1
Exhibit 4.20
INDENTURE SUPPLEMENT NO. 2
INDENTURE SUPPLEMENT NO. 2, dated as of March 15, 2001 (the "Indenture
Supplement"), among AIRPLANES U.S. TRUST, a Delaware business trust created
pursuant to the Airplanes Trust Agreement ("Airplanes Trust"), as issuer of the
Notes (the "Issuer"), AIRPLANES LIMITED, a limited liability company
incorporated in Jersey, Channel Islands ("Airplanes Limited"), as guarantor of
the Notes (the "Guarantor" and, together with the Issuer and their respective
subsidiaries, "Airplanes Group") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"), as trustee of each class of Airplanes Trust Notes
(the "Indenture Trustee"), to the Indenture dated as of March 28, 1996, among
the Issuer, the Guarantor and the Trustee and supplemented by the Indenture
Supplement No. 1 dated as of March 16, 1998 (as supplemented, the "Indenture").
Capitalized terms used herein but not defined herein shall have the meanings
given to such terms in the Indenture.
W I T N E S S E T H:
WHEREAS, the Issuer intends to issue one subclass of Refinancing Notes
to refinance the Outstanding Principal Balance of the Subclass A-7 and A-4 Notes
(the "2001 Refinancing") in accordance with Section 2.07 of the Indenture;
WHEREAS, in accordance with the Indenture, the subclass of the
Refinancing Notes to be issued in the 2001 Refinancing is intended to be
entitled to all the rights and benefits appertaining to the corresponding
subclass of Notes to be refinanced under the Indenture, except as specified
herein or in the form of such Refinancing Notes;
WHEREAS, the Issuer intends to correct certain errors of a formal,
minor or technical nature in the Indenture in connection with the 2001
Refinancing in accordance with Section 9.02 of the Indenture; and
WHEREAS, all of the conditions and requirements necessary to make this
Indenture Supplement, when duly executed and delivered, a legal, valid and
binding instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Indenture Supplement in the form and with the terms hereof have
been in all respects duly authorized.
NOW, THEREFORE, in consideration of the premises herein, it is agreed
among the Issuer, the Guarantor and the Indenture Trustee as follows:
ARTICLE I
MODIFICATIONS
Section 1.01. Modifications. The Indenture is, effective as of the date
hereof, hereby modified as follows:
(a) Article I. (i) The following definitions shall be modified
to read as follows:
1
2
"Class A Minimum Principal Payment Amount" means the
difference, if positive, between the aggregate Outstanding Principal
Balance of the Class A Airplanes Group Notes and the Class A Target
Principal Balance on such Payment Date; provided that, if on any
Payment Date the Outstanding Principal Balance of the Class A Airplanes
Group Notes is greater than the Adjusted Portfolio Value, then the
"Class A Minimum Principal Payment Amount" shall be equal to the
difference between the Outstanding Principal Balance of the Class A
Airplanes Group Notes and the Class A Adjusted Balance.
"Class A Supplemental Principal Payment Amount" means the
difference, if positive, between (A) the Outstanding Principal Balance
of the Class A Airplanes Group Notes (after giving effect to the
payment of the Class A Minimum Principal Payment Amount and any Class A
Principal Adjustment Amount to be made on such Payment Date) and (B)
the Class A Supplemental Principal Balance on such Payment Date.
(ii) The following terms shall be added to have the following meanings
indicated below:
"Subclass A-9 Airplanes Group Notes" means the Subclass A-9
Notes and the Subclass A-9 Guarantor Notes.
"Subclass A-9 Certificates" means the Subclass A-9 Pass
Through Certificates due March 15, 2019, issued by the Subclass A-9
Pass Through Trust in an aggregate initial principal amount of
$750,000,000, including any certificates issued in exchange,
replacement or substitution therefor and any Refinancing Certificate
issued to refinance any such Subclass A-9 Certificate, in each case
ranking pari passu in order of payment priority to the Subclass A-9
Certificates.
"Subclass A-9 Guarantor Notes" means the "Subclass A-9 Notes"
referred to in the Guarantor Indenture.
"Subclass A-9 Noteholder" means a Person in whose name a
Subclass A-9 Note is registered from time to time in the register for
the Subclass A-9 Notes maintained by or on behalf of the Issuer.
