% 0.000% November 15, 2025.... 0.000% 0.000% December 15, 2030... 0.000% 0.000%
December 15, 2020.... 0.550% 0.000% December 15, 2025.... 0.000% 0.000% January 15, 2031.... 0.000% 0.000%
January 15, 2021..... 0.531% 0.000% January 15, 2026..... 0.000% 0.000% February 15, 2031... 0.000% 0.000%
February 15, 2021.... 0.510% 0.000% February 15, 2026.... 0.000% 0.000% March 15, 2031...... 0.000% 0.000%
March 15, 2021....... 0.488% 0.000% March 15, 2026....... 0.000% 0.000% April 15, 2031...... 0.000% 0.000%
April 15, 2021....... 0.466% 0.000% April 15, 2026....... 0.000% 0.000% May 15, 2031........ 0.000% 0.000%
May 15, 2021......... 0.445% 0.000% May 15, 2026......... 0.000% 0.000% June 15, 2031....... 0.000% 0.000%
June 15, 2026........ 0.000% 0.000% July 15, 2031....... 0.000% 0.000%
</Table>
<Page>
SCHEDULE 4
ASSUMED PRINCIPAL PAYMENTS ON THE CLASS B-2, CLASS C-2
AND CLASS D-2 NOTES
<Table>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
July 15, 2001....................... 421,037 -- --
August 15, 2001..................... 246,353 -- --
September 15, 2001.................. 337,411 -- --
October 15, 2001.................... 186,406 -- --
November 15, 2001................... 232,385 -- --
December 15, 2001................... 321,184 -- --
January 15, 2002.................... 175,189 -- --
February 15, 2002................... 236,231 -- --
March 15, 2002...................... 332,088 -- --
April 15, 2002...................... 187,352 -- --
May 15, 2002........................ 263,555 -- --
June 15, 2002....................... 353,094 -- --
July 15, 2002....................... 176,585 159,509 55,385
August 15, 2002..................... 227,549 205,545 71,370
September 15, 2002.................. 305,483 275,943 95,814
October 15, 2002.................... 174,995 158,073 54,886
November 15, 2002................... 218,246 197,142 68,452
December 15, 2002................... 297,318 268,567 93,253
January 15, 2003.................... 169,549 153,154 53,178
February 15, 2003................... 214,574 193,824 67,300
March 15, 2003...................... 285,556 257,943 89,564
April 15, 2003...................... 190,258 171,860 59,674
May 15, 2003........................ 251,116 226,833 78,762
June 15, 2003....................... 301,550 272,390 94,580
July 15, 2003....................... 86,538 78,169 27,142
August 15, 2003..................... 252,552 228,130 79,212
September 15, 2003.................. 270,978 244,774 84,991
October 15, 2003.................... 216,201 195,295 67,811
November 15, 2003................... 260,847 235,623 81,814
December 15, 2003................... 263,575 238,087 82,669
January 15, 2004.................... 212,357 191,823 66,605
February 15, 2004................... 264,885 239,271 83,080
March 15, 2004...................... 268,907 242,904 84,342
April 15, 2004...................... 218,011 196,929 68,378
May 15, 2004........................ 279,563 252,529 87,684
June 15, 2004....................... 279,818 252,760 87,764
July 15, 2004....................... 156,184 141,081 48,986
August 15, 2004..................... 282,208 254,919 88,513
September 15, 2004.................. 283,755 256,316 88,998
October 15, 2004.................... 235,200 212,456 73,770
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
November 15, 2004................... 278,882 251,914 87,470
December 15, 2004................... 281,655 254,419 88,340
January 15, 2005.................... 230,590 208,292 72,324
February 15, 2005................... 283,218 255,830 88,830
March 15, 2005...................... 288,463 260,569 90,475
April 15, 2005...................... 226,421 204,526 71,016
May 15, 2005........................ 296,530 267,856 93,006
June 15, 2005....................... 296,934 268,220 93,132
July 15, 2005....................... 248,409 224,388 77,912
August 15, 2005..................... 299,922 270,920 94,069
September 15, 2005.................. 301,566 272,405 94,585
October 15, 2005.................... 253,838 229,292 79,615
November 15, 2005................... 301,512 272,355 94,568
December 15, 2005................... 305,140 275,633 95,706
January 15, 2006.................... 254,262 229,675 79,748
February 15, 2006................... 307,045 277,354 96,303
March 15, 2006...................... 312,243 282,049 97,934
April 15, 2006...................... 259,076 234,023 81,258
May 15, 2006........................ 313,021 282,752 98,178
June 15, 2006....................... 313,574 283,252 98,351
July 15, 2006....................... 265,080 239,447 83,141
August 15, 2006..................... 316,746 286,117 99,346
September 15, 2006.................. 318,482 287,685 99,890
October 15, 2006.................... 269,998 243,889 84,684
November 15, 2006................... 321,707 290,598 100,902
December 15, 2006................... 324,594 293,206 101,808
January 15, 2007.................... 273,885 247,401 85,903
February 15, 2007................... 326,750 295,153 102,484
March 15, 2007...................... 331,865 299,773 104,088
April 15, 2007...................... 278,996 252,017 87,506
May 15, 2007........................ 332,986 300,786 104,440
June 15, 2007....................... 333,713 301,443 104,668
July 15, 2007....................... 285,264 257,679 89,472
August 15, 2007..................... 337,106 304,508 105,732
September 15, 2007.................. 338,953 306,176 106,311
October 15, 2007.................... 290,516 262,423 91,119
November 15, 2007................... 342,403 309,293 107,393
December 15, 2007................... 346,755 313,224 108,758
January 15, 2008.................... 296,235 267,589 92,913
February 15, 2008................... 349,468 315,675 109,609
March 15, 2008...................... 354,331 320,068 111,135
April 15, 2008...................... 303,140 273,826 95,079
May 15, 2008........................ 357,786 323,188 112,218
June 15, 2008....................... 358,562 323,889 112,461
July 15, 2008....................... 310,179 280,185 97,286
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
August 15, 2008..................... 362,227 327,200 113,611
September 15, 2008.................. 364,212 328,993 114,234
October 15, 2008.................... 315,842 285,300 99,063
November 15, 2008................... 367,939 332,359 115,403
December 15, 2008................... 370,941 335,071 116,344
January 15, 2009.................... 320,625 289,620 100,563
February 15, 2009................... 373,746 337,604 117,224
March 15, 2009...................... 378,695 342,075 118,776
April 15, 2009...................... 326,506 294,933 102,407
May 15, 2009........................ 380,613 343,808 119,378
June 15, 2009....................... 381,745 344,830 119,733
July 15, 2009....................... 333,414 301,173 104,574
August 15, 2009..................... 385,370 348,105 120,870
September 15, 2009.................. 387,196 349,754 121,443
October 15, 2009.................... 339,413 306,592 106,456
November 15, 2009................... 390,600 352,829 122,510
December 15, 2009................... 394,737 356,566 123,807
January 15, 2010.................... 342,815 309,665 107,522
February 15, 2010................... 395,765 357,495 124,130
March 15, 2010...................... 406,891 367,545 127,620
April 15, 2010...................... 348,233 314,559 109,222
May 15, 2010........................ 404,827 365,680 126,972
June 15, 2010....................... 403,149 364,164 126,446
July 15, 2010....................... 357,849 323,245 112,238
August 15, 2010..................... 406,746 367,413 127,574
September 15, 2010.................. 408,687 369,167 128,183
October 15, 2010.................... 364,206 328,987 114,232
November 15, 2010................... 412,339 372,466 129,328
December 15, 2010................... 419,772 379,180 131,660
January 15, 2011.................... 364,959 329,668 114,468
February 15, 2011................... 418,028 377,605 131,113
March 15, 2011...................... 438,783 396,353 137,623
April 15, 2011...................... 370,787 334,932 116,296
May 15, 2011........................ 430,664 389,019 135,076
June 15, 2011....................... 425,963 384,772 133,602
July 15, 2011....................... 383,948 346,820 120,424
August 15, 2011..................... 430,328 388,716 134,971
September 15, 2011.................. 432,742 390,896 135,728
October 15, 2011.................... 390,750 352,965 122,557
November 15, 2011................... 403,119 364,137 126,437
December 15, 2011................... 429,323 387,807 134,655
January 15, 2012.................... 424,910 383,821 133,271
February 15, 2012................... 427,293 385,974 134,019
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
March 15, 2012...................... 442,936 400,105 138,925
April 15, 2012...................... 432,174 390,383 135,550
May 15, 2012........................ 441,087 398,434 138,345
June 15, 2012....................... 437,073 394,808 137,086
July 15, 2012....................... 445,877 402,761 139,847
August 15, 2012..................... 442,026 399,282 138,640
September 15, 2012.................. 444,505 401,522 139,417
October 15, 2012.................... 453,145 409,326 142,127
November 15, 2012................... 449,540 406,070 140,997
December 15, 2012................... 458,387 414,061 143,771
January 15, 2013.................... 454,952 410,958 142,694
February 15, 2013................... 457,504 413,264 143,494
March 15, 2013...................... 477,454 431,284 149,751
April 15, 2013...................... 461,979 417,305 144,898
May 15, 2013........................ 470,219 424,749 147,482
June 15, 2013....................... 465,470 420,459 145,993
July 15, 2013....................... 473,586 427,790 148,538
August 15, 2013..................... 470,738 425,217 147,645
September 15, 2013.................. 473,378 427,603 148,473
October 15, 2013.................... 481,319 434,775 150,964
November 15, 2013................... 476,375 430,309 149,413
December 15, 2013................... 484,184 437,364 151,862
January 15, 2014.................... 479,395 433,037 150,360
February 15, 2014................... 482,084 435,466 151,204
March 15, 2014...................... 499,529 451,225 156,675
April 15, 2014...................... 487,590 440,440 152,931
May 15, 2014........................ 495,086 447,211 155,282
June 15, 2014....................... 493,102 445,419 154,659
July 15, 2014....................... 500,476 452,080 156,972
August 15, 2014..................... 496,806 448,765 155,821
September 15, 2014.................. 499,592 451,282 156,695
October 15, 2014.................... 506,771 457,767 158,947
November 15, 2014................... 505,237 456,381 158,466
December 15, 2014................... 512,292 462,753 160,678
January 15, 2015.................... 508,496 459,324 159,488
February 15, 2015................... 511,348 461,901 160,382
March 15, 2015...................... 526,166 475,286 165,030
April 15, 2015...................... 517,168 467,158 162,208
May 15, 2015........................ 522,492 471,967 163,878
June 15, 2015....................... 521,601 471,163 163,598
July 15, 2015....................... 528,188 477,112 165,664
August 15, 2015..................... 527,490 476,482 165,445
September 15, 2015.................. 530,449 479,155 166,373
October 15, 2015.................... 536,839 484,927 168,377
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
November 15, 2015................... 536,436 484,562 168,251
December 15, 2015................... 542,694 490,215 170,214
January 15, 2016.................... 542,209 489,778 170,062
February 15, 2016................... 544,775 492,095 170,866
March 15, 2016...................... 553,825 500,270 173,705
April 15, 2016...................... 550,937 497,662 172,799
May 15, 2016........................ 555,315 501,616 174,172
June 15, 2016....................... 555,604 501,877 174,263
July 15, 2016....................... 559,377 505,286 175,446
August 15, 2016..................... 559,861 505,722 175,598
September 15, 2016.................. 563,001 508,559 176,583
October 15, 2016.................... 568,554 513,575 178,325
November 15, 2016................... 569,349 514,293 178,574
December 15, 2016................... 567,070 512,235 177,859
January 15, 2017.................... 568,033 513,104 178,161
February 15, 2017................... 571,219 515,983 179,161
March 15, 2017...................... 580,287 524,173 182,005
April 15, 2017...................... 577,679 521,817 181,186
May 15, 2017........................ 582,694 526,348 182,760
June 15, 2017....................... 584,187 527,697 183,228
July 15, 2017....................... 589,059 532,097 184,756
