Execution Copy
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into March 15, 2000 between MORGAN STANLEY AIRCRAFT FINANCE, a
statutory business trust organized under the laws of the State of Delaware (the
"Issuer"), and MORGAN STANLEY & CO. INTERNATIONAL LIMITED (the "Initial
Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated as
of March 8, 2000 (the "Purchase Agreement"), among the Issuer and the Initial
Purchaser which provides for the issue and sale by the Issuer to the Initial
Purchaser of $1,310,000,000 aggregate principal amount of five subclasses of the
Issuer's notes (the "Notes"). In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Issuer has agreed to provide to the Initial
Purchaser and its direct and indirect transferees the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Issuer" shall have the meaning set forth in the preamble and shall
also include the Issuer's successors.
"Exchange Offer" shall mean the exchange offer by the Issuer of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Exchange Notes" shall mean the subclasses of securities issued by
the Issuer under a supplement to the Indenture, containing terms identical
to the subclasses of Registrable Notes (except that (i) interest thereon
shall accrue from the last date on which interest was paid on the
Registrable Notes or, if no such interest has been paid, from March 15,
2000, and (ii) the interest rate per annum on each subclass of the
Exchange Notes shall be the applicable interest rate set forth in the form
of such subclass of Registrable Notes, without giving effect to any
increase in such interest rate pursuant to the definition of "Stated
Interest Rate" contained in the Indenture) and to be offered to Holders of
Registrable Notes in exchange for Registrable Notes pursuant to the
Exchange Offer.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Notes
under the Indenture; provided that for purposes of Sections 4 and 5 of
this Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Notes dated as
of March 3, 1998 between the Issuer and Bankers Trust Company, as trustee,
as supplemented by Supplement Number 1 dated March 15, 2000, and as the
same may be further amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the
Issuer shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage or amount.
"Initial Purchaser" shall have the meaning set forth in the preamble.
2
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Notes covered by a Shelf Registration
Statement, and by all other amendments and supplements to such prospectus,
and in each case including all material incorporated by reference therein.
"Registrable Notes" shall mean the Notes; provided, however, that the
Notes shall cease to be Registrable Notes (i) when a Registration
Statement with respect to the Notes shall have been declared effective
under the 1933 Act and the Notes shall have been disposed of pursuant to
such Registration Statement, (ii) when the Notes have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force,
but not Rule 144A) under the 1933 Act or (iii) when the Notes shall have
ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Issuer with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel
for any underwriters or Holders in connection with "blue sky"
qualification of any of the Exchange Notes or Registrable Notes), (iii)
all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents relating to
the performance of and compliance with this Agreement, (iv) all rating
agency fees, (v) all fees and disbursements relating to the qualification
of the Indenture under applicable securities laws, (vi) the fees and
disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Issuer and, in the case of a Shelf
Registration Statement, the fees and disbursements of one counsel for the
Holders which counsel shall be counsel for the Initial Purchaser and
(viii) the fees and disbursements of the independent public accountants of
the Issuer, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding fees and expenses of counsel to the underwriters (other than
fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of Registrable Notes by a Holder.
3
"Registration Statement" shall mean any registration statement of the
Issuer that covers any of the Exchange Notes or Registrable Notes pursuant
to the provisions of this Agreement and all amendments and supplements to
any such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuer pursuant to the provisions of Section 2(b) of this
Agreement which covers all of the Registrable Notes (but no other
securities unless approved by the Holders whose Registrable Notes are
covered by such Shelf Registration Statement) on an appropriate form under
Rule 415 under the 1933 Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Notes
under the Indenture.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Notes are sold to an Underwriter (as
hereinafter defined) for reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Issuer shall use its best efforts to
cause to be filed an Exchange Offer Registration Statement covering the offer by
the Issuer to the Holders to exchange all of the Registrable Notes for Exchange
Notes and to have such Registration Statement remain effective until the closing
of the Exchange Offer. The Issuer shall commence the Exchange Offer promptly
after the Exchange Offer Registration Statement has been declared effective by
the SEC and use its best efforts to have the Exchange Offer consummated not
later than 60 days after such effective date. The Issuer shall commence the
Exchange Offer by mailing the related exchange offer Prospectus and accompanying
documents to each Holder stating, in addition to such other disclosures as are
required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Notes validly
tendered will be accepted for exchange;
4
(ii) the dates of acceptance for exchange (which shall be a
period of not less than 20 business days commencing from the date such
notice is mailed) (the "Exchange Dates");
(iii) that any Registrable Note not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Note
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Note, together with the enclosed letters of
transmittal, to the institutions and at the addresses (located in the
Borough of Manhattan, The City of New York and in Luxembourg) specified
in the notice prior to the close of business on the last Exchange Date;
and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the last Exchange Date, by
sending to the applicable institution and at the address (located in
either the Borough of Manhattan, The City of New York or Luxembourg)
specified in the notice a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Notes delivered for exchange and a statement that such
Holder is withdrawing his election to have such Notes exchanged.
