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Exhibit 10.6
Dated 15 July 1998
GPA GROUP PLC
SKYSCAPE LIMITED
and
AERCO LIMITED
SHARE PURCHASE AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Solicitors
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CONTENTS
1. Interpretation 2
2. Purchase and Sale 8
3. Closing 8
4. Representations and Warranties of Sellers 9
5. Indemnity 10
6. Limitations on Warranties and Indemnity 13
7. Representations and Warranties of Purchaser 14
8. Additional Covenants and Agreements 14
9. Conditions to Closing 14
10. Miscellaneous 17
SCHEDULE 1 - Details relating to the Shares and AerCo USA Stock 21
SCHEDULE 2 - Further information Concerning the Companies 22
SCHEDULE 3 - Representations and Warranties of Sellers 26
SCHEDULE 4 - Purchaser's Representations and Warranties 45
SCHEDULE 5 - Deed of Tax Indemnity 47
SCHEDULE 6A - Form of Solvency Certificate (non-US companies) 54
SCHEDULE 6B - Form of Solvency Certificate (US companies) 55
SCHEDULE 7 - Intra-Group Debt at Closing 56
SCHEDULE 8 - Particulars of the Aircraft 58
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THIS AGREEMENT is made on 15 July 1998
BETWEEN
(1) GPA GROUP PLC ("GPA"), a company incorporated in Ireland and having its
registered office at GPA House, Shannon, Co Clare, Ireland and SKYSCAPE
LIMITED ("SKYSCAPE"), a company incorporated in Ireland and having its
registered office at GPA House, Shannon, Co ▇▇▇▇▇, Ireland (together the
"Sellers") and
(2) AERCO LIMITED, a company incorporated in Jersey and having its registered
office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
(the "Purchaser").
RECITALS:
(A) Each of AerCo Ireland Limited ("AERCO") and AerCo Ireland II Limited
("AERCO IRELAND II") (together the "IRISH COMPANIES") is a private
limited company incorporated in Ireland under the Companies Acts 1963 to
1990 and with share capital as set out in Schedule 2.
(B) GPA is the beneficial owner of the whole of the issued share capital of
each of the Irish Companies. Skyscape holds one ordinary share in each of
the Irish Companies as nominee for GPA.
(C) It is proposed that AerCo Ireland II will contract to acquire all of the
issued share capital in AerFi Belgium N.V., brief particulars of which are
set out in Schedule 2 ("AERFI BELGIUM"), from the Sellers.
(D) AerCoUSA Inc ("AERCO USA") is a Delaware corporation, all the issued stock
in which was transferred by GPA to First Security Bank, National
Association (the "VOTING TRUSTEE") under the terms of a Voting Trust
Agreement (the "VOTING TRUST") dated as of 22 April 1998 between GPA as
Stockholder and the Voting Trustee. All Voting Trust Certificates issued
under the Voting Trust are held by GPA.
(E) The Sellers have agreed to sell and the Purchaser has agreed to purchase
all of the issued ordinary shares in the capital of each of the Irish
Companies (the "SHARES"), and GPA has agreed to sell (having first
terminated the Voting Trust) and the Purchaser has agreed to acquire all of
the issued and outstanding shares of common stock in AerCo USA (the "AERCO
USA STOCK"), in each case on the terms and conditions and on the basis of
the representations, warranties, undertakings, agreements and indemnities
hereinafter set out.
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NOW IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: In this Agreement unless the context requires otherwise:
"ACTION" means any claim, action, suit, arbitration, inquiry, proceeding
or investigation by or before any Governmental Authority;
"AERCO GROUP" means the Purchaser, the Companies, an any other
companies which are, or which on or after the Closing Date become, direct
or indirect subsidiaries of the Purchaser;
"AERFI ACCOUNTS" means the audited balance sheets of AerFi Belgium as at
31 March 1998 and its audited profit and loss accounts for the financial
year ended on 31 March 1998;
"AFFILIATE" means, with respect to any person, any body corporate which
is (a) a subsidiary or the holding company of such person or (b) a
subsidiary of any body corporate of which that person is also a subsidiary;
"AIRCRAFT" means the aircraft listed in Schedule B together with, unless
otherwise specified, all Engines and Parts related thereto;
"AIRCRAFT DOCUMENTS" means all records, logs, technical data and manuals
relating to the maintenance and operation of the Aircraft;
"AIRCRAFT PURCHASE AGREEMENTS" means the Aircraft Purchase Agreements
relating to the Aircraft;
(i) dated 28 April 1998 between GPA as seller and AerCo Ireland II
(under its then name Littsfield Limited) as purchaser in respect of
the Aircraft with manufacturer's serial number 240;
(ii) dated 8 July 1998 between GPA as seller and AerCo Ireland as
purchaser in respect of the Aircraft with manufacturer's serial
numbers 085, 23868, 23979, 26066, 22496, 11341 and 11350;
(iii) dated 10 July 1998 between GPA Corporation as seller and AerCo USA
as purchaser in respect of the Aircraft with manufacturer's serial
number 46064; and
(iv) dated 7 July 1998 between AeroUSA II Inc as seller and AerCo USA as
purchaser in respect of the Aircraft with manufacturer's serial
number aircraft msn 46060;
"APPRAISERS" means Aircraft Information Services, Inc, Airclaims Limited
and BK Associates, Inc.;
"BASE VALUE" means, at any time, the value of any Aircraft on the basis
of an open, unrestricted, and stable market environment with a reasonable
balance of
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supply and demand of other aircraft and with full consideration of such
Aircraft's "highest and best use" and presuming an arm's length, cash
transaction between willing, able and knowledgeable parties, acting
prudently, with an absence of duress and with a reasonable period of time
available for marketing such Aircraft adjusted to account for the
maintenance status of such Aircraft (with certain assumptions as to use
since the last reported status, as set out, as regards any appraisal of
base value, in such appraisal);
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorised by law to be closed in London or
New York;
"CLOSING" means the closing of the sale and purchase of the Shares in
accordance with Clause 3 hereof;
"CLOSING DATE" means the date upon which Closing takes place;
"COMPANIES" means the Irish Companies and AerCo USA. The term "Companies"
also includes AerFi Belgium if that company is later sold by the Sellers to
the Purchaser and/or its nominees, and "Company" shall be construed
accordingly;
"DEED OF TAX INDEMNITY" means a deed in the form set out in Schedule 5;
"DIRECTORS" and "SECRETARY" in relation to a Company means the persons
described in Schedule 2 as directors and secretary thereof respectively;
"DISCLOSURE LETTER" means the disclosure letter of even date herewith from
the Sellers to the Purchaser, a copy of which is annexed hereto;
"DOLLARS" or "$" or "US$" means the lawful currency of the United States of
America;
"ENGINE" means each engine listed in Schedule 8 or, where any such engine
has been replaced under the terms of the relevant Lease, and title to the
replacement engine has passed to the relevant Company, such replacement
engine, and including any and all Parts incorporated in, installed on or
attached to such engine or replacement engine;
"GOVERNMENTAL AUTHORITY" means any governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body;
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority;
"INITIAL APPRAISED VALUE" means, in respect of any Aircraft, the average of
the aggregate Base Values for that Aircraft as at 1 March 1998 obtained
from the Appraisers and set out opposite the description of that Aircraft
in Schedule 8;
"INTRA-GROUP DEBT" means indebtedness incurred by the Companies to GPA, the
amount of which, as at Closing, is set out in Schedule 7;
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"LEASE" means, for each Aircraft, the aircraft lease agreement relating to
it described in Schedule 8 and the sub-leases referred to in Schedule 8;
"LESSEE" means a lessee under a Lease;
"LESSOR" means the lessor under a Lease;
"LIABILITIES" means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising
under any law (including, without limitation, any environmental law),
Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking;
"LIEN" means any security interest, pledge, mortgage, lien (including,
without limitation, environmental and tax liens), charge, encumbrance,
adverse claim, preferential arrangement or restriction of any kind,
including, in the case of shares, without limitation, any restriction on
the use, voting, transfer, receipt of income or other exercise of any
attributes of ownership of such shares;