August 15, 2017..................... 590,769 533,641 185,292
September 15, 2017.................. 579,080 523,083 181,626
October 15, 2017.................... 583,651 527,212 183,060
November 15, 2017................... 570,670 515,487 178,988
December 15, 2017................... 575,016 519,412 180,351
January 15, 2018.................... 577,097 521,292 181,004
February 15, 2018................... 580,334 524,216 182,019
March 15, 2018...................... 586,219 529,532 183,865
April 15, 2018...................... 574,355 518,815 180,148
May 15, 2018........................ 4,507,402 4,071,537 1,413,728
June 15, 2018....................... -- -- --
July 15, 2018....................... -- -- --
August 15, 2018..................... -- -- --
September 15, 2018.................. -- -- --
October 15, 2018.................... -- -- --
November 15, 2018................... -- -- --
December 15, 2018................... -- -- --
January 15, 2019.................... -- -- --
February 15, 2019................... -- -- --
March 15, 2019...................... -- -- --
April 15, 2019...................... -- -- --
May 15, 2019........................ -- -- --
June 15, 2019....................... -- -- --
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
July 15, 2019....................... -- -- --
August 15, 2019..................... -- -- --
September 15, 2019.................. -- -- --
October 15, 2019.................... -- -- --
November 15, 2019................... -- -- --
December 15, 2019................... -- -- --
January 15, 2020.................... -- -- --
February 15, 2020................... -- -- --
March 15, 2020...................... -- -- --
April 15, 2020...................... -- -- --
May 15, 2020........................ -- -- --
June 15, 2020....................... -- -- --
July 15, 2020....................... -- -- --
August 15, 2020..................... -- -- --
September 15, 2020.................. -- -- --
October 15, 2020.................... -- -- --
November 15, 2020................... -- -- --
December 15, 2020................... -- -- --
January 15, 2021.................... -- -- --
February 15, 2021................... -- -- --
March 15, 2021...................... -- -- --
April 15, 2021...................... -- -- --
May 15, 2021........................ -- -- --
June 15, 2021....................... -- -- --
July 15, 2021....................... -- -- --
August 15, 2021..................... -- -- --
September 15, 2021.................. -- -- --
October 15, 2021.................... -- -- --
November 15, 2021................... -- -- --
December 15, 2021................... -- -- --
January 15, 2022.................... -- -- --
February 15, 2022................... -- -- --
March 15, 2022...................... -- -- --
April 15, 2022...................... -- -- --
May 15, 2022........................ -- -- --
June 15, 2022....................... -- -- --
July 15, 2022....................... -- -- --
August 15, 2022..................... -- -- --
September 15, 2022.................. -- -- --
October 15, 2022.................... -- -- --
November 15, 2022................... -- -- --
December 15, 2022................... -- -- --
January 15, 2023.................... -- -- --
February 15, 2023................... -- -- --
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
March 15, 2023...................... -- -- --
April 15, 2023...................... -- -- --
May 15, 2023........................ -- -- --
June 15, 2023....................... -- -- --
July 15, 2023....................... -- -- --
August 15, 2023..................... -- -- --
September 15, 2023.................. -- -- --
October 15, 2023.................... -- -- --
November 15, 2023................... -- -- --
December 15, 2023................... -- -- --
January 15, 2024.................... -- -- --
February 15, 2024................... -- -- --
March 15, 2024...................... -- -- --
April 15, 2024...................... -- -- --
May 15, 2024........................ -- -- --
June 15, 2024....................... -- -- --
July 15, 2024....................... -- -- --
August 15, 2024..................... -- -- --
September 15, 2024.................. -- -- --
October 15, 2024.................... -- -- --
November 15, 2024................... -- -- --
December 15, 2024................... -- -- --
January 15, 2025.................... -- -- --
February 15, 2025................... -- -- --
March 15, 2025...................... -- -- --
April 15, 2025...................... -- -- --
May 15, 2025........................ -- -- --
June 15, 2025....................... -- -- --
July 15, 2025....................... -- -- --
August 15, 2025..................... -- -- --
September 15, 2025.................. -- -- --
October 15, 2025.................... -- -- --
November 15, 2025................... -- -- --
December 15, 2025................... -- -- --
January 15, 2026.................... -- -- --
February 15, 2026................... -- -- --
March 15, 2026...................... -- -- --
April 15, 2026...................... -- -- --
May 15, 2026........................ -- -- --
June 15, 2026....................... -- -- --
July 15, 2026....................... -- -- --
August 15, 2026..................... -- -- --
September 15, 2026.................. -- -- --
October 15, 2026.................... -- -- --
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
November 15, 2026................... -- -- --
December 15, 2026................... -- -- --
January 15, 2027.................... -- -- --
February 15, 2027................... -- -- --
March 15, 2027...................... -- -- --
April 15, 2027...................... -- -- --
May 15, 2027........................ -- -- --
June 15, 2027....................... -- -- --
July 15, 2027....................... -- -- --
August 15, 2027..................... -- -- --
September 15, 2027.................. -- -- --
October 15, 2027.................... -- -- --
November 15, 2027................... -- -- --
December 15, 2027................... -- -- --
January 15, 2028.................... -- -- --
February 15, 2028................... -- -- --
March 15, 2028...................... -- -- --
April 15, 2028...................... -- -- --
May 15, 2028........................ -- -- --
June 15, 2028....................... -- -- --
July 15, 2028....................... -- -- --
August 15, 2028..................... -- -- --
September 15, 2028.................. -- -- --
October 15, 2028.................... -- -- --
November 15, 2028................... -- -- --
December 15, 2028................... -- -- --
January 15, 2029.................... -- -- --
February 15, 2029................... -- -- --
March 15, 2029...................... -- -- --
April 15, 2029...................... -- -- --
May 15, 2029........................ -- -- --
June 15, 2029....................... -- -- --
July 15, 2029....................... -- -- --
August 15, 2029..................... -- -- --
September 15, 2029.................. -- -- --
October 15, 2029.................... -- -- --
November 15, 2029................... -- -- --
December 15, 2029................... -- -- --
January 15, 2030.................... -- -- --
February 15, 2030................... -- -- --
March 15, 2030...................... -- -- --
April 15, 2030...................... -- -- --
May 15, 2030........................ -- -- --
June 15, 2030....................... -- -- --
<Page>
<Caption>
ASSUMED ASSUMED ASSUMED
CLASS B-2 CLASS C-2 CLASS D-2
PAYMENT DATE PRINCIPAL PRINCIPAL PRINCIPAL
OCCURRING IN PAYMENTS PAYMENTS PAYMENTS
------------ -------- -------- --------
July 15, 2030....................... -- -- --
August 15, 2030..................... -- -- --
September 15, 2030.................. -- -- --
October 15, 2030.................... -- -- --
November 15, 2030................... -- -- --
December 15, 2030................... -- -- --
January 15, 2031.................... -- -- --
February 15, 2031................... -- -- --
March 15, 2031...................... -- -- --
April 15, 2031...................... -- -- --
May 15, 2031........................ -- -- --
June 15, 2031....................... -- -- --
July 15, 2031....................... -- -- --
</Table>
<Page>
Schedule 5
Principal Amortization of the Bridge Notes
<Table>
<Caption>
Payment Date Occurring In Payments ($)
--------------------------------------------------------------------------------
July 15, 2001................................................ 3,500,000.00
August 15, 2001.............................................. 3,500,000.00
September 15, 2001........................................... 3,500,000.00
October 15, 2001............................................. 3,500,000.00
November 15, 2001............................................ 3,500,000.00
December 15, 2001............................................ 3,500,000.00
January 15, 2002............................................. 3,500,000.00
February 15, 2002............................................ 3,500,000.00
March 15, 2002............................................... 3,500,000.00
April 15, 2002............................................... 3,500,000.00
May 15, 2002................................................. 3,500,000.00
June 15, 2002................................................ 3,500,000.00
July 15, 2002................................................ 1,268,512,575.50
</Table>
<Page>
EXHIBIT A-1
FORM OF NOTE FOR ANY SUBCLASS OF CLASS A NOTES THAT ARE FLOATING
RATE NOTES
<Page>
FORM OF SUBCLASS OF CLASS A NOTES THAT ARE FLOATING RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
A-1-2
<Page>
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
[IF THIS NOTE IS OFFERED AND SOLD IN RELIANCE ON SECTION 4(2)
OF THE SECURITIES ACT (OTHER THAN IN RELIANCE ON RULE 144A),
INSERT:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
A-1-3
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS A-[ ] FLOATING RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ______________________________ DOLLARS ($_________) on
[_____, __ 20__] (the "Final Maturity Date") and to pay interest monthly in
arrears on the Outstanding Principal Balance hereof at a fluctuating rate per
annum equal to the sum of LIBOR (calculated as provided in the Indenture) plus
[_.__]% per annum ([as adjusted for Maturity Step-Up Interest]* [and
Registration Step-Up Interest]**, the "Stated Rate of Interest") from the date
hereof until the Outstanding Principal Balance hereof is paid, payable on each
Payment Date. Interest on this Note in each Interest Accrual Period will be
calculated by the Administrative Agent (as hereinafter defined) by multiplying
the Stated Rate of Interest on this Note for the relevant Interest Accrual
Period by the Outstanding Principal Balance of this Note on the first day of
such Interest Accrual Period and by multiplying the product by the actual number
of days in such Interest Accrual Period divided by 360 and rounding the
resulting amount to the nearest cent (with half a cent being rounded upwards).
This Class A-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class A Notes of any subclass (including additional Class A-[ ]
Notes), Class B Notes, Class C Notes and Class D Notes. All capitalized terms
used in this Class A-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class A-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
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principal hereof as provided in Section 3.08 of the Indenture (after making
payments entitled to priority under Section 3.08 of the Indenture). In addition,
the Issuer may optionally redeem all or part of the Outstanding Principal
Balance of this Note on any Payment Date at the applicable Redemption Price
(calculated as provided in the Indenture) or, in the case of a redemption for
taxation reasons specified in the Indenture or a redemption in certain default
circumstances as provided in the Indenture, at the Outstanding Principal Balance
hereof plus accrued and unpaid interest hereon, in each case as provided in
Section 3.10 of the Indenture. Further, the Issuer may provide for the
defeasance of this Note in accordance with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class A-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and
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* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
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shall be forthwith paid over to the Security Trustee in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to
or held as collateral (in the case of non-cash property or securities) for the
payment or prepayment of the Senior Claims (as defined in the Indenture) in
accordance with the terms of the Indenture.