On the date of commencement of the Exchange Offer, the Issuer shall
publish a notice announcing the commencement of the Exchange Offer in the
Luxemburger Wort.
As soon as practicable after the last Exchange Date, the Issuer
shall:
(i) accept for exchange Registrable Notes or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for
exchange by the Issuer and issue, and cause the Trustee to promptly
authenticate and mail to each Holder, an Exchange Security equal in
principal amount to the principal amount of the Registrable Notes
surrendered by such Holder; and
(iii) publish a notice in the Luxemburger Wort setting forth
the results of the Exchange Offer.
The Issuer shall use its best efforts to complete the Exchange Offer
as provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate
5
applicable law or any applicable interpretation of the Staff of the SEC. The
Issuer shall inform the Initial Purchaser of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchaser shall have
the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Notes in the Exchange Offer.
(b) In the event that (i) the Issuer determines that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be consummated as soon as practicable after the last Exchange Date because
it would violate applicable law or the applicable interpretations of the Staff
of the SEC, (ii) the Exchange Offer is not for any other reason consummated by
the date that is 270 days after the Closing Date or (iii) the Exchange Offer has
been completed and in the opinion of counsel for the Initial Purchaser a
Registration Statement must be filed and a Prospectus must be delivered by the
Initial Purchaser in connection with any offering or sale of Registrable Notes,
the Issuer shall use its best efforts to cause to be filed as soon as
practicable after such determination, date or notice of such opinion of counsel
is given to the Issuer, as the case may be, a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Notes and to
have such Shelf Registration Statement declared effective by the SEC. The Issuer
agrees to use its best efforts to keep the Shelf Registration Statement
continuously effective until the second anniversary of the Closing Date or such
shorter period that will terminate when all of the Registrable Notes covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Issuer further agrees to supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Issuer for such
Shelf Registration Statement or by the 1933 Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use its best
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Issuer agrees to furnish to the Holders of Registrable Notes copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Issuer shall pay all Registration Expenses in connection with
the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay
all underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder's Registrable Notes pursuant to the
Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that, if, after it has been declared effective, the
offering of Registrable Notes pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume. As provided for in the Indenture,
from and after the date that is 270 days after the
6
Closing Date, the interest rate on each subclass of Registrable Notes will be
increased by 0.50% per annum until the completion of an Exchange Offer or the
date a Shelf Registration Statement is declared effective by the SEC, whereupon
the interest rate on each subclass of Registrable Notes will permanently
decrease to the applicable interest rate provided for such subclass of
Registrable Note.