"MATERIAL ADVERSE EFFECT" means any material adverse effect on the business
condition (financial or otherwise), operations, performance or properties
of the Companies, taken as a whole;
"MINISTER" means the Minister for the time being for Enterprise, Trade and
Employment;
"NOTE PURCHASE AGREEMENT" means the Purchase Agreement dated 23 June 1998
between the Purchaser, GPA and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited;
and
"NOTES INDENTURE" means the Indenture dated on or about the date hereof
made between the Purchaser as issuer and Bankers Trust Company as trustee;
"NOVATION AGREEMENTS" means the Novation Agreements to which one or more of
the Companies is party included within the descriptions of Leases in
Schedule 8;
"OFFERING MEMORANDUM" means the Offering Memorandum issued on 23 June 1998
in respect of a debt issue by the Purchaser;
"OTHER TRANSACTION DOCUMENTS" means the Offering Memorandum, the Aircraft
Purchase Agreements, the Deed of Tax Indemnity, the Novation Agreements and
the Notes Indenture;
"PARTS" means any part, component, appliance, accessory, instrument or
other item of equipment (other than any of the Engines) incorporated in,
installed on or attached to any Aircraft or Engine;
"PERMITTED LIENS", in respect of any Aircraft, means:
(a) any lien for taxes, assessments and governmental charges or levies
which are not yet due and payable or which are being contested in
good faith by
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appropriate proceedings (provided that if the member of the Seller
Group who is the owner or lessor of the relevant Aircraft has become
aware of any such lien, such lien shall not be a "Permitted Lien"
hereunder unless such owner or lessor is using commercially
reasonable efforts to have such lien lifted);
(b) any liens of a repairer, carrier or hangar keeper arising in the
ordinary course of business by operation of law, any other similar
lien or any engine or parts pooling arrangements in the ordinary
course of business;
(c) any "permitted lien" as defined under the relevant Lease (other than
liens created by the relevant Lessor);
(d) any liens created by or through or arising from debt or liabilities
or any act or omission of any Lessee, in each case in contravention
of the relevant Lease (whether or not such Lease has been terminated)
or without the consent of the relevant Lessor (provided that if such
Lessor has become aware of any such lien, such lien shall not be a
"Permitted Lien" hereunder unless such Lessor is using commercially
reasonable efforts to have any such liens lifted);
(e) any head lease, lease, conditional sale agreement or option permitted
under the Leases or purchase options relating to the Aircraft;
(f) any liens for air navigation authority, airport tending, gate or
handling (or similar) charges or levies;
(g) any lien which would not adversely affect the owner's rights
(provided that, taking all the Aircraft as a whole, liens which are
permitted under this paragraph (i) but do not otherwise qualify as
"Permitted Liens" shall not exceed 1% of the aggregate Initial
Appraised Values, or, if greater, $250,000 per Aircraft);
"PURCHASER INDEMNITY" means the indemnity set out in Clause 5.1 hereof;
"PURCHASER WARRANTIES" means the warranties and undertakings of the
Purchaser contained in Schedule 4;
"REFERENCE BALANCE SHEETS" means the balance sheets of the Companies
prepared as at 31 May 1998 showing the financial positions of each of the
Companies as they would have been if the transactions contemplated by the
Aircraft Sale Agreements and the Lease Novations had been completed as at
that date, and had AerFi Belgium been a subsidiary of AerCo Ireland II at
that date;
"REFERENCE BALANCE SHEET DATE" means 31 May 1998;
"RELATED DOCUMENTS" has the meaning attributed to it in the Notes
Indenture;
"SELLERS' ACCOUNTANTS" means KPMG, Dublin, independent accountants of the
Sellers;
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"SELLER GROUP" means GPA and its consolidated subsidiaries but excluding
(i) the Companies and (ii) the Purchaser and any other companies which are
or on or after Closing become subsidiaries of the Purchaser;
"SELLER INDEMNITY" means the indemnity set out in Clause 5.2 hereof;
"SHARES" has the meaning described in Recital (E) above;
"SOLVENT" means, in respect of any company at any date and on the
assumption that the transactions contemplated by this Agreement, the Other
Transaction Documents and the Related Documents have been completed or
will complete (as the case may be) on the terms and conditions set out
therein:--
(i) In respect of any company other than AerCo USA, that such company on
such date:
(a) is not unable to pay its debts nor would it be deemed to be
unable to pay its debts within the meaning of the Relevant
Solvency Acts (as defined below); and
(b) would not become unable to pay its debts nor would be deemed to
be unable to pay its debts within the meaning of the Relevant
Solvency Acts (as defined below)
where "RELEVANT SOLVENCY ACTS" means, (i) in respect of a company
incorporated in Ireland, Section 214 of the Companies Act, 1963 (ii)
in respect of a company incorporated outside Ireland, the equivalent
provisions under the laws of its state of Incorporation;
(ii) in respect of AerCo USA, that on such date:
(a) the fair value of its property is greater than the total amount
of its liabilities, including, without limitation, contingent
liabilities;
(b) the present fair saleable value of its assets is not less than
the amount that will be required to pay its probable liability
on its debts as they become absolute and matured;
(c) it does not intend to, and does not believe that it will, incur
debts or liabilities beyond its ability to pay such debts and
liabilities as they mature;
(d) it is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which its property
would constitute an unreasonably small capital;
for the purposes of this paragraph (ii), the amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability;
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and the term "insolvent" shall be construed accordingly:
"TCA" means the Taxes Consolidation Act, 1997;
"WARRANTIES" means the warranties and undertakings of the Sellers contained
in Schedule 3.
1.2 COMPUTATION OF TIME PERIODS: In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean
"to but excluding",
1.3 STATUTES: Any reference in this Agreement and/or in the Schedules hereto to
any statute or statutory provision shall be deemed to include any statute
or statutory provision which amends, extends, consolidates or replaces the
same, or which has been amended, extended, consolidated or replaced by the
same and shall include any orders, regulations, instruments or other
subordinate legislation made under the relevant statute.
1.4 NUMBER, GENDER: Unless the context shall otherwise require words importing
the singular number shall include the plural number and vice versa and
words importing persons shall include corporations.
1.5 INTERNAL REFERENCES:
(a) Words such as "HEREUNDER", "HERETO", "HEREOF" and "HEREIN" and other
words commencing with "HERE" shall unless the context clearly
indicates the contrary refer to the whole of this Agreement and not to
any particular Clause, Sub-Clause, paragraph or sub-paragraph hereof.
(b) References to "this Agreement" include the schedules and annexes
hereto and the Disclosure Letter, and any amendments made in
accordance with clause 10.7 below.
(c) Any reference to any clause, sub-Clause, paragraph or sub-paragraph
shall be a reference to the clause, sub-Clause, paragraph or
sub-paragraph of this Agreement in which the reference occurs unless
it is indicated that reference to some other provision is intended.
(d) All references to Schedules refer to Schedules to this Agreement.
1.6 HEADINGS: The headings contained in this Agreement and the Schedules are
inserted for convenience of reference only and shall not in any way form
part of nor affect or be taken into account in the construction or
interpretation of any provisions of this Agreement or the Schedules.
2. PURCHASE AND SALE
Upon the terms and subject to the conditions of this Agreement, the Sellers
shall sell as beneficial owners (and as holder of record with respect to
the AerCo USA Stock), and the Purchaser shall purchase, the Shares and the
AerCo USA Stock for the aggregate of the amounts set out in the column
headed "Price" in Schedule
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1 (the "PURCHASE PRICE"). The Shares and AerCo USA Stock shall be sold
free from all Liens and with the benefit of all rights attached or
accruing thereto.