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class A-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class A-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class A-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a
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request to register the transfer or to exchange it for an equal principal amount
of Class A-[ ] Notes of other authorized denominations [(including an exchange
of this Note for an Exchange Note)]**, the Registrar shall register the transfer
or make the exchange as requested if its requirements for such transactions are
met (including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder) [; provided that no
exchanges of this Note for an Exchange Note shall occur until a Registration
Statement shall have been declared effective by the Commission] **. No service
charge shall be made for any registration of transfer or exchange of this Note,
but the party requesting such new Note or Notes may be required to pay a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class A-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
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** If the Note is to be issued as a Registrable Note.
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necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class A-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class A-[ ] Notes under the Indenture.
The Class A-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this Class A-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date:______________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By:
--------------------------------------
Name:
Title: Authorized Signatory
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[ ] Notes designated above and referred to in the
within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as the Trustee
By: _______________________________
Authorized Signatory
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[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No. __________________
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the
within-mentioned instrument
in every particular,
without alteration or any
change whatsoever.
The undersigned covenants and agrees that it will treat this Note as
indebtedness for all purposes and will not take any action contrary to such
characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior to the date which
is the earlier of [(i) the date the Shelf Registration Statement or the Exchange
Offer Registration Statement is declared effective and this Note has been
exchanged for a freely tradable Exchange Note bearing terms substantially
identical to this Note or (ii)]** the end of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
----------
** If the Note is to be issued as a Registrable Note.
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{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
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EXHIBIT A-2
FORM OF NOTE FOR ANY SUBCLASS OF CLASS A NOTES THAT ARE FIXED RATE
NOTES
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FORM OF SUBCLASS OF CLASS A NOTES THAT ARE FIXED RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
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HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
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LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS A-[ ] FIXED RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ________________ DOLLARS ($_________) on [_____, __ 20__]
(the "Final Maturity Date") and to pay interest monthly in arrears on the
Outstanding Principal Balance hereof at the rate of [_.__]% per annum ([as
adjusted for Maturity Step-Up Interest]* [and Registration Step-Up Interest]**,
the "Stated Rate of Interest") from the date hereof until the Outstanding
Principal Balance hereof is paid, payable on each Payment Date. Interest on this
Note in each Interest Accrual Period will be calculated by the Administrative
Agent (as hereinafter defined) on the basis of a 360-day year and one-twelfth of
an annual interest payment on the Outstanding Principal Balance and, in the case
of the first Interest Accrual Period, on the basis of a 360-day year consisting
of twelve 30-day months and the actual number of days in such Interest Accrual
Period.
This Class A-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class A Notes of any subclass (including additional Class A-[ ]
Notes), Class B Notes, Class C Notes and Class D Notes. All capitalized terms
used in this Class A-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class A-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the principal hereof as provided in Section 3.08 of
the Indenture (after making payments entitled to priority under Section 3.08 of
the Indenture). In addition, the Issuer may optionally redeem all or part of the
Outstanding Principal Balance of this Note on any Payment Date at the applicable
Redemption Price (calculated as provided in the Indenture) or, in the case of a
redemption for taxation reasons specified in the Indenture or a redemption in
certain default circumstances as provided in the Indenture, at the Outstanding
Principal Balance hereof plus accrued and unpaid
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
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interest hereon, in each case as provided in Section 3.10 of the Indenture.
Further, the Issuer may provide for the defeasance of this Note in accordance
with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class A-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and shall be forthwith paid over to the Security Trustee in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as collateral (in the case of non-cash property or securities)
for the payment or prepayment of the Senior Claims (as defined in the Indenture)
in accordance with the terms of the Indenture.
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
** If the Note is to be issued as a Registrable Note.
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
A-2-5
<Page>
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class A-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class A-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class A-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of Class A-[ ] Notes of other authorized denominations [(including an
exchange of this Note for an Exchange Note)]**, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Note is
----------
** If the Note is to be issued as a Registrable Note.
A-2-6
<Page>
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder)[;
provided that no exchanges of this Note for an Exchange Note shall occur until a
Registration Statement shall have been declared effective by the Commission.]
**. No service charge shall be made for any registration of transfer or exchange
of this Note, but the party requesting such new Note or Notes may be required to
pay a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class A-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any
----------
** If the Note is to be issued as a Registrable Note.
A-2-7
<Page>
amendment or modification of the Indenture shall be binding on every Holder
hereof, whether or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class A-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class A-[ ] Notes under the Indenture.
The Class A-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
A-2-8
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class A-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date: _________________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By:
-------------------------------------
Name:
Title: Authorized Signatory
A-2-9
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[ ] Notes designated above and
referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as
the Trustee
By: ______________________________
Authorized Signatory
A-2-10
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
The undersigned covenants and agrees that it will treat this
Note as indebtedness for all purposes and will not take any action contrary to
such characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior
to the date which is the earlier of [(i) the date the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective and
this Note has been exchanged for a freely tradable Exchange Note bearing terms
substantially identical to this Note or (ii)]* the end of the period referred to
in Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
----------
* If the Note is to be issued as a Registrable Note.
A-2-11
<Page>
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this Note in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.13 of the Indenture
shall have been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
A-2-12
<Page>
EXHIBIT B-1
FORM OF NOTE FOR ANY SUBCLASS OF CLASS B NOTES THAT ARE FLOATING
RATE NOTES
<Page>
FORM OF SUBCLASS OF CLASS B NOTES THAT ARE FLOATING RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
<Page>
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
[IF THIS NOTE IS OFFERED AND SOLD IN RELIANCE ON SECTION 4(2) OF THE
SECURITIES ACT (OTHER THAN IN RELIANCE ON RULE 144A), INSERT:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
B-1-2
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS B-[ ] FLOATING RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ______________________________ DOLLARS ($_________) on
[_____, __ 20__] (the "Final Maturity Date") and to pay interest monthly in
arrears on the Outstanding Principal Balance hereof at a fluctuating rate per
annum equal to the sum of LIBOR (calculated as provided in the Indenture) plus
[_.__]% per annum ([as adjusted for Maturity Step-Up Interest]* [and
Registration Step-Up Interest]**, the "Stated Rate of Interest") from the date
hereof until the Outstanding Principal Balance hereof is paid, payable on each
Payment Date. Interest on this Note in each Interest Accrual Period will be
calculated by the Administrative Agent (as hereinafter defined) by multiplying
the Stated Rate of Interest on this Note for the relevant Interest Accrual
Period by the Outstanding Principal Balance of this Note on the first day of
such Interest Accrual Period and by multiplying the product by the actual number
of days in such Interest Accrual Period divided by 360 and rounding the
resulting amount to the nearest cent (with half a cent being rounded upwards).
This Class B-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class B Notes of any subclass (including additional Class B-[ ]
Notes), Class A Notes, Class C Notes and Class D Notes. All capitalized terms
used in this Class B-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class B-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
B-1-3
<Page>
principal hereof as provided in Section 3.08 of the Indenture (after making
payments entitled to priority under Section 3.08 of the Indenture). In addition,
the Issuer may optionally redeem all or part of the Outstanding Principal
Balance of this Note on any Payment Date at the applicable Redemption Price
(calculated as provided in the Indenture) or, in the case of a redemption for
taxation reasons specified in the Indenture or a redemption in certain default
circumstances as provided in the Indenture, at the Outstanding Principal Balance
hereof plus accrued and unpaid interest hereon, in each case as provided in
Section 3.10 of the Indenture. Further, the Issuer may provide for the
defeasance of this Note in accordance with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class B-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
B-1-4
<Page>
shall be forthwith paid over to the Security Trustee in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to
or held as collateral (in the case of non-cash property or securities) for the
payment or prepayment of the Senior Claims (as defined in the Indenture) in
accordance with the terms of the Indenture.
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class B-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class B-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class B-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a
B-1-5
<Page>
request to register the transfer or to exchange it for an equal principal amount
of Class B-[ ] Notes of other authorized denominations [(including an exchange
of this Note for an Exchange Note)]**, the Registrar shall register the transfer
or make the exchange as requested if its requirements for such transactions are
met (including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder) [; provided that no
exchanges of this Note for an Exchange Note shall occur until a Registration
Statement shall have been declared effective by the Commission] **. No service
charge shall be made for any registration of transfer or exchange of this Note,
but the party requesting such new Note or Notes may be required to pay a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class B-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
----------
** If the Note is to be issued as a Registrable Note.
B-1-6
<Page>
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class B-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class B-[ ] Notes under the Indenture.
The Class B-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
B-1-7
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class B-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date:______________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By:___________________________________
Name:
Title: Authorized Signatory
B-1-8
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-[ ] Notes designated above and referred to in the
within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as the Trustee
By: _______________________________
Authorized Signatory
B-1-9
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto Insert Taxpayer Identification No. __________________
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the
within-mentioned instrument
in every particular,
without alteration or any
change whatsoever.
The undersigned covenants and agrees that it will treat this Note as
indebtedness for all purposes and will not take any action contrary to such
characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior to the date which
is the earlier of [(i) the date the Shelf Registration Statement or the Exchange
Offer Registration Statement is declared effective and this Note has been
exchanged for a freely tradable Exchange Note bearing terms substantially
identical to this Note or (ii)]** the end of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
----------
** If the Note is to be issued as a Registrable Note.
B-1-10
<Page>
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
B-1-11
<Page>
EXHIBIT B-2
FORM OF NOTE FOR ANY SUBCLASS OF CLASS B NOTES THAT ARE FIXED RATE
NOTES
<Page>
FORM OF SUBCLASS OF CLASS B NOTES THAT ARE FIXED RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
B-2-2
<Page>
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
[IF THIS NOTE IS OFFERED AND SOLD IN RELIANCE ON SECTION 4(2)
OF THE SECURITIES ACT (OTHER THAN IN RELIANCE ON RULE 144A),
INSERT:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
B-2-3
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS B-[ ] FIXED RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ________________ DOLLARS ($_________) on [_____, __ 20__]
(the "Final Maturity Date") and to pay interest monthly in arrears on the
Outstanding Principal Balance hereof at the rate of [_.__]% per annum ([as
adjusted for Maturity Step-Up Interest]* [and Registration Step-Up Interest]**,
the "Stated Rate of Interest") from the date hereof until the Outstanding
Principal Balance hereof is paid, payable on each Payment Date. Interest on this
Note in each Interest Accrual Period will be calculated by the Administrative
Agent (as hereinafter defined) on the basis of a 360-day year and one-twelfth of
an annual interest payment on the Outstanding Principal Balance and, in the case
of the first Interest Accrual Period, on the basis of a 360-day year consisting
of twelve 30-day months and the actual number of days in such Interest Accrual
Period.
This Class B-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class B Notes of any subclass (including additional Class B-[ ]
Notes), Class B Notes, Class C Notes and Class D Notes. All capitalized terms
used in this Class B-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class B-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the principal hereof as provided in Section 3.08 of
the Indenture (after making payments entitled to priority under Section 3.08 of
the Indenture). In addition, the Issuer may optionally redeem all or part of the
Outstanding Principal Balance of this Note on any Payment Date at the applicable
Redemption Price (calculated as provided in the Indenture) or, in the case of a
redemption for taxation reasons specified in the Indenture or a redemption in
certain default circumstances as provided in the Indenture, at the Outstanding
Principal Balance hereof plus accrued and unpaid
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
B-2-4
<Page>
interest hereon, in each case as provided in Section 3.10 of the Indenture.