(e) Without limiting the remedies available to the Initial
Purchaser and the Holders, the Issuer acknowledges that any failure by the
Issuer to comply with its obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Initial Purchaser or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchaser or any Holder may obtain such relief
as may be required to specifically enforce the Issuer's obligations under
Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Issuer with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Issuer shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the 1933 Act, which form (x) shall be
selected by the Issuer and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Notes by the
selling Holders thereof and (z) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use
its best efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Notes or Exchange Notes;
(c) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes, to counsel for the Initial Purchaser, to
counsel for the Holders and to each Underwriter of an Underwritten
Offering of Registrable Notes, if any, without charge, as many copies
of each Prospectus, including each preliminary Prospectus, and any
amendment or supplement thereto and such other documents as such Holder
or Underwriter may reasonably request, in order to facilitate the
public sale or other
7
disposition of the Registrable Notes; and the Issuer consents to the
use of such Prospectus and any amendment or supplement thereto in
accordance with applicable law by each of the selling holders of
Registrable Notes and any such Underwriters in connection with the
offering and sale of the Registrable Notes covered by and in the
manner described in such Prospectus or any amendment or supplement
thereto in accordance with applicable law;
(d) use its best efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Notes covered
by a Registration Statement shall reasonably request in writing by the
time the applicable Registration Statement is declared effective by the
SEC, to cooperate with such Holders in connection with any filings
required to be made with the National Association of Securities
Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Notes
owned by such Holder; provided, however, that the Issuer shall not be
required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3(d), (ii) file any general consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes, counsel for the Holders and counsel for the Initial
Purchaser promptly and, if requested by any such Holder or counsel,
confirm such advice in writing (i) when a Registration Statement has
become effective and when any post-effective amendment thereto has been
filed and becomes effective, (ii) of any request by the SEC or any
state securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale
of Registrable Notes covered thereby, the representations and
warranties of the Issuer contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to the offering cease to be true and correct in all material respects
or if the Issuer receives any notification with respect to the
suspension of the qualification of the Registrable Notes for sale in
any jurisdiction or the initiation of any proceeding for such purpose,
(v) of the happening of any event during the period a Shelf
Registration Statement is effective which makes any statement made in
such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements
therein not misleading and (vi) of any determination by the Issuer that
a post-effective amendment to a Registration Statement would be
appropriate;
8
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes, without charge, at least one conformed
copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold and not bearing any restrictive legends and enable such
Registrable Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the
selling Holders may reasonably request at least two business days prior
to the closing of any sale of Registrable Notes;
(i) in the case of a Shelf Registration, upon the occurrence
of any event contemplated by Section 3(e)(v) hereof, use its best
efforts to prepare and file with the SEC a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Notes, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Issuer agrees to notify the
Holders to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and the Holders hereby agree to
suspend use of the Prospectus until the Issuer has amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of
such document to the Initial Purchaser and its counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel)
and make such of the representatives of the Issuer as shall be
reasonably requested by the Initial Purchaser or its counsel (and, in
the case of a Shelf Registration Statement, the Holders or their
counsel) available for discussion of such document, and shall not at
any time file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration
Statement or a Prospectus or any document which is to be incorporated
by reference into a Registration Statement or a Prospectus, of which
the Initial Purchaser and its counsel (and, in the case of a Shelf
Registration Statement,
9
the Holders and their counsel) shall not have previously been advised
and furnished a copy or to which the Initial Purchaser or its counsel
(and, in the case of a Shelf Registration Statement, the Holders or
their counsel) shall object;
(k) obtain a CUSIP number and such other identification
numbers as may be necessary for all Exchange Notes or Registrable
Notes, as the case may be, not later than the effective date of a
Registration Statement;
(l) use its best efforts to list the Exchange Notes, if any,
on the Luxembourg Stock Exchange not later than the Effective Date of
an Exchange Offer Registration Statement;
(m) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes or Registrable Notes, as the case
may be, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the Trustee to execute, all documents as may
be required to effect such changes and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(n) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable Notes,
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all financial
and other records, pertinent documents and properties of the Issuer,
and cause the respective officers, directors and employees of the
Issuer to supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in connection with
a Shelf Registration Statement;
(o) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Notes to be listed on any securities exchange
or any automated quotation system on which similar securities issued by
the Issuer are then listed if requested by the Majority Holders, to the
extent such Registrable Notes satisfy applicable listing requirements;
(p) use its best efforts to cause the Exchange Notes or
Registrable Notes, as the case may be, to be rated by Standard Poor's
Ratings Group, Moody's Investors Service, Inc. and Duff & Phelps
Credit Rating Co. or two other nationally recognized statistical