3. CLOSING
Subject to the satisfaction of the conditions specified in Clause 9
hereof. Closing shall take place on the Closing Date, when:
(a) the Sellers shall deliver to the Purchaser or its nominee (in Dublin,
in the case of the items referred to in paragraph (i), and in New York
in the case of the items referred to in paragraph (ii) and (iii), and
as regards the other items at such location as the Sellers and
Purchaser agree):
(i) duly executed transfers in favour of the Purchaser or its
nominees in respect of all the Shares together with all
existing share certificates issued in respect thereof or in the
case of any lost share certificate an indemnity in lieu thereof
in terms reasonably satisfactory to the Purchaser;
(ii) duly executed stock transfers in favour of the Purchaser in
respect of the AerCo USA Stock together with all existing
share certificates issued in respect thereof or in the case of
any lost share certificate an indemnity in lieu thereof in
terms reasonably satisfactory to the Purchaser;
(iii) Evidence satisfactory to the Purchaser of termination of the
Voting Trust;
(iv) the opinions, certificates and other documents to be delivered
pursuant to Clause 9.2;
(v) any power of attorney under which any document required to be
delivered to the Purchaser under this Clause has been executed
and such other documents including any waivers or consents as
the Purchaser may require to enable the Purchaser or its
nominees to be registered as holders of the Shares;
(vi) the Certificates of Incorporation and Certificates of
Incorporation on Change of Name in respect of the Irish
Companies, and the Certificate of Amendment of Certificate of
Incorporation in the case of AerCo USA, the by-laws of
AerCo USA and the seals, statutory books (duly written up to
date), books of account, and all other books, documents or
records and papers of the Companies other than AerFi Belgium;
(vii) the written resignations of the directors and the secretaries
from their respective offices in the Companies (other than in
the case of AerFi Belgium), with written acknowledgements
under seal from each of them in such form as the Purchaser
requires that he or she has no claim against the relevant
Company in respect of breach of contract, compensation for
loss of office, redundancy or unfair dismissal or on any
grounds whatsoever;
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(b) board meetings of the Irish Companies shall be held at which:
(i) such persons as the Purchaser may nominate shall be appointed
additional directors or equivalent officers of such companies;
(ii) the transfers referred to at paragraph 3(a)(i) shall be
approved (subject to stamping);
(iii) the resignations referred to in paragraphs 3(a)(vii) shall be
submitted and accepted;
(c) board meetings of AerCo USA shall be held at which the resignations
referred to in paragraphs 3(a)(vii) shall be submitted and accepted,
such persons as the Purchaser may nominate shall be appointed
additional directors or equivalent officers of such companies; and
(d) the Purchaser shall pay to the Sellers the Purchase Price by wire
transfer in immediately available funds to such bank account(s) as
the Sellers shall have specified by written notice to the Purchaser
not later than five (5) Business Days prior to the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF SELLERS
4.1 WARRANTIES IN TERMS OF SCHEDULE 3: Subject to such matters as are
contained in the Disclosure Letter, the Sellers and each of them jointly
and severally hereby represent, warrant and undertake to the Purchaser as
of the date hereof and at the Closing Date in the terms of the Warranties
set out in Schedule 3.
4.2 SEPARATE AND INDEPENDENT: Each of the Warranties shall be construed as a
separate and independent representation and warranty and shall not be
limited or restricted by reference to the terms of any other provision of
this Agreement or any other Warranty.
4.3 NOTICE AND REMEDY FOR BREACH:
(a) At any time after Closing, upon becoming aware of any breach of
Warranty, the Purchaser shall be entitled to deliver to the Sellers a
notice specifying the Warranty or Warranties which is or are untrue or
incorrect by reference to the facts and circumstances subsisting at
the Closing with details of such facts or circumstances (a "BREACH
NOTICE").
(b) The Sellers shall, on receipt of a Breach Notice, have a period of
30 days (or such longer period as the Purchaser may agree) from the
date of receipt of the Breach Notice to remedy the matter giving rise
to the breach of Warranty (if capable of remedy) specified in such
Breach Notice.
4.4 DISCLAIMER: SAVE AS EXPRESSLY PROVIDED IN SCHEDULE 3 HEREOF, THE SELLERS
MAKE NO WARRANTIES, GUARANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE, WITH RESPECT TO THE AIRCRAFT OR ANY OF THEM.
THE PURCHASER HEREBY WAIVES RELEASES AND RENOUNCES ALL WARRANTIES,
OBLIGATIONS AND
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LIABILITIES OF THE SELLERS INCLUDING BUT NOT LIMITED TO (1) ANY IMPLIED
WARRANTY AS TO THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR
ANY PURPOSE, VALUE, CONDITION, DESIGN, USE OR OPERATION OF THE AIRCRAFT OR
ANY PAST PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE OR OTHERWISE, (2)
ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT (INCLUDING STRICT
LIABILITY), AND (3) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR
LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH
RESPECT TO THE AIRCRAFT, FOR ANY LIABILITY OF ANY LESSEE TO ANY THIRD
PARTY, FOR ANY LIABILITY OF THE PURCHASER TO ANY THIRD PARTY, OR FOR ANY
OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES; AND ALL SUCH WARRANTIES,
GUARANTEES, REPRESENTATIONS, OBLIGATIONS, LIABILITIES, RIGHTS, CLAIMS OR
REMEDIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY
EXCLUDED.
5. INDEMNITY
5.1 PURCHASER INDEMNITY: The Purchaser agrees to indemnify the Sellers and
their affiliates, and any of their successors and assigns, officers,
directors, servants, agents and employees (each a "PURCHASER
INDEMNITEE") from and against any claims, damages, losses, costs,
expenses, fees (including counsel's fees), payments, demands, liabilities,
actions, proceedings, penalties or fines (together, the "LOSSES") which
any Purchaser Indemnitee may incur or suffer, (i) in relation to any
Aircraft to the extent it arises out of a loss or liability relating to
acts or omissions (other than acts or omissions of a Purchaser Indemnitee)
after the Closing Date, or (ii) in relation to any misrepresentation or
breach of warranty, covenant or agreement made or to be performed by the
Purchaser pursuant to this Agreement (together the "PURCHASER
INDEMNITY"), provided that:-
(a) such loss or liability would exceed in the aggregate US$4.5 million
and, in such event, subject to clause 6 hereof, the Purchaser agrees
to indemnify for the full amount of such loss or liability; and
(b) the Purchaser Indemnity shall not extend to any claim on account of
any Taxes occasioned by any delivery of Aircraft.
5.2 SELLER INDEMNITY: The Sellers hereby jointly and severally agree to
indemnify the Purchaser and its affiliates, and any of their successors and
assigns, officers, directors, servants, agents and employees (each a
"SELLER INDEMNITEE" and, together with the Purchaser Indemnitees, the
"INDEMNIFIED PARTIES") against any Losses arising out of or resulting
from:-
(a) the breach by the Sellers of any Warranty;
(b) the breach of any covenant or agreement contained in this Agreement
by the Sellers; and
(c) Non-agreed Liabilities of the Companies or any of them not reflected
on the Reference Balance Sheets, whether arising before or after the
Closing Date, that are directly caused by any action or inaction on
the part of the
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Companies or any of them prior to the Closing Date other than any
actions or inactions in the ordinary course of the business of the
relevant Company,
in each case whether or not any action, investigation, litigation or
proceeding relating thereto is brought by the Purchaser, the Sellers or any
other Seller indemnitee and whether or not a Seller indemnitee is otherwise
a party thereto. To the extent that the Sellers' undertakings in this
Clause 5.2 may be unenforceable, the Sellers shall jointly and severally
contribute the maximum amount that it is permitted to contribute under any
applicable law to the payment and satisfaction of all Losses which any
Seller Indemnitee or any Company may incur or suffer,
PROVIDED THAT the indemnity contained in this clause 5.2 shall not extend
to or cover any liabilities or claims for Losses resulting from, incurred
in connection with or arising from a liability to Tax (it being the
intention of the parties that claims in respect of Tax would be subject
matter of the Deed of Tax Indemnity).