Further, the Issuer may provide for the defeasance of this Note in accordance
with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class B-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and shall be forthwith paid over to the Security Trustee in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as collateral (in the case of non-cash property or securities)
for the payment or prepayment of the Senior Claims (as defined in the Indenture)
in accordance with the terms of the Indenture.
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
** If the Note is to be issued as a Registrable Note.
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
B-2-5
<Page>
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class B-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class B-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class B-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of Class B-[ ] Notes of other authorized denominations [(including an
exchange of this Note for an Exchange Note)]**, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Note is
----------
** If the Note is to be issued as a Registrable Note.
B-2-6
<Page>
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder)[;
provided that no exchanges of this Note for an Exchange Note shall occur until a
Registration Statement shall have been declared effective by the Commission.]
**. No service charge shall be made for any registration of transfer or exchange
of this Note, but the party requesting such new Note or Notes may be required to
pay a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class B-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any
----------
** If the Note is to be issued as a Registrable Note.
B-2-7
<Page>
amendment or modification of the Indenture shall be binding on every Holder
hereof, whether or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class B-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class B-[ ] Notes under the Indenture.
The Class B-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
B-2-8
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class B-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date: _________________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By:___________________________________
Name:
Title: Authorized Signatory
B-2-9
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-[ ] Notes designated above and
referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its individual
capacity but solely as the Trustee
By: _______________________________
Authorized Signatory
B-2-10
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
The undersigned covenants and agrees that it will treat this
Note as indebtedness for all purposes and will not take any action contrary to
such characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior
to the date which is the earlier of [(i) the date the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective and
this Note has been exchanged for a freely tradable Exchange Note bearing terms
substantially identical to this Note or (ii)]* the end of the period referred to
in Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
----------
* If the Note is to be issued as a Registrable Note.
B-2-11
<Page>
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this Note in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.13 of the Indenture
shall have been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
B-2-12
<Page>
EXHIBIT C-1
FORM OF NOTE FOR ANY SUBCLASS OF CLASS C NOTES THAT ARE FLOATING
RATE NOTES
<Page>
FORM OF SUBCLASS OF CLASS C NOTES THAT ARE FLOATING RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
C-1-2
<Page>
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
[IF THIS NOTE IS OFFERED AND SOLD IN RELIANCE ON SECTION 4(2)
OF THE SECURITIES ACT (OTHER THAN IN RELIANCE ON RULE 144A),
INSERT:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
C-1-3
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS C-[ ] FLOATING RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ______________________________ DOLLARS ($_________) on
[_____, __ 20__] (the "Final Maturity Date") and to pay interest monthly in
arrears on the Outstanding Principal Balance hereof at a fluctuating rate per
annum equal to the sum of LIBOR (calculated as provided in the Indenture) plus
[_.__]% per annum ([as adjusted for Maturity Step-Up Interest]* [and
Registration Step-Up Interest]**, the "Stated Rate of Interest") from the date
hereof until the Outstanding Principal Balance hereof is paid, payable on each
Payment Date. Interest on this Note in each Interest Accrual Period will be
calculated by the Administrative Agent (as hereinafter defined) by multiplying
the Stated Rate of Interest on this Note for the relevant Interest Accrual
Period by the Outstanding Principal Balance of this Note on the first day of
such Interest Accrual Period and by multiplying the product by the actual number
of days in such Interest Accrual Period divided by 360 and rounding the
resulting amount to the nearest cent (with half a cent being rounded upwards).
This Class C-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class C Notes of any subclass (including additional Class C-[ ]
Notes), Class A Notes, Class B Notes and Class D Notes. All capitalized terms
used in this Class C-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class C-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
C-1-4
<Page>
principal hereof as provided in Section 3.08 of the Indenture (after making
payments entitled to priority under Section 3.08 of the Indenture). In addition,
the Issuer may optionally redeem all or part of the Outstanding Principal
Balance of this Note on any Payment Date at the applicable Redemption Price
(calculated as provided in the Indenture) or, in the case of a redemption for
taxation reasons specified in the Indenture or a redemption in certain default
circumstances as provided in the Indenture, at the Outstanding Principal Balance
hereof plus accrued and unpaid interest hereon, in each case as provided in
Section 3.10 of the Indenture. Further, the Issuer may provide for the
defeasance of this Note in accordance with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class C-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
C-1-5
<Page>
shall be forthwith paid over to the Security Trustee in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to
or held as collateral (in the case of non-cash property or securities) for the
payment or prepayment of the Senior Claims (as defined in the Indenture) in
accordance with the terms of the Indenture.
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class C-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class C-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class C-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a
C-1-6
<Page>
request to register the transfer or to exchange it for an equal principal amount
of Class C-[ ] Notes of other authorized denominations [(including an exchange
of this Note for an Exchange Note)]**, the Registrar shall register the transfer
or make the exchange as requested if its requirements for such transactions are
met (including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder) [; provided that no
exchanges of this Note for an Exchange Note shall occur until a Registration
Statement shall have been declared effective by the Commission] **. No service
charge shall be made for any registration of transfer or exchange of this Note,
but the party requesting such new Note or Notes may be required to pay a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class C-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
----------
** If the Note is to be issued as a Registrable Note.
C-1-7
<Page>
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class C-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class C-[ ] Notes under the Indenture.
The Class C-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
C-1-8
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class C-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date:______________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By:
--------------------------------------
Name:
Title: Authorized Signatory
C-1-9
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C-[ ] Notes designated above and referred to in the
within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as the Trustee
By: _______________________________
Authorized Signatory
C-1-10
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto Insert Taxpayer Identification No. __________________
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the
within-mentioned instrument
in every particular,
without alteration or any
change whatsoever.
The undersigned covenants and agrees that it will treat this Note as
indebtedness for all purposes and will not take any action contrary to such
characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior to the date which
is the earlier of [(i) the date the Shelf Registration Statement or the Exchange
Offer Registration Statement is declared effective and this Note has been
exchanged for a freely tradable Exchange Note bearing terms substantially
identical to this Note or (ii)]** the end of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
----------
** If the Note is to be issued as a Registrable Note.
C-1-11
<Page>
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
C-1-12
<Page>
EXHIBIT C-2
FORM OF NOTE FOR ANY SUBCLASS OF CLASS C NOTES THAT ARE FIXED RATE
NOTES
<Page>
FORM OF SUBCLASS OF CLASS C NOTES THAT ARE FIXED RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
[IF THIS NOTE IS REPRESENTED BY A GLOBAL NOTE INSERT:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEASE INVESTMENT FLIGHT TRUST OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
C-2-2
<Page>
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.13 OF THE INDENTURE.]
[IF A TEMPORARY REGULATION S GLOBAL NOTE, INSERT:
THIS NOTE IS A TEMPORARY REGULATION S GLOBAL NOTE WITHIN THE MEANING OF
THE TRUST INDENTURE REFERRED TO HEREINAFTER AND IS SUBJECT TO
RESTRICTIONS ON THE TRANSFER AND EXCHANGE THEREOF AND ON THE PAYMENT OF
INTEREST THEREON AS SPECIFIED IN THE INDENTURE.]
[IF THIS NOTE IS OFFERED AND SOLD IN RELIANCE ON SECTION 4(2)
OF THE SECURITIES ACT (OTHER THAN IN RELIANCE ON RULE 144A),
INSERT:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
C-2-3
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS C-[ ] FIXED RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ________________ DOLLARS ($_________) on [_____, __ 20__]
(the "Final Maturity Date") and to pay interest monthly in arrears on the
Outstanding Principal Balance hereof at the rate of [_.__]% per annum ([as
adjusted for Maturity Step-Up Interest]* [and Registration Step-Up Interest]**,
the "Stated Rate of Interest") from the date hereof until the Outstanding
Principal Balance hereof is paid, payable on each Payment Date. Interest on this
Note in each Interest Accrual Period will be calculated by the Administrative
Agent (as hereinafter defined) on the basis of a 360-day year and one-twelfth of
an annual interest payment on the Outstanding Principal Balance and, in the case
of the first Interest Accrual Period, on the basis of a 360-day year consisting
of twelve 30-day months and the actual number of days in such Interest Accrual
Period.
This Class C-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class C Notes of any subclass (including additional Class C-[ ]
Notes), Class A Notes, Class B Notes and Class D Notes. All capitalized terms
used in this Class C-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class C-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the principal hereof as provided in Section 3.08 of
the Indenture (after making payments entitled to priority under Section 3.08 of
the Indenture). In addition, the Issuer may optionally redeem all or part of the
Outstanding Principal Balance of this Note on any Payment Date at the applicable
Redemption Price (calculated as provided in the Indenture) or, in the case of a
redemption for taxation reasons specified in the Indenture or a redemption in
certain default circumstances as provided in the Indenture, at the Outstanding
Principal Balance hereof plus accrued and unpaid
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
C-2-4
<Page>
interest hereon, in each case as provided in Section 3.10 of the Indenture.
Further, the Issuer may provide for the defeasance of this Note in accordance
with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest] [and Registration Step-Up Interest]) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class C-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and shall be forthwith paid over to the Security Trustee in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as collateral (in the case of non-cash property or securities)
for the payment or prepayment of the Senior Claims (as defined in the Indenture)
in accordance with the terms of the Indenture.
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
----------
** If the Note is to be issued as a Registrable Note.
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
C-2-5
<Page>
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class C-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class C-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Note, however, shall be made only upon
presentation and surrender of this Note by the Holder or its agent at the
Corporate Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
The Trustee or Paying Agent shall mail such notice of the final payment of this
Note to the Holder, specifying the date and amount of such final payment, no
later than five Business Days prior to such final payment. At such time, if any,
as this Note is issued in the form of one or more Definitive Notes, payments on
a Payment Date shall be made by check mailed to each Holder of such a Definitive
Note on the applicable Record Date at its address appearing on the Register
maintained with respect to the Notes. Alternatively, upon application in writing
to the Trustee, not later than the applicable Record Date, by a Holder of one or
more Definitive Notes of Class C-[ ] Notes having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer to
an account designated by such Holder at a financial institution in New York, New
York. The final payment with respect to any such Definitive Note, however, shall
be made only upon presentation and surrender of such Definitive Note by the
Holder or its agent at the Corporate Trust Office or agency of the Trustee or
Paying Agent specified in the notice of such final payment given by the Trustee
or Paying Agent. The Trustee or Paying Agent shall mail such notice of the final
payment of this Note to the Holder, specifying the date and amount of such final
payment, no later than five Business Days prior to such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of Class C-[ ] Notes of other authorized denominations [(including an
exchange of this Note for an Exchange Note)]**, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Note is
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder)[;
provided that no exchanges of this Note for an Exchange
----------
** If the Note is to be issued as a Registrable Note.
C-2-6
<Page>
Note shall occur until a Registration Statement shall have been declared
effective by the Commission.] **. No service charge shall be made for any
registration of transfer or exchange of this Note, but the party requesting such
new Note or Notes may be required to pay a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class C-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
----------
** If the Note is to be issued as a Registrable Note.
C-2-7
<Page>
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class C-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class C-[ ] Notes under the Indenture.
