Exhibit 10.1
EXECUTION COPY
AMENDMENT AND RESTATEMENT,
Dated as of December 15, 2006 of the
CREDIT AGREEMENT (2006-A)
by and among
AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED,
AIRCASTLE IRELAND NO. 1 LIMITED,
AIRCASTLE IRELAND NO. 3 LIMITED,
and
THE BORROWERS PARTY HERETO FROM TIME TO TIME,
as Borrowers,
JPMORGAN CHASE BANK, N.A.,
BEAR STEARNS CORPORATE LENDING INC. and
CITICORP NORTH AMERICA, INC.,
as Lenders
and
JPMORGAN CHASE BANK, N.A.,
as Agent
and
THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME
Dated as of February 28, 2006
Page
ARTICLE I
Definitions and Terms
1.1. Definitions....................................................1
1.2. Rules of Interpretation.......................................23
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans...............................................24
2.2. Payment of Interest...........................................26
2.3. Payment of Principal..........................................26
2.4. Manner of Payment.............................................28
2.5. Notes.........................................................28
2.6. Pro Rata Payments.............................................28
2.7. Reductions....................................................28
2.8. Conversions and Elections of Subsequent Interest Periods......29
2.9. Increase and Decrease in Amounts..............................29
2.10. Fees..........................................................29
2.11. Deficiency Advances...........................................30
2.12. Use of Proceeds...............................................30
2.13. Designation of Borrowing Affiliate; Releases..................30
2.14. Joint and Several Liability...................................31
2.15. Eligible Lease Involving Eligible Intermediary................32
ARTICLE III
Security
3.1. Security......................................................33
3.2. Further Assurances............................................33
3.3. Information Regarding Collateral..............................33
3.4. Quiet Enjoyment...............................................34
ARTICLE IV
Change in Circumstances
4.1. Requirements of Law...........................................34
4.2. Limitation on Types of Loans..................................35
4.3. Illegality....................................................35
4.4. Treatment of Affected Loans...................................36
4.5. Compensation..................................................36
4.6. Taxes.........................................................37
ARTICLE V
Conditions to Making Loans
5.1. Conditions of Closing of Amended
and Restated Credit Agreement.................................39
5.2. Conditions of Revolving Loans.................................41
5.3. Conditions of Subsequent Advances Under Revolving Loans.......44
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority....................................45
6.2. Loan Documents................................................46
6.3. Solvency......................................................46
6.4. Subsidiaries and Stockholders.................................46
6.5. Ownership Interests...........................................46
6.6. Liens.........................................................47
6.7. Title to Properties...........................................47
6.8. Taxes.........................................................47
6.9. Other Agreements..............................................47
6.10. Litigation....................................................48
6.11. Federal Regulations...........................................48
6.12. Investment Company............................................48
6.13. Patents, Etc..................................................48
6.14. No Untrue Statement...........................................48
6.15. No Consents, Etc..............................................48
6.16. Employee Benefit Plans........................................49
6.17. No Default....................................................49
6.18. Environmental Laws............................................49
6.19. Employment Matters............................................50
6.20. Taxes.........................................................50
ARTICLE VII
Affirmative Covenants
7.1. Financial Reports, Etc........................................50
7.2. Maintain Properties...........................................51
7.3. Existence, Qualification, Etc.................................51
7.4. Regulations and Taxes.........................................52
7.5. Insurance.....................................................52
7.6. True Books....................................................52
7.7. Right of Inspection...........................................52
7.8. Observe all Laws..............................................52
7.9. Governmental Licenses.........................................52
7.10. Covenants Extending to Other Persons..........................53
7.11. Officer's Knowledge of Default................................53
7.12. Suits or Other Proceedings....................................53
7.13. Notice of Environmental Complaint or Condition................53
7.14. Environmental Compliance......................................53
7.15. Indemnification...............................................54
7.16. Further Assurances............................................54
7.17. Hedging Agreements............................................54
7.18. Continued Operations..........................................54
7.19. Maintenance of Eligible Assets; Other Covenants
and Restrictions; Non-Discrimination..........................54
7.20. Re-registration of Eligible Assets............................55
7.21. Employee Benefit Plans........................................55
7.22. Accounts......................................................55
7.23. Eligible Lease; Lessee Notice.................................55
ARTICLE VIII
Negative Covenants
8.1. Acquisitions..................................................55
8.2. Capital Expenditures..........................................55
8.3. Liens.........................................................55
8.4. Indebtedness..................................................57
8.5. Transfer of Assets............................................57
8.6. Subsidiaries; Investments.....................................58
8.7. Merger or Consolidation.......................................58
8.8. Transactions with Affiliates..................................58
8.9. Employee Benefit Plans; ERISA Affiliates; Employees...........58
8.10. Fiscal Year...................................................59
8.11. Dissolution, etc..............................................59
8.12. Change in Control.............................................59
8.13. Negative Pledge Clauses.......................................59
8.14. Partnerships..................................................59
8.15. Business and Operations.......................................59
8.16. Ownership, Operation and Leasing of Financed Eligible Assets..59
8.17. Bank Accounts.................................................60
8.18. Representations Regarding Agent and Lenders...................60
8.19. Bermuda Holding 2 Ltd; AI 3 Ltd...............................60
8.20. Organizational Documents......................................60
8.21. Borrowing Base Covenant.......................................60
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default.............................................60
9.2. Agent to Act..................................................64
9.3. Cumulative Rights.............................................64
9.4. No Waiver.....................................................64
9.5. Allocation of Proceeds........................................64
9.6. Activities of Eligible Carriers...............................65
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities...........................65
10.2. Reliance by Agent.............................................66
10.3. Defaults......................................................66
10.4. Rights as Lender..............................................67
10.5. Indemnification...............................................67
10.6. Non-Reliance on Agent and Other Lenders.......................67
10.7. Resignation of Agent..........................................67
10.8. Fees..........................................................68
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations................................68
11.2. Notices.......................................................70
11.3. Right of Set-off; Adjustments.................................71
11.4. Survival......................................................72
11.5. Expenses......................................................72
11.6. Amendments and Waivers........................................73
11.7. Counterparts..................................................73
11.8. Return of Funds...............................................73
11.9. Indemnification; Limitation of Liability......................74
11.10. Severability..................................................75
11.11. Entire Agreement..............................................75
11.12. Payments......................................................76
11.13. Confidentiality...............................................76
11.14. Governing Law; Waiver of Jury Trial...........................76
11.15. Judgment Currency.............................................77
11.16. USA PATRIOT Act...............................................78
EXHIBITS
EXHIBIT A Applicable Commitment Percentages
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Notice of Appointment (or Revocation)
of Authorized Representative
EXHIBIT D Form of Borrowing Notice
EXHIBIT E Form of Interest Rate Selection Notice
EXHIBIT F Form of Note
EXHIBIT G-1 Form of Domestic Counsel Opinion
EXHIBIT G-2 Form of FAA Counsel Opinion at Funding
EXHIBIT G-3 Form of Foreign Counsel Opinion as to Borrower
EXHIBIT G-4 Form of Foreign Counsel Opinion as to Lease and Lessee
EXHIBIT H Compliance Certificate
EXHIBIT I Form of Facility Guaranty
EXHIBIT J Form of Security Agreement
EXHIBIT K List of Approved Aircraft Models
EXHIBIT L Required Insurance on Each Aircraft
EXHIBIT M Form of Lessee Notice
EXHIBIT N Form of Account Control Agreement
EXHIBIT O Form of Lockbox Agreement
EXHIBIT P [reserved]
EXHIBIT Q Form of Assumption Letter
EXHIBIT R Borrowing Base Certificate
EXHIBIT S-1 Form of Pledge and Security Agreement
(for pledged beneficial
interest in Holdings Subsidiary Trust)
EXHIBIT S-2 Form of Pledge and Security Agreement
(for pledged interest in Holdings SPC,
Beneficial Owner, Applicable
Intermediary or other Subsidiary)
EXHIBIT S-3 Form of Bermuda Pledge
EXHIBIT S-4 Form of Irish Pledge
SCHEDULES
Schedule 1.1 Certain Persons who are not Eligible Assignees
Schedule 3.3 Information Regarding Collateral
Schedule 6.7 Existing Liens
Schedule 6.8 Tax Matters
Schedule 6.10 Litigation
Schedule 7.19(a) Maintenance, Return, Alteration, Replacement, Pooling
and Lease
Schedule 8.4 Indebtedness
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT AND RESTATEMENT, dated as of December 15, 2006, (as may
be further amended, supplemented or otherwise modified from time to time, the
"Agreement") of the CREDIT AGREEMENT (2006-A), dated as of February 28, 2006
(the "Original Credit Agreement"), made by and among, AIRCASTLE INVESTMENT
HOLDINGS 2 LIMITED, an exempted company organized and existing under the laws of
Bermuda ("Bermuda Holding 2 Ltd."), AIRCASTLE IRELAND NO. 1 LIMITED, a limited
liability company incorporated in Ireland ("AI 1 Ltd."), AIRCASTLE IRELAND NO. 3
LIMITED, a limited liability company incorporated in Ireland ("AI 3 Ltd."), and
certain Holdings Subsidiary Trusts and Holdings SPCs (as defined below)
designated as Borrowing Affiliates hereunder (such Holdings Subsidiary Trusts
and Holdings SPCs being referred to individually as a "Borrower" or collectively
as the "Borrowers"), JPMORGAN CHASE BANK, N.A., a national banking association,
in its capacity as a Lender ("JPMCB"), BEAR STEARNS CORPORATE LENDING INC., a
national banking corporation, CITICORP NORTH AMERICA, INC., a national banking
association, and each other financial institution party hereto (such financial
institutions, and their successors and assigns, a "Lender"; collectively the
"Lenders"), and JPMORGAN CHASE BANK, N.A., in its capacity as agent for the
Lenders (in such capacity, and together with any successor agent appointed in
accordance with the terms of Section 10.7, the "Agent");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., the Borrowers
and the Guarantors desire to amend and restate the Original Credit Agreement in
its entirety to among other things, increase the revolving commitment of the
Lenders to $1,000,000,000 the proceeds of which are to be used solely to provide
interim financing for the purchase or refinancing by the Borrowers of Eligible
Assets (as hereinafter defined);
WHEREAS, the Lenders and the Agent, subject to the conditions set forth
herein (including the conditions set forth in Section 5.1), are willing to amend
and restate the Original Credit Agreement as set forth herein;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
as follows:
ARTICLE I
DEFINITIONS AND TERMS
---------------------
1.1. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Account" has the meaning given in the Lockbox Agreement. "Account
Control Agreement" means an account control agreement in substantially the form
of Exhibit N.
"Acquisition" means the acquisition of any beneficial interest, equity
interest or other ownership interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to acquire such
interest at the time it becomes exercisable by the holder thereof), whether by
purchase of such interest or upon exercise of an option or warrant for, or
conversion of securities into, such interest.
"Affiliate" means any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with any Guarantor or any Borrower; or (ii) which beneficially owns or
holds 10% or more of any class of the outstanding voting stock (or in the case
of a Person which is not a corporation, 10% or more of the equity interest or
beneficial interest) of any Guarantor or any Borrower; or 10% or more of any
class of the outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest or beneficial interest) of which
is beneficially owned or held by any Guarantor or any Borrower; provided,
however, at the time any Guarantor registers any security issued by it pursuant
to the Securities Act of 1933, as amended, the figure "10%" used in this
definition shall automatically change to "5%" without further action. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise.
"Agreement" has the meaning given to such term in the first recital to
this Agreement.
"AHC Ltd." means Aircastle Holding Corporation Limited, an exempted
company organized and existing under the laws of Bermuda.
"AI 1 Ltd." has the meaning given such term in the preamble to this
Agreement.
"AI 3 Ltd." has the meaning given such term in the preamble to this
Agreement.
"Aircraft" means any Stage III fixed wing airframe together with the
jet Engines therefor (whether or not) affixed thereto.
"Aircraft Portfolio" means the collective reference to all of the
Eligible Assets owned by any Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or
AI 3 Ltd. at any one time.
"Applicable Borrower" means, with respect to any Financed Eligible
Asset, the Borrower that has requested or received a Loan to enable such
Borrower to purchase or refinance such Financed Eligible Asset.
"Applicable Carrier" means, with respect to any Financed Eligible
Asset, the Eligible Carrier that has leased such Financed Eligible Asset from
the Applicable Borrower, or from the Applicable Intermediary in accordance with
Section 2.15.
"Applicable Commitment Percentage" means, with respect to each Lender
at any time, a fraction, the numerator of which shall be such Lender's Revolving
Credit Commitment and the denominator of which shall be the Total Revolving
Credit Commitment, which Applicable Commitment Percentage for each Lender as of
the Closing Date is as set forth in Exhibit A; provided that the Applicable
Commitment Percentage of each Lender shall be increased or decreased to reflect
any assignments to or by such Lender effected in accordance with Section 11.1.
"Applicable Foreign Aviation Law" means, with respect to any Eligible
Asset, any applicable law (other than the FAA Act) of any country or subdivision
thereof, governing the registration, ownership, operation, or leasing of all or
any part of such Eligible Asset, or the creation, recordation, maintenance,
perfection or priority or Liens on all or any part of such Eligible Asset.
"Applicable Foreign Jurisdiction" means, with respect to any Eligible
Asset, any jurisdiction that administers an Applicable Foreign Aviation Law.
"Applicable Intermediary" means, with respect to any Financed Eligible
Asset, the Eligible Intermediary that has leased such Eligible Asset from the
Applicable Borrower, and has leased such Eligible Asset to the Applicable
Carrier, in each case in accordance with Section 2.15.
"Applicable Lease Cure Period" has the meaning assigned thereto in
Section 9.6.
"Applicable Lending Office" means, for each Lender and for each Type of
Loan, the "Lending Office" for such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrowers by written notice in
accordance with the terms hereof as the office by which its Loans are to be made
and maintained.
"Applicable Margin" means:
(a) with respect to the Eurodollar Rate, 1.25%; and
(b) with respect to the Base Rate, 0.25%.
"Approved Conversion Company" means The Boeing Company and others to be
mutually agreed by the Borrowers and the Administrative Agent.
"Approved Improvements" means improvements made or added to an Eligible
Asset acceptable to the Agent in its reasonable judgment.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit B (with blanks appropriately filled in)
delivered to the Agent in connection with an assignment of a Lender's interest
under this Agreement pursuant to Section 11.1.
"Assumption Letter" means an Assumption Letter in substantially the
form of Exhibit Q.
"Authorized Representative" means any of the President, Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer or Vice President of
the Parent, Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd., as applicable, or
any Beneficial Owner, in each case as authorized representative for each of the
Borrowers, or any other Person expressly designated by the Board of Directors of
each of the Borrowers (or the appropriate committee thereof) as an Authorized
Representative of each of the Borrowers as set forth from time to time in a
certificate in the form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to the sum of
(a) the higher of (i) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (ii) the Prime Rate for such day, plus (b) the Applicable
Margin. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Beneficial Owner" means, with respect to any Holdings Subsidiary
Trust, either Aircastle Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. or any
Person who is a direct or indirect wholly-owned subsidiary of Bermuda Holding 2
Ltd., AI 1 Ltd. or AI 3 Ltd., in any case holding a beneficial interest in such
Holdings Subsidiary Trust.
"Bermuda Holding 2 Ltd." has the meaning given to such term in the
preamble to this Agreement.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrower" has the meaning given to such term in the preamble to this
Agreement.
"Borrowing Affiliate" means any direct or indirect wholly-owned
Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. and any Holdings
Subsidiary Trust or Holdings SPC that in either case is designated as a
Borrowing Affiliate hereunder pursuant to Section 2.13 hereof.
"Borrowing Base" means, as of any date of determination, the aggregate
of the Individual Eligible Asset Borrowing Base of all Eligible Assets then
owned by any Borrower or any Subsidiary thereof.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit R.
"Borrowing Base Covenant" has the meaning set forth with respect to
such term in Section 8.21.
"Borrowing Base Event" means, with respect to any Borrower, if (a) one
or more judgments or orders where the amount not covered by insurance (or the
amount as to which the insurer denies liability) is in excess of $250,000 is
rendered against such Borrower or any Subsidiary thereof, or (b) there is any
attachment, injunction or execution against any of such Borrower's or
Subsidiaries' properties for any amount in excess of $250,000 in the aggregate;
and such judgment, attachment, injunction or execution remains unpaid, unstayed,
undischarged, unbonded or undismissed for a period of thirty (30) days.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with a Loan under the Revolving Credit Facility, in
the form of Exhibit D.
"Business Day" means, (i) with respect to any Base Rate Loan, any day
which is not a Saturday, Sunday or a day on which banks in the State of New York
are authorized or obligated by law, executive order or governmental decree to be
closed and, (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described above, and on which the relevant international
financial markets are open for the transaction of business contemplated by this
Agreement in London, England and New York, New York.
"Calculation Date" mean the date three Business Days prior to each
Payment Date.
"Capital Expenditures" means, with respect to the Borrowers and their
respective Subsidiaries, for any period the sum of (without duplication) (i) all
expenditures (whether paid in cash or accrued as liabilities) by any Borrower or
any Subsidiary during such period for items that would be classified as
"property, plant or equipment" or comparable items on the consolidated balance
sheet of such Borrower and its Subsidiaries, including without limitation all
transactional costs incurred in connection with such expenditures provided the
same have been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance, as evidenced in
writing and submitted to the Agent together with any compliance certificate
delivered pursuant to Section 7.1(a) or (b), and (ii) with respect to any
Capital Lease entered into by any Borrower or its Subsidiaries during such
period, the present value of the lease payments due under such Capital Lease
over the term of such Capital Lease applying a discount rate equal to the
interest rate provided in such lease (or in the absence of a stated interest
rate, that rate used in the preparation of the financial statements described in
Section 7.1(a)), all the foregoing in accordance with GAAP.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time including
Statement No. 13 of the Financial Accounting Standards Board and any successor
thereof.
"Capital Stock" means, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated) of
capital stock of (or other ownership or profit interests or units in) such
Person and all of the warrants, options or other rights for the purchase,
acquisition or exchange from such Person of any of the foregoing (including
through convertible securities).
"Change of Control" means, at any time, 100% of the beneficial
ownership of (a) any Borrower or any Eligible Intermediary is not directly or
indirectly owned by Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. or (b)
Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. is not directly or indirectly
owned by Parent.
"Closing Date" means the date as of which this Agreement is executed by
the Borrowers, the Lenders and the Agent and on which the conditions set forth
in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder. "Collateral" means, collectively, all
property of any Borrower, any Subsidiary, any Eligible Intermediary, Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any other Person in which the Agent or
any Lender is granted a Lien as security for all or any portion of the
Obligations under any Security Instrument including, without limitation, the
Leases, the Pledged Interests, the Securitization Interests and the other
collateral described in such Security Agreement, Pledge Agreement, Lockbox
Agreement and other Security Instrument. For the avoidance of doubt, none of the
Security Instruments shall provide for the grant of a perfected security
interest in the Financed Eligible Assets.