5.3 NOTICE OF CLAIMS:
(a) An Indemnified Party shall give the Purchaser or the Sellers (as the
case may be) (the "INDEMNIFYING PARTY") notice of any matter which
such Indemnified Party has determined has given, or could give, rise
to a right of indemnification under this Agreement, within sixty (60)
days of such determination. The notice shall state the amount of the
Loss, if known, and the method of its calculation and shall contain a
reference to the provisions of this Agreement in respect of which such
right of indemnification is claimed or arises.
(b) If an Indemnified Party receives written notice of any third party
claim or potential claim ("THIRD PARTY CLAIM") against it which is or
may be subject of a claim by it under the Purchaser Indemnity or the
Seller Indemnity (as the case may be), the obligations and liabilities
of the Indemnifying Party under this Clause 5 shall be subject to
the following terms and conditions:
(i) the Indemnified Party shall give written notice thereof to the
Indemnifying Party within thirty (30) days of receipt of such
notice provided that failure to give such notice shall not
release the Indemnifying Party from any of its obligations under
this clause 5 except to the extent such Indemnifying Party has
been released from any other obligation or liability that it may
have to an Indemnified Party otherwise than under this Clause 5;
(ii) the Indemnifying Party shall be entitled to assume and control
the defence of such Third Party Claim and take such further
action to contest, resist or appeal the validity, applicability
and amount of such claim in appropriate administrative or
judicial proceedings either:
(A) In the name of the Indemnified Party (provided the
Indemnifying Party shall Indemnify and secure the
Indemnified Party to its
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reasonable satisfaction against all losses costs damages and
expenses which may be incurred thereby), or
(B) In its own name,
in either case, at its own expense and through retaining legal
advisers of its choice provided that it gives notice of its
intention to do so to the Indemnified Party within five (5) days
of receipt of the notice of such Third Party Claim from the
Indemnified Party; provided however, that if there exists or is
reasonably likely to exist a conflict of interest that would make
it inappropriate in the judgment of the Indemnified Party, in its
sole and absolute discretion, for the same legal advisers to
represent both the Indemnified Party and the Indemnifying Party,
then the Indemnified Party shall be entitled to retain its own
legal advisers, in each jurisdiction for which the Indemnified
Party reasonably determines counsel is required, at the expense
of the Indemnifying Party. In the event that the Indemnifying
Party exercises its right hereunder to undertake the defence of
any such Third Party Claim, the Indemnified Party shall
co-operate with the Indemnifying Party in such defence as is
reasonably required by the Indemnifying Party. In the event that
the Indemnified Party is, directly or indirectly, conducting the
defence against any such Third Party Claim, the Indemnifying
Party shall co-operate with the Indemnified Party in such defence
as is reasonably required by the Indemnified Party. No such Third
Party Claim may be settled by the Indemnifying Party without the
prior written consent of the Indemnified Party.
5.4 TO BE MADE FREE FROM DEDUCTIONS: All sums payable under or pursuant to the
Purchaser Indemnity or the Seller Indemnity shall be paid free and clear of
all deductions or withholdings whatsoever save only as may be required by
law. If any such deductions or withholdings are required by law the
Indemnifying Party shall be obliged to pay to the Indemnified Party such
sums as will after such deduction or withholding have been made leave the
Indemnified Party with the same amount as it would have been entitled to
receive in the absence of any such requirement to make a deduction or
withholding together with interest on the amount payable by the
Indemnifying Party under this sub-clause at a rate equal to the rate of
interest applicable to the Class D Notes (as defined in the Notes
Indenture) in respect of the period commencing on the date upon which
payment of the full amount was due until payment by the Indemnifying Party
of such amount is made (both before and after judgment). If any sum payable
by the Indemnifying Party under or pursuant to the Purchaser Indemnity or
the Seller Indemnity is subject to tax in the hands of the Indemnified
Party the same obligation to make an increased payment shall apply in
relation to such tax liability as if it were a deduction or withholding
required by law. For the avoidance of doubt, the parties hereby agree and
confirm that any Indemnifying Party shall not be under any obligation to
make any payment to any Indemnified Party under this Clause 5.4 to the
extent that the Indemnified Party would be in a better position than if no
payment by way of indemnity was required to be made.
6. LIMITATIONS ON WARRANTIES AND INDEMNITY
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6.1 TIME LIMIT ON CLAIMS: No claim shall be brought by the Purchaser in respect
of any breach of the Warranties or under or pursuant to the Seller
Indemnity unless notice in writing of such claim (specifying in reasonable
detail (a) the event matter or default which gives rise to the claim, (b)
the breach that results and (c) the amount claimed) has been given to the
Sellers not later than; in the case of a tax Warranty, the expiration of a
period of seven (7) years from Closing or, in the case of any other
Warranty, the expiration of a period of three (3) years from Closing.
6.2 FINANCIAL LIMIT ON CLAIMS: Notwithstanding anything to the contrary
contained in this Agreement, the Deed of Tax Indemnity, or the Aircraft
Sale Agreements the maximum aggregate liability of:
(a) the Sellers and their Affiliates arising out of or resulting from or
by reason of any claims under or pursuant to (i) the Warranties, (ii)
the Seller Indemnity (iii) the Deed of Tax Indemnity and (iv) the
Aircraft Sale Agreements shall not exceed US$185 million; and
(b) the Purchaser arising out of or resulting from or by reason of any
claims under or pursuant to the representations and warranties
contained in this Agreement or the Purchaser Indemnity shall not
exceed US$5 million.
6.3 EXCLUSION OF SMALL CLAIMS: The Sellers shall only be liable in respect of
any claim brought by the Purchaser for a breach of the Warranties or Seller
Indemnity if the aggregate liability of the Sellers for such claims, when
aggregated with any claims under the Deed of Tax Indemnity, would exceed in
aggregate US$4.5 million (the "THRESHOLD"). In the event that such claim or
claims exceed the Threshold, the Sellers shall be liable (subject to clause
6.2 (a)) for the full amount of such claim.
6.4 RETROSPECTIVE LEGISLATION: The Sellers shall not be liable for any breach
of any of the Warranties if such breach arises as a result of any statute,
enacted or any amendment, modification or order made or Statutory
Instrument passed or the occurrence of any analogous event after this date.
6.5 LIABILITY OF SKYSCAPE: The Purchaser hereby acknowledges that Skyscape is a
party to this Agreement in its capacity only as holder of one Ordinary
Share in each of the Irish Companies as nominee for GPA. Skyscape's maximum
liability to the Purchaser in respect of any claims under this Agreement
(including any breaches of Warranty or under the Seller Indemnity) or under
the Deed of Tax Indemnity shall be limited to IR (pound) 1.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
WARRANTIES IN TERMS OF SCHEDULE 4: The Purchaser hereby represents,
warrants and undertakes to the Sellers and each of them in the terms of the
Purchaser Warranties.
8. ADDITIONAL COVENANTS AND AGREEMENTS
8.1 FURTHER ACTION: At the request of the Purchaser, the Sellers and each of
them shall (and shall procure that any other necessary parties shall)
execute and do all
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such documents acts and things as may reasonably be required subsequent to
Closing by the Purchaser in order to perfect the right, title and interest
of the Purchaser to and in the Shares and the AerCo USA Stock and to
procure the registration of the Purchaser as the registered holder of the
Shares and the AerCo USA Stock as appropriate.