The Class C-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
C-2-8
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class C-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date: _________________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By:
-------------------------------------
Name:
Title: Authorized Signatory
C-2-9
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C-[ ] Notes designated above and
referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as
the Trustee
By: ______________________________
Authorized Signatory
C-2-10
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
The undersigned covenants and agrees that it will treat this
Note as indebtedness for all purposes and will not take any action contrary to
such characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior
to the date which is the earlier of [(i) the date the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective and
this Note has been exchanged for a freely tradable Exchange Note bearing terms
substantially identical to this Note or (ii)]* the end of the period referred to
in Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
----------
* If the Note is to be issued as a Registrable Note.
C-2-11
<Page>
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this Note in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.13 of the Indenture
shall have been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
C-2-12
<Page>
EXHIBIT D-1
FORM OF NOTE FOR ANY SUBCLASS OF CLASS D NOTES THAT ARE FLOATING
RATE NOTES
<Page>
FORM OF SUBCLASS OF CLASS D NOTES THAT ARE FLOATING RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS NOTE IS SUBJECT TO ADDITIONAL RESTRICTIONS ON THE TRANSFER THEREOF
SET FORTH IN SECTION 2.13(H) OF THE INDENTURE, INCLUDING A LIMIT ON THE
NUMBER OF DIRECT OR INDIRECT HOLDERS THEREOF, A PROHIBITION ON
TRANSFERS TO NON-U.S. PERSONS AND DELIVERY BY THE TRANSFEREE OF CERTAIN
CERTIFICATIONS TO THE TRUSTEE.
D-1-2
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS D-[ ] FLOATING RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to _____________, or registered
assigns, the principal sum of ______________________________ DOLLARS
($_________) on [_____, __ 20__] (the "Final Maturity Date") and to pay interest
monthly in arrears on the Outstanding Principal Balance hereof at a fluctuating
rate per annum equal to the sum of LIBOR (calculated as provided in the
Indenture) plus [_.__]% per annum ([as adjusted for Maturity Step-Up Interest]*
[and Registration Step-Up Interest]**, the "Stated Rate of Interest") from the
date hereof until the Outstanding Principal Balance hereof is paid, payable on
each Payment Date. Interest on this Note in each Interest Accrual Period will be
calculated by the Administrative Agent (as hereinafter defined) by multiplying
the Stated Rate of Interest on this Note for the relevant Interest Accrual
Period by the Outstanding Principal Balance of this Note on the first day of
such Interest Accrual Period and by multiplying the product by the actual number
of days in such Interest Accrual Period divided by 360 and rounding the
resulting amount to the nearest cent (with half a cent being rounded upwards).
This Class D-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class D Notes of any subclass (including additional Class D-[ ]
Notes), Class A Notes, Class B Notes and Class C Notes. All capitalized terms
used in this Class D-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class D-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
D-1-3
<Page>
principal hereof as provided in Section 3.08 of the Indenture (after making
payments entitled to priority under Section 3.08 of the Indenture). In addition,
the Issuer may optionally redeem all or part of the Outstanding Principal
Balance of this Note on any Payment Date at the applicable Redemption Price
(calculated as provided in the Indenture) or, in the case of a redemption for
taxation reasons specified in the Indenture or a redemption in certain default
circumstances as provided in the Indenture, at the Outstanding Principal Balance
hereof plus accrued and unpaid interest hereon, in each case as provided in
Section 3.10 of the Indenture. Further, the Issuer may provide for the
defeasance of this Note in accordance with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class D-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
D-1-4
<Page>
shall be forthwith paid over to the Security Trustee in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to
or held as collateral (in the case of non-cash property or securities) for the
payment or prepayment of the Senior Claims (as defined in the Indenture) in
accordance with the terms of the Indenture.
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class D-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class D-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment.
Payments on a Payment Date shall be made by check mailed to each Holder on the
applicable Record Date at its address appearing on the Register maintained with
respect to the Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Holder of one or more Class D-[
] Notes having an aggregate principal amount of not less than $1,000,000, any
such payments shall be made by wire transfer to an account designated by such
Holder at a financial institution in New York, New York. The final payment with
respect to any such Note, however, shall be made only upon presentation and
surrender of such Note by the Holder or its agent at the Corporate Trust Office
or agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. The Trustee or Paying Agent shall
mail such notice of the final payment of this Note to the Holder, specifying the
date and amount of such final payment, no later than five Business Days prior to
such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of Class D-[ ] Notes of other authorized denominations [(including an
exchange of this Note for an Exchange Note)]**, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Note is
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in
----------
** If the Note is to be issued as a Registrable Note.
D-1-5
<Page>
writing to act on behalf of the Holder) [; provided that no exchanges of this
Note for an Exchange Note shall occur until a Registration Statement shall have
been declared effective by the Commission] **. No service charge shall be made
for any registration of transfer or exchange of this Note, but the party
requesting such new Note or Notes may be required to pay a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class D-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
D-1-6
<Page>
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class D-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class D-[ ] Notes under the Indenture.
The Class D-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
D-1-7
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class D-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date:______________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By:
--------------------------------------
Name:
Title: Authorized Signatory
D-1-8
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D-[ ] Notes designated above and referred to in the
within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as the Trustee
By: _______________________________
Authorized Signatory
D-1-9
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto Insert Taxpayer Identification No. __________________
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the
within-mentioned instrument
in every particular,
without alteration or any
change whatsoever.
The undersigned covenants and agrees that it will treat this Note as
indebtedness for all purposes and will not take any action contrary to such
characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior to the date which
is the earlier of [(i) the date the Shelf Registration Statement or the Exchange
Offer Registration Statement is declared effective and this Note has been
exchanged for a freely tradable Exchange Note bearing terms substantially
identical to this Note or (ii)]** the end of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
----------
** If the Note is to be issued as a Registrable Note.
D-1-10
<Page>
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
D-1-11
<Page>
EXHIBIT D-2
FORM OF NOTE FOR ANY SUBCLASS OF CLASS D NOTES THAT ARE FIXED RATE
NOTES
<Page>
FORM OF SUBCLASS OF CLASS D NOTES THAT ARE FIXED RATE NOTES
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF LEASE INVESTMENT
FLIGHT TRUST THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY(I) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) IF OTHER THAN A CLASS D NOTE,
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (IV) IF OTHER THAN A CLASS D NOTE, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS NOTE IS SUBJECT TO ADDITIONAL RESTRICTIONS ON THE TRANSFER THEREOF
SET FORTH IN SECTION 2.13(H) OF THE INDENTURE, INCLUDING A LIMIT ON THE
NUMBER OF DIRECT OR INDIRECT HOLDERS THEREOF, A PROHIBITION ON
TRANSFERS TO NON-U.S. PERSONS AND DELIVERY BY THE TRANSFEREE OF CERTAIN
CERTIFICATIONS TO THE TRUSTEE.
D-2-2
<Page>
LEASE INVESTMENT FLIGHT TRUST
$___,___,___ CLASS D-[ ] FIXED RATE ASSET BACKED NOTES SERIES [20__]-[ ]
No. ____
CUSIP:
ISIN:
Common Code:
$_________
LEASE INVESTMENT FLIGHT TRUST, a business trust organized
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to _____________, or registered
assigns, the principal sum of ________________ DOLLARS ($_________) on [_____,
__ 20__] (the "Final Maturity Date") and to pay interest monthly in arrears on
the Outstanding Principal Balance hereof at the rate of [_.__]% per annum ([as
adjusted for Maturity Step-Up Interest]* [and Registration Step-Up Interest]**,
the "Stated Rate of Interest") from the date hereof until the Outstanding
Principal Balance hereof is paid, payable on each Payment Date. Interest on this
Note in each Interest Accrual Period will be calculated by the Administrative
Agent (as hereinafter defined) on the basis of a 360-day year and one-twelfth of
an annual interest payment on the Outstanding Principal Balance and, in the case
of the first Interest Accrual Period, on the basis of a 360-day year consisting
of twelve 30-day months and the actual number of days in such Interest Accrual
Period.
This Class D-[ ] Note is one of a duly authorized issue of
Notes of the Issuer issued under the Trust Indenture dated as of June [ ], 2001
(as amended or supplemented from time to time, the "Indenture"), between the
Issuer, LIFT Trust-Sub 1, Phoenix American Financial Services, Inc., in its
capacity as Administrative Agent (the "Administrative Agent") and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Class D Notes of any subclass (including additional Class D-[ ]
Notes), Class A Notes, Class B Notes and Class C Notes. All capitalized terms
used in this Class D-[ ] Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of Class D-[ ] Notes. This Note is subject to all of the terms of the
Indenture.
The Outstanding Principal Balance of this Note may be repaid
prior to the Final Maturity Date through the application on the Payment Dates of
the Available Collections to the principal hereof as provided in Section 3.08 of
the Indenture (after making payments entitled to priority under Section 3.08 of
the Indenture). In addition, the Issuer may optionally redeem all or part of the
Outstanding Principal Balance of this Note on any Payment Date at the applicable
Redemption Price (calculated as provided in the Indenture) or, in the case of a
redemption for taxation reasons specified in the Indenture or a redemption in
certain default circumstances as
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
D-2-3
<Page>
provided in the Indenture, at the Outstanding Principal Balance hereof plus
accrued and unpaid interest hereon, in each case as provided in Section 3.10 of
the Indenture. Further, the Issuer may provide for the defeasance of this Note
in accordance with Article XI of the Indenture.
Any amount of premium or interest ([including Maturity Step-Up
Interest]* [and Registration Step-Up Interest]**) on this Note that is not paid
when due shall, to the fullest extent permitted by applicable law, bear interest
at an interest rate per annum equal to the Stated Rate of Interest from the date
when due until such amount is paid or duly provided for, payable on the next
succeeding Payment Date, subject to the availability of the Available
Collections therefor after making payments entitled to priority under Section
3.08 of the Indenture.
[If a Registration Default (as defined and determined under
Section __ of the Registration Rights Agreement) occurs, thereafter an
additional incremental interest amount ("Registration Step-Up Interest") will
accrue on this Note at an annual rate of [_.__]% until such Registration Default
shall no longer be deemed to be continuing (as determined under Section __ of
the Registration Rights Agreement). The Holder of this Note is entitled to the
benefits of the Registration Rights Agreement.] **
[If this Note is not repaid on or before the Expected Final
Maturity Date, additional interest, at a rate of 0.50% per annum shall accrue on
the Outstanding Principal Balance of this Note ("Maturity Step-Up Interest").]*
The indebtedness evidenced by the Class D-[ ] Notes is, to the
extent and in the manner provided in the Indenture and the Security Trust
Agreement, subordinate and subject in right of payment to the prior payment in
full of all Senior Claims (as defined in the Indenture), and this Note is issued
subject to the provisions thereof providing for such subordination. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee and the Security Trustee on
its behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints each of the
Trustee and the Security Trustee its attorney-in-fact for such purpose. All
payments or distributions upon or with respect to any Obligations (as defined in
the Indenture), which include payment of principal, premium and interest on this
Note, that are received by the Holder of this Note contrary to the priority of
payment provisions of the Indenture or in excess of the amounts to which the
Holder of this Note is entitled under Section 3.08 of the Indenture shall be
received for the benefit of the Senior Claimant (as defined in the Indenture),
shall be segregated from other funds and property held by the Holder of this
Note and shall be forthwith paid over to the Security Trustee in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as collateral (in the case of non-cash property or securities)
for the payment or prepayment of the Senior Claims (as defined in the Indenture)
in accordance with the terms of the Indenture.