"Subclass A-9 Notes" means the Subclass A-9 Notes, due March
15, 2019, of the Issuer in the initial aggregate principal amount of
$67,555,882.53, issued to refinance the Subclass A-7 and Subclass A-4
Notes, including any note issued in replacement or substitution
therefor and any Refinancing Note issued to refinance any such note, in
each case ranking pari passu in order of payment priority to the
Subclass A-9 Notes, substantially in the form of Exhibit A hereto.
"Subclass A-9 Pass Through Trust" means the trust created
pursuant to the Subclass A-9 Pass Through Trust Agreement.
"Subclass A-9 Pass Through Trust Agreement" means Trust
Supplement No. 13 dated as of March 15, 2001, among the Issuer, the
Guarantor and Bankers Trust, as trustee, supplementing the Pass Through
Trust Agreement dated as of March 28, 1996, among the Issuer, the
Guarantor and Bankers Trust, as trustee, as supplemented by Supplement
A thereto dated as of March 16, 1998.
2
3
"Subclass A-9 Principal Distribution Amount" means,
collectively, on any Payment Date, the Class A Minimum Principal
Payment Amount, if any, the Class A Principal Adjustment Amount, if
any, and the Class A Supplemental Principal Payment Amount, if any, to
be paid in respect of principal of the Class A Airplanes Group Notes on
such Payment Date in accordance with Section 3.08 hereof and allocable
to the Subclass A-9 Airplanes Group Notes in accordance with Section
3.09 hereof.
(b) Section 3.09 is hereby amended and restated in its
entirety to read as follows:
"Section 3.09. Allocation of Principal Payments Among
Subclasses of the Class A Airplanes Group Notes. To the extent
that any Class A Minimum Principal Payment Amount, Class A
Principal Adjustment Amount, Class A Supplemental Principal
Payment Amount or Redemption Price is required to be made with
respect to the Class A Airplanes Group Notes, and sufficient
funds are available therefor, such amounts will be applied to
repay, first, all amounts Outstanding under the Subclass A-6
Airplanes Group Notes, then, all amounts Outstanding under the
Subclass A-8 Airplanes Group Notes but only following its
Amortization Commencement Date, and then all amounts
Outstanding under the Subclass A-9 Airplanes Group Notes."
(c) Section 5.03(a) is hereby amended and restated in its
entirety to read as follows:
"(a) Concentration Limits. Unless the Board obtains 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 F hereto (the
"Concentration Limits"; provided that the Issuer and any
Issuer Subsidiary shall be entitled to renew or extend any
Lease to the existing Lessee thereunder irrespective of the
effect of such renewal or extension on the Concentration
Limits. The Issuer shall not permit any Issuer Subsidiary to
lease or re-lease any Aircraft operated or to be operated by a
Lessee domiciled in a jurisdiction set forth in Exhibit F
hereto and as amended from time to time upon the approval of
the Rating Agencies as "Prohibited Countries"."
(d) Exhibit F is hereby amended and restated in its entirety
to read as Exhibit F attached hereto.
3
4
ARTICLE II
REFINANCING NOTES
Section 2.01. The Refinancing Notes. There are hereby created Subclass
A-9 Notes to be issued under the Indenture to refinance the Outstanding
Principal Balances of the Subclass A-7 and A-4 Notes on the date hereof. The
terms and conditions applicable to the Subclass A-9 Notes are as follows:
(a) The aggregate principal amount of the Subclass A-9 Notes
that shall be authenticated under the Indenture upon their issuance is
$67,555,882.53.
(b) The Subclass A-9 Notes shall be in the form attached
hereto as Exhibit A.
(c) The proceeds of the sale of the Subclass A-9 Notes shall
be used to repay the Outstanding Principal Balances of the Subclass A-7
and A-4 Notes on the date hereof.
Section 2.02. Issuance of Notes.
On the date hereof, the Issuer shall execute and the Indenture Trustee
shall authenticate and deliver, in fully registered form only, the Subclass A-9
Notes upon the written order of the Issuer, in authorized denominations and in
the names specified by the Issuer.
ARTICLE III
THE INDENTURE TRUSTEE
Section 3.01. The Indenture Trustee.
The Indenture Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Indenture Supplement or
the due execution hereof by the Issuer, or for or in respect of the recitals and
statements contained herein, all of which recitals and statements are made
solely by the Issuer.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Indenture
Trustee other than as set forth in the Indenture, and this Indenture Supplement
is executed and accepted on behalf of the Indenture Trustee, subject to all the
terms and conditions set forth in the Indenture, upon the effectiveness thereof,
as fully to all intents as if the same were herein set forth at length.