8.2 INSURANCE: The Purchaser covenants and agrees to use its best endeavours to
procure or to cause the Lessees to continue to maintain in accordance with
the terms of the Leases until the third anniversary of the Closing Date,
insurances relating to the Aircraft naming as additional insureds those of
the Sellers or their Affiliates, or any existing Servicer of any of them,
who are named as insureds on the Insurance policies in effect at the
Closing Date. In the event that any such existing insurance coverage in
respect of the Sellers or their Affiliates, or any existing Servicer,
cannot be maintained, the Purchaser shall provide written notice to the
Seller before such coverage is terminated.
8.3 MANUFACTURERS' WARRANTIES/FURTHER ASSURANCE: The Sellers agree to assign,
or, as appropriate, to use their best endeavours to procure that their
Affiliates assign to the relevant Company, to the extent permitted by law,
any rights and benefits under any manufacturers' warranties still in effect
to the extent that they (a) relate to the Aircraft and (b) have not already
been assigned to the relevant Company. After the Closing Date, the
Purchaser and the Sellers agree to take all appropriate action which may be
reasonably necessary or advisable to carry out any of the provisions
hereof; provided that, with respect to carrying out the assignments
referred to in the preceding sentence, the Sellers shall not be obliged to
seek the consent of any such manufacturer.
9. CONDITIONS TO CLOSING
9.1 CONDITIONS TO OBLIGATIONS OF SELLERS: The obligation of the Sellers under
this Agreement are conditional upon satisfaction of the following
conditions on or prior to Closing:--
(a) compliance with rules regarding provision of financial assistance in
Ireland;
(b) all authorisations, consents, orders and approvals of Government
Authorities and officials listed in the Disclosure Letter having been
obtained in form and substance reasonably satisfactory to the Sellers;
(c) the representations and warranties of the Purchaser contained in this
Agreement being true and correct when made and being true and correct
in all material respects as of the Closing Date, other than such
representations and warranties as are made as of another date, and the
covenants and agreements contained in this Agreement to be complied
with by the Purchaser on or before Closing having been complied with
in all material respects, and the Seller having received a duly
executed certificate of the Purchaser to such effect;
(d) no Action having been commenced by or before any Governmental
Authority against either the Sellers, the Purchaser, the Companies or
any of them seeking to restrain or materially and adversely alter the
transactions
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contemplated by this Agreement which, in the reasonable, good faith
determination of the Sellers, is likely to render it impossible or
unlawful for any of the parties to perform their obligations
hereunder PROVIDED HOWEVER that this condition shall not apply to any
Action directly or indirectly solicited or encouraged by the Sellers;
(e) the Purchaser having performed or having satisfied in all material
respects all covenants, agreements and conditions on its part to be
performed or satisfied by it under this Agreement and, to the extent
required to be satisfied on or prior to the Closing Date, the Other
Transaction Documents and Related Documents to which it is a party,
and no material default having occurred and being still in existence,
or resulting from the execution, delivery or performance of this
Agreement under any Other Transaction Document;
(f) the Note Purchase Agreement having been duly entered into on terms
satisfactory to the Sellers and having become unconditional in all
respects save for any conditions relating to this Agreement or the
satisfaction of the conditions precedent hereunder;
(g) receipt of a certified copy resolution of the board of directors of
the Purchaser duly authorising the execution, delivery and
performance by the Purchaser of this Agreement and the Deed of Tax
Indemnity and the transactions contemplated hereby and thereby; and
(h) receipt of a certificate of the Secretary or Assistant Secretary of
the Purchaser certifying the names and signatures of each of the
directors or other officers of the Purchaser authorised to sign this
Agreement and the Deed of Tax Indemnity and the documents to be
delivered thereunder.
9.2 CONDITIONS TO OBLIGATIONS OF PURCHASER: The obligations of the Purchaser
under this Agreement are conditional upon satisfaction of the following
conditions on or prior to Closing:-
(a) compliance with rules regarding provision of financial assistance in
Ireland;
(b) all authorisations, consents, orders and approvals of Government
Authorities and officials listed in the Disclosure Letter having been
obtained in form and substance reasonably satisfactory to the
Purchaser;
(c) the Warranties being true and correct when made and being true and
correct as of the Closing Date other than such Warranties as are made
as of another date and the covenants and agreements contained in this
Agreement to be complied with by the Sellers on or before Closing
having been complied with in all material respects and the Purchaser
having received a duly executed certificate from the Sellers to such
effect;
(d) no Action having been commenced or threatened by or before any
Governmental Authority against the Sellers, the Purchaser, the
Companies or any of them seeking to restrain or materially and
adversely alter the transactions contemplated hereby which the
Purchaser reasonably believes is likely to render it impossible or
unlawful for any of the parties to perform
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their obligations hereunder or which could have a Material Adverse
Effect and the Purchaser having received a duly executed certificate
of the Sellers to such effect in regard to the Sellers and the
Companies; PROVIDED HOWEVER that this condition shall not apply to
any Action solicited or encouraged by the Purchaser;
(e) receipt of a certified copy resolution of the board of each of the
Sellers duly authorising the execution, delivery and performance by
the Sellers of this Agreement and the Deed of Tax Indemnity and the
transactions contemplated hereby and thereby;
(f) receipt of a certificate of the Secretary or Assistant Secretary of
each of the Sellers certifying the names and signatures of each of
the officers of the Sellers authorised to sign this Agreement and the
Deed of Tax Indemnity and the documents to be delivered thereunder;
(g) GPA having delivered to the Purchaser a certificate of solvency in
the form set out in Schedule 6A or such other form as may be agreed
with the Purchaser;
(h) the Note Purchase Agreement and Other Transaction Documents having
been duly entered into and having become unconditional in all
respects save for any conditions relating to this Agreement or the
satisfaction of the conditions precedent hereunder;
(i) insofar as not already provided to the Purchaser or held by the
Companies, receipt of:--
(i) the Leases (and, as regards the Aircraft with serial number 240,
the head lease), or confirmation (in terms satisfactory to the
Purchaser) that same are held to the order of the Purchaser or
the relevant Company; and
(ii) delivery acknowledgements or bills of sale evidencing the title
of the relevant Companies to the Aircraft PROVIDED that nothing
in this Clause shall compel the Sellers to produce any original
bills of sale at any location in the United Kingdom;
(j) the Purchaser having determined that each member of the Seller Group
has performed or caused to have performed on or prior to the Closing
Date each covenant, agreement, delivery or condition to be performed
or satisfied under all of the Leases on or prior to the Closing Date,
the non-performance of which, taken as a whole, would materially
affect the decision of a reasonable purchaser of the Notes to
purchase Notes;
(k) receipt of certified copies of the reports of the Appraisers;
(l) receipt of the Deed of Tax Indemnity duly executed by the Sellers;
(m) receipt of the Disclosure Letter (including any supplements to the
Closing Date). In form and substance reasonably satisfactory to the
Purchaser; and
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(n) receipt of an option of the Insurance Adviser.
9.3 LEGAL OPINIONS: The Sellers shall deliver to the Purchaser on or
immediately after Closing:-
(i) an opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ addressed to the Purchaser and
certain other parties and dated the Closing Date;
(ii) an opinion of Morris, James, Hitchens & ▇▇▇▇▇▇▇▇ with respect to the
transfer of the AerCo USA Stock, addressed to the Purchaser and
certain other parties and dated the Closing Date; and
(iii) an option of ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇ as to the efficacy of the
termination of the Voting Trust, addressed to the Purchaser and
certain other parties and dated the Closing Date.