rating organizations (as such term is defined in Rule 436(g)(2) under
the 1933 Act);
10
(q) if reasonably requested by any Holder of Registrable Notes
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be
included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Issuer has
received notification of the matters to be incorporated in such filing;
and
(r) in the case of a Shelf Registration, enter into such
customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of
the Registrable Notes being sold) in order to expedite or facilitate
the disposition of such Registrable Notes including, but not limited
to, an Underwritten Offering and in such connection, (i) to the extent
possible, make such representations and warranties to the Holders and
any Underwriters of such Registrable Notes with respect to the business
of the Issuer and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when requested, (ii)
obtain opinions of counsel to the Issuer (which counsel and opinions,
in form, scope and substance, shall be reasonably satisfactory to the
Holders and such Underwriters and their respective counsel) addressed
to each selling Holder and Underwriter of Registrable Notes, covering
the matters customarily covered in opinions requested in underwritten
offerings, (iii) obtain "cold comfort" letters from the independent
certified public accountants of the Issuer (and, if necessary, any
other certified public accountant of any subsidiary of the Issuer, or
of any business acquired by the Issuer for which financial statements
and financial data are or are required to be included in the
Registration Statement) addressed to each selling Holder and
Underwriter of Registrable Notes, such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings, and (iv) deliver
such documents and certificates as may be reasonably requested by the
Holders of a majority in principal amount of the Registrable Notes
being sold or the Underwriters, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Issuer made pursuant to clause
(i) above and to evidence compliance with any customary conditions
contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Issuer may
require each Holder of Registrable Notes to furnish to the Issuer such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Notes as the Issuer may from time to time reasonably request in
writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Issuer of the happening of any
event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Notes
11
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof,
and, if so directed by the Issuer, such Holder will deliver to the Issuer (at
its expense) all copies in its possession, other than permanent file copies then
in such Holder's possession, of the Prospectus covering such Registrable Notes
current at the time of receipt of such notice. If the Issuer shall give any such
notice to suspend the disposition of Registrable Notes pursuant to a
Registration Statement, the Issuer shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus necessary to resume
such dispositions. The Issuer may give any such notice only twice during any 365
day period and any such suspensions may not exceed 30 days for each suspension
and there may not be more than two suspensions in effect during any 365 day
period.
The Holders of Registrable Notes covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Notes in an Underwritten
Offering. In any such Underwritten Offering, the investment banker or investment
bankers and manager or managers (the "Underwriters") that will administer the
offering will be selected by the Majority Holders of the Registrable Notes
included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Issuer shall require each holder of Notes who wishes to
exchange any such Notes for Exchange Notes in the Exchange Offer to represent
that (i) it is neither an affiliate of the Issuer nor a broker-dealer tendering
Notes acquired directly from the Issuer for its own account, (ii) any Exchange
Notes to be received by it are being acquired in the ordinary course of its
business and (iii) at the time of commencement of the Exchange Offer, it has no
arrangement with any person to participate in a distribution (within the meaning
of the 1933 Act) of the Exchange Notes.
The Staff of the SEC has taken the position that any broker-dealer
that receives Exchange Notes for its own account in the Exchange Offer in
exchange for Registrable Notes that were acquired by such broker-dealer as a
result of market-making or other trading activities (a "Participating
Broker-Dealer"), may be deemed to be an "underwriter" within the meaning of the
1933 Act and must deliver a prospectus meeting the requirements of the 1933 Act
in connection with any resale of such Exchange Notes.
The Issuer understands that it is the Staff's position that if
the Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Notes, without naming
the Participating Broker-Dealers or specifying the amount of Exchange Notes
owned by them, such Prospectus may be delivered by Participating Broker-Dealers
to satisfy their prospectus delivery obligation under the 1933 Act
12
in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, the Issuer agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be reasonably requested by the Initial Purchaser or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Notes by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
(i) the Issuer shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i), for a period
exceeding 180 days after the last Exchange Date (as such period may be
extended pursuant to the penultimate paragraph of Section 3 of this
Agreement) and Participating Broker-Dealers shall not be authorized by
the Issuer to deliver and shall not deliver such Prospectus after such
period in connection with the resales contemplated by this Section 4;
and
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Staff of the SEC or
the 1933 Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Issuer by the Initial
Purchaser or with the reasonable request in writing to the Issuer by
one or more broker-dealers who certify to the Initial Purchaser and the
Issuer in writing that they anticipate that they will be Participating
Broker-Dealers; and provided further that, in connection with such
application of the Shelf Registration procedures set forth in Section 3
to an Exchange Offer Registration, the Issuer shall be obligated (x) to
deal only with one entity representing the Participating
Broker-Dealers, which shall be the Initial Purchaser unless it elects
not to act as such representative, (y) to pay the fees and expenses of
only one counsel representing the Participating Broker-Dealers, which
shall be counsel to the Initial Purchaser unless such counsel elects
not to so act and (z) to cause to be delivered only one, if any, "cold
comfort" letter with respect to the Prospectus in the form existing on
the last Exchange Date and with respect to each subsequent amendment or
supplement, if any, effected during the period specified in clause (i)
above.