4
5
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Trust Indenture Ratified.
Except and so far as herein expressly provided, all of the provisions,
terms and conditions of the Trust Indenture are in all respects ratified and
confirmed; and the Trust Indenture and this Indenture Supplement shall be taken,
read and construed as one and the same instrument. The Guarantor hereby
acknowledges that its Guarantee under Article XII of the Trust Indenture shall
be as fully applicable to the Refinancing Notes issued pursuant to this
Indenture Supplement as to the Notes being refinanced thereby.
Section 4.02. GOVERNING LAW.
THIS INDENTURE SUPPLEMENT AND THE SUBCLASS A-9 NOTES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 4.03. Execution in Counterparts.
This Indenture Supplement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
5
6
IN WITNESS WHEREOF, the Indenture Trustee, the Issuer and the Guarantor
have caused this Indenture Supplement to be duly executed as of the day and year
first written above.
AIRPLANES U.S. TRUST, as Issuer
By: /s/ Hugh Jenkins
------------------------------------
Name: Hugh Jenkins
Title: Controlling Trustee
AIRPLANES LIMITED, as Guarantor
By: /s/ Hugh Jenkins
------------------------------------
Name: Hugh Jenkins
Title: Director
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Peter Morse
------------------------------------
Name: Peter Morse
Title: Vice President
6
7
EXHIBIT A
FORM OF SUBCLASS A-9 NOTE
AIRPLANES U.S. TRUST
SUBCLASS A-9 NOTE, due March 15, 2019
No. ____ $_________
[DATE]
AIRPLANES U.S. TRUST, a business trust organized under the laws of the
State of Delaware (herein referred to as the "Issuer"), for value received,
hereby promises to pay to BANKERS TRUST COMPANY, as Trustee, or registered
assigns, the principal sum of___________________________________________________
_______________________________________________________________________________
_________________________________________________DOLLARS ($__________) on March
15, 2019 (the "Final Maturity Date") and to pay interest monthly in arrears on
the Outstanding Principal Balance hereof at a fluctuating interest rate per
annum equal to the sum of LIBOR plus 0.55% per annum (the "Stated Interest
Rate") from the date hereof until the Outstanding Principal Balance hereof is
paid or duly provided for, payable on each Payment Date. Interest on this
Subclass A-9 Note in each Interest Accrual Period shall be calculated on the
basis of a 360-day year and the actual number of days elapsed in such Interest
Accrual Period.
This Subclass A-9 Note is one of a duly authorized issue of Refinancing
Notes of the Issuer, designated as its "Subclass A-9 Notes, due March 15, 2019",
issued under the Trust Indenture dated as of March 28, 1996 as supplemented by
an Indenture Supplement dated as of March 16, 1998 and as further supplemented
by an Indenture Supplement dated as of March 15, 2001 (as amended or
supplemented from time to time, the "Indenture"), among the Issuer, AIRPLANES
LIMITED, a limited liability company organized under the laws of Jersey, Channel
Islands (the "Guarantor"), and Bankers Trust Company, as indenture trustee (the
"Indenture Trustee"). All capitalized terms used in this Subclass A-9 Note and
not defined herein shall have the respective meanings assigned to such terms in
the Indenture. Reference is made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights and obligations
thereunder of the Issuer, the Guarantor, the Indenture Trustee and the Subclass
A-9 Noteholders. This Subclass A-9 Note is subject to all terms of the Indenture
and shall constitute an Amortizing Note thereunder.
The Issuer will pay or redeem the Outstanding Principal Balance of this
Subclass A-9 Note prior to the Final Maturity Date on the dates and in the
amounts specified in the Indenture, subject to the availability of Available
Collections therefor after making payments entitled to priority under Sections
3.08 and 3.09 of the Indenture. The Expected Final Payment Date of this Subclass
A-9 Note is November 15, 2008.
The Issuer may redeem all or part of the Outstanding Principal Balance
of this Subclass A-9 Note prior to the Final Maturity Date on any Payment Date,
in the amounts and under the circumstances specified in the Indenture.