----------
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
** If the Note is to be issued as a Registrable Note.
** If the Note is to be issued as a Registrable Note.
* If the Note is to be issued as an Initial Subclass A-1 Note, an Initial
Subclass A-2 Note, a Refinancing Note or an Additional Note for which
Maturity Step-Up Interest is provided.
D-2-4
<Page>
The maturity of this Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Note is and will be secured, on a subordinated basis as
referred to above, by the collateral pledged as security therefor as provided in
the Security Trust Agreement.
Subject to and in accordance with the terms of the Indenture,
there will be distributed with respect to this Note monthly on each Payment Date
commencing on July 15, 2001, to the Person in whose name this Note is registered
at the close of business on the Record Date with respect to such Payment Date,
such Person's pro rata share (based on the aggregate percentage of the
Outstanding Principal Balance of the Class D-[ ] Notes represented by this Note)
of the aggregate amount as may be distributable to all Holders of Class D-[ ]
Notes on such Payment Date pursuant to Sections 3.08 and 3.09 of the Indenture.
All amounts payable in respect of this Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment.
Payments on a Payment Date shall be made by check mailed to each Holder on the
applicable Record Date at its address appearing on the Register maintained with
respect to the Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Holder of one or more Class D-[
] Notes having an aggregate principal amount of not less than $1,000,000, any
such payments shall be made by wire transfer to an account designated by such
Holder at a financial institution in New York, New York. The final payment with
respect to any such Note, however, shall be made only upon presentation and
surrender of such Note by the Holder or its agent at the Corporate Trust Office
or agency of the Trustee or Paying Agent specified in the notice of such final
payment given by the Trustee or Paying Agent. The Trustee or Paying Agent shall
mail such notice of the final payment of this Note to the Holder, specifying the
date and amount of such final payment, no later than five Business Days prior to
such final payment.
This Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effective until, and such transferee shall
succeed to the rights of a Holder only upon, final registration of the transfer
by the Registrar in the Register. When this Note is presented to the Registrar
with a request to register the transfer or to exchange it for an equal principal
amount of Class D-[ ] Notes of other authorized denominations [(including an
exchange of this Note for an Exchange Note)]**, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including, in the case of a transfer, that such Note is
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and Registrar duly executed by the Holder thereof or
by an attorney who is authorized in writing to act on behalf of the Holder)[;
provided that no exchanges of this Note for an Exchange Note shall occur until a
Registration Statement shall have been declared effective by the Commission.]
**. No service charge shall be made for any registration of transfer or exchange
of
----------
** If the Note is to be issued as a Registrable Note.
D-2-5
<Page>
this Note, but the party requesting such new Note or Notes may be required to
pay a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith.
Prior to the registration of transfer of this Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the absolute owner and Holder hereof for the purpose
of receiving payment of all amounts payable with respect to this Note and for
all other purposes, and neither the Issuer nor the Trustee shall be affected by
notice to the contrary.
The Indenture permits the amendment or modification of the
Indenture and the Class D-[ ] Notes by the Issuer with the consent of the
Holders of a majority of the Outstanding Principal Balance of all Notes on the
date of any vote of such Holders (voting as a single class); provided that, (A)
without the consent of each provider of a Credit Facility, no such amendment may
modify (i) the provisions of the Indenture relating to such Person's Credit
Facility or (ii) to the extent affecting such Person's Credit Facility, Credit
Facilities generally; provided further that, (B) without the consent of each
Swap Provider, each provider of a Credit Facility and each Holder of any Notes,
in each instance affected thereby, no such amendment may, except as otherwise
provided in Section 3.11 of the Indenture, (i) modify the provisions of the
Indenture or the Notes setting forth the frequency or the currency of payment
of, the maturity of, or the method of calculation of the amount of, any
interest, principal or Redemption Price payable in respect of any subclass of
Notes, (ii) reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of Section
9.01 of the Indenture or, except as otherwise provided in Section 3.09 of the
Indenture, (iii) alter the manner or priority of payment of such subclass of
Notes (each such amendment referred to in subsection A and B, a "Basic Terms
Modification"). The Indenture also permits the Trustee to agree with the Issuer,
without the consent of any Holder of the Notes, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of the
relevant subclass of Notes to correct a manifest error or an error which is of a
formal, minor or technical nature, (b) to modify the provisions of the Indenture
or the Administrative Agency Agreement relating to the timing of movement of
Rental Payments or other monies received or Expenses Incurred among the Accounts
by the Administrative Agent, (c) to add or reflect any Credit Facility, (d) to
any amendment (other than a Basic Terms Modification) of an immaterial nature
necessary to permit the issuance of Refinancing Notes and/or Additional Notes
and the acquisition of Additional Aircraft consistent with the expense
provisions of the Indenture or (e) to comply with the requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act of 1939 (as amended, the "Trust Indenture Act"). Any amendment or
modification of the Indenture shall be binding on every Holder hereof, whether
or not notation thereof is made upon this Note.
The subordination provisions contained in Section 3.08,
Section 3.09 and Article X of the Indenture may not be amended or modified
without the consent of each Swap Provider, each provider of a Credit Facility,
each Holder of the Notes of the subclass affected thereby and each Holder of any
subclass of Notes ranking senior thereto. In no event shall the provisions set
D-2-6
<Page>
forth in Section 3.08 of the Indenture relating to the priority of the Expenses,
Swap Payments and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders
of Notes representing a majority of the Outstanding Principal Balance of the
Senior Class, on behalf of the Holders of all of the Class D-[ ] Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Note and of any Note issued upon the registration of transfer of, in
exchange or in lieu of or upon the refinancing of this Note, whether or not
notation of such consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Class D-[ ] Notes under the Indenture.
The Class D-[ ] Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
THIS NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual or facsimile
signature, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
D-2-7
<Page>
IN WITNESS WHEREOF, the Issuer has caused this Class D-[ ]
Note to be signed manually or by facsimile by its Owner Trustee.
Date: _________________ LEASE INVESTMENT FLIGHT TRUST
By: Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By:
-------------------------------------
Name:
Title: Authorized Signatory
D-2-8
<Page>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D-[ ] Notes designated above and
referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as
the Trustee
By: ______________________________
Authorized Signatory
D-2-9
<Page>
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
The undersigned covenants and agrees that it will treat this
Note as indebtedness for all purposes and will not take any action contrary to
such characterization, including, without limitation, filing any tax returns or
financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
{THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES
AND PERMANENT REGULATION S GLOBAL NOTES}
In connection with any transfer of this Note occurring prior
to the date which is the earlier of [(i) the date the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective and
this Note has been exchanged for a freely tradable Exchange Note bearing terms
substantially identical to this Note or (ii)]* the end of the period referred to
in Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:
----------
* If the Note is to be issued as a Registrable Note.
D-2-10
<Page>
{Check One}
{ } (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
{ } (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this Note in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.13 of the Indenture
shall have been satisfied.
Date: {Signature of Transferor}
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933 and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Issuer as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: {Signature of Transferee}
NOTICE: to be executed by an
executive officer
<Page>
EXHIBIT E
CONCENTRATION LIMITS
PERCENTAGE OF MOST
RECENT APPRAISED
LESSEE CONCENTRATION LIMITS VALUE OF PORTFOLIO(1)
---------------------------------------------- ---------------------
Single Lessee Rated BBB/Baa2 (or the equivalent)
or better .................................... 15
Other single Lessee........................... 12
Five largest Lessees.......................... 40 (2)
PERCENTAGE OF MOST
RECENT APPRAISED
COUNTRY CONCENTRATION LIMITS VALUE OF PORTFOLIO(1)
----------------------------------------------- ---------------------
Countries rated AAA/Aaa (or the equivalent)....(3) 30
Other countries rated BBB/Baa2 (or the equivalent)
or better (3).................................. 20
Other single countries......................... 15
PERCENTAGE OF MOST
RECENT APPRAISED
REGION CONCENTRATION LIMITS VALUE OF PORTFOLIO(1)
-------------------------------- ---------------------
Developed Concentration Region(4)............... 60
Emerging Concentration Region(4)................ 30
Asia and Pacific Regions together(4)............ 45
Undesignated(4)................................. 20(5)
----------
(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 LIFT Group.
(2) On and after June 26, 2006, the initial Lessee Concentration Limit of 40%
of the aggregate most recent Appraised Values applicable to the five
largest Lessees will reduce to 35%, unless a Rating Agency Confirmation is
obtained.
(3) 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.
(4) The designation of Regions is set forth below.
(5) In addition, within the "Undesignated" countries, 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
<Page>
in "Undesignated" countries in Africa.
The Concentration Limits for the Initial Aircraft will be determined based on
the Leases to which such Initial Aircraft are subject to, regardless of the time
or order of Acquisition prior to the last Delivery Expiry Date for an Initial
Aircraft. Without limiting Section 5.03 of the Indenture, any failure to meet
the Concentration Limits arising solely by reason of the non-Acquisition of an
Initial Aircraft will be deemed not to result in a Concentration Default.
REGION COUNTRIES
Developed Markets European Union (excluding Luxembourg and Greece*),
Europe............... Norway
and Switzerland
North America........ Canada and the United States
Pacific.............. Australia, Hong Kong, Japan, New Zealand and
Singapore
Emerging Markets China, India, Indonesia, Korean, Malaysia, Pakistan,
Asia................. Philippines, Sri Lanka, Taiwan and Thailand
Europe and Middle East Czech Republic, Greece*, Hungary, Israel, Jordan,
Poland, Russia and Turkey
Latin America........ Argentina, Brazil, Chile, Columbia, Mexico, Peru and
Venezuela
Undesignated......... All other countries
----------
* If Greece is admitted to the Euro zone then Greece will be included as a
member of the Europe Developed Market Region
<Page>
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 Niger
Azerbaijan Ethiopia Sao Tome & Principe
Belarus Grenada Somalia
Benin Kazakhstan Turkmenistan
Bhutan Kirbati Uzbekistan
Cameroon Kyrgistan
Cape Verde Islands Liberia
Chad Moldova
Comoros
Congo
<Page>
EXHIBIT F
INSURANCE PROVISIONS
<Table>
<Caption>
--------------------------------------------------------------------------------
MODEL MINIMUM LIMITS
----- --------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ATP/ATR/Dash-8/RJ/F50/F70 US$250 million
--------------------------------------------------------------------------------
HS146/AVRO/F28/F100 US$300 million
--------------------------------------------------------------------------------
B727/B737/A320/MD80/DC9 US$500 million
--------------------------------------------------------------------------------
DC8/A310 US$650 million
--------------------------------------------------------------------------------
B757/B767/A300 US$800 million
--------------------------------------------------------------------------------
L1011/DC10/A330/A340/MD11/B777 US$600 million
--------------------------------------------------------------------------------
B747 US$750 million
--------------------------------------------------------------------------------
</Table>
Notwithstanding the foregoing, with respect to any liability insurance
maintained by any Issuer Group Member for the benefit of any Person listed in
clause 2(h) of Schedule 6 to Annex 1 of the Servicing Agreement, such amount of
insurance shall be not less that US$750 million for wide-body Aircraft and
US$600 million for any other type of Aircraft.
<Page>
EXHIBIT G
FORM OF MONTHLY REPORT TO EACH NOTEHOLDER
<Table>
(1) Regarding each payment date,
(a) the balances on deposit on the calculation date immediately
preceding the prior payment date;
(b) the aggregate amounts of deposits and withdrawals between that
calculation date and the calculation date immediately preceding
the payment date; and
(c) the balances on deposit in the expense account, collections
account, any cash collateral account and lessee funded account on
the calculation date immediately preceding that payment date.