"Contingent Obligation" of any Person means all contingent liabilities
required (or which, upon the creation or incurring thereof, would be required)
to be included in the financial statements (including footnotes) of such Person
in accordance with GAAP, including Statement No. 5 of the Financial Accounting
Standards Board, all Rate Hedging Obligations and any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or other
obligation of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or any property
or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the purchase or
payment of such Indebtedness or other obligation, or (ii) to maintain a
minimum working capital, net worth or other balance sheet condition or any
income statement condition of the primary obligor;
(3) to grant or convey any lien, security interest, pledge, charge or
other encumbrance on any property or assets of such Person to secure
payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other property or
services primarily for the purpose of assuring the owner or holder of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof.
"Continue", "Continuation", and "Continued" refers to the continuation
pursuant to Section 2.8 hereof of a Eurodollar Rate Loan of one Type as a
Eurodollar Rate Loan of the same Type from one Interest Period to the next
Interest Period.
"Convention" means the Convention on the International Recognition of
Rights in Aircraft signed initially at Geneva in 1948, as the same may be
amended, modified or supplemented from time to time.
"Convert", "Conversion", and "Converted" refers to a conversion
pursuant to Section 2.8 or Article IV of one Type of Loan into another Type of
Loan.
"Credit Party" means, collectively, each Borrower, each Eligible
Intermediary, each Guarantor, and each other Person (excluding ACH Ltd. and
Ireland Holding Limited) providing Collateral pursuant to any Security
Instrument.
"Default" means any event or condition which, with the giving or
receipt of notice or lapse of time or both, would constitute an Event of Default
hereunder, provided that if, pursuant to Section 9.6, such event or condition is
not deemed to be a breach of the Credit Parties' obligations under this
Agreement and the other Loan Documents, such event or condition shall not be
deemed to be a "Default" except for the purposes of Section 7.11, the first two
sentences of Section 10.3, the Compliance Certificate in the form of Exhibit H,
and Section 4 of the Borrowing Base Certificate in the form of Exhibit R.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the end of the Interest Period applicable thereto, a rate of two percent
(2%) above the Eurodollar Rate applicable to such Loan, and thereafter at a rate
of interest per annum which shall be two percent (2%) above the Base Rate, (ii)
with respect to Base Rate Loans, at a rate of interest per annum which shall be
two percent (2%) above the Base Rate and (iii) in any case, the maximum rate
permitted by applicable law, if lower.
"Depositary Bank" means a bank, trust company or other Person,
satisfactory to the Agent, that executes the Lockbox Agreement in the capacity
of "Depositary Bank" thereunder.
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of America.
"Eligible Aircraft" means any Aircraft which satisfies each of the
following requirements:
(a) such Aircraft is a Stage III aircraft and is one of the models
listed on Exhibit K attached hereto;
(b) such Aircraft is owned by the Applicable Borrower;
(c) such Aircraft is covered by all of the insurance described on
Exhibit L attached hereto and the Agent (for itself and on behalf of the
Lenders) is named as loss payee or contract party on the hull insurance and
is named as an additional insured or contract party on the liability
insurance;
(d) neither the Applicable Carrier (if any) nor the Applicable
Intermediary (if any) is organized under the laws of, or domiciled in, any
Prohibited Country; and
(e) either (x) the age of such Aircraft is (i) in the case of a
passenger aircraft, 19 years or less and (ii) in the case of a freighter
aircraft, 25 years or less, in each case measured from the date of original
manufacture as a passenger aircraft or a freighter aircraft, as the case
may be, to the date of the original Loan made or to be made in respect of
such Eligible Aircraft, or (y) immediately after giving effect to the Loan
to be drawn in respect of such Aircraft the total amount of Loans
outstanding in respect of all Aircraft not satisfying clause (x) above
shall not exceed $50,000,000; provided that in the event that any Eligible
Aircraft is considered an Eligible Aircraft pursuant to clause (e)(y)
above, each reference to "65%" in Sections 2.1, 2.3, 2.12 and 8.21 of this
Agreement shall be replaced with "50%", with respect to such Eligible
Asset.
"Eligible Asset" means an Eligible Aircraft or an Eligible Engine.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a Lender
that is a "resident" (as that term is used in the Treaty) of the U.S. or a
"qualified person" (as that term is used in the Treaty) and (iii) any other
Person approved by the Agent (such consent not to be unreasonably withheld or
delayed) that is either (A) a resident of the U.S., (B) a qualified person under
the Treaty or (C) a "bank" (as that term is used in Article 23 of the Treaty)
that is a resident of Ireland or, if not such a resident, in whose hands the
income from the Loans is attributable to a permanent establishment of such
Persons in the U.S. or Ireland; provided, however, that (x) neither any Borrower
nor an affiliate of any Borrower shall qualify as an Eligible Assignee and (y)
unless a Default or Event of Default has occurred and is continuing, none of the
Persons listed on Schedule 1.1 shall qualify as an Eligible Assignee unless the
Parent shall have consented to such qualification, such consent not to be
unreasonably withheld or delayed.
"Eligible Carrier" means any air carrier duly licensed to carry
passengers or cargo under applicable law, foreign or domestic.
"Eligible Engine" means any Engine suitable for use on an Eligible
Aircraft.
"Eligible Intermediary" means, with respect to any Financed Eligible
Asset, Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. or a Person that is a
direct or indirect wholly-owned subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd.
or AI 3 Ltd.
"Eligible Lease" or "Eligible Leases" means a fully-executed Lease by a
Borrower or Eligible Intermediary (as lessor) to an Eligible Carrier (as lessee)
of an Eligible Asset, which Lease satisfies each of the following requirements:
(a) such Lease is a "triple net lease" (subject to any arrangement
whereby the Borrower and the Eligible Carrier agree to share certain
expenses relating to aircraft or engine maintenance, directives, service
bulletins or similar items) and requires the lessee to maintain the
insurance described in Exhibit L attached hereto with respect to such
Eligible Asset, and to bear all risk of loss, damage or liability with
respect to such Eligible Asset;
(b) if the Eligible Carrier is domiciled in the United States, the
lessor is entitled to the benefits of Section 1110 of the U.S. bankruptcy
code with respect to the lessor's rights against such lessee, including
without limitation the rights to require performance of such lessee's
obligations under the Lease or return such Eligible Asset during such
lessee's bankruptcy or insolvency;
(c) such Lease requires the lessee to comply with covenants and
restrictions regarding the maintenance, return, alteration, replacement,
pooling and sublease of such Eligible Asset, which covenants and
restrictions satisfy the requirements of Section 7.19(a) and Schedule
7.19(a) hereto;
(d) if such Lease contains a purchase option, the expected exercise
price is equal to or greater than the expected outstanding principal and
accrued interest on all Loans relating to such Eligible Asset as of the
date of exercise of such option;
(e) such Lease prohibits the lessee from flying or locating such
Eligible Asset in any country in violation of the applicable laws of any
jurisdiction;
(f) such Lease provides rent payments in US dollars or Euros and
contains customary covenants and restrictions relating to re-registration
of such Eligible Asset; which covenants and restrictions satisfy the
requirements of the Security Agreement; provided that the total amount of
Loans outstanding in respect of Aircraft subject to Leases where rent is
paid in Euros shall in no circumstances exceed $50,000,000;
(g) at the time of any Loan hereunder relating to such Eligible Asset
or, if later, at the time of the entering into such Lease, no prepayment
shall have been made under such Lease, and no Lease payment obligation
shall have been accelerated, provided that it is understood that a
scheduled rental payment to be paid in advance for a rental period in
accordance with the Lease terms is not deemed to be a prepayment;
(h) at the time of any Loan relating to such Eligible Asset or, if
later, at the time of the delivery of such Eligible Asset under such Lease,
the applicable lessor shall have delivered a Lessee Notice to the
applicable lessee; and
(i) either (i) such Lease is a "true lease" lease (and not a lease
intended as security) under applicable commercial law and other applicable
law relating to creditors' rights and bankruptcy; or (ii) such Lease grants
to such Borrower, and such Borrower has at all times under the FAA Act (in
the case of Eligible Assets registered in the United States), a perfected
first priority mortgage Lien on such Eligible Asset (subject only to
Permitted Liens), which Lien has been assigned to the Agent;
provided, however, that in the circumstances described in Section 2.15,
"Eligible Lease" means, individually and collectively, (X) a fully-executed
Lease by a Borrower (as lessor) to the Applicable Intermediary (as lessee) of an
Eligible Asset, which Lease satisfies each of the requirements for an "Eligible
Lease" set forth in clauses (a) through (h) above except that the lessee is not
an Eligible Carrier, and (Y) a fully-executed sublease by such Applicable
Intermediary (as sublessor) to an Eligible Carrier (as sublessee) of such
Financed Eligible Asset, which Eligible Carrier is not a U.S. Carrier, and which
Lease is identical in all material respects (other than the Persons that are
lessor and lessee) to the Lease described in clause (X) above, and which Lease
satisfies all the requirements for an "Eligible Lease" set forth in clauses (a)
through (i) above, except that the lessor is not a Borrower.
"Employee Benefit Plan" means, at a particular time, any employee
benefit plan that is covered by ERISA and in respect of which any Guarantor or
any Borrower or any of their respective ERISA Affiliates is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" as defined in Section 3(5) of ERISA.
"Engine" means any aircraft jet engine.
"Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license regulating,
relating to, or imposing liability or standards of conduct concerning, any
environmental matters or conditions, environmental protection or conservation,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the Resource Conservation and Recovery
Act, as amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all regulations
promulgated thereunder, and any other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means an entity, whether or not incorporated, that is
under common control with any Guarantor or any Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes any Guarantor or any
Borrower and that is treated as a single employer within the meaning of Section
414 of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar Interbank Offered Rate Applicable
----------------------
Rate = 1- Reserve Requirement + Margin
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as such in
Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"FAA" means the United States Federal Aviation Administration.
"FAA Act" means 49 U.S.C. Subtitle VII, ss.ss. 40101 et seq., as
amended from time to time, any regulations promulgated thereunder and any
successor provision.
"FAA Counsel" means DeBee & Gilchrist, Daugherty, Fowler and Peregrin,
Haught and Jenson, Crowe & Dunlevy, or any other law firm having nationally
recognized expertise in FAA matters acceptable to the Agent.
"FAA Recording Office" means the office of the FAA in Oklahoma City,
Oklahoma, maintained as the office for the recordation of Liens on Eligible
Assets and pursuant to the FAA Act, and any successor or additional office
performing the same or a comparable function. "Facility Guaranty" means each
Guaranty Agreement between one or more Guarantors and the Agent for the benefit
of the Lenders (substantially in the form of Exhibit I-1 attached hereto),
delivered as of the Initial Closing Date and reaffirmed as of the Closing Date
and otherwise pursuant to Section 2.13, 5.1 or 5.2, as the same may be amended,
modified or supplemented from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent (in its
individual capacity) on such day on such transactions as determined by the
Agent.
"Fee Letter" means the Fee Letter dated December __, 2006, by JPMorgan
Chase Bank, N.A., J.P. Morgan Securities Inc., Bear Stearns & Co. Inc., Bear
Stearns Corporate Lending Inc., Citigroup Global Markets, Inc. and accepted and
agreed to by the Parent.
"Fee Payment Date" means, for any month in which a commitment fee is
due, the twentieth (20th ) calendar day of each calendar month (or, if such day
is not a Business Day, on the next succeeding Business Day).
"Financed Aircraft" with respect to any Loan means, collectively, each
Eligible Aircraft, the acquisition of which was or is to be financed or
refinanced in whole or in part by such Loan.
"Financed Eligible Asset" with respect to any Loan means, collectively,
each Eligible Aircraft or Eligible Engine, or part thereof, the acquisition of
which was or is to be financed or refinanced in whole or in part by such Loan.
"Fiscal Year" means the twelve-month fiscal period of the Parent and
its Subsidiaries commencing on January 1 of each calendar year and ending on
December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any province,
state, territory, protectorate or other political subdivision thereof
regulating, relating to, or imposing liability or standards of conduct
concerning, any Employee Benefit Plan.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set forth
in pronouncements of the Financial Accounting Standards Board, the American
Institute of Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the date of
a report.
"Governmental Authority" means any Federal, state, municipal, national
or other government (whether foreign or domestic and including the European
Union) or governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state or local government of the United States, the United
States, or a foreign entity or foreign government.
"Guarantors" means, at any date, the collective reference to Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and the Beneficial Owners, Eligible
Intermediaries and Subsidiaries who are required to be parties to a Facility
Guaranty at such date.
"Hazardous Material" means and includes any pollutant, contaminant, or
hazardous, toxic or dangerous waste, substance or material (including without
limitation petroleum products, asbestos-containing materials and lead), the
generation, handling, storage, transportation, disposal, treatment, release,
discharge or emission of which is subject to any Environmental Law.
"Hedging Agreement" means one or more agreements between any Borrower
or any Guarantor and any Lender or any Affiliate thereof, on terms mutually
acceptable to such Borrower or any Guarantor and such Lender (or Affiliate),
which agreements create Rate Hedging Obligations.
"Holdings SPC" means a Subsidiary, 100% of the voting and equity
interests in which are owned directly or indirectly by Bermuda Holding 2 Ltd.,
AI 1 Ltd. or AI 3 Ltd.
"Holdings Subsidiary Trust" means any trust (a) that is organized under
the laws of a state of the United States, (b) whose trustee is a Qualified
Trustee and (c) in which 100% of all beneficial interests are owned directly by
Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. or a direct or indirect
wholly-owned Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd.
"Indebtedness" means with respect to any Person, without duplication,
all Indebtedness for Money Borrowed, all indebtedness of such Person for the
acquisition of property or arising under Rate Hedging Obligations, all
indebtedness secured by any Lien on the property of such Person whether or not
such indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary course of
business), all Contingent Obligations, and other items which in accordance with
GAAP is required to be classified as a liability on a balance sheet; but
excluding all accounts payable in the ordinary course of business so long as
payment therefor is due within one year; provided that in no event shall the
term Indebtedness include surplus and retained earnings, lease obligations
(other than pursuant to Capital Leases), reserves for deferred income taxes and
investment credits, other deferred credits or reserves or deferred compensation
obligations.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed, as reflected
on the balance sheet of such Person in accordance with GAAP, including without
limitation all Capital Leases and the deferred purchase price of any property or
asset, evidenced by a promissory note, bond, debenture or similar written
obligation for the payment of money (including conditional sales or similar
title retention agreements), other than trade payables incurred in the ordinary
course of business.
"Individual Eligible Asset Borrowing Base" with respect to any Eligible
Asset means (i) prior to the date that is twelve months after the date a Loan is
made to acquire such Eligible Asset, the Purchase Price of such Eligible Asset
and (ii) any time thereafter, 95% of the Purchase Price of such Eligible Asset.
"Initial Closing Date" mean February 28, 2006.
"Ireland Holding Ltd." means Aircastle Ireland Holding Limited, a
limited company incorporated in Ireland.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means to pertain to a condition of Insolvency.
"Interbank Offered Rate" means, with respect to any Eurodollar Rate
Loan for the Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary), to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period (or, if no such comparable term is quoted, an interpolated rate as
reasonably determined by the Agent). If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, with respect to any
Eurodollar Rate Loan for the Interest Period applicable thereto, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or Converted or on the
last day of the preceding Interest Period, as the case may be, and ending on (x)
the next occurring day that is the fifteenth day of a calendar month or (y) in
the case of an Interest Period of one week, the last day of such week (provided,
that Interest Periods of one week in duration may not be selected by a Borrower
other than in anticipation of a prepayment of a Loan); provided, that,
(a) if an Interest Period for a Eurodollar Rate Loan would end on a day
which is not a Business Day, such Interest Period shall be extended to the
next Business Day (unless such extension would cause the applicable
Interest Period to end in the succeeding calendar month, in which case such
Interest Period shall end on the next preceding Business Day); and
(b) except in the case of a one-week Interest Period, any Interest
Period which begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business
Day of a calendar month.
"Interest Rate Selection Notice" means the written notice delivered by
an Authorized Representative in connection with the election of a subsequent
Interest Period for any Eurodollar Rate Loan or the Conversion of any Base Rate
Loan into a Eurodollar Rate Loan, in the form of Exhibit E.
"Joint Lead Arrangers" means J.P. Morgan Securities Inc., Bear Stearns
& Co. Inc. and Citigroup Global Markets, Inc.
"Lease" has the meaning given in the Security Agreement.
"Lease Event of Default" means any event characterized as an "event of
default" (or the equivalent) under any Lease of any Eligible Asset (or that
would be so characterized assuming the sending of any required notice by the
lessor in a timely manner).
"Lender" has the meaning given to such term in the preamble to this
Agreement.
"Lessee Notice" means a certificate in form and substance reasonably
acceptable to the Agent, duly completed and executed by an Applicable Borrower
with respect to an Eligible Asset; and the Agent agrees that the form of Lessee
Notice attached hereto as Exhibit M is acceptable.
"Lien" means any interest in property securing any obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of this
Agreement, any Borrower and any Subsidiary shall be deemed to be the owner of
any property which it has acquired or holds subject to a conditional sale
agreement, financing lease, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes.
"Loan" or "Loans" means any of the Revolving Loans.
"Loan Documents" means this Agreement, the Notes (if any), the Security
Instruments, the Facility Guaranties, the Assumption Letters, the Reaffirmation
of Guaranties, the Fee Letters and all other instruments and documents
heretofore or hereafter executed or delivered to or in favor of any Lender or
the Agent in connection with the Loans made and transactions contemplated under
this Agreement, as the same may be amended, supplemented or replaced from the
time to time.
"Lockbox Agreement" means a lockbox agreement between any Beneficial
Owner (if applicable), any Borrower, the Depositary Bank and the Agent
substantially the form of Exhibit O hereto, as supplemented from time to time in
accordance with the terms thereof.
"Manufacturer" means any manufacturer of any Financed Eligible Asset.
"Manufacturer's Warranty" means any warranty made or offered by any
Manufacturer with respect to any Financed Eligible Asset.
"Material Adverse Effect" means a material adverse effect on (i) the
ability of the Credit Parties, taken as a whole, to pay or perform their
respective obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms thereof, or
(ii) the rights, powers and remedies of the Agent or any Lender under any Loan
Document or the validity, legality or enforceability thereof.
"Monthly Servicer and Covenant Compliance Report" means the report
substantially in the form of Exhibit P to be attached hereto and made part of
this Agreement pursuant to Section 11.17.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" means an Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which any
Borrower or any ERISA Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions within the
preceding six (6) Fiscal Years.
"Notes" means, collectively, the promissory notes (if any) of the
Borrowers evidencing Revolving Loans executed and delivered to the Lenders as
provided in Section 2.5 substantially in the form of Exhibit F, with appropriate
insertions as to amounts, dates and names of Lenders.
"Obligations" means the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., or any Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of Bermuda Holding 2 Ltd.,
AI 1 Ltd., AI 3 Ltd. or any Borrower to the Agent (acting in any capacity) or to
any Lender (or, in the case of Rate Hedging Obligations, any affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, any Rate Hedging
Obligation entered into with any Lender or any affiliate of any Lender or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Agent (acting in any capacity) or to any
Lender that are required to be paid by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd. or any Borrower pursuant thereto) or otherwise.
"Operating Circular" means an operating circular issued by the Federal
Reserve Bank.