7
8
Other than in the case of a redemption for taxation reasons specified
in the Indenture, upon (i) any redemption funded other than from Available
Collections (including proceeds from Refinancing Notes and proceeds from third
parties) of any amount of the Outstanding Principal Balance of this Subclass A-9
Note, such amount shall be redeemed at a Redemption Price equal to the product
of the Redemption Premium for such date of redemption set forth below and the
amount of Outstanding Principal Balance thereof being redeemed and (ii) any
redemption out of Available Collections, such amount shall be redeemed at a
Redemption Price equal to the amount of Outstanding Principal Balance thereof
being redeemed, without premium (such redemption price being the "Floating Rate
Redemption Price" referred to in the Indenture for the Subclass A-9 Notes).
Redemption
Redemption Date Premium
--------------- -------
After March 15, 2001 101.00%
On or after March 15, 2002 100.50%
On or after March 15, 2003 100.00%
Any amount of Premium or interest on this Subclass A-9 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest at a fluctuating interest rate per annum equal to the Stated Interest
Rate from the date when due until such amount is paid or duly provided for,
payable on the next succeeding Payment Date, subject to the availability of
Available Collections therefor after making payments entitled to priority under
Sections 3.08 and 3.09 of the Indenture.
The indebtedness evidenced by the Subclass A-9 Notes is, to the extent
and in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass A-9 Note is issued subject to such provisions.
Each Holder of this Subclass A-9 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Indenture
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Indenture Trustee his attorney-in-fact for such purpose.
The maturity of this Subclass A-9 Note is subject to acceleration upon
the occurrence and during the continuance of the Events of Default specified in
the Indenture.
This Subclass A-9 Note is and will be secured, on a subordinated basis,
by the collateral pledged as security therefor as provided in the Security
Documents.
Subject to and in accordance with the terms of the Indenture, there
will be distributed monthly on each Payment Date commencing on April 17, 2001,
to the Person in whose name this Subclass A-9 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the Subclass
A-9 Notes held by such Person) of the aggregate amount distributable to all
Holders of Subclass A-9 Notes on such Payment Date.
All amounts payable in respect of this Subclass A-9 Note shall be
payable in U.S. dollars in immediately available funds at the Corporate Trust
Office of the Indenture
8
9
Trustee or as otherwise directed in the manner provided in the Indenture to the
Holder hereof on the Record Date relating to such payment. Notwithstanding the
foregoing, the Indenture Trustee shall pay, or cause to be paid, if so requested
by the Holder hereof by written notice to the Issuer and the Indenture Trustee,
all amounts payable hereunder to the Holder hereof, or a nominee therefor, by
transferring by wire in immediately available funds to an account maintained by
the Holder hereof with a bank in the United States, the amount to be distributed
to the Holder hereof (provided that written instructions necessary to implement
such wire transfers are received by the Indenture Trustee prior to the Record
Date related to any payment), without any presentment or surrender of any
Subclass A-9 Note, except that the Holder hereof shall surrender this Subclass
A-9 Note to the Indenture Trustee upon payment in full of the principal and
interest on this Subclass A-9 Note and such other sums payable to the Holder
hereof hereunder or under the Indenture. Any reduction in the principal amount
of this Subclass A-9 Note (or any one or more predecessor Subclass A-9 Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Subclass A-9 Note and of any Subclass A-9 Note issued
upon the registration of transfer of, in exchange or in lieu of or upon the
refinancing of this Subclass A-9 Note, whether or not noted hereon.
The Holder of this Subclass A-9 Note agrees, by acceptance hereof, to
pay over to the Cash Manager any money (including principal, Premium and
interest) paid to it in respect of this Subclass A-9 Note in the event that the
Cash Manager, acting in good faith, determines subsequently that such monies
were not paid in accordance with the priority of payment provisions of the
Indenture or as a result of any other mistake of fact or law on the part of the
Cash Manager in making such payment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Subclass A-9 Note may be registered on the
register maintained by the Indenture Trustee for the purpose of registering
transfers and exchanges upon surrender of this Subclass A-9 Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or his attorney duly authorized in writing, with
such signature guaranteed, and such other documents as the Indenture Trustee may
require, and thereupon one or more new Subclass A-9 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Subclass A-9 Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Prior to the due presentment for registration of transfer of this
Subclass A-9 Note, the Issuer, the Indenture Trustee and any agent of the Issuer
or the Indenture Trustee may deem and treat the Person in whose name this
Subclass A-9 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect to this Subclass A-9 Note and for all other purposes, and neither the
Issuer, the Indenture Trustee nor any such agent shall be affected by notice to
the contrary.