9.4 FURTHER CONDITION AND AGREEMENT: The obligations of the Sellers and the
Purchaser under this Agreement are further conditional upon no change
having occurred after the date of this Agreement in any applicable law
which would make it illegal for any party to this Agreement or the Other
Transaction Documents or Related Documents to perform any of their
respective obligations under this Agreement or such Other Transaction
Documents or Related Documents; provided, however, that if any such change
has occurred in relation to this Agreement, the parties shall cooperate
and for such purposes use all reasonable endeavours to restructure their
respective obligations under this Agreement as to avoid the aforementioned
illegality.
10. MISCELLANEOUS
10.1 WAIVER: The Sellers or the Purchaser may (a) extend the time for the
performance of any of the obligations or other acts of the other party,
(b) waive any inaccuracies in the representations and warranties of the
other party contained in this Agreement or in any document delivered by
the other party pursuant hereto or (c) waive compliance with any of the
agreements or conditions of the other party contained herein. Any such
waiver or extension shall be valid only if set forth in an instrument in
writing signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or
a subsequent waiver of the same term or condition, or a waiver of any
other term or condition, of this Agreement. The failure by any party to
assert any of its rights hereunder shall not constitute a waiver of any of
such rights.
10.2 AGREEMENT NULL AND VOID: If this Agreement does not become unconditional
on or before 15 September 1998 (or such later day as the Sellers and the
Purchaser shall agree), then this Agreement shall be null and void and the
parties shall be released from their obligations hereunder. The Sellers
and the Purchaser shall use their respective best endeavours to ensure
that this Agreement becomes unconditional by such date.
10.3 EXPENSES: Except as otherwise specified in this Agreement, each party to
this Agreement shall pay its or his own costs of and incidental to this
Agreement and
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the sale and purchase hereby agreed to be made, whether or not Closing
shall have occurred.
10.4 NOTICES: Every notice, request, demand or other communication under this
Agreement shall:
(a) be in writing delivered personally, or by prepaid courier delivery
services such as Federal Express, DHL or other similar services, or
by telex (but only where being sent to a party for whom a telex
number is stated in paragraph (c) below) or facsimile (confirmed, in
the case of facsimile, by prepaid airmail letter sent within 24 hours
of dispatch but so that non-receipt of such confirmation shall not
affect in any way the validity of the facsimile in question);
(b) be deemed to have been received, subject as otherwise provided in this
Agreement, in the case of a facsimile or telex, at the time of
dispatch with confirmed answerback of the addressee appearing at the
beginning and end of the communication, (provided, however, that, in
the case of a facsimile, if the date of dispatch is not a business day
in the country of the addressee it shall be deemed to have been
received at the opening of business on the next such business day),
and in the case of a letter, when delivered personally; provided,
however, that if personal delivery or delivery by courier of a notice
is tendered but refused, such notice shall be effective upon such
tender; and
(c) be sent:-
if to the Sellers, to:
GPA House
Shannon
Co Clare
Ireland
Attn: Company Secretary
Facsimile: 00 353 61 360 220
if to the Purchaser, to:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Channel Islands
Attn: Mourant & Co. Secretaries Limited
Facsimile: 0044 1534 609 333,
with a copy to GPA Administrative Services Limited as Administrative
Agent at GPA House, Shannon, Co Clare, Ireland, Attn: Company
Secretary, Facsimile: 00 353 61 360503.
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10.5 SEVERABILITY: If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon any determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated by this
Agreement are effected as originally contemplated to the greatest extent
possible.
10.6 ASSIGNMENT: This Agreement shall be binding upon and enure to the benefit
of the successors of the parties but shall not be assignable by either the
Sellers or the Purchaser without the express written consent of the other
party (which consent may be granted or withheld in the sole discretion of
that other party) provided however that the Purchaser may assign this
Agreement to an Affiliate of the Purchaser without the consent of the
Sellers.
10.7 AMENDMENT: This Agreement may not be amended except (a) by an instrument in
writing signed by or on behalf of the Sellers and the Purchaser or (b) by a
waiver in accordance with clause 10.1 hereof.
10.8 APPLICABLE LAW AND JURISDICTION:
(a) This Agreement shall be governed by and construed in accordance with
the laws of Ireland, except that the warranties relating to AerCo USA
set out in Part 2 of Schedule 3 and the definition of "Solvency" as it
relates to AerCo USA shall be interpreted in accordance with the laws
of the State of New York.
(b) Each of the parties hereby submits to the non-exclusive jurisdiction
of the courts of Ireland. The Purchaser hereby irrevocably:-
(i) waives any objections on the ground of venue or forum non
conveniens or any similar grounds; and
(ii) consents to service of process by mail or in any other manner
permitted by applicable law.
(c) The Purchaser shall at all times maintain an agent for service of
process in Ireland. The Purchaser appoints GPA Administrative Services
Limited, of GPA House, Shannon, Co ▇▇▇▇▇, Ireland, Attn: Company
Secretary, as such agent. Any writ, judgment or other notice of legal
process issued out of the courts in Ireland in respect of this
Agreement shall be sufficiently served on the Purchaser if delivered
to such agent at its address for the time being. The Purchaser
undertakes not to revoke the authority of the above agent and if, for
any reason, such agent no longer serves as agent of the Purchaser, the
Purchaser shall promptly appoint another such agent and advise the
Sellers thereof.
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10.9 SURVIVAL AFTER CLOSING: The provisions of this Agreement in so far as the
same shall not have been performed at Closing shall remain in full force
and effect notwithstanding Closing.
10.10 COUNTERPARTS: This Agreement may be executed in one or more counterparts
and by the different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties have executed this Agreement on the date written
above.
Signed by __________________
the duly authorised attorney
of GPA GROUP PLC
in the presence of:
Signed by __________________
the duly authorised attorney
of SKYSCAPE LIMITED
in the presence of:
Signed by __________________
for and on behalf
of AERCO LIMITED
in the presence of:
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SCHEDULE 1 -- DETAILS RELATING TO THE SHARES AND AERCO USA STOCK
SHARES/AERCO USA STOCK HELD BY PRICE
TO BE SOLD
1 Irish Pound Share of GPA Group plc US$150,000
IR(Pound)1
and 150,000 Ordinary
Shares of US$1 in AerCo
Ireland Limited
1 Irish Pound Share of Skyscape Limited
IR(Pound)1 in AerCo
Ireland Limited
1 Irish Pound Share of GPA Group plc US$150,000
IR(Pound)1 and 150,000
Ordinary Shares of US$1
in AerCo Ireland Limited
1 Irish Pound Share of Skyscape Limited
IR(Pound)1 in AerCo
Ireland II Limited
10,000 shares of GPA Group plc US$10,000
Common Stock of AerCo
USA Inc of par value $1
per share
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SCHEDULE 2 - FURTHER INFORMATION CONCERNING THE COMPANIES
1. AERCO IRELAND LIMITED
Incorporated in Ireland under the Companies Acts, 1963 - 1990 on 21 November
1997 under the name Moomington Limited and changed its name to its current name
on 16 May 1998.
REGISTERED NUMBER: 275814
REGISTERED OFFICE: ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇
DIRECTORS:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
SECRETARY:
▇▇▇▇ ▇▇▇▇▇▇▇
AUDITORS:
AUTHORISED SHARE CAPITAL: IR(pound)100,000 divided into 100,000 Irish Pound
shares of IR(pound)1 each, and US$1,000,000 divided into 1,000,000 Ordinary
Shares of US$1 each.
ISSUED SHARE CAPITAL; IR(pound)2 divided into 2 Irish Pound shares of
IR(pound)1 each, and US$150,000 divided into 150,000 Ordinary Shares of US$1
each, held as follows:
REGISTERED HOLDER BENEFICIAL OWNER SHARES HELD
GPA Group plc GPA Group plc 1 IR(pound)1 Irish Pound share
GPA Group plc GPA Group plc 150,000 US$1 Ordinary shares
Skyscape Limited GPA Group plc 1 IR(pound)1 Irish Pound share
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2. AERCO IRELAND II LIMITED
Incorporated in Ireland under the Companies Acts, 1963 - 1990 on 21 November
1997 under the name Littsfield Limited and changed its name to its current name
on 28 April 1998.