"Organizational Action" means with respect to any corporation, limited
liability company, partnership, limited partnership, limited liability
partnership, trust or other legally authorized incorporated or unincorporated
entity, any corporate, organizational or partnership action (including any
required shareholder, trustee, member or partner action), or other similar
official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited liability
partnership, trust or other legally authorized incorporated or unincorporated
entity, (i) the articles of incorporation, certificate of incorporation,
articles of organization, certificate of limited partnership, trust agreement or
other applicable organizational or charter documents relating to the creation of
such entity which will, in each case, contain provisions reasonably satisfactory
to the Lenders to ensure such entity's bankruptcy remoteness, including
provisions relating to the appointment of a special member or independent
director, the consent of which will be required to approve any decisions related
to bankruptcy matters and (ii) the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents relating
to the operation, governance or management of such entity.
"Parent" means Aircastle Limited, an exempted company organized and
existing under the laws of Bermuda.
"Parent Revolving Credit Agreement" means that certain $250,000,000
Credit Agreement, dated as of December 15, 2006, by and among the Parent,
JPMorgan Chase Bank, N.A., as administrative agent and the lenders party
thereto.
"Parent Credit Parties" means credit parties to the Parent Revolving
Credit Agreement.
"Partnership Interests" has the meaning therefor provided in the Pledge
Agreement.
"Payment Date" means any date provided for herein on which the
principal of, interest on or other amounts in respect of the Loans is due and
payable.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Permitted Lien" means any Lien permitted by Section 8.3.
"Person" means an individual, partnership, corporation, limited
liability company, limited liability partnership, business trust, joint stock
company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Pledge Agreement" means, collectively (or individually as the context
may indicate), (i) those certain Pledge and Security Agreements or Share Charges
entered prior to and still effective as of the Closing Date, and (ii) any
additional Pledge and Security Agreement or Share Charge(substantially in the
form of Exhibit S-1, S-2, S-3 or S-4 attached hereto, as applicable), delivered
to the Agent pursuant to Section 5.1, 5.2 or 2.13, as hereafter amended,
supplemented or replaced from time to time.
"Pledged Interests" means the interests so defined in the Pledge
Agreement including, without limitation, all Capital Stock of Bermuda Holding 2
Ltd., AI 1 Ltd. and AI 3 Ltd. and all Securitization Interests.
"Prime Rate" means the per annum rate of interest established from time
to time by the Reference Bank as its prime or reference rate, which rate may not
be the lowest rate of interest charged by the Reference Bank to its customers.
"Principal Office" means the principal office of the Agent presently
located at 270 Park Avenue, New York, New York 10017 or such other office and
address as the Agent may from time to time designate. Payments shall be made to
the account specified in the Lockbox Agreement or to such other account as the
Agent may from time to time specify in writing.
"Prohibited Countries" means any country in which an Aircraft or Engine
would not be covered by the insurance requirements of Section 3.7 of the
Security Agreement (including, if required, political risk insurance), any
country with which the United States does not maintain normal diplomatic
relations and any country where or with nationals of which it is unlawful for
Persons subject to the jurisdiction of the United States to conduct business
without material restrictions or limitations.
"Purchase Price" with respect to any Eligible Assets means the actual
purchase price paid for such Eligible Assets by the Applicable Borrower,
together with all other reasonable out of pocket expenses (including reasonable
attorneys fees of each of the Borrower and the Agent) incurred or which is
estimated by the Borrower to be incurred in respect of such Eligible Assets, in
each case reasonably acceptable to the Agent.
"Qualified Conversion" means the conversion of a Financed Aircraft from
passenger configuration to a freighter configuration that meets the following
conditions: (a) such conversion is performed by a conversion company that is
well established with a program that has an FAA granted Supplemental Type
Certificate to perform the intended work, and either (b)(i) such conversion is
performed by an Approved Conversion Company or (ii) either (x) the senior
unsecured long-term debt rating of the conversion company is not less than
BBB/Baa2 or (y) the conversion company has caused a performance bond, letter of
credit or other security naming the Agent as beneficiary, in an amount equal to
125% of the Loan of such Financed Aircraft, in form and substance satisfactory
to the Lenders.
"Qualified Trustee" means (i) Wilmington Trust Company, Wells Fargo
Bank Northwest, N.A., JPMorgan Chase Bank, N.A., or another bank or trust
company having a combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000) or (ii) any other Person acceptable to the Agent.
"Qualifying Lender" means a Lender, beneficially entitled to the
interest payable to that Lender in respect of any Loan under this Agreement; (a)
which is a bank carrying on a bona fide banking business in Ireland; (b) which
is a person resident in a country with which Ireland has a double taxation
treaty or resident in a member state of the European Communities (other than
Ireland) provided the loan is not connected with an Irish branch or agency of
such Lender; or (c) which is a corporation established under the laws of the USA
which is subject to tax in the USA on its worldwide income and the Loan is not
connected with an Irish branch or agency of such Lender.
"Quarterly Period" means a fiscal quarter of the Borrowers and their
Subsidiaries.
"Rate Hedging Obligations" means any and all obligations of Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., any Borrower or any Subsidiary, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, Dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements; and (ii)
any and all cancellations, buybacks, reversals, terminations or assignments of
any of the foregoing.
"Reaffirmation of Guaranties" means the Reaffirmation of Guaranties,
dated as of December 15, 2006, executed by each Credit Party party to any
Facility Guaranty existing as of such date.
"Reference Bank" means JPMorgan Chase Bank, N.A.
"Regulation A" means a Regulation A circular issued by such Federal
Reserve Bank.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Regulatory Change" means any change effective after the Closing Date
in United States federal or state laws or regulations (including Regulation D
and capital adequacy regulations) or foreign laws or regulations or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks, which includes any of the Lenders, under any
United States federal or state or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy, including those
relating to "highly leveraged transactions," whether or not having the force of
law, and whether or not failure to comply therewith would be unlawful and
whether or not published or proposed prior to the date hereof.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the third day notice period is
waived by the PBGC.
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating more than 50% of the aggregate
Credit Exposures of all the Lenders on such date. For purposes of the preceding
sentence, the amount of the "Credit Exposure" of each Lender shall be equal at
all times (a) other than following the occurrence and during the continuance of
an Event of Default, to the amount of its Revolving Credit Commitment; and (b)
following the occurrence and during the continuance of an Event of Default, to
the aggregate principal amount of such Lender's Applicable Commitment Percentage
of Revolving Credit Outstandings; provided that, for the purpose of this
definition only, if any Lender shall have failed to fund its Applicable
Commitment Percentage of any Loan, the Revolving Credit Commitment of such
Lender shall be deemed reduced by the amount it so failed to fund for so long as
such failure shall continue and such Lender's Credit Exposure attributable to
such failure shall be deemed held by any Lender making more than its Applicable
Commitment Percentage of such Loan to the extent it covers such failure.
"Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the Eurodollar Rate
is to be determined, or (ii) any category of extensions of credit or other
assets which include Eurodollar Rate Loans. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Reserve Requirement.
"Revolving Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to make Revolving Loans to the Borrowers up to an
aggregate principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in Article II
hereof providing for Loans to the Borrowers by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of determination,
the aggregate principal amount of all Revolving Loans then outstanding.
"Revolving Credit Termination Date" means the earliest of (i) the
Stated Termination Date, (ii) the date of termination of Lenders' obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or (iii)
such date as the Borrowers may voluntarily and permanently terminate the
Revolving Credit Facility by payment in full of all Revolving Credit
Outstandings, together with all accrued and unpaid interest thereon and reduce
the Total Revolving Credit Commitment to zero pursuant to Section 2.7.
"Revolving Loan" or "Revolving Loans" means any borrowing pursuant to a
Loan under the Revolving Credit Facility in accordance with Article II.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"Secured Party" has the meaning given in the Security Agreement.
"Securitization Interest" means the equity or subordinated interests
received by the Parent or any of its Subsidiaries pursuant to the sale,
transfer, conveyance or other disposition of any Financed Eligible Asset or
direct or indirect interest therein in connection with the securitization by the
Parent, an Affiliate thereof, or any of its Subsidiaries, of such aircraft or
interest therein.
"Securitization Subsidiary" means one or more special purpose
bankruptcy-remote entities (directly or indirectly "economically" owned by
Parent) and formed for the purpose of securitizing Eligible Assets.
"Security Agreement" means, collectively (or individually as the
context may indicate), any Security Agreement (substantially in the form of
Exhibit J attached hereto) delivered to the Agent pursuant to Section 2.13, 5.1
or 5.2, as hereafter modified, amended or supplemented from time to time.
"Security Instruments" means, collectively, the Pledge Agreement,
Security Agreement, the Lockbox Agreement, the Account Control Agreement and all
other agreements, instruments and other documents, whether now existing or
hereafter in effect, pursuant to which any Guarantor, Borrower, any Beneficial
Owner, any Subsidiary, any Intermediary or any other Person shall grant or
convey to the Agent or the Lenders a Lien in property as security for all or any
portion of the Obligations, as any of them may be amended, modified or
supplemented from time to time.
"Single Employer Plan" means any Employee Benefit Plan covered by Title
IV of ERISA which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at the time
of determination:
(i) the fair value of its assets (both at fair valuation and at present
fair saleable value on an orderly basis) is in excess of the total amount
of its liabilities, including Contingent Obligations; and
(ii) it is then able and expects to be able to pay its debts as they
mature;
(iii) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted; and
(iv) with respect to any Person incorporated in Ireland, such Person is
"unable to pay its debts" as that phrase is defined under Irish law in
Section 214 of the Companies Act 1963 and Section 2(3) of the Companies
(Amendment) Act 1990.
"Stated Termination Date" means December 15, 2008.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity interests is
owned directly or indirectly by one or more Guarantors, Borrowers and/or by one
or more of any Guarantor's Subsidiaries or any Borrower's Subsidiaries. With
respect to any specified Guarantor or Borrower, the "Subsidiaries" of such
Guarantor or Borrower shall mean (y) any Subsidiary owned directly or indirectly
by such Guarantor or Borrower or by any of its Subsidiaries, or (z) any trust
with respect to which such Guarantor or such Borrower or any of its Subsidiaries
has a beneficial interest.
"Taxes" means all present or future taxes, levies, imposts, duties,
charges, fees, deductions or withholdings imposed, levied, collected, withheld
or assessed by any Governmental Authority, including any interest, additions to
tax or penalties applicable thereto.
"Termination Event" means: (i) a "Reportable Event"; or (ii) the
termination of a Single Employer Plan or the filing of a notice of intent to
terminate a Single Employer Plan; or (iii) the institution of proceedings to
terminate a Single Employer Plan by the PBGC; or (iv) the partial or complete
withdrawal of any Borrower or any ERISA Affiliate from a Multiemployer Plan; or
(v) the imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA in favor of the PBGC or a Employee Benefit Plan; or (vi) any event or
condition which results in the Reorganization or Insolvency of a Multiemployer
Plan; or (vii) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Revolving Credit Commitment" means a principal amount equal to
$1,000,000,000, as may be reduced from time to time in accordance with Section
2.7.
"Treaty" means the "Convention Between the Government of the United
States of America and the Government of Ireland for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
and Capital Gains" as amended and in effect on the date hereof.
"Trust Agreement" means a trust agreement between a Beneficial Owner
and a Qualified Trustee.
"Trust Estate" means all estate, right, title and interest of each
Trustee in and to each Eligible Asset, each lease and all related documents and
all other property of the Trustee, including, without limitation, all amounts of
rent, insurance proceeds (other than liability insurance proceeds payable to or
for the benefit of any Borrower, any Beneficial Owner, any Lender or the Agent)
and requisition, indemnity or other payments or any kind for or with respect to
each Eligible Asset.
"Trustee" means a Qualified Trustee, solely in its capacity as trustee
under a Trust Agreement.
"Type" means any type of Loan (i.e., a Base Rate Loan or a Eurodollar
Rate Loan).
"Unleaseable" with respect to a Financed Eligible Asset means (a) such
Financed Eligible Asset shall not be subject to an Eligible Lease for 120
consecutive days (excluding the number of days such Eligible Asset shall be
undergoing (i) maintenance or repairs in accordance with the provisions of the
Loan Documents, (ii) Approved Improvements or (iii) a Qualified Conversion) and
(b) after such 120 day period the Agent shall have reasonably determined that
Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd., as applicable, will be unable to
lease such Financed Eligible Asset within 120 days after the date of
determination.
"Voting Stock" means shares of capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall have the
meanings assigned to such terms and shall be interpreted in accordance with
GAAP applied on a Consistent Basis.
(b) The headings, subheadings and table of contents used herein or in
any other Loan Document are solely for convenience of reference and shall
not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules in or to this Agreement.
(d) All definitions set forth herein or in any other Loan Document
shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to
the feminine or neuter gender, and vice versa, as the context may require.
(e) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(f) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters,
to matters similar to those specifically mentioned.
(g) All dates and times of day specified herein shall refer to such
dates and times in New York, New York.
(h) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents and
all exhibits, schedules and appendices thereto.
(i) Any reference to an officer of any Borrower or any other Person by
reference to the title of such officer shall be deemed to refer to each
other officer of such Person, however titled, exercising the same or
substantially similar functions.
(j) All references to any agreement or document as amended, modified or
supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from
time to time only as and to the extent permitted therein and in the Loan
Documents.
ARTICLE II
THE REVOLVING CREDIT FACILITY
-----------------------------
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Loans to any of the Borrowers under
the Revolving Credit Facility from time to time from the Closing Date until
the Revolving Credit Termination Date on a pro rata basis as to the total
borrowing requested by the applicable Borrower on any day determined by
such Lender's Applicable Commitment Percentage up to but not exceeding the
Revolving Credit Commitment of such Lender, provided, however, that (A) the
proceeds of such Loan shall be used by such Borrower to (i) finance or
reimburse a Borrower for up to 65% of (x) the Purchase Price of an Eligible
Asset and (y), without duplication of amounts included in clause (x), the
costs incurred in connection with any Approved Improvements or any
Qualified Conversion related to such Eligible Asset and (ii) subsequent to
the initial purchase of such Eligible Asset, to finance up to 65% of the
Individual Eligible Asset Borrowing Base for such Eligible Asset and (B)
the amount of such Loan (together with any other Loans relating to such
Eligible Asset) shall not exceed 65% of the Individual Eligible Asset
Borrowing Base of such Eligible Asset; and provided, further, that the
Lenders will not be required and shall have no obligation to make any such
Loan (i) so long as a Default or an Event of Default has occurred and is
continuing or (ii) if the Agent has accelerated the maturity of any of the
Loans as a result of an Event of Default; and provided, further, that
immediately after giving effect to each such Loan, (A) the Borrowers shall
be in compliance with the Borrowing Base Covenant; and (B) the amount of
Revolving Credit Outstandings shall not exceed the Total Revolving Credit
Commitment. Within such limits, the Borrowers may borrow, repay and
reborrow under the Revolving Credit Facility on a Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including,
the Revolving Credit Termination Date; provided, however, that (1) no
Revolving Loan that is a Eurodollar Rate Loan shall be made which has an
Interest Period that extends beyond the Stated Termination Date and (2)
each Revolving Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.7, be repaid only on the last day of the Interest
Period with respect thereto unless such payment is accompanied by the
additional payment, if any, required by Section 4.5.
(b) Amounts. Each Revolving Loan hereunder and each Conversion under
Section 2.8, shall be in an amount of at least $500,000 (other than
Revolving Loans made in connection with an Approved Improvement or a
Qualified Conversion).
(c) Procedures. An Authorized Representative shall give the Agent (i)
at least three (3) Business Days' irrevocable written notice of an Interest
Rate Selection Notice with appropriate insertions, effective upon receipt,
of each Revolving Loan that is to be Converted into a Eurodollar Rate Loan
prior to 10:30 A.M. and (ii) at least one (1) Business Day's written
notice, revocable only on or before noon the following Business Day of a
Borrowing Notice with appropriate insertions, effective upon receipt, of
each Revolving Loan (which shall be borrowed as a Base Rate Loan) prior to
10:30 A.M. and (iii) at least one (1) Business Day's irrevocable written
notice of an Interest Rate Selection Notice with appropriate insertions,
effective upon receipt, of each Revolving Loan that is to be Converted into
a Base Rate Loan prior to 10:30 A.M. Each such notice shall (A) specify the
name of the respective Borrower, the amount of the borrowing, the date of
borrowing or Conversion (as applicable), type of Revolving Loan (Base Rate
or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
the Interest Period to be used in the computation of interest and (B)
identify the Financed Eligible Asset the acquisition of which is to be
financed with the proceeds of the borrowing. Notice of receipt of such
Borrowing Notice or Interest Rate Selection Notice, as the case may be,
together with the amount of each Lender's portion of a Loan requested
thereunder, shall be provided by the Agent to each Lender by facsimile
transmission with reasonable promptness, but (provided the Agent shall have
received such notice by 10:30 A.M.) not later than 1:00 P.M. on the same
day as the Agent's receipt of such notice.
(i) Promptly (and, to the extent feasible, not later than 2:00
P.M.) on the date specified for each borrowing under this Section 2.1,
each Lender shall, pursuant to the terms and subject to the conditions
of this Agreement, make the amount of the Loan or Loans to be made by
it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the Revolving Loan or Revolving
Loans to be made on such day. Such wire transfer shall be directed to
the Agent at the Principal Office and shall be in the form of Dollars
constituting immediately available funds. The amount so received by
the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Applicable Borrower by delivery of
the proceeds thereof to the Borrowers' Account or otherwise as shall
be directed in the applicable Borrowing Notice by an Authorized
Representative and reasonably acceptable to the Agent.
(ii) Each Loan will be made initially as a Base Rate Loan. The
Borrowers shall have the option to elect the duration of the initial
and any subsequent Interest Periods and to Convert the Revolving Loans
in accordance with Section 2.8. Eurodollar Rate Loans and Base Rate
Loans may be outstanding at the same time, provided, however, there
shall not be outstanding at any one time Eurodollar Rate Loans for any
or any Borrower having more than two (2) different Interest Periods.
If the Agent does not receive an Interest Rate Selection Notice giving
notice of election of the duration of an Interest Period by the time
prescribed by Section 2.8, the applicable Borrower shall be deemed to
have elected for any Eurodollar Loan an Interest Period of the
duration provided in clause (x) of the definition of Interest Period.
2.2. Payment of Interest.
(a) The Borrowers, jointly and severally, shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid
principal amount of each Loan made by such Lender for the period commencing
on the date of such Loan until such Loan shall be due at the then
applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
Eurodollar Rate Loans, as designated by the Authorized Representative
pursuant to Section 2.1; provided, however, that if any Event of Default
shall occur and be continuing, all amounts outstanding hereunder shall bear
interest during such period at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a year of
360 days and calculated in each case for the actual number of days elapsed.
Interest on each Loan shall be paid (x) monthly in arrears on the twentieth
(20th) calendar day of each calendar month (or, if such day is not a
Business Day, on the next succeeding Business Day), (y) upon payment or
prepayment of the principal amount of any Loan or any portion thereof, on
the amount so paid or prepaid and (z) at the Revolving Credit Termination
Date.
2.3. Payment of Principal.
(a) Scheduled Repayment; Voluntary Prepayments. The principal amount of
each Revolving Loan shall be due and payable to the Agent for the benefit
of each Lender in full on the Stated Termination Date, or earlier as
specifically provided herein. The Borrower may prepay the outstanding
principal amount of any Eurodollar Loan, in whole or in part, upon two
Business Days' notice to the Lenders and, in the case of Base Rate Loans,
upon same day notice to the. All such prepayments must be accompanied by
accrued interest up to, and including, the date of such prepayment and any
compensation due under Section 4.5 hereof.