(2) Analysis of expense account activity balance on the preceding calculation date
Net transfer to the expense account during the period between the prior
calculation date and the relevant calculation date Payments during
period between the prior calculation date and the relevant calculation
date
- Payments on the prior payment date.......................................................
- Other payments...........................................................................
Balance on relevant calculation date.............................................................
(3) Analysis of collections account activity
Balance on the preceding calculation date........................................................
Required Expense Amount (including on the preceding payment date)................................
G-1
<Page>
Net transfer to lessee funded accounts ....................................................
Collections during the period....................................................................
Drawings under any liquidity facilities..........................................................
Aggregate note payments..........................................................................
Swap payments....................................................................................
Repayments of drawings under liquidity facilities................................................
Balance on relevant calculation date (separately stating the
amount of cash reserve that must be retained in the collections account)...................
Analysis of current payment date distributions...................................................
(4) Payments on the notes
(a) Floating rate notes (by class and, if applicable, subclass)
- Applicable LIBOR for the current interest accrual period................................
- Applicable margin for the current interest accrual period...............................
- Applicable interest rate for the current interest accrual period........................
- Interest Amount payable.................................................................
- Maturity Step-Up Interest...............................................................
- Registration Step-Up Interest...........................................................
- Additional Interest.....................................................................
- Opening outstanding principal balance...................................................
- Minimum Principal Payment Amount........................................................
- Scheduled Principal Payment Amount......................................................
- Redemption Price........................................................................
- Amount allocable to principal...........................................................
- Amount allocable to premium......................................................................
- Other principal reductions.......................................................................
- Closing outstanding principal balance...................................................
(b) Fixed rate notes (by class and, if applicable, subclass)
- Interest rate...........................................................................
- Interest Amount payable.................................................................
- Opening outstanding principal balance...................................................
- Minimum Principal Payment Amount........................................................
- Scheduled Principal Payment Amount...............................................................
- Redemption Price........................................................................
- Amount allocable to principal.......................................................
- Amount allocable to premium......................................................................
- Other principal reductions.......................................................................
- Closing outstanding principal balance....................................................
(5) Floating rate notes information for next interest accrual period (by subclass)
LIBOR............................................................................................
Margin...........................................................................................
Interest rate....................................................................................
(6) Payments per $100,000 initial outstanding principal
balance of notes (by subclass)
G-2
<Page>
Opening outstanding principal balance............................................................
Total principal payments.........................................................................
Closing outstanding principal balance............................................................
Total interest...................................................................................
Total premium....................................................................................
</Table>
G-3
<Page>
EXHIBIT H
FORM OF CERTIFICATE
_____________, _____
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
LEASE INVESTMENT FLIGHT TRUST
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-1000
Re: LEASE INVESTMENT FLIGHT TRUST (the "Issuer")
Dear Sirs:
This letter relates to U.S. $ principal amount of Class __ Notes of the Issuer
represented by a Note which bears a legend (the "Legended Note") outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.01 of
the Indenture dated as of June [26], 2001 (the "Indenture") relating to the
Class __ Notes and certain other classes of notes, we hereby certify that we are
(or we will hold such securities on behalf of) a person outside the United
States to whom the Class __ Notes may be transferred in accordance with
Regulation S promulgated under the U.S. Securities Act of 1933, as amended
("Regulation S"). Accordingly, you are hereby requested to exchange the Legended
Note for an unlegended Note representing an identical principal amount of Class
__ Notes, all in the manner provided for in the Indenture.
Each of you is entitled to rely upon this letter and is irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Euroclear][Clearstream]
By: ________________________
Authorized Signature
<Page>
EXHIBIT I
FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
Bankers Trust Company....................... ______________, ____
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
LEASE INVESTMENT FLIGHT TRUST
c/o Wilmington Trust Company
1100 North Market Square
Rodney Square North
Wilmington, Delaware 19890-1000
Re: LEASE INVESTMENT FLIGHT TRUST (the "Issuer")
Dear Sirs:
In connection with our proposed sale of U.S.$ aggregate principal amount of the
Class __ Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended
("Regulation S") and, accordingly, we represent that:
(1) the offer of the Class __ Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was outside the
United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the registration
requirements of the U.S. Securities Act of 1933.
Each of you is entitled to rely upon this letter and is irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
{Name of Transferor}
By: ________________________
Authorized Signature
<Page>
EXHIBIT J
FORM OF LETTER TO BE DELIVERED BY ACCREDITED INVESTORS
Lease Investment Flight Trust
c/o Wilmington Trust Company
1100 North Market Street
Rodney Square North
Wilmington, Delaware 19890-0001
Credit Suisse First Boston Corporation
as the Representative of the initial purchasers
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
We are delivering this letter in connection with an offering of asset
backed notes (the "Securities") of Lease Investment Flight Trust, a Delaware
business trust (the "Company"), all as described in the Confidential Offering
Circular (the "Offering Circular") relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of the Securities by
us will be for our own account or for the account of one or
more other Institutional Accredited Investors or as fiduciary
for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7)
under the Securities Act and for each of which we exercise
sole investment discretion or (B) we are a "bank", within the
meaning of Section 3(a)(2) of the Securities Act, or a
"savings and loan association" or other institution described
in Section 3(a)(5)(A) of the Securities Act that is acquiring
the Securities as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;
(iii) in the event that we purchase any of the Securities, we
will acquire Securities having a minimum purchase price of not less than
$100,000 for our own account or for any separate account for which we are
acting;
<Page>
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing the Securities;
(v) we are not acquiring the Securities with a view to
distribution thereof or with any present intention of offering or selling any of
the Securities, except inside the United States in accordance with Rule 144A
under the Securities Act, or if the securities are other than Class D Notes,
outside the United States under Regulation S under the Securities Act, as
provided below; PROVIDED that the disposition of our property and the property
of any accounts for which we are acting as fiduciary shall remain at all times
within our control; and
(vi) we have received a copy of the Offering Circular relating
to the offering of the Securities and acknowledge that we have had access to
financial and other information, and have been afforded the opportunity to ask
questions of representatives of the Company and receive answers thereto, as we
deem necessary in connection with our decision to purchase the Securities.
We understand that the Securities are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Securities have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any Securities, that if in the
future we decide to resell, pledge or otherwise transfer the Securities, the
Securities may be offered, resold, pledged or otherwise transferred only (i) in
the United States to a person who we reasonably believe is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, (ii) if the securities are
other than the Class D Notes, outside the Untied States in a transaction in
accordance with Rule 904 under the Securities Act, (iii) under an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available) or (iv) under an effective registration statement under the
Securities Act, in each of cases (i) through (iv), subject to any applicable
securities laws of any State of the United States or any other applicable
jurisdiction. We understand that the registrar and transfer agent for the
Securities, will not be required to accept for registration of transfer any
Securities acquired by us, except upon presentation of evidence satisfactory to
the Company and the transfer agent that he foregoing restrictions on transfer
have been complied with. We further understand that any Securities acquired by
us, will be in the form of definitive physical certificates and that the
certificates will bear a legend reflecting the substance of this paragraph.
We acknowledge that you, the Company and others will rely upon
our confirmations, acknowledgements and agreements set forth herein, and we
agree to notify you promptly in writing if any of our representations of
warranties herein ceases to be accurate and complete.
J-2
<Page>
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
------------------------------
(Name of Purchaser)
By:___________________________
Name:
Title:
Address:
Date:______________________
J-3
<Page>
EXHIBIT K
CORE LEASE PROVISIONS
1. Representations and Warranties, etc.
representations and warranties or a legal opinion or such other comfort
acceptable to the lessor as to, without limitation, the due execution
of such lease by the related lessee and the validity of such lessee's
obligations thereunder, due authorization of such lease and procurement
of relevant licenses and permits in connection therewith;
2. Subleasing
permission to sublease only if the primary lessee thereunder remains
obligated to make payments on such primary lease, except with respect
to the specific classes of sublessees and under the specific conditions
provided in such lease;
3. Permitted Encumbrances
provisions requiring the lessee not to create any Encumbrances in
respect of the aircraft or the related engines, except for exceptions
thereto consistent with the reasonable commercial practices of leading
international aircraft operating lessors, including Encumbrances not
affecting the use or operation of the aircraft arising in the ordinary
course of the lessee's business;
4. No Right to Sell
the lease shall not permit a lessee to sell any aircraft except, with
respect to an aircraft the subject of a Purchase Option, pursuant to an
agreement entered into by such lessee prior to the exercise of such
Purchase Option to sell or otherwise transfer ownership of such
aircraft upon the exercise of such Purchase Option;
5. Events of Loss
provisions stipulating that the lease will terminate in the event of a
Total Loss of the relevant aircraft;
6. Return of Aircraft
provisions for redelivery of the relevant aircraft, including, if
applicable, replacement engines and parts, on expiry or termination of
the lease (other than any expiration or termination coincident with the
purchase of the relevant aircraft pursuant to exercise of a Purchase
Option by the relevant lessee or in cases in which such lease provides
for retention of the relevant Aircraft by the lessee or for delivery to
a third party), specifying the required return condition and any
obligation upon the lessee to remedy or compensate the lessor, directly
or indirectly, for any material deviations from such return condition,
in each case considering the other terms of the relevant lease and to
the extent consistent with the reasonable commercial practices of
leading international aircraft operating lessors;
7. Termination Events
provisions setting forth the conditions under which the lessor may
terminate a lease and repossess the relevant aircraft, at any time
after the expiration of any
<Page>
agreed grace period or remedy period, in each case consistent with the
reasonable commercial practices of leading international aircraft
operating lessors;
8. Assignment
provisions prohibiting the assignment of any benefits or obligations
under the lease to any Person, subject to exceptions consistent with
the reasonable commercial practices of leading international aircraft
operating lessors;
9. Disclaimer of Conditions or Warranty
provisions acknowledging that when the Lessee gives formal notice of
acceptance of the relevant aircraft, it takes delivery of such aircraft
with no condition, warranty or representation of any kind having been
given by or on behalf of the lessor in respect of such aircraft, except
as to matters expressly set forth in the lease;
10. Net Lease
provisions stating the Lessee's obligation to make rental payments is
absolute and unconditional under any and all circumstances and
regardless of other events or similar provisions.
K-2
<Page>
EXHIBIT L-1
FORM OF CERTIFICATE TO DEPOSITORY REGARDING INTEREST
____________, ___
Euroclear
[address]
AND/OR
Clearstream
[address]
Re: Lease Investment Flight Trust
-----------------------------
Reference is hereby made to the Indenture, dated as of June [26], 2001
(the "INDENTURE"), made by and between Lease Investment Flight Trust (the
"ISSUER"), Phoenix American Financial Services, Inc. (the "ADMINISTRATIVE
AGENT") and Bankers Trust Company (in such capacity, the "TRUSTEE"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to [ ] principal amount of Class ___ Notes that is
held in the form of a beneficial interest in the Temporary Regulation S Global
Note (CUSIP No.[ __ ]) through [insert name of Depository] by the undersigned
(the "HOLDER") in the name of [insert name of Participant]. The Holder of such
Temporary Regulation S Global Note hereby requests the receipt of payment of
interest, principal and Sale Premium, if any, due and payable [on the applicable
Payment Date] pursuant to Section 2.05 of the Indenture.