The Indenture permits the amendment or modification of the Indenture
and the Subclass A-9 Notes by the Issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Holder of any class or subclass of
9
10
Notes then Outstanding, no such amendment may (i) modify the provisions of the
Indenture, the Notes or the Cash Management Agreement setting forth the
frequency or the currency of payment of, the maturity of, or the method of
calculation of the amount of, any interest, principal and Premium, if any,
payable in respect of such class or subclass of Notes, (ii) modify the
provisions of Section 5.02 of the Indenture relating to the sale of any assets
of the Issuer, (iii) reduce the percentage of the aggregate Outstanding
Principal Balance of such class or subclass of Notes required to approve any
amendment or waiver of Section 9.01 of the Indenture or (iv) alter the manner or
priority of payment of any class or subclass of Notes or the priority of payment
of the Expenses, the Swap Payments or the Swap Breakage Costs (each, a "Basic
Terms Modification"). Any such amendment or modification shall be binding on
every Holder hereof, whether or not notation thereof is made upon this Subclass
A-9 Note. The Indenture also permits the Indenture Trustee to agree, without the
consent of any Noteholder, (a) to any modification (other than a Basic Terms
Modification) of, or the waiver or authorization of any breach or prospective
breach of, any provision of any Related Document or of the relevant Notes to
correct a manifest error or an error which is of a formal, minor or technical
nature or (b) to modify the provisions of the Indenture or the Cash Management
Agreement relating to the timing of movement of Rental Payments or other monies
received or Expenses incurred among the Accounts by the Cash Manager.
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 Noteholder of the class or subclass affected thereby and each
Noteholder of any class or 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 Swap Breakage Costs be amended or
modified.
The Indenture also contains provisions permitting the Holders of Notes
representing a majority of the Outstanding Principal Balance of the Senior Class
of Notes, on behalf of the Holders of all of the Subclass A-9 Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Subclass A-9 Note and of any Subclass A-9 Note issued upon the registration
of transfer of, in exchange or in lieu of or upon the refinancing of this
Subclass A-9 Note, whether or not notation of such consent or waiver is made
upon this Subclass A-9 Note.
The term "Issuer" as used in this Subclass A-9 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 Indenture Trustee and the
Holders of Subclass A-9 Notes under the Indenture.
The Subclass A-9 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass A-9 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.
10
11
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this
Subclass A-9 Note shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
11
12
IN WITNESS WHEREOF, the Issuer has caused this Subclass A-9 Note to be
duly executed by its Responsible Officer.
AIRPLANES U.S. TRUST
By:_____________________________________
Name:
Title:
12
13
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass A-9 Notes designated above and referred to
in the within-mentioned Indenture.
Date: _______________ BANKERS TRUST COMPANY, not in its
individual capacity but
solely as Indenture Trustee
By:_____________________________________
Name:
Title:
13
14
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.
14
15
EXHIBIT F
CONCENTRATION LIMITS, PROHIBITED COUNTRIES AND
CORE LEASE PROVISIONS
I. Concentration Limits
Lessee Limits
Lessee % of Most Recent Appraised Value of
Current Portfolio
Any single Lessee 10%
Five largest Lessees 35%
Country Limits
Country Rating % of Most Recent Appraised Value of
Current Portfolio
A- (or the equivalent) or better1 20%
Other 15%
Regional Limits
Region % of Most Recent Appraised Value of
Current Portfolio
Africa 5%
Asia 45%
Australia 10%
Europe (including Turkey but
excluding CIS and
Eastern Europe) 45%
Middle East 15%
North America 45%
Latin America 35%
Other (including CIS and
Eastern Europe) 10%
- ----------
1 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.
15
16
II. Prohibited Countries
Burma
Cuba
Iran
Iraq
Libya
North Korea
Sudan
Syria
III. 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;
16
17
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
termination a lease and repossess the relevant aircraft, at any time
after the expiration of any agreed grace period or remedy period, in
each case consistent with the reasonable commercial practices of
leading international aircraft operating lessors;
8. Assignment
provisions prohibiting the assignment of any benefits or obligations
under the lease to any Person, subject to exceptions consistent with
the reasonable commercial practices of leading international aircraft
operating lessors;
9. Disclaimer of Condition 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.
17