(b) Mandatory Prepayments.
(i) Upon the sale of any Financed Eligible Asset or other asset
by any Borrower (including the sale or disposition of the equity
interests in any such Borrower that holds a Financed Eligible Asset
(including a transfer to any Securitization Subsidiary) but excluding
any transfer of an Eligible Asset to a direct or indirect Subsidiary
of Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. who, in connection
with such transfer will assume all of the transferor's obligations and
shall satisfy all requirements under Section 5.2 to become a Borrower
hereunder), or upon the refinancing of any Indebtedness of any
Borrower arising from any Loan hereunder, the Borrowers, jointly and
severally, shall immediately pay to the Agent an amount equal to the
greater of (A) the outstanding principal of and accrued interest on
any Loans made to, or for the benefit of, such Borrower in connection
with such Financed Eligible Asset and (B) an amount sufficient to
bring the Borrowers into compliance with the Borrowing Base Covenant
after giving effect to such sale, disposition or refinancing. If any
net proceeds of such sale or refinancing remain after the repayment in
full of all outstanding principal and accrued interest on the Loans
attributable to the Financed Eligible Asset sold, such excess proceeds
shall be applied first, to reduce the outstanding principal and
accrued interest on Loans as directed by Bermuda Holding 2 Ltd., AI 1
Ltd. or AI 3 Ltd. until the Borrowers are in compliance with the
Borrowing Base Covenant and second, if no Default or Event of Default
exists at the time, to the Applicable Borrower to be used or
distributed by the Applicable Borrower in its sole discretion.
(ii) If as of any Calculation Date the aggregate principal amount
of the Loans shall be greater than 65% of the Borrowing Base on such
day, the Borrowers shall, on the Payment Date immediately following
such Calculation Date, prepay the Loans in an amount equal to the
amount necessary to cause the aggregate outstanding principal amount
of the Loans to be not greater than 65% of the Borrowing Base on such
Payment Day.
(iii) If the estimated amount of out of pocket costs incurred by
an Applicable Borrower in connection with the acquisition of a
Financed Eligible Asset exceeds the actual amount of such out of
pocket costs included in the Purchase Price of such Financed Eligible
Asset, the Borrowers shall prepay the Loan relating to such Financed
Eligible Asset in an amount equal to 65% of such excess out of pocket
costs within five Business Days after a Responsible Officer learns of
such excess.
(iv) The Borrowers, jointly and severally, shall prepay the Loans
in respect of a Financed Eligible Asset upon the occurrence of an
Event of Loss in respect of such Finance Eligible Asset and on the
date required by Section 3.8(b) of the Security Agreement. If any net
proceeds received in respect of such Event of Loss remain after the
repayment in full of all outstanding principal and accrued interest on
such Loans, if no Default or Event of Default exists at the time, such
excess proceeds shall be paid to the Applicable Borrower and may be
used by such Borrower in accordance with the terms of this Agreement
and the other Loan Documents.
2.4. Manner of Payment. Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds without setoff, deduction or counterclaim before
12:30 P.M. on the date such payment is due.
(a) The Agent shall deem any payment made by or on behalf of any
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:30 P.M. to be a non-conforming payment. Any
such payment shall not be deemed to be received by the Agent until the time
such funds become available funds. Any non-conforming payment may
constitute or become a Default or Event of Default. Interest shall continue
to accrue on any principal as to which a non-conforming payment is made
until the later of (x) the date such funds become available funds or (y)
the next Business Day at the Default Rate from the date such amount was due
and payable.
(b) In the event that any payment hereunder becomes due and payable on
a day other than a Business Day, then such due date shall be extended to
the next succeeding Business Day unless provided otherwise under clause
(ii) of the definition of "Interest Period"; provided that interest shall
continue to accrue during the period of any such extension and provided,
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
(c) Any payment or prepayment of any principal or interest on any Loan
hereunder shall be accompanied by a certificate signed by an Authorized
Representative and delivered to the Agent, which certificate shall identify
such Loan, the amount of principal and interest paid thereon, and the
Borrower to whom, or for whose benefit, such Loan was originally advanced.
2.5. Notes. At the request of any Lender, Revolving Loans made by such
Lender shall be evidenced by a Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Revolving
Credit Commitment and shall be duly completed, executed and delivered by the
Borrowers.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in Section 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by any Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from any Borrower.
2.7. Reductions. The Borrowers shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, facsimile notice, or telephonic notice (confirmed in
writing), of such reduction. Each such reduction shall be in the aggregate
amount of $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the
Revolving Loans to the extent that the principal amount of Revolving Credit
Outstandings exceeds the Total Revolving Credit Commitment after giving effect
to such reduction, together with accrued and unpaid interest on the amounts
prepaid. No such reduction shall result in the payment of any Eurodollar Rate
Loan other than on the last day of the Interest Period of such Eurodollar Rate
Loan unless such prepayment is accompanied by amounts due, if any, under Section
4.5.
2.8. Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth below and in Article IV, the Borrowers may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on any
Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate
Loans; and
(b) provided that no Default or Event of Default shall have occurred
and be continuing and upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30
A.M. three (3) Business Days' prior to the date of such election or
Conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and Conversion pursuant to this Section 2.8 shall be subject to
the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1, 2.3 and Article IV. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment that shall be available to the Borrowers as Loans
shall be reduced by the aggregate amount of Revolving Credit Outstandings.
2.10. Fees. Borrower shall pay (i) the fees specified in the Fee
Letters on the dates specified therein and (ii) a commitment fee for the period
from and including the date hereof to the Revolving Credit Termination Date,
computed at a rate of 0.125% per annum on the average daily amount of the
available unused Revolving Credit Commitment of such Lender during the period
for which payment is made, payable monthly in arrears on each Fee Payment Date,
commencing on the first such date to occur after the date hereof.
2.11. Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan hereunder nor shall the Revolving Credit Commitment of any Lender
hereunder be increased as a result of such default of any other Lender. Without
limiting the generality of the foregoing, in the event any Lender shall fail to
advance funds to any Borrower as herein provided, the Agent may in its
discretion and in its capacity as a Lender, but shall not be obligated to,
advance all or any portion of such amount or amounts (each, a "deficiency
advance") and shall thereafter be entitled to payments of principal of and
interest on such deficiency advance in the same manner and at the same interest
rate or rates as if it had originally made such Loan; provided that, (i) such
defaulting Lender shall not be entitled to receive payments of principal,
interest or fees with respect to such deficiency advance until such deficiency
advance shall be paid by such Lender and (ii) upon payment to the Agent from
such other Lender of the entire outstanding amount of each such deficiency
advance, together with accrued and unpaid interest thereon, from the most recent
date or dates interest was paid to the Agent by a Borrower on each Loan
comprising the deficiency advance at the interest rate per annum for overnight
borrowing by the Agent from the Federal Reserve Bank, then such payment shall be
to the Agent as a Lender in full payment of such deficiency advance and such
Borrower shall be deemed to have borrowed the amount of such deficiency advance
from such other Lender as of the most recent date or dates, as the case may be,
upon which any payments of interest were made by such Borrower thereon.
2.12. Use of Proceeds. The proceeds of each Loan made pursuant to the
Revolving Credit Facility hereunder shall be used by the Applicable Borrower to
(a) finance or reimburse a Borrower for up to 65% of the Purchase Price of an
Eligible Asset and 65% of the costs incurred in connection with any Approved
Improvements or any Qualified Conversion or (b) subsequent to the initial
purchase of an Eligible Asset, finance up to 65% of the Individual Eligible
Asset Borrowing Base of such Eligible Asset.
2.13. Designation of Borrowing Affiliate; Releases.
(a) An Authorized Representative may from time to time designate any
Holdings Subsidiary Trust or Holdings SPC which has not joined in the
execution of this Agreement as a "Borrowing Affiliate" hereunder by causing
such Holdings Subsidiary Trust or Holdings SPC to execute and deliver a
duly completed Assumption Letter (in the form attached hereto as Exhibit Q)
to the Agent with the written acknowledgment of the Borrowers and
the Agent at the foot thereof, together with (a) Facility Guaranties
executed by each Beneficial Owner of any such Holdings Subsidiary Trust, by
each Subsidiary of any such Beneficial Owner (other than such Holdings
Subsidiary Trust), by each Subsidiary of such Holdings Subsidiary Trust or
of such Holdings SPC and by the Applicable Intermediary (if any), (b)
Security Agreements signed by such Holdings Subsidiary Trust or Holdings
SPC, by each Beneficial Owner of any such Holdings Subsidiary Trust, by
each Subsidiary of any such Beneficial Owner, by each Subsidiary of such
Holdings Subsidiary Trust or Holdings SPC and by the Applicable
Intermediary (if any), (c) Pledge Agreements signed by the respective
Beneficial Owners and other owners, granting a security interest in the
Pledged Interests in such Holdings Subsidiary Trust or Holdings SPC in any
Subsidiary thereof, in any Beneficial Owner and in any Subsidiary thereof,
and in the Applicable Intermediary (if any), and (d) all additional
documents required under such Assumption Letter. Upon such execution,
delivery and consent, such Holdings Subsidiary Trust or Holdings SPC (as
the case may be) shall for all purposes be a party hereto as a Borrower as
fully as if it had executed and delivered this Agreement.
(b) So long as (w) all Loans made to or on behalf of any Borrower,
together with all accrued interest on such Loans, have been paid in full,
(x) all other outstanding Obligations of such Borrower (except Obligations
to pay principal and interest on Loans other than those Loans described in
clause (w)) have been paid in full, (y) no Default or Event of Default has
occurred and will be continuing after giving effect to such termination,
and (z) any prepayment required under Section 2.3(b) has been made, then
such Borrower may, by not less than three (3) days prior notice to the
Agent (which shall promptly notify the Lenders thereof), (i) terminate its
status as a "Borrowing Affiliate" and "Borrower" hereunder and under the
other Loan Documents, and (ii) (with respect to any Beneficial Owner of
such Borrower) unless such Person also holds a beneficial interest in any
other Borrower, terminate the status of such Person and any other
Subsidiary of such Person as a "Guarantor" hereunder and under the other
Loan Documents, and (iii) terminate the status of the Applicable
Intermediary (if any) and any other Subsidiary of such Borrower as a
"Guarantor" hereunder and under the other Loan Documents. Upon such
terminations (provided the conditions to such terminations are satisfied),
the Agent shall take all actions reasonably requested by such Borrower (A)
to release the Liens of the Agent on all Collateral owned by such Borrower
and its Subsidiaries (including the Applicable Intermediary, if any) and to
release such Borrower and such Subsidiaries from all of their respective
obligations under the Loan Documents (including without limitation a
written release to such effect), (B) unless such Beneficial Owner also
holds a beneficial interest in any other Borrower, to release the Liens of
the Agent on all Collateral owned by such Beneficial Owner and its other
Subsidiaries and to release such Beneficial Owner and such other
Subsidiaries from all of their respective obligations under the Loan
Documents (including without limitation a written release to such effect),
(C) to release the Lien of the Agent with respect to any Pledged Interests
in such Borrower, its Subsidiaries and the Applicable Intermediary, and (D)
(unless such Beneficial Owner also holds a beneficial interest in any other
Borrower) to release the Lien of the Agent with respect to any Pledged
Interests in such Beneficial Owner. Any provision of this Section 2.13 or
any other provision of any Loan Document notwithstanding, in no event shall
Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. be released from its
obligations to pay indemnification to, or reimburse any costs or expenses
of, the Agent or any Lender (including without limitation the obligations
under Article IV and Sections 4.6, 7.15, 11.5 and 11.9), which agreements
and obligations shall survive any release or termination of any Credit
Party (other than Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd.) pursuant
to this Section 2.12.
2.14. Joint and Several Liability. Each Borrower (including without
limitation each Borrowing Affiliate) agrees and acknowledges that the
Obligations (subject to the proviso in the last sentence in the definition of
"Obligations" as such term is defined in Section 1.1 herein) constitute and will
constitute joint and several obligations and liabilities of the Borrowers;
provided, however, that anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Borrower with respect to
the joint and several liability under this Section 2.14 shall in no event exceed
the amount which can be guaranteed by such Borrower under applicable federal,
state and applicable foreign laws relating to the insolvency of debtors. Each
Borrower further agrees and acknowledges that all actions taken, elections made
and notices and certificates furnished or received by it under or pursuant to
the Loan Documents shall constitute the action, election, notice or
certification of all of the Borrowers under the Loan Documents, and that each
Authorized Representative shall have full authority to act for and on behalf of
all of the Borrowers for all purposes of the Loan Documents. Each Borrower
agrees that the joint and several liability of the Borrowers shall not be
impaired or affected by any modification, supplement, extension or amendment of
any contract or agreement to which the parties thereto may hereafter agree, nor
by any modification, release or other alteration of any of the rights of the
Agent or any Lender with respect to the Collateral other than as provided in
Section 2.13(b) hereof, nor by any delay, extension of time, renewal, compromise
or other indulgence granted by the Agent, any Lender or any other Person with
respect to any of the Obligations, nor by any other agreements or arrangements
whatever with any other Borrower or with anyone else, each Borrower hereby
waiving all notice of any such delay, extension, release, substitution, renewal,
compromise or any such delay, extension, release, substitution, renewal,
compromise or other indulgence, and hereby consenting to be bound thereby as
fully and effectually as if it had expressly agreed thereto in advance. The
liability of each Borrower hereunder is direct and unconditional as to all of
the Obligations hereunder, and may be enforced without requiring the Agent, any
Lender or any other Person first to resort to any other right, remedy or
security; no Borrower shall have any right of subrogation, reimbursement or
indemnity whatsoever, nor any right of recourse to security for indemnity
whatsoever, nor any right of recourse to security for any of the Obligations
hereunder, unless and until all of said Obligations have been paid in full;
except as provided in Section 2.13(b) hereof and subject to the proviso to the
first sentence of this Section 2.14, nothing shall discharge or satisfy the
liability of any Borrower hereunder except the full payment and performance of
all of the Obligations; any and all present and future debts and obligations of
each Borrower to the other Borrowers are hereby waived and postponed in favor of
and subordinated to the full payment and performance of all present and future
Obligations of the Borrowers to the Agent, the Lenders and any other Person.
2.15. Eligible Lease Involving Eligible Intermediary. In lieu of
leasing a Financed Eligible Asset directly to an Eligible Carrier, a Borrower
may lease such Financed Eligible Asset directly to an Eligible Intermediary
pursuant to an Eligible Lease described in clause (X) of the proviso to the
definition of "Eligible Lease"; provided that
(a) such Eligible Intermediary simultaneously subleases such Eligible
Asset to an Eligible Carrier pursuant to an Eligible Lease described in
clause (Y) of the proviso to the definition of "Eligible Lease" and such
sublease is pledged as collateral security for the obligations of the
Eligible Intermediary under the head lease;
(b) in the case of any Loan with respect to such Eligible Asset, all
Loan conditions that pertain to any Eligible Lease or other Lease by a
Borrower of such Eligible Asset (including without limitation requirements
concerning the perfection of Liens on Collateral, and delivery of copies of
the Leases and Lessee Notices) shall be satisfied with respect to each such
Lease to or by the Applicable Intermediary;
(c) all provisions of any Loan Document that pertain to any Eligible
Lease or other Lease by a Borrower of such Eligible Asset shall apply to
each such Lease to or by the Applicable Intermediary; and
(d) the lease/sublease structure shall not result in adverse tax or
other consequences to the Agent or any Lender which have not been
indemnified or otherwise addressed to the reasonable satisfaction of the
Agent.
ARTICLE III
SECURITY
--------
3.1. Security. As security for the full and timely payment and
performance of all Obligations, each Borrower will, or will cause the Credit
Parties to, on or before the date of the initial Loan do or cause to be done all
things necessary in the reasonable opinion of the Agent and its counsel to grant
to the Agent for the benefit of the Lenders a duly perfected first priority
security interest under all applicable laws in all Collateral subject to no
prior Lien or other encumbrance (that, in each case, has not previously been
satisfied in full) or restriction on transfer (other than Permitted Liens).
3.2. Further Assurances. At the request of the Agent, each Borrower
will, or will cause the other Credit Parties to, execute, by its duly authorized
officers, alone or with the Agent, any certificate, instrument, statement or
document, or to procure any such certificate, instrument, statement or document,
or to take such other action (and pay all connected costs) which the Agent
reasonably deems necessary from time to time to create, continue or preserve the
liens and security interests in Collateral (and the perfection and priority
thereof) of the Agent contemplated hereby and by the other Loan Documents and
specifically including all Collateral acquired by any Borrower, or any Guarantor
or any other Credit Party after the Closing Date.
3.3. Information Regarding Collateral. Bermuda Holding 2, AI 1 Ltd., AI
3 Ltd., and each Borrower represents, warrants and covenants that (i) the chief
executive office of AHC Ltd., Ireland Holding Limited and each Credit Party
providing Collateral pursuant to a Security Instrument (each, a "Grantor") at
the Closing Date is located at the address or addresses specified on Schedule
3.3, and (ii) Schedule 3.3 (as may be amended, supplemented or modified from
time to time) contains a true and complete list of (a) the name and address of
each Grantor, (b) each location of the chief executive office and principal
place of business of each Grantor and (c) the country of registration (if
applicable) of each Eligible Asset. No Borrower shall change, or permit any
other Grantor to change, the location of its chief executive office or principal
place of business, or use or permit any other Grantor to use, any additional
trade style, except upon giving not less than thirty (30) days' prior written
notice to the Agent and taking or causing to be taken all such action at the
Borrowers' or such other Grantor's expense as may be reasonably requested by the
Agent to perfect or maintain the perfection of the Lien of the Agent in
Collateral.
3.4. Quiet Enjoyment. The Agent and each Lender hereby agree that, so
long as no Lease Event of Default shall have occurred and be continuing under an
Eligible Lease, it will not interfere with the quiet enjoyment of the possession
and use of the Eligible Asset by the Applicable Carrier during the term of such
Eligible Lease and it will (subject to any requirements or restrictions imposed
by applicable law) dispose of its interest in the Eligible Asset leased under
such Eligible Lease expressly subject to such Eligible Lease and on terms such
that the purchaser provides a similar right of quiet enjoyment to such
Applicable Carrier. Upon the request of any Borrower, the Agent (on behalf of
itself and the Lenders) will confirm the immediately preceding sentence in
writing to any Applicable Carrier.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
-----------------------
4.1. Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date
hereof:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate; or
(ii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost (other than a
Tax) to such Lender, by an amount that such Lender deems to be material, of
making, converting into, continuing or maintaining Eurodollar Rate Loans or to
reduce any amount receivable hereunder in respect thereof (other than by reason
of any Tax), then, in any such case, the Borrowers shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender (on an after-tax basis) for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrowers (with a copy
to the Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
after submission by such Lender to the Borrowers (with a copy to the Agent)
of a written request therefor, the Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such
corporation (on an after-tax basis) for such reduction.