The Holder hereby represents and warrants that it (i) is not a U.S.
person and (ii) does not hold the above-referenced Temporary Regulation S Global
Note for the account or benefit of a U.S. person (other than a distributor).
Terms in this sentence have the meanings given to them in Regulation S under the
Securities Act of 1933, as amended.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Paying Agent.
[Insert name of Holder]
By: ___________________________
Name:
Title:
<Page>
EXHIBIT L-2
FORM OF DEPOSITORY CERTIFICATE REGARDING INTEREST
____________, ___
Bankers Trust Company, as Paying Agent
Four Albany Street
New York, New York 10006
Re: Lease Investment Flight Trust
-----------------------------
Reference is hereby made to the Indenture, dated as of June [26], 2001
(the "INDENTURE"), made by and between Lease Investment Flight Trust (the
"ISSUER"), Phoenix American Financial Services, Inc. (the "ADMINISTRATIVE
AGENT") and Bankers Trust Company (in such capacity, the "TRUSTEE"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
This letter relates to [ ] principal amount of Class ___ Notes that is
held in the form of beneficial interests in the Temporary Regulation S Global
Note (CUSIP No. ) through [insert name of Depository]. Certain Holders of the
beneficial interests in such Temporary Regulation S Global Note have requested
the receipt of payment of interest, principal and Sale Premium, if any, on the
applicable Payment Date pursuant to Section 2.05 of the Indenture.
We have received from such Holders certifications to the effect that
they (i) are not U.S. persons and (ii) do not hold the above-referenced
Temporary Regulation S Global Note for the account or benefit of U.S. persons
(other than distributors). Terms in this sentence have the meanings given to
them in Regulation S under the Securities Act of 1933, as amended.
Accordingly, the Holders of beneficial interests in the Temporary
Regulation S Global Note are entitled to receive interest, principal and Sale
Premium, if any, in accordance with the terms of the Indenture in the amount of
[ ].
[CLEARSTREAM][EUROCLEAR]
By: ___________________________
Name:
Title:
<Page>
EXHIBIT M
THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM.
LIFT TRUST-SUB 1
$___,___,___,___ BRIDGE NOTE SERIES 2001
No. __
$___,___,___,___
LIFT TRUST-SUB 1, a business trust organized under the laws of the
State of Delaware (herein referred to as the "Bridge Note Issuer"), for value
received, hereby promises to pay to CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
the principal sum of ______________($___,___,___,___) on [_____, __ 20__] (the
"Final Maturity Date") and to pay interest monthly in arrears on the outstanding
principal balance hereof at a fluctuating rate per annum equal to the Bridge
Rate (as defined in Annex A hereto) from the date hereof until the outstanding
principal balance hereof is paid, payable on each date (each, a "Payment Date")
listed on Schedule 1 hereto; PROVIDED HOWEVER, if this Bridge Note is prepaid
prior to 1:00 p.m. on June 26, 2001, no interest shall be deemed to have accrued
or be payable with respect to this Bridge Note.
This Bridge Note is one of a duly authorized issue of Bridge Notes of
the Bridge Note Issuer issued under the Trust Indenture dated as of June 26,
2001 (as amended or supplemented from time to time, the "Indenture"), between
the Bridge Note Issuer, Lease Investment Flight Trust, Phoenix American
Financial Services, Inc., in its capacity as Administrative Agent (the
"Administrative Agent") and Bankers Trust Company, as trustee (the "Trustee").
All capitalized terms used in this Bridge Note and not defined herein shall have
the respective meanings assigned to such terms in the Indenture. Reference is
made to the Indenture and all indentures supplemental thereto for a statement of
the respective rights and obligations thereunder of the Bridge Note Issuer, the
Trustee and the Holders of Bridge Notes. This Bridge Note is subject to all of
the terms of the Indenture.
Any amount of Bridge Break Amount or interest on this Bridge Note that
is not paid when due shall, to the fullest extent permitted by applicable law,
bear interest at an interest rate per annum equal to the Bridge Rate determined
with reference to the Default Margin from the date when due until such amount is
paid or duly provided for, payable on the next succeeding
<Page>
Payment Date. This Bridge Note may be prepaid (1) on the Effective Time, in
whole, (2) on any Payment Date pursuant to Section 3.14(c) of the Indenture, in
whole or in part and (3) at any time in whole upon 2 Business Days' prior
written notice from the Trustee.
The maturity of this Bridge Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Bridge Note is and will be secured by the collateral pledged as
security therefor as provided in the Security Trust Agreement.
All amounts payable in respect of this Bridge Note shall be payable in
U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Bridge Note, however, shall be made only upon
presentation and surrender of this Bridge Note by the Holder or its agent at (1)
in the case of final payment on the Effective Time, the office of the Escrow
Agent specified in the Escrow Agreement or (2) on any other day the Corporate
Trust Office or agency of the Trustee specified in the notice given by the
Trustee with respect to such final payment.
This Bridge Note is issuable only in registered form. A Holder may
transfer this Bridge Note only by written application to the Registrar stating
the name of the proposed transferee and otherwise complying with the terms of
the Indenture. No such transfer shall be effective until, and such transferee
shall succeed to the rights of a Holder only upon, final registration of the
transfer by the Registrar in the Register. When this Bridge Note is presented to
the Registrar with a request to register the transfer or to exchange it for an
equal principal amount of Bridge Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including, in the case of a
transfer, that such Bridge Note is duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Registrar
duly executed by the Holder thereof or by an attorney who is authorized in
writing to act on behalf of the Holder). No service charge shall be made for any
registration of transfer or exchange of this Note, but the party requesting such
new Bridge Note or Bridge Notes may be required to pay a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith.
Prior to the registration of transfer of this Bridge Note, the Bridge
Note Issuer and the Trustee may deem and treat the Person in whose name this
Bridge Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the absolute owner and Holder
hereof for the purpose of receiving payment of all amounts payable with respect
to this Bridge Note and for all other purposes, and neither the Issuer nor the
Trustee shall be affected by notice to the contrary.
The Bridge Note Issuer hereby waives, to the extent permitted by law,
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Bridge Note, and assent to any extension or postponement of the time of
payment or any other indulgence, to any release of collateral and to the
addition or release of any other party or person primarily or secondarily
liable.
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The term "Bridge Note Issuer" as used in this Bridge Note includes any
successor to the Bridge Note Issuer under the Indenture.
The Bridge Note Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Bridge Notes under the Indenture.
THIS BRIDGE NOTE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual or facsimile signature, this
Bridge Note shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
All capitalized terms used herein and not otherwise defined herein
attached hereto shall have the same meanings set forth in the Indenture.
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IN WITNESS WHEREOF, the Bridge Note Issuer has caused this Bridge Note
to be signed manually or by facsimile by its Owner Trustee.
LIFT TRUST SUB-1
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bridge Notes designated above and referred to in the
within-mentioned
Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By: _______________________________
Authorized Signatory
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[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto:
Insert Taxpayer Identification No. __________________
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
the within Bridge Note and all rights thereunder, hereby irrevocably
constituting and appointing ______________________________ attorney to transfer
said Bridge Note on the books of the Bridge Note Issuer with full power of
substitution in the premises.
Date: {Signature of Transferor}
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the
within-mentioned instrument
in every particular,
without alteration or any
change whatsoever.
The undersigned covenants and agrees that it will treat this within
Bridge Note as indebtedness for all purposes and will not take any action
contrary to such characterization, including, without limitation, filing any tax
returns or financial statements inconsistent therewith.
Date: {Signature of Transferee}
NOTICE: to be executed by
an executive officer
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ANNEX A
"ADJUSTED EURODOLLAR RATE" shall mean, for any Interest Period
or portion thereof, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of one percent) equivalent to the rate determined pursuant to
the following formula:
ADJUSTED EURODOLLAR RATE = LIBOR RATE
------------------------ ---------------------------------
1-LIBOR Reserve Percentage
on the first day of such Interest Period. For purposes of this definition, (a)
"LIBOR RATE" shall mean, with respect to any Interest Period or portion thereof,
the rate per annum shown on page 3750 of the Bridge Information Systems Telerate
screen or any successor page as the composite offered rate for London interbank
deposits for a period equal to such Interest Period (or portion) thereof, as
shown under the heading "USD" as of 11:00 a.m., London time, two London Business
Days prior to the first day of such Interest Period; PROVIDED that in the event
no such rate is shown, the LIBOR Rate shall be the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of one percent based on the rates
at which Dollar deposits for a period equal to such Interest Period (or portion
thereof) are displayed on page "LIBOR" of the Reuters Monitor Money Rates
Service or such other page as may replace the LIBOR page on that service for the
purpose of displaying London interbank offered rates, of major banks as of 11:00
a.m., London time, two Business Days prior to the first day of such Interest
Period (it being understood that if at least two such rates appear on such page,
the rate will be the arithmetic mean of such displayed rates); PROVIDED FURTHER
that in the event fewer than two such rates are displayed, or if no such rate is
relevant, the LIBOR Rate shall be the rate per annum equal to the rate quoted by
the Trustee as the rate at which deposits in are offered by the principal London
Office of Credit Suisse First Boston at approximately 11:00 a.m., London time,
two Business Days prior to the first day of such Interest Period to prime banks
in the London interbank market for a period equal to such Interest Period (or
portion thereof); PROVIDED FURTHER that if no such rate is quoted by the
Trustee, the rate shall be the arithmetic mean of the rates quoted by major
banks in New York City, selected by Credit Suisse First Boston, at approximately
11:00 a.m., New York City time, on the first day of such Interest Period to
leading European banks for Dollar deposits for a period equal to such Interest
Period (or portion thereof); PROVIDED FURTHER that if the LIBOR Rate is not
established for any such Interest Period as otherwise provided above, the "LIBOR
Rate" for purposes hereof for each day during such Interest Period shall equal
the Corporate Base Rate for such day and (b) "LIBOR RESERVE PERCENTAGE" shall
mean, with respect to any Interest Period or portion thereof, a percentage
(expressed as a decimal) equal to the weighted average of the percentages in
effect during such Interest Period, as prescribed by the Federal Reserve Board
(or any successor thereto) for determining the maximum reserve requirements
applicable to "Eurocurrency liabilities" pursuant to Regulation D or any other
applicable regulation of the Federal Reserve Board (or any successor thereto)
which prescribes reserve requirements applicable to "Eurocurrency liabilities"
as currently defined in Regulation D.
"APPLICABLE MARGIN" means, (a) at any time when no Event of
Default shall be continuing, the Margin; and (b) at any time when any Event of
Default shall be continuing, the Default Margin.
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"BRIDGE RATE" means the sum of the Adjusted Eurodollar Rate
plus the Applicable Margin.
"DEFAULT MARGIN" means a rate per annum which is two (2) times
the Margin.
"INTEREST PERIOD" means, as to the Bridge Notes, the period
beginning on (and including) the Bridge Date and ending on (but excluding) the
first Payment Date thereafter and each successive period beginning on (and
including) a Payment Date and ending on (but excluding) the next succeeding
Payment Date.
"MARGIN" means five percent (5.0%) per annum.
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SCHEDULE 1
PRINCIPAL AND PAYMENT DATES OF THE BRIDGE NOTES