(c) The Initial Purchaser shall have no liability to the Issuer or
any Holder with respect to any request that it may make pursuant to Section 4(b)
above.
5. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless the
Initial Purchaser, each Holder and each person, if any, who controls the Initial
Purchaser or any Holder within
13
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act,
or is under common control with, or is controlled by, the Initial Purchaser or
any Holder, from and against all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
by the Initial Purchaser, any Holder or any such controlling or affiliated
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which Exchange Notes or Registrable Notes were registered under the 1933 Act,
including all documents incorporated therein by reference, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Issuer shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial Purchaser or any Holder
furnished to the Issuer in writing by the Initial Purchaser or any selling
Holder expressly for use therein. In connection with any Underwritten Offering
permitted by Section 3, the Issuer will also indemnify the Underwriters, if any,
selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of the Securities Act and the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders, if requested in connection with any Registration
Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Issuer, the Initial Purchaser and the other
selling Holders, and each of their respective trustees, directors, officers who
sign the Registration Statement and each Person, if any, who controls the
Issuer, the Initial Purchaser and any other selling Holder within the meaning of
either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same
extent as the foregoing indemnity from the Issuer to the Initial Purchaser and
the Holders, but only with reference to information relating to such Holder
furnished to the Issuer in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding,
14
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchaser and all
persons, if any, who control the Initial Purchaser within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Issuer, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Issuer within the meaning of either such
Section and (c) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all persons, if any, who
control any Holders within the meaning of either such Section, and that all such
fees and expenses shall be reimbursed as they are incurred. In such case
involving the Initial Purchaser and persons who control the Initial Purchaser,
such firm shall be designated in writing by the Initial Purchaser. In such case
involving the Holders and such persons who control Holders, such firm shall be
designated in writing by the Majority Holders. In all other cases, such firm
shall be designated by the Issuer. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but,
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which such indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 4 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Issuer and the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer or by the Holders
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
15
Holders' respective obligations to contribute pursuant to this Section 5(d) are
several in proportion to the respective number of Registrable Notes of such
Holder that were registered pursuant to a Registration Statement.
(e) The Issuer and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Notes were
sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any person controlling the Initial
Purchaser or any Holder, or by or on behalf of the Issuer, its officers or
directors or any person controlling the Issuer, (iii) acceptance of any of the
Exchange Notes and (iv) any sale of Registrable Notes pursuant to a Shelf
Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Issuer has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Issuer's other issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Issuer has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement,
16
waiver or consent; provided, however, that no amendment, modification,
supplement, waiver or consents to any departure from the provisions of Section 5
hereof shall be effective as against any Holder of Registrable Notes unless
consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Issuer by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Initial Purchaser,
the address set forth in the Purchase Agreement; and (ii) if to the Issuer,
initially at the Issuer's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Notes in
violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Notes, in any manner, whether by operation of
law or otherwise, such Registrable Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Notes such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement and such person shall be
entitled to receive the benefits hereof. The Initial Purchaser (in its capacity
as Initial Purchaser) shall have no liability or obligation to the Issuer with
respect to any failure by a Holder to comply with, or any breach by any Holder
of, any of the obligations of such Holder under this Agreement.
(e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer, on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
17
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise
affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
MORGAN STANLEY AIRCRAFT FINANCE
By /s/ Brian J. Gill
------------------------------------
Brian J. Gill
Authorized Signatory
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INTERNATIONAL
LIMITED
By________________________________
Name:
Title:
19