(c) Each Lender shall promptly notify Bermuda Holding 2 Ltd., AI 1
Ltd., AI 1 Ltd., AI 3 Ltd. and the Agent of any event of which it has
knowledge occurring after the date hereof, which will entitle a Lender to
compensation pursuant to this Section 4.1, and such Lender shall, upon
written request by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any
Borrower, designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrowers (with a
copy to the Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrowers
shall not be required to compensate a Lender pursuant to this Section for
any amounts incurred more than three months prior to the date that such
Lender notifies the Borrowers of such Lender's intention to claim
compensation therefor; provided that, if the circumstances giving rise to
such claim have a retroactive effect, then such three-month period shall be
extended to include the period of such retroactive effect. The obligations
of the Borrowers pursuant to this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
4.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be conclusive) that
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Rate Loans for such Interest Period;
then the Agent shall give the Borrowers prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type or to Convert Loans
of any other Type into Loans of such Type, and the Borrowers shall, jointly and
severally, on the last day(s) of the then current Interest Period(s) for the
outstanding Loans of the affected Type, either prepay such Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
4.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrowers thereof and such Lender's obligation
to make or Continue Eurodollar Rate Loans and to Convert other Types of Loans
into Eurodollar Rate Loans shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Rate Loans (in which case the
provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 4.1
or 4.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 4.3 hereof, on such earlier date as such Lender
may specify to the Borrowers with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 4.1 or 4.3 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Loans of the Affected Type shall be made or Continued instead as Base
Rate Loans, and all Loans of such Lender that would otherwise be Converted
into Loans of the Affected Type shall be Converted instead into (or shall
remain as) Base Rate Loans.
If such Lender gives notice to the Borrowers (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
4.5. Compensation. Upon the request of any Lender, Bermuda Holding 2
Ltd., AI 1 Ltd., AI 3 Ltd. and the Borrowers, jointly and severally, shall pay
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense incurred
by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Rate Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 9.1) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by any Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article V
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Rate
Loan on the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Agreement.
4.6. Taxes.
(a) Any and all payments by any Borrower to or for the account of any
Lender or the Agent hereunder or under any other Loan Document shall be
made free and clear of and without deduction or withholding for any and all
Taxes, and all liabilities with respect thereto, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of each Lender and the Agent, Taxes imposed on its
income, receipts, capital, net worth or items of tax preference and
franchise, doing business and similar Taxes (imposed on it in lieu of net
income taxes), imposed on such Lender or Agent as a result of a present or
former connection between the Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection
arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded Taxes ("
Indemnified Taxes") or Other Taxes (as defined below) are required to be
withheld after the date hereof from or in respect of any sum payable under
this Agreement or any other Loan Document to any Lender or the Agent, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.6) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions, (iii) such Borrower shall
timely pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law, and (iv) such Borrower
shall furnish to the Agent, at its address referred to in Section 11.2, the
original or a certified copy of a receipt evidencing payment thereof or
other evidence of payment reasonably acceptable to such Lender or the
Agent; provided however, that the Borrowers shall not be required to
increase such amounts payable to any Lender with respect to any Taxes (i)
that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are
United States or Irish withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from the Borrowers with
respect to such Taxes pursuant to this paragraph.
(b) In addition, Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and the
Borrowers agree, jointly and severally, to timely pay any and all present
or future stamp or documentary taxes which arise from the execution or
delivery of this Agreement or any other Loan Document or the provision of
the security interest in any Collateral required hereunder (hereinafter
referred to as "Other Taxes").
(c) Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and the Borrowers
agree, jointly and severally, to indemnify each Lender and the Agent for
the full amount of Indemnified Taxes and Other Taxes (including, without
limitation, any Indemnified Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 4.6) paid by such Lender
or the Agent (as the case may be) and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the case
of each other Lender, and from time to time thereafter if requested in
writing by any Borrower or the Agent (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on
which a form originally was required to be provided), shall provide the
Borrowers and the Agent with (i) a complete and properly executed Internal
Revenue Service Form W-8BEN, W-8ECI or W-8IMY (including all required
accompanying information), as appropriate, or any successor form prescribed
by the Internal Revenue Service (including a United States taxpayer
identification number), certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest, certifying
that the Lender is eligible for the "portfolio interest exemption" or
certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States or (ii) Internal Revenue Service Form W-9 or any successor form
prescribed by the Internal Revenue Service. In addition, each Lender and
the Agent agrees that it will (i) take all actions reasonably requested by
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or a Borrower in writing that
are consistent with applicable legal and regulatory restrictions to claim
any available reductions or exemptions from Indemnified Taxes or Other
Taxes and (ii) otherwise cooperate with Bermuda Holding 2 Ltd., AI 1 Ltd.,
AI 3 Ltd. and the Borrowers to minimize any amounts payable by Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or the Borrowers under this Section
4.6; provided, however, that in each case, any out-of-pocket cost relating
to such action or cooperation requested by Bermuda Holding 2 Ltd., AI 1
Ltd., AI 3 Ltd. or a Borrower shall be borne by Bermuda Holding 2 Ltd., AI
1 Ltd., AI 3 Ltd. or such Borrower and no Lender shall be required to take
any action that it determines in its sole good faith discretion, may be
adverse in any non de minimis respect to it and not indemnified to its
satisfaction. Each Lender listed on the signature page hereto represents
that it is a Qualifying Lender as of the Closing Date and each assignee
represents that it is a Qualifying Lender as of the date such party becomes
an assignee.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to such
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law or reasonably requested by such Borrower, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender's judgment such completion,
execution or submission would not materially prejudice the legal position
of such Lender.
(f) If Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Borrower is
required to pay additional amounts to or for the account of any Lender
pursuant to this Section 4.6, then such Lender will agree to use reasonable
efforts to change the jurisdiction of its Applicable Lending Office so as
to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the sole judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or the applicable Borrower
shall furnish to the Agent the original or a certified copy of a receipt
evidencing such payment or otherwise evidence of such payment as is
reasonably acceptable to the Agent.
(h) If the Agent or any Lender receives a refund of any Taxes or Other
Taxes as to which it has been indemnified by Bermuda Holding 2 Ltd., AI 1
Ltd., AI 3 Ltd. or a Borrower or with respect to which Bermuda Holding 2
Ltd., AI 1 Ltd., AI 3 Ltd. or a Borrower has paid additional amounts
pursuant to this Section 4.6, it shall pay over such refund to Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or such Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or a Borrower under this Section 4.6
with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses (including any net increase in Taxes imposed
on such Person by reason of such refund and the payment by such Person
pursuant to this sentence) of the Agent or such Lender and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided, that Bermuda Holding 2 Ltd., AI 1 Ltd.,
AI 3 Ltd. or the Borrower, upon the request of the Agent or such Lender,
agrees to repay the amount paid over to Bermuda Holding 2 Ltd., AI 1 Ltd.,
AI 3 Ltd. or such Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent or such Lender
in the event the Agent or such Lender is required to repay such refund to
such Governmental Authority. This paragraph shall not be construed to
require the Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Borrower or any other
Person.
(i) Without prejudice to the survival of any other agreement of Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Borrower hereunder, the
agreements and obligations of Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd.
and each Borrower contained in this Section 4.6 shall survive the
termination of the Revolving Credit Commitments and the payment in full of
the Loans.
ARTICLE V
CONDITIONS TO MAKING LOANS
--------------------------
5.1. Conditions of Closing of Amended and Restated Credit Agreement.
The effectiveness of this Agreement is subject to the prior or concurrent
satisfaction or waiver of each of the conditions precedent set forth in this
Section 5.1. For the limited purpose of this Section 5.1, the phrases "shall
have received", "shall have approved", "shall have demonstrated", "shall have
delivered" and similar phrases contemplating that future performances were
required shall be construed as being performed or waived as of the Closing Date:
(a) the Agent shall have received, as of the Closing Date, in form and
substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the Notes (if
applicable), the initial Facility Guaranties, the initial Security
Agreements, the initial Pledge Agreements, the Omnibus Amendment and
the other initial Loan Documents, together with all schedules and
exhibits thereto;
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of
special counsel to the Credit Parties dated the Closing Date
(including opinions of New York, Bermuda and Irish counsel), addressed
to the Agent (on behalf of itself and the Lenders), substantially in
the form of Exhibit G-1 and Exhibit G-3 or otherwise reasonably
satisfactory to special counsel to the Agent;
(iii) resolutions of the boards of directors or other appropriate
governing body (or of the appropriate committee thereof) of each
Credit Party (except in the case of a Credit Party that is a trust),
certified by its secretary or assistant secretary as of the Closing
Date, approving and adopting the Loan Documents to be executed by such
Person, and authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of each Credit Party
executing the Loan Documents on behalf of such party, certified by the
secretary or assistant secretary of such party;
(v) the Organizational Documents of each Credit Party and each of
the trustees for each Holdings Subsidiary Trust certified as of a
recent date by the Secretary of State or comparable official of its
jurisdiction of organization (provided that the Trust Agreement of a
Holdings Subsidiary Trust may be certified by the secretary or
assistant secretary of its Beneficial Owner);
(vi) certificates issued as of a recent date by the Secretaries
of State or comparable officials of the respective jurisdictions of
formation of each of the Credit Parties (excluding Holdings Subsidiary
Trusts) as to the due existence and good standing of such Person;
(vii) notice of appointment of the initial Authorized
Representative(s);
(viii) Uniform Commercial Code financing statements appropriate
for filing in all places required by applicable law to perfect the
Liens of the Agent under the Security Instruments as a first priority
Lien as to items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such other
documents and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien in and to such other Collateral
as the Agent may require;
(ix) the delivery by the Borrowers of all stock certificates and
other certificates, if any, evidencing ownership of any Pledged
Interests, accompanied in each case by duly executed stock or transfer
powers (or other appropriate transfer documents) in blank affixed
thereto; and
(x) the delivery by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd.,
and the Borrowers of "control agreements" that have been executed by
the respective issuers (and consented to by the respective Credit
Parties) with respect to any uncertificated Pledged Interests; and
(xi) evidence that any fees payable by any Credit Party on the
Closing Date to the Agent and the Lenders have been paid in full; and
(b) in the good faith judgment of the Agent and the Lenders:
(i) no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or threatened
which could reasonably be likely to result in a Material Adverse
Effect; and
(ii) the Credit Parties shall have received all approvals,
consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the
transactions contemplated hereby without the occurrence of any default
under, conflict with or violation of (A) any applicable law, rule,
regulation, order or decree of any Governmental Authority or arbitral
authority or (B) any agreement, document or instrument to which any of
the Credit Parties is a party or by which any of them or their
properties is bound.
5.2. Conditions of Revolving Loans. The obligation of the Lenders to
make Revolving Loans hereunder on or subsequent to the Closing Date (other than
additional loans to a Borrower in connection with Approved Improvements, or a
Qualified Conversion) is subject to the conditions precedent that:
(a) each of the conditions to making the Revolving Credit Facility
available to the Borrowers, as set forth in Section 5.1, shall have been
satisfied on or prior to the date of the initial Loan after the Closing
Date;
(b) the representations and warranties of the Credit Parties set forth
in Article VI and in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Loan, with
the same effect as though such representations and warranties had been made
on and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date;
(c) the Borrowing Affiliate with respect to such Loan shall have
executed and delivered to the Agent an Assumption Letter, and each Borrower
and the Agent shall have executed such Assumption Letter and the Borrowing
Affiliate shall have delivered to the Agent all other agreements,
instruments and documents required by such Assumption Letter;
(d) the Borrowing Affiliate with respect to such Loan shall have
delivered to the Agent (i) Facility Guaranties fully executed by any
Beneficial Owner of such Borrowing Affiliate, by each Subsidiary of any
such Beneficial Owner (other than such Borrowing Affiliate), by each
Subsidiary of such Borrowing Affiliate and by the Applicable Intermediary
(if any); (ii) Pledge Agreements fully executed by the appropriate
pledgors, granting a security interest in all Pledged Interests with
respect to each such Beneficial Owner, such Borrowing Affiliate, each
Subsidiary of any Beneficial Owner, each Subsidiary of such Borrowing
Affiliate, and the Applicable Intermediary (if any); (iii) Security
Agreements fully executed by such Borrowing Affiliate, any Beneficial Owner
of such Borrowing Affiliate, each Subsidiary of any Beneficial Owner, each
Subsidiary of such Borrowing Affiliate, and the Applicable Intermediary (if
any); and ((iv) Lockbox Agreements executed by each Borrower;
(e) the Agent shall have received the latest drafts of the following
within 5 Business Days prior to the date of the Loan, an organized
pre-closing of the required documentation shall have occurred at least one
Business Day prior to the date of the Loan, and the Agent shall have
received final versions of the following, in form and substance
satisfactory to the Agent and the Lenders, on or prior to the date of the
Loan:
(i) each of the documents and instruments (including without
limitation the opinions of counsel, the resolutions of boards of
directors or other appropriate governing bodies or committees, the
specimen signatures, officer's certificates, Organizational Documents
and governmental certificates (if any) of existence, qualification,
good standing and assumed name) required by Section 5.1 as if such
Borrowing Affiliate had been a Borrowing Affiliate (and its Beneficial
Owner, their respective Subsidiaries and the Applicable Intermediary
(if any) had been in such positions) on the Closing Date;
(ii) with respect to each Financed Eligible Asset registered in
the United States, the favorable written opinion with respect to the
Loan Documents and the transactions contemplated thereby of FAA
Counsel dated the date of such Loan, addressed to the Agent (on behalf
of itself and the Lenders), substantially in the form of Exhibit G-2
or otherwise reasonably satisfactory to special counsel to the Agent;
(iii) with respect to every other Financed Eligible Asset, the
favorable written opinion with respect to the Loan Documents and the
transactions contemplated thereby of local counsel in each Applicable
Foreign Jurisdiction dated the date of such Loan, addressed to the
Agent (on behalf of itself and the Lenders), substantially in the
forms of Exhibit G-3 and Exhibit G-4 or otherwise reasonably
satisfactory to special counsel to the Agent;
(iv) certificates of insurance from qualified brokers of aircraft
insurance or other evidence satisfactory to the Agent, evidencing all
insurance required by the Loan Documents (including without limitation
all insurance required by Exhibit L with respect to each Eligible
Asset that is to be a Financed Eligible Asset);
(v) a Borrowing Notice;
(vi) a certificate of an Authorized Representative substantially
in the form of Exhibit R containing computations of the Borrowing Base
and providing information about the Financed Eligible Asset, in each
case after giving effect to such Loan and any related Financed
Eligible Asset;
(vii) Uniform Commercial Code financing statements appropriate
for filing in all places required by applicable law to perfect the
Liens of the Agent under the Security Instruments as a first priority
Lien as to items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such other
documents and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien in and to such other Collateral
as the Agent may require, including without limitation:
(1) the delivery by the Borrowers of all stock certificates
and other certificates, if any, evidencing ownership of any
Pledged Interests, accompanied in each case by duly executed
stock or transfer powers (or other appropriate transfer
documents) in blank affixed thereto; and
(2) the delivery by the Borrowers of "control agreements"
that have been executed by the respective issuers (and consented
to by the respective Credit Parties) with respect to any
uncertificated Pledged Interests;
(3) with respect to each Financed Eligible Asset registered
in the United States, evidence of the filing with the FAA
Recording Office all documents required by the FAA in order to
protect the Applicable Borrower's right, title and interest in
such Financed Eligible Asset;
(4) with respect to each Financed Eligible Asset not
registered in the United States, evidence of the filing with each
applicable recording office in each Applicable Foreign
Jurisdiction of all documents required by such office or any
Applicable Foreign Aviation Law in order to protect the
Applicable Borrower's right, title and interest in such Financed
Eligible Asset in such Applicable Foreign Jurisdiction;
(5) a copy of the executed purchase agreement and executed
bill of sale evidencing the purchase by the Applicable Borrower
of each Financed Eligible Asset;
(6) copies of the certificates of aircraft registration
issued by the FAA and certificates of airworthiness issued by the
FAA, in each case with respect to each Aircraft registered in the
United States; and
(7) evidence of registration and other applicable
qualification issued by any Applicable Foreign Jurisdiction to
the extent such registration or qualification is required by an
Applicable Foreign Aviation Law, in each case with respect to
each Eligible Asset not registered in the United States;
(viii) results of a search of Liens filed with the FAA or any
Applicable Foreign Jurisdiction with respect to any Eligible Asset
that is or is to be a Financed Eligible Asset;
(ix) for each Financed Eligible Asset that will be subject to an
Eligible Lease on the date of the initial Loan, copies of each such
Eligible Lease; and
(x) for each Financed Eligible Asset that will be subject to an
Eligible Lease on the date of the initial Loan for such Financed
Eligible Asset, a Lessee Notice and evidence (which may be in the form
of a legal opinion) that the Agent shall have the right, under the
laws of the Applicable Foreign Jurisdiction, to enforce directly the
Eligible Lease against the Lessee, including without limitation, the
obligation of the Lessee to make payments under the Eligible Lease to
the applicable Account.
(f) at the time of (and after giving effect to) the initial Loan, no
Default or Event of Default specified in Article IX shall have occurred and
be continuing;
(g) immediately after giving effect to the initial Loan;
(i) the aggregate principal balance of all outstanding Revolving
Loans for each Lender shall not exceed such Lender's Revolving Credit
Commitment; and
(ii) the Revolving Credit Outstandings shall not exceed the
lesser of the Borrowing Base or the Total Revolving Credit Commitment.
5.3. Conditions of Subsequent Advances Under Revolving Loans. The
obligation of the Lenders to make an additional loan to a Borrower in connection
with Approved Improvements or a Qualified Conversion is subject to the
conditions precedent that:
(a) the representations and warranties of the Credit Parties set forth
in Article VI and in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Loan, with
the same effect as though such representations and warranties had been made
on and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date;
(b) the Agent shall have received final versions of the following at
least one Business Day prior to the date of the Loan:
(i) a Borrowing Notice; and
(ii) a certificate of an Authorized Representative substantially
in the form of Exhibit R containing computations of the Borrowing Base
and providing information about the Financed Eligible Asset, in each
case after giving effect to such Loan and any related Financed
Eligible Asset;
(c) at the time of (and after giving effect to) the initial Loan, no
Default or Event of Default specified in Article IX shall have occurred and
be continuing; and
(d) immediately after giving effect to the initial Loan;
(i) the aggregate principal balance of all outstanding Revolving
Loans for each Lender shall not exceed such Lender's Revolving Credit
Commitment;
(ii) the Revolving Credit Outstandings shall not exceed the
lesser of the Borrowing Base or the Total Revolving Credit Commitment.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., each other Guarantor and
each Borrower represents and warrants with respect to itself, its Subsidiaries
(if any) and each other Credit Party (which representations and warranties shall
survive the delivery of the documents mentioned herein and the making of Loans),
that:
6.1. Organization and Authority.
(a) Each Borrower, each Subsidiary and each other Credit Party is a
trust, corporation, partnership or limited liability company duly organized
and validly existing under the laws of the jurisdiction of its formation;
(b) Each Borrower, each Subsidiary and each other Credit Party (x) has
the requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every jurisdiction
in which failure so to qualify would have a Material Adverse Effect;
(c) Each Borrower has the power and authority to execute, deliver and
perform this Agreement and the Notes (if applicable), and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party (other than the Borrowers) has the power and
authority to execute, deliver and perform each of the Loan Documents to
which it is a party; and
(e) When executed and delivered, each of the Loan Documents to which
any Credit Party is a party will be the legal, valid and binding obligation
or agreement, as the case may be, of such Credit Party (as the case may
be), enforceable against such Credit Party (as the case may be) in
accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in a proceeding
at law or in equity);
6.2. Loan Documents. The execution, delivery and performance by each
Credit Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational Action of
such Credit Party (as the case may be) required for the lawful execution,
delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority binding
on such Credit Party or their respective properties, or (iii) the
Organizational Documents of such Credit Party;
(c) does not and will not be in conflict with, result in a breach of or
constitute an event of default, or an event which, with notice or lapse of
time or both, would constitute an event of default, under any contract,
indenture, agreement or other instrument or document to which such Credit
Party is a party, or by which the properties or assets of such Credit Party
are bound; and
(d) does not and will not result in the creation or imposition of any
Lien upon any of the properties or assets of such Credit Party or any
Subsidiary except any Liens in favor of the Agent and the Lenders created
by the Security Instruments;
6.3. Solvency. At the time of each Loan to a Borrower, such Borrower
and each Beneficial Owner of such Borrower and each Eligible Intermediary, if
any, is Solvent after giving effect to the transactions contemplated by the Loan
Documents;
6.4. Subsidiaries and Stockholders. No Borrower or Guarantor (other
than Bermuda Holding 2 Ltd., AI 1 Ltd. and AI 3 Ltd.) has any Subsidiaries,
except that a Guarantor may have a beneficial interest in a Borrower, a Borrower
may own an Eligible Intermediary and a Borrower may be a Subsidiary of a
Guarantor;
6.5. Ownership Interests.
(a) No Borrower or Guarantor owns any interest in any Person, except
that a Guarantor may have a beneficial interest in a Borrower, and a
Borrower may own an Eligible Intermediary; and
(b) Bermuda Holding 2 Ltd., AI 1 Ltd. or AI 3 Ltd. owns, directly or
indirectly, all of the Capital Stock of each Borrower, except for
directors' qualifying shares, if any.