REGISTERED NUMBER: 275810
REGISTERED OFFICE: ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇
DIRECTORS:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
SECRETARY:
▇▇▇▇ ▇▇▇▇▇▇▇
AUDITORS:
AUTHORISED SHARE CAPITAL: IR(pound)100,000 divided into 100,000 Irish Pound
shares of IR(pound)1 each, and US$1,000,000 divided into 1,000,000 Ordinary
Shares of US$1 each.
ISSUED SHARE CAPITAL: IR(pound)2 divided into 2 Irish Pound shares of
IR(pound)1 each, and US$150,000 divided into 150,000 Ordinary Shares of
US$1 each, held as follows:
REGISTERED HOLDER BENEFICIAL OWNER SHARES HELD
GPA Group plc GPA Group plc 1 IR(pound)1 Irish Pound share
GPA Group plc GPA Group plc 150,000 US$1 Ordinary Shares
Skyscape Limited GPA Group plc 1 IR(pound)1 Irish Pound share
26
3. AERFI BELGIUM N.V.
Incorporated in Belgium on 31 January 1985 under the name Guinness Peat Aviation
(Belgium) N.V. and changed its name to its current name on 8 April 1998.
REGISTERED NUMBER: 467580
REGISTERED OFFICE: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
DIRECTORS:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
AUDITORS:
KPMG
Authorised share capital: BEF1,250,000 divided into 1,250 shares with no par
value
Issued shares: 1,250 shares with no par value held as follows:
REGISTERED HOLDER BENEFICIAL OWNER SHARES HELD
GPA Group plc GPA Group plc 1,249
Skyscape Limited Skyscape Limited 1
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4. AERCOUSA INC.
Incorporated in Delaware on 13 July 1997 under the name Elasis Leasing USA Inc.
and changed its name to its current name on 13 April 1998.
REGISTERED OFFICE: c/o Nationwide Information Services, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DIRECTORS:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
OFFICERS:
President - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary and Treasurer - ▇▇▇▇▇ ▇▇▇▇
AUDITORS:
AUTHORISED SHARE CAPITAL: US$10,000 divided into 10,000 shares of US$1 each
ISSUED STOCK:
10,000 shares of Common Stock of par value $1, held by First Security Bank,
National Association, under terms of Voting Trust Agreement dated as of 22 April
1998 among GPA Group plc, AerCoUSA and First Security Bank, National Association
as amended on 9 July 1998; all Voting Certificates under the Voting Trust
Agreement are owned by GPA Group plc.
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SCHEDULE 3 - REPRESENTATIONS AND WARRANTIES OF SELLERS
PART 1 - GENERAL MATTERS AND MATTERS RELATING TO ALL OF THE COMPANIES
1. SELLERS
Each of the Sellers is duly incorporated and validly existing under the
laws of Ireland and each has all necessary power and authority to enter
into this Agreement and the Deed of Tax Indemnity and to carry out its
obligations thereunder. The execution and delivery of this Agreement and
the Deed of Tax Indemnity by each Seller and the performance of its
obligations thereunder have been duly authorised by all requisite action on
its part. This Agreement and the Deed of Tax Indemnity have been duly
executed and delivered by the Sellers and (assuming due authorisation,
execution and delivery by the Purchaser) constitute legal, valid and
binding obligations of each of the Sellers.
2. NO CONFLICTS
The entry into and performance by each Seller of this Agreement, and the
transactions contemplated hereby, do not and will not conflict with or
violate:
(a) the constitutional documents of such Seller or any of the Companies;
or
(b) any laws, rules, regulations, orders, judgments or decrees binding on
such Seller or any of the Companies; or
(c) in any material respect, any material agreement, instrument or
document which is binding upon such Seller or any of the Companies or
any of their respective assets nor result in the creation of any
Lien, other than Permitted Liens, over any of their assets to be
transferred to the Purchaser hereunder.
3. GOVERNMENT CONSENTS AND APPROVALS
(a) The execution, delivery and performance of this Agreement by each
Seller does not require any material consent, approval, authorisation
or other order of, action by, filing with or notification to any
Governmental Authority, other than (a) such consent, approval,
authorisation or other order, or action by, filing with or
notification to any Governmental Authority that will be made or
obtained at or prior to Closing or (b) as described in the Disclosure
Letter.
4. FULL AND FINAL TRANSFER
The sale of the Shares contemplated by this Agreement shall constitute,
following registration in the Registers of Members of the Irish Companies,
a full and final transfer of the legal and beneficial ownership of the
Shares to the Purchasers and/or its nominee(s) and after Closing the
Sellers shall retain no right, title or interest therein.
The sale of the AerCo USA Stock pursuant to the terms and conditions of
this Agreement shall constitute a full and final transfer of the legal and
beneficial
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ownership of GPA's right, title and interest in the AerCo USA Stock to the
Purchaser and after Closing GPA shall retain no right, title or interest
therein.
5. LITIGATION
No litigation, arbitration or administrative proceeding or claim which
could reasonably by itself or together with any other such proceedings or
claims:-
(a) have a Material Adverse Effect or
(b) materially adversely affect any Seller's ability to observe or perform
any of its obligations hereunder or challenge the legality, validity
or enforceability of this Agreement or the transactions contemplated
hereby
is at present in progress or pending or threatened in writing against any
Seller or any of the Companies (other than, in the case of proceedings
involving the Sellers or either of them, any which such Seller is
contesting in good faith by appropriate proceedings and in respect of which
proper provision has been made) except as set forth in the Disclosure
Letter which describes the parties, nature of the proceedings, the date and
method commenced, the amount of damages or other relief sought and, if
applicable, paid or granted.
6. COMPLIANCE WITH LAWS
6.1 None of the Companies has violated any applicable laws or Governmental
Orders in any material respect.
6.2 Save to the extend that same is the responsibility of the Lessee under the
Lease of an Aircraft, each of the Companies has obtained and is maintaining
all material permits, licences, authorisations, certificates, exemptions
and approvals necessary to enable it to carry on its business (including in
regard to any environmental matters) (collectively, "PERMITS") and failure
to obtain which would give rise to a fine, penalty or other liability or
sanction on the part of such Company and all such Permits are in full force
and effect.
7. MATERIAL CONTRACTS
7.1 None of the Companies is party to any contract other than the Aircraft
Purchase Agreements, the Leases and head leases (details of which are set
out in Schedule 8) the Intra-Group Debt and Other Transaction Documents and
Related Documents;
8. AIRCRAFT
8.1 LIST OF AIRCRAFT
Schedule 8 of this Agreement lists:
(a) each Aircraft and Engine owned by the Companies as of the date hereof
and each Aircraft (including Engines) which the Companies have
contracted to acquire on or prior to Closing;
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(b) each Lease, and, in the case of the Aircraft with serial numbers
240 and 22496, the head leases and, in the case of the Aircraft
with serial number 46064, the sub-lease
(c) the Initial Appraised Value of each such Aircraft.
No head lease is in effect in respect of any Aircraft other than the
Aircraft with serial numbers 240 and 22496 and no sub-lease is in
effect in respect of any of the Aircraft other than the Aircraft with
serial number 46064.
8.2 TITLE TO ASSETS
The Companies have or will at Closing have full legal and beneficial
title to their respective Aircraft free and clear from any Liens (other
than Permitted Liens).
8.3 THE LEASES AND RELATED MATTERS
At Closing, the Sellers shall have delivered or shall have caused a
copy of each Lease (and, where applicable, head lease) and related
collateral document to which a Company is party (or to which a Company
will become party on Closing) to be delivered to or made available to
or held to the order of the Purchaser or the relevant Company.