6.6. Liens. The Agent (for itself and on behalf of the Lenders) has a
first priority perfected Lien (subject to Permitted Liens) on all Collateral
under the Security Instruments;
6.7. Title to Properties. Each Borrower and each of its Subsidiaries,
each Guarantor and each other Credit Party has good and marketable title to all
its real and personal properties, subject to no transfer restrictions or Liens
of any kind except as provided in the Security Instruments and the Leases; and
6.8. Taxes. Except as set forth in Schedule 6.8, each Borrower, each of
its Subsidiaries, each Guarantor and each other Credit Party has filed or caused
to be filed all federal, state, local and foreign Tax returns in each case that
are required to be filed by it and that, the failure to file, would have a
Material Adverse Effect (individually or in the aggregate) and, except for Taxes
and assessments being contested in good faith by appropriate proceedings
diligently conducted and against which reserves in accordance with GAAP
reflected in the financial statements most recently delivered pursuant to
Section 7.1(a) and satisfactory to the Borrowers' independent certified public
accountants have been established, have paid or caused to be paid all Taxes as
shown on said returns or on any assessment received by it, to the extent that
such Taxes have become due;
6.9. Other Agreements. No Guarantor, other Credit Party nor any
Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or of AI 3 Ltd.:
(i) is a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions,
which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect;
(ii) is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which such Guarantor, other Credit Party or
such Subsidiary is a party, which default has, or if not remedied
within any applicable grace period could reasonably be likely to have,
a Material Adverse Effect; or
(iii) shall have, prior to its execution of the Assumption
Letter, conducted business other than related to the acquisition,
leasing, maintenances, financing (solely under the Loan Documents),
ownership and disposition of Eligible Assets or have incurred any
liabilities except to the extent related to such business, including,
without limitation, under the Eligible Lease to which it is a party,
an aircraft acquisition, sale, maintenance or overhaul agreement and
the Loan Documents, none of which liabilities (except (a) the purchase
price in respect of an Eligible Asset, (b) liabilities in respect of
Approved Improvements and (c) those arising under the Loan Documents
and the Eligible Leases) are material to the Borrowers taken as a
whole.
6.10. Litigation. Except as set forth in Schedule 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of any Borrower, threatened by or against any Guarantor, any Borrower
or any Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or of AI 3 Ltd. or any
other Credit Party or affecting any such Person or any properties or rights of
any such Person, which could reasonably be likely to have a Material Adverse
Effect;
6.11. Federal Regulations. No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used (a) for "buying" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect
for any purpose that violates the provisions of the Regulations of the Board or
(b) for any purpose that violates the provisions of the Regulations of the
Board. If requested by any Lender or the Agent, the Borrowers will furnish to
the Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U;
6.12. Investment Company. No Credit Party is an "investment company,"
or "promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
ss. 80a-1, et seq.). The application of the proceeds of the Loans and repayment
thereof by each Borrower and the performance by each Borrower and the other
Credit Parties of the transactions contemplated by the Loan Documents will not
violate any provision of said Act, or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder, in each case as in effect on
the date hereof;
6.13. Patents, Etc. Each Borrower, each Guarantor and each other Credit
Party owns or has the right to use, under valid license agreements or otherwise,
all material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to or used in
the conduct of its businesses as now conducted and as contemplated by the Loan
Documents, without known conflict with any patent, license, franchise,
trademark, trade secret, trade name, copyright, other proprietary right of any
other Person;
6.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of any Borrower or any other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any written statement, representation, or warranty
provided to the Agent in connection with the negotiation or preparation of the
Loan Documents contains any misrepresentation or untrue statement of material
fact or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation or
statement contained therein not misleading;
6.15. No Consents, Etc. Neither the respective businesses or properties
of the Credit Parties or any Subsidiary, nor any relationship among the Credit
Parties or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be;
6.16. Employee Benefit Plans.
(a) Neither any Guarantor nor any Borrower or any of their respective
Subsidiaries has or has ever sponsored any Employee Benefit Plan, any
Single Employer Plan or any Multiemployer Plan, or had any obligation to
fund any such plan;
(b) Neither any Borrower nor any ERISA Affiliate has incurred any
"accumulated funding deficiency" within the meaning of Section 412 of the
Code or Section 302 of ERISA with respect to any Single Employer Plan,
whether or not waived, during the six-year period prior to the date on
which this representation is made or deemed made or any other liability to
the PBGC which remains outstanding, in each case, in an amount that would
be reasonably likely to have a Material Adverse Effect;
(c) No Termination Event has occurred during the six-year period prior
to the date on which this representation is made or deemed made or is
reasonably expected to occur with respect to any Single Employer Plan or
Multiemployer Plan, neither any Borrower nor any ERISA Affiliate has
incurred any unpaid withdrawal liability with respect to any Multiemployer
Plan that, in each case, could be reasonably expected to have a Material
Adverse Effect; and
(d) The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Single Employer
Plan) did not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made for each such plan, exceed
the then current value of the assets of such Single Employer Plan allocable
to such benefits by a material amount;
6.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
6.18. Environmental Laws. Except as listed on Schedule 6.18, each
Borrower, each Guarantor and each Subsidiary of Bermuda Holding 2 Ltd., AI 1
Ltd. or of AI 3 Ltd. is in compliance with all applicable Environmental Laws and
has been issued and currently maintains all required federal, state and local
permits, licenses, certificates and approvals. Except as listed on Schedule
6.18, neither any Borrower, any Guarantor nor any Subsidiary of Bermuda Holding
2 Ltd., AI 1 Ltd. or of AI 3 Ltd. has been notified of any pending or threatened
action, suit, proceeding or investigation, and neither any Borrower, any
Guarantor nor any Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or of AI 3
Ltd. is aware of any facts, which (a) calls into question, or could reasonably
be expected to call into question, compliance by any Borrower, any Guarantor or
any Subsidiary of Bermuda Holding 2 Ltd., AI 1 Ltd. or of AI 3 Ltd. with any
Environmental Laws, (b) seeks, or could reasonably be expected to form the basis
of a meritorious proceeding, to suspend, revoke or terminate any license, permit
or approval necessary for the operation of any Borrower's, any Guarantor's or
any of Bermuda Holding 2 Ltd.'s, AI 1 Ltd.'s or of AI 3 Ltd.'s Subsidiary's
business or facilities or for the generation, handling, storage, treatment or
disposal of any Hazardous Materials, or (c) seeks to cause, or could reasonably
be expected to form the basis of a meritorious proceeding to cause, any property
of any Borrower, any Guarantor or any Subsidiary of Bermuda Holding 2 Ltd., AI 1
Ltd. or of AI 3 Ltd. or other Credit Party to be subject to any restrictions on
ownership, use, occupancy or transferability under any Environmental Law;
6.19. Employment Matters. No Borrower, Guarantor or Credit Party has or
has ever had any employee other than officers thereof; and 6.20. Taxes. AI 1
Ltd. and AI 3 Ltd. are eligible for the benefits of the Income Tax Treaty
between the United States of America and Ireland. No Borrower, to its knowledge,
as of the date of this Agreement, is required to withhold or deduct any Taxes
imposed by any non-U.S. Governmental Authority, in an amount or to an extent
that would be reasonably expected to have a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
Unless the Required Lenders shall otherwise consent in writing, Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower will, and where
applicable will cause each Guarantor and each Subsidiary (if any) to:
7.1. Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days after the end
of each Fiscal Year, deliver or cause to be delivered to the Agent and each
Lender audited consolidated balance sheets of Parent and its Subsidiaries
as at the end of such Fiscal Year, and the notes thereto (if any), and the
relating audited consolidated statements of income, changes in
stockholders' (or members') equity and cash flows, and the respective notes
thereto (if any), for such Fiscal Year, setting forth comparative financial
statements for the preceding year (if applicable), reported on by Ernst &
Young LLP or other independent certified public accountants of nationally
recognized standing all prepared in accordance with GAAP and accompanied by
a certificate of an Authorized Representative, which certificate shall be
in the form of Exhibit H;
(b) as soon as practical and in any event within 60 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender consolidated income statements of
Parent and its Subsidiaries prepared in accordance with GAAP and
accompanied by a certificate of an Authorized Representative to the effect
that such financial statements present fairly, in all material respects,
the financial position of Parent and its Subsidiaries and of each of the
Borrowers and their respective Subsidiaries as of the end of such fiscal
period and the results of their operations for such fiscal period;
(c) as soon as practical and in any event within 10 days after the end
of each calendar month with respect to a draft (for the Agent) and within
30 days after the end of each calendar month with respect to a final report
(for the Agent and each Lender), deliver or cause to be delivered as set
forth above a report in form and substance reasonably satisfactory to the
Agent, stating that each Borrower is in compliance with the covenants and
terms hereof and that no Default or Event of Default has occurred and is
continuing, in each case as of the end of such month (the "Monthly Covenant
Compliance Report");
(d) promptly upon their becoming available to Bermuda Holding 2 Ltd.,
AI 1 Ltd., AI 3 Ltd. or any Borrower, such Person shall deliver to the
Agent and each Lender a copy of (i) all regular or special reports or
effective registration statements which Bermuda Holding 2 Ltd., AI 1 Ltd.,
AI 3 Ltd., any Borrower, any Guarantor or any Subsidiary shall file with
the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) any proxy statement distributed by Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., any Borrower, any Guarantor or any
Subsidiary to its shareholders, bondholders or the financial community in
general, and (iii) any management letter or other report submitted to any
Borrower, any Guarantor or any Subsidiary by independent accountants in
connection with any annual, interim or special audit of any Borrower or any
Subsidiary; and
(e) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Bermuda Holding
2 Ltd.'s, AI 1 Ltd.'s, AI 3 Ltd.'s, any Borrower's, any Guarantor's and any
Subsidiary's operations, business affairs and financial condition as the
Agent or such Lender may reasonably request.
Subject to Section 11.15, the Agent and the Lenders are hereby authorized to
deliver a copy of any such financial or other information delivered hereunder to
the Lenders (or any affiliate of any Lender) or to the Agent, to any
Governmental Authority having jurisdiction over the Agent or any of the Lenders
pursuant to any written request therefor or in the ordinary course of
examination of loan files, or to any other Person who shall acquire or consider
the assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement;
7.2. Maintain Properties. If a Financed Eligible Asset is not subject
to an Eligible Lease, maintain and make repairs to such Financed Eligible Asset
in compliance with the requirements set forth in Section 3.4 of the Security
Agreement; and each Borrower, Guarantor and Subsidiary shall maintain all other
properties necessary to its operations in good working order and condition, make
all needed repairs, replacements and renewals to such other properties, and
maintain free from Liens all trademarks, trade names, patents, copyrights, trade
secrets, know-how, and other intellectual property and proprietary information
(or adequate licenses thereto), in each case as are reasonably necessary to
conduct its business as currently conducted or as contemplated hereby, all in
accordance with customary and prudent business practices;
7.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 8.7, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary;
7.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and timely pay
all Taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien other than a
Permitted Lien against any of its properties;
7.5. Insurance. Maintain or cause to be maintained with respect to each
Financed Eligible Asset and all other Collateral the insurance described on
Exhibit L and cause the Agent for itself and on behalf of the Lenders to be
named additional insureds (in the case of any liability insurance) and loss
payee or contract party (in the case of any hull insurance) on such insurance
and on any and all other insurance maintained by any Credit Party with respect
to such Financed Aircraft or provided by or on behalf of a lessee or other
Person pursuant to the terms of any Lease;
7.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
7.7. Right of Inspection. Permit any Person designated by any Lender or
the Agent to visit and inspect any Financed Eligible Asset, or any other
property, corporate book or financial report of any Borrower or any Subsidiary
and to discuss its affairs, finances and accounts with its principal officers
and independent certified public accountants; and cause each Eligible Carrier to
permit any Person designated by any Lender or any Agent to inspect any Financed
Eligible Asset, all at reasonable times, at reasonable intervals and with
reasonable prior notice, subject to any restriction on inspection contained in
an Eligible Lease with respect to such Financed Eligible Asset, provided that
notwithstanding any such Lease, (a) any Person designated by a Lender or the
Agent may inspect such Financed Eligible Asset at any reasonable time upon an
event of default under such Lease, and (b) upon any Event of Default, the
Applicable Borrower will use its best efforts to cause the Applicable Carrier
(and any other Person) to permit any Person designated by a Lender or the Agent
to inspect such Financed Eligible Asset at any time;
7.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
7.9. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
7.10. Covenants Extending to Other Persons. Cause each Guarantor and
each of their respective Subsidiaries (if any) to do with respect to itself, its
business and its assets, each of the things required of any Borrower in Sections
7.2 through 7.9, and 7.18 inclusive;
7.11. Officer's Knowledge of Default. Upon any officer of any Guarantor
or any Borrower obtaining knowledge of any Default or Event of Default hereunder
or under any other obligation of any Borrower or any Subsidiary or other Credit
Party to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such officer or
an Authorized Representative to promptly notify the Agent of the nature thereof,
the period of existence thereof, and what action such Borrower or such
Subsidiary or other Credit Party proposes to take with respect thereto;
7.12. Suits or Other Proceedings. Upon any officer of any Guarantor or
any Borrower obtaining knowledge of any action, suit, litigation, investigation,
or other proceeding being instituted or threatened against any Borrower or any
Subsidiary or other Credit Party, in any court or before any Governmental
Authority, or any attachment, levy, execution or other process being instituted
against any assets of any Borrower or any Subsidiary or other Credit Party,
making a claim or claims in an aggregate amount greater than $250,000, exclusive
of punitive damages, not otherwise covered by insurance or that would otherwise
be reasonably expected to have a Material Adverse Effect, promptly deliver to
the Agent written notice thereof stating the nature and status of such action,
suit, litigation, investigation, dispute, proceeding, levy, execution or other
process;
7.13. Notice of Environmental Complaint or Condition. Promptly provide
to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by any Borrower,
any Guarantor or any Subsidiary relating to any (a) violation or alleged
violation by any Borrower, any Guarantor or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by any Borrower, any
Guarantor or any Subsidiary, or by any Person handling, transporting or
disposing of any Hazardous Material on behalf of any Borrower, any Guarantor or
any Subsidiary, or at any facility or property owned or leased or operated by
any Borrower, any Guarantor or any Subsidiary, of any Hazardous Material, except
where occurring legally pursuant to a permit or license; or (c) liability or
alleged liability of any Borrower, any Guarantor or any Subsidiary for the costs
of cleaning up, removing, remediating or responding to a release of Hazardous
Materials;
7.14. Environmental Compliance. If any Borrower, any Guarantor or any
Subsidiary shall receive any letter, notice, complaint, order, directive, claim
or citation alleging that any Borrower, any Guarantor or any Subsidiary has
violated any Environmental Law, has released any Hazardous Material, or is
liable for the costs of cleaning up, removing, remediating or responding to a
release of Hazardous Materials, any Borrower, any Guarantor and any Subsidiary
shall, within the time period permitted and to the extent required by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability;
7.15. Indemnification. Without limiting the generality of Section 11.9,
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower hereby agrees
jointly and severally to indemnify and hold the Agent and the Lenders, and their
respective officers, directors, employees and agents, harmless from and against
any and all claims, losses, penalties, liabilities, damages and expenses
(including assessment and cleanup costs and reasonable attorneys', consultants'
or other expert fees, expenses and disbursements) arising directly or indirectly
from, out of or by reason of (a) the violation of any Environmental Law by any
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by any Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of any Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by any Borrower or any
Subsidiary. The provisions of this Section 7.15 shall survive repayment of the
Obligations and expiration or termination of this Agreement;
7.16. Further Assurances. At the Borrowers' cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents (including any
additional Facility Guaranties in connection with new Guarantors), certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement, the Security Instruments and the other Loan Documents;
7.17. Hedging Agreements. Subject to Section 8.4, each Borrower or any
Guarantor may, in its sole discretion, maintain Hedging Agreements with a Lender
or a Lender Affiliate in an aggregate notional amount for the Borrowers and
Guarantors not greater than the Total Revolving Credit Commitment;
7.18. Continued Operations. Subject to Section 8.15, continue at all
times to conduct its business and engage principally in the same line or lines
of business substantially as heretofore conducted;
7.19. Maintenance of Eligible Assets; Other Covenants and Restrictions;
Non-Discrimination.
(a) Ensure that any Lease with respect to any Financed Eligible Asset
contains covenants and restrictions regarding the maintenance, alteration,
replacement, pooling, sublease and (in the case of a Lease) return of such
Eligible Asset by the Applicable Carrier, which covenants and restrictions
satisfy the requirements of Schedule 7.19(a) hereto;
(b) Promptly and diligently take or cause to be taken all steps which a
prudent international aircraft lessor or financier would reasonably take in
light of all of the relevant circumstances to compel the relevant Eligible
Carrier to comply with the terms of any Lease, or, if applicable and the
Applicable Borrower is entitled to do so, to repossess the applicable
Financed Eligible Asset (and, if a prudent international aircraft lessor or
financier would determine it necessary or desirable, to de-register and
export the same to a safe location) if any failure to comply with such
Lease is not promptly remedied;
7.20. Re-registration of Eligible Assets. Ensure that any Lease with
respect to any Eligible Asset contain covenants and restrictions regarding
re-registration of such Eligible Asset, which covenants and restrictions satisfy
the requirements of the Security Agreement;
7.21. Employee Benefit Plans. Without limiting the generality of
Section 8.9, with reasonable promptness, and in any event within thirty (30)
days after any Borrower knows or has reason to know thereof, give notice to the
Agent of (a) the establishment of any Single Employer Plan (which notice shall
include a copy of such plan), (b) the failure of any Borrower or any ERISA
Affiliate to make a required installment or payment under Section 302 of ERISA
or Section 412 of the Code by the due date; (c) the occurrence of a Termination
Event with respect to any Single Employer Plan or Multiemployer Plan; and (d)
the institution of proceedings or the taking of any other action by the PBGC or
any Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to
the withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan;
7.22. Accounts. Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., the
Guarantors and the Borrowers shall establish the Accounts as provided in the
Lockbox Agreement and shall deposit all proceeds (including without limitation
rent) from any Lease of any Financed Eligible Asset to the Accounts designated
under the Lockbox Agreement;
7.23. Eligible Lease; Lessee Notice. Deliver to the Agent promptly upon
execution, any Lease entered into by any Borrower, together with a Lessee Notice
in connection with such Lease, the opinion referred to in Section 5.2(e)(iii)
and the evidence referred to in Section 5.2(e)(x); and
ARTICLE VIII
NEGATIVE COVENANTS
------------------
Unless the Required Lenders shall otherwise consent in writing, Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower will not, and will cause
each Guarantor and each Subsidiary thereof (if any) not to:
8.1. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, except for the Acquisition of a Subsidiary as
permitted by Section 8.6;
8.2. Capital Expenditures. Make or become committed to make any Capital
Expenditures, except for Capital Expenditures to maintain or purchase Eligible
Assets or in connection with Approved Improvements and Qualified Conversions;
8.3. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to (a) any property or assets
now owned or hereafter acquired by any Borrower, any Guarantor or any Subsidiary
or (b) any Financed Eligible Asset, except the following (the "Permitted
Liens"):
(i) Liens created under the Security Instruments in favor of the
Agent and the Lenders; and Liens arising under the Eligible Leases in
favor of the Applicable Intermediary (as lessor) or the Applicable
Borrower which Liens in each case have been assigned to the Agent;
(ii) Liens set forth in Schedule 6.7;
(iii) Liens imposed by law for Taxes (A) not yet due or (B) which
are being contested in good faith by appropriate proceedings
diligently conducted, each of which Liens in clause (B) above shall be
fully bonded over, to the reasonable satisfaction of the Agent;
(iv) statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by law or created in the ordinary
course of business and (i) in existence less than 90 days from the
date of creation thereof for amounts not yet due or (ii) which are
being contested in good faith by appropriate proceedings diligently
conducted, which are inferior in respect of the Collateral to the
Liens conferred under the Security Instruments or have been fully
bonded over to the reasonable satisfaction of the Agent, and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(v) Liens arising out of any judgment or award with respect to
which an appeal or proceeding for review is being prosecuted in good
faith by appropriate proceedings diligently conducted, and with
respect to which a stay of execution is in effect;
(vi) Liens created by the Applicable Carrier under an Eligible
Lease that are not subject to clause (vii) below, which Liens are
created without the knowledge of the Applicable Borrower and are
released or fully bonded over to the reasonable satisfaction of the
Agent within 30 days after the Applicable Borrower has notice or
knowledge of any such Lien;
(vii) with respect to any Lease and the related Eligible Asset,
(i) any "Permitted Liens" (as defined in or the equivalent term in
such Lease Agreement and as agreed to by the Agent) (except a
Permitted Lien that is a Lessor Lien (as defined in or the equivalent
term in such Lease Agreement)), and (ii) any other Lien created by a
Lessee, a sublessee of a Lessee or any Person claiming by or through a
Lessee or sublessee, in each case in this clause (ii) as agreed to by
the Agent; provided, that with respect to Liens of the type listed in
clause (ii), such Lien is being contested in good faith by appropriate
proceedings or, upon the Applicable Borrower receiving notice or
knowledge of such Lien, such Applicable Borrower is diligently and
promptly enforcing the lessor's rights against the Lessee;
(viii) any head lease in respect of any Eligible Asset;
(ix) any Lien from air navigation authority, airport tending,
gate or handling (or similar) charges or levies (A) not yet overdue or
(B) which are being contested in good faith by appropriate
proceedings, each of which Liens in clause (B) above shall be fully
bonded over, to the reasonable satisfaction of the Agent;
(x) Liens securing Indebtedness described in Section 8.4(b);
(xi) Liens securing Indebtedness described in Section 8.4(f);
(xii) Liens granted by a Borrower, Guarantor or any Subsidiary
thereof in favor of a Lender or an Affiliate of a Lender in an
aggregate amount not to exceed the lesser of (A) $30,000,000 and (B)
5% of the Borrowing Base, in each case in connection with Indebtedness
permitted under Section 8.4(c).
8.4. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of Bermuda Holdings 2 Ltd., AI 1 Ltd., AI 3 Ltd., any Guarantor or
any Subsidiary thereof, howsoever evidenced, except:
(a) Indebtedness owing to (including guaranties in favor of) the Agent
or any Lender in connection with this Agreement, any Note or other Loan
Document;
(b) the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;
(c) Indebtedness arising from Hedging Agreements permitted under
Section 7.17; provided that the aggregate notional amount of Hedging
Agreements shall not exceed the Total Revolving Credit Commitment;
(d) unsecured intercompany Indebtedness for loans and advances made by
Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Beneficial Owner to a
Borrower or a Guarantor, provided that such intercompany Indebtedness is
evidenced by a promissory note or similar written instrument acceptable to
the Agent which provides that such Indebtedness is subordinated to
obligations, liabilities and undertakings of the holder or owner thereof
under the Loan Documents on terms acceptable to the Agent;
(e) Contingent Obligations of Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd. or any other Credit Party in support of the obligations of any Credit
Party.
(f) Contingent Obligations of any Credit Party in support of any
Subsidiary in connection with the purchase of an Eligible Asset or with an
Eligible Lease pursuant to which such Subsidiary is the lessor; and
(g) Indebtedness existing on the date hereof and listed on Schedule 8.4
hereof.
8.5. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets other than (a) leases by Borrowers and Applicable Intermediaries of
Eligible Assets under Eligible Leases, (b) sales by Borrowers and Applicable
Intermediaries of Eligible Assets or all of the beneficial interest or ownership
of a Beneficial Owner or a Borrower, provided that (i) the purchaser of such
Eligible Asset or beneficial interest from a Borrower or Applicable Intermediary
shall have acknowledged receipt of the Applicable Borrower's irrevocable
instruction to pay the sales price for such Eligible Asset or beneficial
interest directly to the Collection Account identified in the Lockbox Agreement
to which the Applicable Borrower is a party, (ii) the net proceeds of such sales
are promptly applied in accordance with Section 2.3(b), and (iii) at the time of
any such sale the requirements of Section 2.13 for release of the respective
Borrower or Guarantor have been satisfied, or (c) Engine swaps, interchange or
pooling arrangements to the extent permitted under any Eligible Lease;
8.6. Subsidiaries; Investments. Own, create or permit to exist any
Subsidiary of Bermuda Holdings 2 Ltd., AI 1 Ltd., AI 3 Ltd., any Borrower or any
Guarantor (except that a Guarantor may own beneficial interests in, or (subject
to Section 8.4(d)) make advances to, a Borrower or another Guarantor and any
Credit Party may own an Applicable Intermediary), or otherwise purchase, own,
invest in or otherwise acquire, directly or indirectly, any stock or other
securities, or make or permit to exist any interest whatsoever in any other
Person or permit to exist any loans or advances to any Person, other than (i)
loans referred to in Section 8.4(d), and (ii) loans to the Parent or any of its
Subsidiaries from funds made available to such Borrower from distributions made
under Section 5.1 of the applicable Lockbox Agreement;
8.7. Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets without the consent of the Agent, except as
permitted by Section 8.5 and except in the case of a Borrower or Guarantor that
simultaneously terminates its status as a Borrower or Guarantor hereunder in
accordance with Section 2.13;
8.8. Transactions with Affiliates. Other than transactions permitted
under Section 8.7, enter into any transaction after the Initial Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of such Person, except (a) that such Persons may render services to a Borrower,
a Guarantor, the Parent or their Subsidiaries for compensation at the same rates
generally paid by Persons engaged in the same or similar businesses for the same
or similar services, (b) that a Borrower, a Guarantor the Parent or any
Subsidiary thereof may render services to such Persons for compensation at the
same rates generally charged by such Borrower, such Guarantor or such
Subsidiary, (c) in either case (a) and (b) in the ordinary course of business
and pursuant to the reasonable requirements of a such Person's business
consistent with past practice of such Person and upon fair and reasonable terms
no less favorable to such Person than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate, (d) that any Borrower
may make loans to the Parent or any of its Subsidiaries from funds made
available to such Borrower from distributions made under Section 5.1 of the
applicable Lockbox Agreement, and (e) that the Parent or any of its Subsidiaries
may render services to the Credit Parties under comparable terms provided to its
other Affiliates;
8.9. Employee Benefit Plans; ERISA Affiliates; Employees. Sponsor any
Employee Benefit Plan or any Multiemployer Plan or agree to have any obligation
to fund any such plan, or hire or retain any employee other than officers
thereof;
8.10. Fiscal Year. Change its Fiscal Year, or have any fiscal year
other than the Fiscal Year;
8.11. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a transaction
permitted pursuant to Section 8.7;
8.12. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control;
8.13. Negative Pledge Clauses. Bermuda Holdings 2 Ltd., AI 1 Ltd., AI 3
Ltd., each Borrower, and each Eligible Intermediary shall not enter into or
cause, suffer or permit to exist any agreement with any Person other than the
Agent and the Lenders pursuant to this Agreement or any other Loan Documents
which prohibits or limits the ability of such Credit Party to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired; provided that any Eligible Lease may
contain such a prohibition or limitation so long as the prohibition or
limitation does not apply to any Lien granted in favor of the Agent or any
Lender pursuant to the Loan Documents;
8.14. Partnerships. Become a general partner in any general or limited
partnership;
8.15. Business and Operations. Engage in any (i) business or operations
other than the ownership, financing, leasing and sale of Eligible Aircraft and
Eligible Engines or the ownership of a Borrower, a Guarantor or Eligible
Intermediary engaged in such business or operations, or matters reasonably
incidental thereto, or the performance of the Loan Documents, provided, however,
that, except as otherwise provided in Section 2.1(a), no Borrower that owns or
is the Applicable Borrower with respect to any Aircraft or Engine may own or be
the Applicable Borrower with respect to any other Aircraft or Engine and (ii)
business in Bermuda or Ireland other than the performance of its obligations
under the Loan Documents; and
8.16. Ownership, Operation and Leasing of Financed Eligible Assets.
(a) Permit any Person other than a Borrower (or a Beneficial Owner
solely by virtue of its beneficial interest in the respective Borrower) to
own beneficially or of record any Financed Eligible Asset;
(b) Permit any Financed Eligible Asset to be leased, subleased or
chartered to any Person other than the Applicable Carrier or the Applicable
Intermediary, or to be operated by any Person other than the Applicable
Borrower or the Applicable Carrier, except as permitted in the Security
Agreement or any Lease;
(c) Permit any Financed Eligible Asset to be leased to an Eligible
Carrier except under the terms of an Eligible Lease;
(d) Permit any Financed Eligible Asset to be flown into or located in
any country (or part thereof) if as a result thereof such Financed Eligible
Asset would not be covered by insurance;
8.17. Bank Accounts. Permit any Borrower or other Credit Party to open
or allow to exist any bank accounts for which the aggregate average daily
balance, together with any bank accounts of the other Credit Parties, will be in
excess of $500,000 unless the Agent is granted a Security Interest in such
account by subjecting such account to a Lockbox Agreement or an Account Control
Agreement.
8.18. Representations Regarding Agent and Lenders. Represent or hold
out, or permit any Credit Party or Applicable Carrier to represent or hold out,
the Agent or any Lender as (a) the owner of any Financed Eligible Asset, (b)
carrying goods or passengers on any Financed Aircraft, or (c) being in any way
responsible for any operation of carriage (whether for hire or reward or
gratuitously) which may be undertaken by any Borrower, Guarantor, Subsidiary or
Applicable Carrier; or
8.19. Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. In the case of
Bermuda Holding 2 Ltd., AI 1 Ltd. and AI 3 Ltd., conduct, transact or otherwise
engage in any business or operations other than those incidental to its voting,
equity, beneficial or any other ownership interests of each Borrower and the
performance of the Loan Documents; or
8.20. Organizational Documents. Amend its Organizational Documents
without the consent of the Lenders and the Collateral Agent (as defined in the
Security Agreement for such Credit Party); or
8.21. Borrowing Base Covenant. Permit the aggregate principal amount of
Loans outstanding hereunder to exceed 65% of the Borrowing Base (the "Borrowing
Base Covenant").
ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
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9.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan or other Obligation, when and as the same shall be
due and payable whether pursuant to any provision of Article II, at
maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan or other Obligation or of any fees or other
amounts payable to any of the Lenders or the Agent within three (3)
Business Days after the date on which the same shall be due and payable; or
(c) if default shall be made in the performance or observance of any
covenant set forth in Section 7.5, 7.11, 7.12, 7.23 or Article VIII
hereunder or set forth in Sections 9(h); or
(d) if a default shall be made in the performance or observance of, or
shall occur under, any covenant, agreement or provision contained in this
Agreement (other than as described in clauses (a), (b) or (c) above), or if
a default shall be made in the performance or observance of, or shall occur
under, any covenant, agreement or provision contained in any of the other
Loan Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent (acting in any
capacity) or any of the Lenders or delivered to the Agent (acting in any
capacity) or any of the Lenders in connection with or pursuant to this
Agreement or any of the Obligations, and such default shall continue for 30
or more days after the earlier of receipt of notice of such default to an
Authorized Representative from the Agent (acting in any capacity) or an
officer of any Borrower becomes aware of such default, or if any Loan
Document ceases to be in full force and effect (other than by reason of any
action by the Agent (acting in any capacity)), or if without the written
consent of the Lenders, this Agreement or any other Loan Document shall be
disaffirmed or shall terminate, be terminable or be terminated or become
void or unenforceable for any reason whatsoever (other than in accordance
with its terms in the absence of default or by reason of any action by the
Lenders or the Agent (acting in any capacity)); or
(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect to
any Indebtedness or Rate Hedging Obligation (other than the Loans and other
Obligations) of Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., any Borrower
or any of its Subsidiaries, or (ii) a default, which is not waived, in the
performance, observance or fulfillment of any term or covenant contained in
any agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd., any Borrower or any of its Subsidiaries, or (iii) any other event of
default as specified in any agreement or instrument under or pursuant to
which any such Indebtedness or Rate Hedging Obligation may have been
issued, created, assumed, guaranteed or secured by Bermuda Holding 2 Ltd.,
AI 1 Ltd., AI 3 Ltd., any Borrower or any of its Subsidiaries, and such
default or event of default under clause (i), (ii) or (iii) above shall
continue for more than the period of grace, if any, therein specified, or
such default or event of default under clause (i), (ii) or (iii) above
shall permit the holder of any such Indebtedness (or any agent or trustee
acting on behalf of one or more holders) to accelerate the maturity
thereof; or
(f) if there shall occur an "Event of Default", which is not waived
under the Parent Revolving Credit Agreement; or
(g) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent (acting in any capacity) or
any Lender by or on behalf of any Borrower or any other Credit Party
pursuant to or in connection with any Loan Document, or otherwise, shall be
false or misleading in any material respect when given; or
(h) if any of the Parent Credit Parties, Bermuda Holding 2 Ltd., AI 1
Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other Credit
Parties shall be unable to pay its debts generally as they become due; or
any of the Parent Credit Parties, Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd., the Borrowers, the Subsidiaries and the other Credit Parties shall
file a petition to take advantage of any insolvency statute; make an
assignment for the benefit of its creditors; commence a proceeding for the
appointment of a receiver, trustee, examiner, liquidator or conservator of
itself or of the whole or any substantial part of its property; file a
petition or answer seeking liquidation, reorganization, examination or
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute; or
(i) if a court of competent jurisdiction shall enter an order, judgment
or decree appointing a custodian, receiver, trustee, examiner, liquidator
or conservator of any of the Parent Credit Parties, Bermuda Holding 2 Ltd.,
AI 1 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other Credit
Parties or of the whole or any substantial part of any such Person's
properties and such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) days, or approve a petition filed against
any of the Parent Credit Parties, Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd., the Borrowers, the Subsidiaries and the other Credit Parties seeking
liquidation, reorganization, examination or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state, which petition is not dismissed
within sixty (60) days; or if, under the provisions of any other law for
the relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of the Parent Credit Parties, Bermuda Holding 2
Ltd., AI 1 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other
Credit Parties or of the whole or any substantial part of any such Person's
properties, which control is not relinquished within sixty (60) days; or if
there is commenced against the any of the Parent Credit Parties, Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and
the other Credit Parties any proceeding or petition seeking reorganization,
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state which proceeding or petition remains undismissed for a period of
sixty (60) days; or if the any of the Parent Credit Parties, Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and
the other Credit Parties takes any action to indicate its consent to or
approval of any such proceeding or petition; or
(j) if any Borrower or any of its Subsidiaries shall, other than in the
ordinary course of business, suspend all or any part of its operations
material to the conduct of its business of the Parent and its Subsidiaries
taken as a whole for a period of more than 60 day; or
(k) if this Agreement or any other Loan Document shall for any reason
not be, or be asserted by any Borrower or any other Credit Party or
Subsidiary not to be, a legal, valid and binding obligation of any Borrower
or any Credit Party (as the case may be) enforceable in accordance with its
terms; or
(l) if any Lien of the Agent pursuant to any Loan Document shall for
any reason not be, or be asserted by any Borrower or any other Credit Party
or Subsidiary not to be a valid, first priority perfected Lien on the
Collateral identified therein (except to the extent that such Lien is not
required hereunder or under the Security Agreement to be a valid, first
priority perfected Lien on such Collateral), subject to no other Liens
except Permitted Liens; or
(m) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Employee Benefit Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Single Employer Plan or any Lien in favor of the PBGC or a
Single Employer Plan shall arise on the assets of any Borrower or any ERISA
Affiliate, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is likely to result in the termination of such Single Employer Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any ERISA
Affiliate shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Employee Benefit
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall continue to exist and not have been cured or
waived,
(A) either or both of the following actions may be taken:
(i) the Agent, with the consent of the Required Lenders, may, and
at the direction of the Required Lenders shall, declare any
obligation of the Lenders to make further Loans terminated,
whereupon the obligation of each Lender to make further Loans
hereunder shall terminate immediately, and (ii) the Agent shall
at the direction of the Required Lenders, at their option,
declare by notice to the Borrowers any or all of the Obligations
to be immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of any
Borrower to the Agent and the Lenders, shall forthwith become
immediately due and payable without presentment, demand, protest,
notice or other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any instrument
evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there shall
occur an Event of Default under clause (g) or (h) above, then the
obligation of the Lenders to make Loans hereunder shall
automatically terminate and any and all of the Obligations shall
be immediately due and payable without the necessity of any
action by the Agent or the Required Lenders or notice to the
Agent or the Lenders;
(B) each Borrower shall, upon demand of the Agent or the
Required Lenders, promptly cause to be performed at Borrowers'
expense by independent certified public accountants acceptable to
the Agent an audit of all Financed Eligible Asset; and
(C) the Agent and each of the Lenders shall have all of the
rights and remedies available under the Loan Documents or under
any applicable law, including without limitation all of the
rights and remedies of a secured party under any applicable
Uniform Commercial Code, the FAA Act, the Convention or any other
applicable law.
9.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. No Waiver. No course of dealing between any Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Loans has been accelerated pursuant to
Article IX hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
any Borrower hereunder, shall be applied by the Agent in the following order (or
in such manner as the Required Lenders may determine):
(a) amounts due to the Lenders pursuant to Sections 2.10 and 11.5;
(b) amounts due to the Agent pursuant to Section 10.8;
(c) payments of interest on Loans, to be applied for the ratable
benefit of the Lenders and amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Hedging Agreement with any
of the Lenders on a pro rata basis according to the amounts owed;
(d) payments of principal of Loans, to be applied for the ratable
benefit of the Lenders;
(e) amounts due to the Lenders pursuant to Sections 7.15 and 11.9;
(f) payments of all other amounts due under any of the Loan Documents,
if any, to be applied for the ratable benefit of the Lenders; and
(g) any surplus remaining after application as provided for herein, to
any Borrower or otherwise as may be required by applicable law.
9.6. Activities of Eligible Carriers. Notwithstanding anything
contained in this Agreement or any other Loan Document, the Credit Parties shall
not be deemed to be in breach of their respective obligations hereunder or
thereunder with respect to the care, maintenance, alteration, possession,
return, replacement, pooling, subleasing, use or operation of any Financed
Eligible Asset or any part thereof subject to an Eligible Lease by virtue of a
default by the Applicable Carrier under such Eligible Lease so long as each of
the following conditions is satisfied:
(a) such default by the Applicable Carrier is not within the control of
any Credit Party;
(b) the Credit Parties are in compliance with Section 7.19; and
(c) such default does not relate to any use or location of an Eligible
Asset in any jurisdiction that constitutes an Event of Default hereunder,
any failure to make any payment required by this Agreement or any other
Loan Document when due hereunder or thereunder, or any failure to maintain
any insurance required under this Agreement or any other Loan Document, any
failure to maintain perfection of the Agent's Lien on any Collateral.
ARTICLE X
THE AGENT
---------
10.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents, as "Mortgagee" under each Security
Agreement and as "Security Agent" under each Lockbox Agreement (references in
this Article X to the term "Agent" being deemed to include as well such other
capacities), with such powers and discretion as are specifically delegated to
the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 hereof shall include its affiliates and its own and its affiliates'
officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except those
expressly set forth in the Loan Documents and shall not be a trustee or
fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any Credit Party
or any other Person to perform any of its obligations thereunder;
(c) shall not be responsible for or have any duty to ascertain, inquire
into, or verify the performance or observance of any covenants or
agreements by any Credit Party or the satisfaction of any condition or to
inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Loan Document, except for its
own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or facsimile) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 11.1 hereof. As to any matters not expressly provided for by the Loan
Documents, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to any
Loan Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
10.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or a Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it, JPMCB (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or affiliates as if it were not acting
as Agent, and JPMCB (and any successor acting as Agent) and its affiliates may
accept fees and other consideration from any Credit Party or any of its
Subsidiaries or affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 11.9 hereof, but without limiting the
obligations of any Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees), or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against
the Agent (including by any Lender) in any way relating to or arising out of any
Loan Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by any
Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by any Borrower. The agreements contained
in this Section 10.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.
10.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Credit Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Credit Party or any of its Subsidiaries or affiliates that may come into the
possession of the Agent or any of its affiliates.
10.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent, subject (so
long as no Default or Event of Default has occurred and is continuing) to the
written consent of an Authorized Representative, which consent shall not be
unreasonably withheld. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent which
shall be a commercial bank organized under the laws of the United States of
America having combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor, such successor
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges, and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
X shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
10.8. Fees. The Borrowers agree, jointly and severally, to pay to the
Agent, for its individual account, an Agent's fee as from time to time agreed to
by any Borrower and the Agent in writing.
ARTICLE XI
MISCELLANEOUS
-------------
11.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit B hereto, together with any Note subject to such assignment
and a processing fee of $3,500 (which amount shall not be payable by
any Borrower);
(v) except in the case of an assignment to another Lender, any
assignment of all or any portion of the Revolving Credit Commitment
shall require the consent of the Agent and, unless a Default or Event
of Default has occurred and is continuing, an Authorized
Representative, such consent in each case not to be unreasonably
withheld; and
(vi) neither any Borrower nor Bermuda Holding 2 Ltd., AI 1 Ltd.
nor AI 3 Ltd. shall incur any greater expense or liabilities
(including, without limitation, indemnities and increased costs (other
than with respect to taxes, which shall be governed by the provisions
of Section 4.6 hereof)) than it would have incurred had such
assignment not taken place.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrowers shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is a Non-U.S.
Lender, it shall deliver to the Borrowers and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in Section 11.2
a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by any Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under
this Agreement (including all or a portion of its Revolving Credit
Commitment or its Loans); provided, however, that (i) such Lender s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article IV and
the right of set-off contained in Section 11.3, (iv) neither any Borrower
nor Bermuda Holding 2 Ltd., AI 1 Ltd. nor AI 3 Ltd. shall have any greater
obligation to a participant than it would have had to such Lender in the
absence of the existence of such participant and (v) each Borrower shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of any Borrower
relating to its Loans and to approve any amendment, modification, or waiver
of any provision of this Agreement (other than amendments, modifications,
or waivers decreasing the amount of principal of or the rate at which
interest or fees are payable on such Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on such
Loans, releasing all or substantially all of the Collateral (except for a
release of Collateral in accordance with Section 2.13), releasing any
Guarantor (except for a release of a Guarantor in accordance with Section
2.13), or extending or increasing its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its
Loans to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) Any Lender may furnish any information concerning any Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.15.
11.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid by certified or registered mail, return
receipt requested, or, in the case of telecopy notice, when received, addressed
as follows in the case of Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd., the
Borrowers and the Agent, and as set forth in an administrative questionnaire
delivered to the Agent in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto
(a) if to Bermuda Holding 2 Ltd. or any Borrower (or, in connection
with notice of service of process with respect to any Credit Party):
to Holdings or such Borrower (or such Credit Party,
as applicable)
c/o Aircastle Advisor LLC
300 First Stamford Place - Fifth Floor
Stamford, CT 06902
Attn: Lease Management
E-Mail: leasemanagement@aircastleinv.com
Facsimile Number: (917) 591-9106
Confirmation Number: (203) 504-1020
(b) if to AI 1 Ltd., AI 3 Ltd. or any Borrower organized under the laws
of Ireland:
c/o Aircastle Advisor (Ireland) Limited
8 FitzWilliam Place,
Dublin 2, Ireland
Telephone: 011-353-1-665-0800
Facsimile: 011-353-1-665-0801
with a copy to:
Aircastle Advisor LLC
300 First Stamford Place - Fifth Floor
Stamford, CT 06902
Attn: Lease Management
E-Mail: leasemanagement@aircastleinv.com
Facsimile Number: (917) 591-9106
Confirmation Number: (203) 504-1020
(c) if to the Agent:
JPMorgan Chase Bank, N.A.
1111 Fannin Street, 10th Floor
Houston, TX 77002
Attention: Michael Chau
Telephone: (713) 750-7913
Facsimile: (713) 750-2938
Electronic Mail: Michael.v.chau@jpmchase.com
with a copy to:
JPMorgan Chase Bank, N.A
270 Park Avenue, 15th Floor
New York, New York 10017
Attention: Vilma Francis
Telephone: (212) 270-5484
Facsimile: (212) 270-4016
Electronic Mail: Vilma.francis@jpmorgan.com
(d) if to any other Credit Party, at the address set forth on the
signature page of the Facility Guaranty or Security Instrument executed by
such Credit Party, as the case may be.
11.3. Right of Set-off; Adjustments.
(a) Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its affiliates) is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Lender (or any of its affiliates) to or for the credit or the
account of any Borrower against any and all of the obligations of any
Borrower now or hereafter existing under this Agreement and the Note held
by such Lender, irrespective of whether such Lender shall have made any
demand under this Agreement or such Note and although such obligations may
be unmatured. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of each Lender under this
Section 11.3 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans owing to it, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans
owing to it, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.3 may,
to the fullest extent permitted by law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation
as fully as if such Person were the direct creditor of the Borrowers in the
amount of such participation.
11.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the execution and delivery to the Lenders of this Agreement and any Notes and
shall continue in full force and effect so long as any of Obligations remain
outstanding or any Lender has any Loan hereunder or any Borrower has continuing
obligations hereunder unless otherwise provided herein. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party and all
covenants, provisions and agreements by or on behalf of any Borrower which are
contained in the Loan Documents shall inure to the benefit of the successors and
permitted assigns of the Lenders or any of them.
11.5. Expenses. Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each
Borrower agree, jointly and severally, to pay on demand (subject, in the case of
preparation, execution, delivery and administration costs, to the Fee Letter),
all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification, and amendment of
this Agreement, the other Loan Documents, subject to any cap that may have
otherwise been agreed, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent (excluding the cost of internal counsel) with respect thereto and with
respect to advising the Agent as to its rights and responsibilities under the
Loan Documents. Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower
further agree, jointly and severally, to pay on demand all costs and expenses of
the Agent and the Lenders, if any (including, without limitation, reasonable
external attorneys' fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.
11.6. Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.6. The
Required Lenders and each Credit Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Agent and each Credit
Party party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, reduce the stated rate of any interest or fee payable
hereunder (except that any amendment or modification of defined terms used in
the financial covenants in this Agreement shall not constitute a reduction in
the rate of interest or fees for purposes of this clause (i)) or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Revolving Credit Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 11.6
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Borrower of any
of their respective rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
all or substantially all of the Guarantors from their obligations under the
various Facility Guarantees, in the case of clauses (i) through (iii) without
the written consent of all Lenders; or (iv) amend, modify or waive any provision
of Article X without the written consent of the Agent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Credit Parties, the Lenders, the Agent and
all future holders of the Loans. In the case of any waiver, the Credit Parties,
the Lenders and the Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon;
No notice to or demand on any Borrower in any case shall entitle such
Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances, except as otherwise expressly provided herein.
No delay or omission on any Lender's or the Agent's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
11.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
11.8. Return of Funds. If after receipt of any payment of all or any
part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and each
Borrower, jointly and severally, shall be liable to, and shall indemnify and
hold the Agent or such Lender harmless for, the amount of such payment
surrendered until the Agent or such Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Agent or the Lenders' rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
11.9. Indemnification; Limitation of Liability.
(a) Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower,
jointly and severally, agree to indemnify and hold harmless the Agent
(which term for purposes of this Section 11.9 includes the "Mortgagee"
under each Security Agreement and the "Security Agent" under each Lockbox
Agreement) and each Lender and each of their affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities, costs, and expenses (including, without limitation, reasonable
external attorneys' fees, but excluding principal and accrued interest on
any Loan) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any
investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions
contemplated herein, any Aircraft, Engine or other Collateral, any
possession, performance, transportation, management, sale, ownership,
registration, mortgage, charging, control, maintenance, service, repair,
design, testing, defect, overhaul, purchase, bearing, use or operation of
any Aircraft, Engine or other Collateral, or the actual or proposed use of
the proceeds of the Loans, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in
this Section 11.9 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by Bermuda Holding
2 Ltd., AI 1 Ltd., AI 3 Ltd., any Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Bermuda Holding 2 Ltd., AI 1 Ltd., AI
3 Ltd. and each Borrower agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to
it, any of its Subsidiaries, any Guarantor or any security holders or
creditors thereof arising out of, related to or in connection with the
transactions contemplated in any Loan Document, except to the extent that
such liability directly results from such Indemnified Party's gross
negligence or willful misconduct. Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3
Ltd. and each Borrower agree not to assert any claim against the Agent, any
Lender, any of their affiliates, or any of their respective directors,
officers, employees, attorneys, agents, and advisers, on any theory of
liability, for special, indirect, consequential, or punitive damages
arising out of or otherwise relating to the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement of Bermuda
Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. or any Borrower hereunder, the
agreements and obligations of Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd.
and each Borrower contained in this Section 11.9 shall survive the payment
in full of the Loans and all other amounts payable under this Agreement.
(c) Except as expressly provided herein, each Lender, each Borrower and
the Agent agree that this Agreement and each other Loan Document entered
into by a Holdings Subsidiary Trust is executed by a Qualified Trustee, not
individually but solely as Trustee under a Trust Agreement in the exercise
of the power and authority conferred and vested in it as such Trustee, that
each and all of the representations, undertakings and agreements by a
Qualified Trustee, or for the purpose or with the intention of binding a
Qualified Trustee, are made and intended for the purpose of binding only
the Trust Estates (and, to the extent any Lender, Borrower or Agent has an
interest therein, any liability insurance proceeds), and that in no case
whatsoever shall any Qualified Trustee be personally liable for any loss in
respect of such representations, undertakings and agreements, that nothing
herein contained shall be construed as creating any liability on any
Qualified Trustee individually or personally, to perform any covenant,
either express or implied, herein, all such liability, if any, being
expressly waived by each Lender, each Borrower and the Agent and by each
and every Person now or hereafter claiming by, through or under such
Persons except with respect to the gross negligence or willful misconduct
of such Qualified Trustee or for any Liens on the Collateral arising from,
through or under such Qualified Trustee in its individual capacity, and
that so far as any Qualified Trustee, individually or personally is
concerned, each Lender, each Borrower and the Agent and any Person claiming
by, through or under such Persons shall look solely, except as provided
above, to the Trust Estates (and, to the extent any Lender, Borrower or
Agent has an interest therein, any liability insurance proceeds), for the
performance of any obligation under this Credit Agreement and the other
Loan Documents. The term "Trustee" as used in this Section 11.9(c) shall
include any Qualified Trustee succeeding a Qualified Trustee, as trustee
under a Trust Agreement. Any obligation of any Holdings Subsidiary Trust
hereunder or under the other Loan Documents may be performed by a
Beneficial Owner, and any such performance shall not be construed as
revocation of the trust created by any Trust Agreement.
11.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
11.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, and other communications between or among the parties, both
oral and written, with respect thereto.
11.12. Payments. All principal, interest, and other amounts to be paid
by any Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim. Subject to the definition of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of interest and fees,
as applicable, and as the case may be.
11.13. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by Bermuda Holding 2 Ltd., AI 1 Ltd., AI 3 Ltd. any other Credit Party or
any Affiliate thereof, pursuant to or in connection with this Agreement or the
other Loan Documents; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or affiliate or any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority, (f) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this Section,
to any actual or proposed participant or assignee.
11.14. Governing Law; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) BERMUDA HOLDING 2 LTD., AI 1 LTD., AI 3 LTD. AND EACH BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL
COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, UNITED STATES
OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, BERMUDA
HOLDING 2 LTD. AND EACH BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BERMUDA HOLDING 2 LTD. AND EACH BORROWER HEREBY
IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) BERMUDA HOLDING 2 LTD., AI 1 LTD., AI 3 LTD. AND EACH BORROWER
AGREES THAT SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF
THE SUMMONS AND COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION
OR PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE
ADDRESS PROVIDED IN SECTION 11.2(a), OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL PRECLUDE
THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY OTHER
JURISDICTION. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH
JURISDICTION, BERMUDA HOLDING 2 LTD., AI 1 LTD., AI 3 LTD. AND EACH
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY
SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE
DELIVERED IN CONNECTION THEREWITH, BERMUDA HOLDING 2 LTD., AI 1 LTD., AI 3
LTD., THE BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO
TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
11.15. Judgment Currency.
(a) To the extent permitted by applicable law, if for the purposes of
obtaining judgment in any court it is necessary to convert a sum due
hereunder in United States Dollars into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that
the rate of exchange used shall be determined in accordance with Section
1.3 of this Agreement on the Business Day preceding that on which final
judgment is given.
To the extent permitted by applicable law, the obligation of each
Credit Party in respect of any sum due in United States Dollars from it to any
Lender or the Agent hereunder shall, notwithstanding any judgment in a currency
other than United States Dollars, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Agent (as the case may be)
of any sum adjudged to be so due in such other currency, such Lender or the
Agent (as the case may be) may in accordance with normal banking procedures
purchase United States Dollars with such other currency; if the United States
Dollars so purchased are less than such sum due to such Lender or the Agent (as
the case may be) in United States Dollars, each Credit Party agrees, to the
extent permitted by applicable law, as a separate obligation and notwithstanding
any such judgment, to indemnify such Lender or the Agent (as the case may be)
against such loss, and if the United States Dollars so purchased exceed such sum
due to any Lender or the Agent (as the case may be) in United States Dollars,
such Lender or the Agent (as the case may be) agrees to remit to each such
Credit Party such excess.
11.16. USA PATRIOT Act. Each Lender hereby notifies Bermuda Holding 2
Ltd., AI 1 Ltd., AI 3 Ltd. and each Borrower that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of
such Borrower and other information that will allow such Lender to identify each
Borrower in accordance with the Act.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED
By: /s/ Ron Wainshal
---------------------------------------
Name: Ron Wainshal
Title: Director
AIRCASTLE IRELAND NO. 1 LIMITED
By: /s/ Ron Wainshal
---------------------------------------
Name: Ron Wainshal
Title: Director
AIRCASTLE IRELAND NO. 3 LIMITED
By: /s/ Ron Wainshal
---------------------------------------
Name: Ron Wainshal
Title: Director
CONSTITUTION AIRCRAFT LEASING
(IRELAND) 2 LIMITED
By: /s/ Ron Wainshal
---------------------------------------
Name: Ron Wainshal
Title: Director
EMER AIRCRAFT LEASING (IRELAND)
LIMITED
By: /s/ Ron Wainshal
---------------------------------------
Name: Ron Wainshal
Title: Director
WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, as
Owner Trustee under the
various Trust Agreements
By: /s/ Val T. Orton
---------------------------------------
Name: Val T. Orton
Title: Vice President
AIRCRAFT MSN 29045 LLC
By: /s/ (illegible)
---------------------------------------
Name:
Title:
AIRCRAFT MSN 29046 LLC
By: /s/ Mark Zeidman
--------------------------------------
Name: Mark Zeidman
Title: Managing Director
AIRCRAFT MSN 1006 LLC
By: /s/ Mark Zeidman
---------------------------------------
Name: Mark Zeidman
Title: Managing Director
AIRCRAFT MSN 28213 LLC
By: /s/ M. Zeidman
---------------------------------------
Name: Mark Zeidman
Title: Managing Director
ENDEAVOR AIRCRAFT LEASING (SWEDEN) 2AB
By: /s/ Peter Plunkett
---------------------------------------
Name: Peter Plunkett
Title: Director
AIRCRAFT MSN 24838 LLC
By: /s/ Mark Zeidman
---------------------------------------
Name: Mark Zeidman
Title: Managing Director
JP MORGAN CHASE BANK, N.A., as Agent and
as a Lender
By: /s/ Matthew H. Massie
---------------------------------------
Name: Matthew H. Massie
Title: Managing Director
BEAR STEARNS CORPORATE LENDING INC.
as a Lender
By: /s/ Victor Bulzacchelli
---------------------------------------
Name: Victor Bulzacchelli
Title: Vice President
CITICORP NORTH AMERICA INC., N.A.,
as a Lender
By: /s/ Gaylord C. Holmes
---------------------------------------
Name: Gaylord C. Holmes
Title: Director