(a) Each Lease, and, where applicable, head lease, constitutes the
whole agreement between the parties thereto relating to the
applicable Aircraft other than agreements the existence of which
would not individually or taken together with all other such
agreements in respect of the Leases materially affect the decision
of a reasonable purchaser of the Notes to purchase Notes;
(b)(i) The Disclosure Letter contains details of any current Events of
Default (as such term is defined in such Lease) under each
Lease and, where applicable, head lease involving failure by
the Lessee to make any payment when due under such Lease or
head lease, as at 30 June 1998;
(ii) To the knowledge of such Seller no other material Events of
Default under any Lease (or, where applicable, head lease) (as
such term is defined in such Leases) have occurred and are
continuing;
(c) No Event of Loss or Casualty Occurrence under any Lease (as such
terms are defined in such Lease) has occurred;
(d) To the Sellers' knowledge, there are no outstanding claims which
have been validly asserted by any Lessee arising out of any Lease
(or, where applicable, head lease), other than claims constituting
Permitted Liens;
(e) To the Sellers' knowledge, no event has occurred or act or thing
has been done or omitted to be done by any of the Sellers or the
Companies pursuant to which or as a result of which any of the
Leases (or, where applicable, head lease) can be terminated or
obligations of any such party thereunder would be rendered
invalid, illegal or unenforceable;
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(f) To the Sellers' knowledge, there are no Aircraft subject to a Lease
with respect to which certificates of airworthiness are not in force;
and, based on the existence of such certificates of airworthiness, the
Sellers have no reason to believe that any compulsory airworthiness
directives are outstanding against any Aircraft;
(g) No claims for contributions to the cost of compliance with
airworthiness directives pursuant to the terms of any lease (or, where
applicable, head lease) by the Sellers or the Companies are
outstanding against any Aircraft;
(h) Since the date of the Appraisers' reports, none of the Aircraft has
been involved in any incident which caused damage in excess of the
relevant Damage Notification Threshold (as defined in the relevant
Lease); and
(i) The rental set out in Schedule B is the current rental payable in
respect of the relevant Aircraft and there are no separate agreements
or understandings with respect to such Aircraft or all of the Aircraft
taken as a whole, which would materially affect the decision of a
reasonable purchaser of the Notes to purchase Notes.
9. EMPLOYMENT
None of the Companies has or has ever had any employees.
10. INSURANCES
10.1 The opinion of the Insurance Adviser, with respect to the insurances
maintained by the Companies in respect of the Aircraft, Engines and Parts,
will be delivered by Closing.
10.2 All material assets, properties and risks of the Companies are, and for the
past five years (or, if shorter, since incorporation) have been, covered by
valid and, except for policies that have expired under their terms in the
ordinary course, currently effective insurance policies of insurance
(including, without limitation, general liability insurance, property
insurance and political risk insurance) issued in favour of the Companies,
as the case may be, in each case with responsible insurance companies, in
such types and amounts and covering such risks as are consistent with
customary practices and standards of companies engaged in businesses and
operations similar to those of the Companies, as the case may be. At the
time of Closing, and upon the completion of the transactions contemplated
hereby, all insurance policies currently in effect will be outstanding and
duly in force. The Disclosure Letter sets out a true and complete list of
all insurance policies maintained by or for the Companies other than those
which are referred to in the opinion of the Insurance Advisor. All such
insurance policies are in full force and effect; the Companies have duly
paid or have required Lessees to pay or have otherwise caused to be paid
all premiums accrued thereon and no notice of termination has been received
from any issuer of any such policies.
11. BANK ACCOUNTS
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A statement of all bank, deposit or similar accounts of the Companies and
of the credit or debit balance thereon at the Reference Balance Sheet Date
is included in the Disclosure Letter and the Companies do not maintain any
other accounts with any bank or other lender or deposit taken and there
have been no payments out of any such accounts not reflected therein.
12. RELATIONS WITH SELLER GROUP
None of the Companies has taken part in the management of the affairs of
any members of the Seller Group or has held itself out as being liable or
responsible for any debts or liabilities of any member of the Seller Group.
13. INTRA-GROUP DEBT
Schedule 7 sets out all of the debt owed by the Companies to GPA as at
Closing. None of the Companies has or will at Closing have any indebtedness
to any member of the Seller Group other than as set out in Schedule 7.
14. DISCLOSURE OF INFORMATION
14.1 ALL DISCLOSURES MADE
The Sellers are not aware of any facts pertaining to the Companies which
would result in a Material Adverse Effect or would affect the decision of a
reasonable purchaser of the Notes to purchase Notes and which have not been
disclosed in (a) this Agreement, (b) the Disclosure Letter, (c) the AerFi
Accounts, the Reference Balance Sheets or any related notes, schedules or
auditors reports thereon or (d) have otherwise been previously disclosed
to the Purchaser by the Sellers in writing.
14.2 None of the Warranties, or any warranties of the Sellers in connection with
the transactions contemplated by this Agreement, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein
not misleading. All information in the Disclosure Letter is true and
correct in all material respects.
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PART 2 - THE IRISH COMPANIES AND AERFI BELGIUM
1. GENERAL
Each of the Irish Companies and AerFi Belgium is duly incorporated and
validly existing under the laws of the jurisdiction of its incorporation
and has all necessary power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on
its business as it has been and is currently conducted. All corporate
actions taken in connection with this Agreement by the Irish Companies and
AerFi Belgium have been duly authorised and none of the Companies has taken
any action that in any respect conflicts with, constitutes a default under
or results in a violation of, any provision of its constitutional
documents. True and correct copies of the certificates of incorporation and
constitutional documents of each of the Irish Companies, each as in effect
on the date hereof, have been delivered by the Sellers to the Purchaser or
to its order.
2. SHARE CAPITAL
(a) The information relating to the Irish Companies and AerFi Belgium in
the Recitals and Schedules 1 and 2 is and will on Closing be accurate
and complete in all respects. The issued share capitals of the Irish
Companies and AerFi Belgium will be fully paid up and beneficially
owned by the persons set out in the relevant Schedule in the
proportions set out therein;
(b) On Closing, the Sellers will be entitled to sell and transfer to the
Purchaser the full legal and beneficial ownership of the Shares free
from any Lien on the terms set out in this Agreement. Immediately upon
Closing, the Shares will be legally and beneficially owned by the
Purchaser free and clear of any Liens (other than Liens in favour of
Bankers Trust under the Related Documents); and
(c) Other than the transactions contemplated by this Agreement and the
Other Transaction Documents or Related Documents, there will be no
options or other agreements (including conversion rights) in force on
Closing which call or may call for the present or future issue of or
accord to any person the right to call for the issue of any share or
loan capital of any of the Irish Companies or AerFi Belgium and there
has been no exercise, purported exercise, or claim of any charge,
lien, encumbrance or equity over any of the issued or unissued share
capital or loan capital or any of the Irish Companies or AerFi
Belgium.
3. STATUTORY BOOKS
The register of members and other statutory books of each of the Irish
Companies and AerFi Belgium are in the possession or held to the order of
such Company, have been properly maintained and contain accurate and
complete records of all matters with which they should deal and do not
contain or reflect any material inaccuracies or discrepancies and none of
the Companies has received any notice or allegation that any of the
foregoing is incorrect and, in
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particular, none of the Companies has received any notice of any intended
application or proceedings to rectify the said registers.
4. SUBSIDIARIES
(a) The Sellers will be entitled on Closing to the full beneficial
ownership of the shares in AerFi Belgium free from any Lien.
(b) None of the Irish Companies is the holder or beneficial owner of, or
has agreed to acquire, any share or loan capital of any other body
corporate, or is a member of any joint venture or partnership or other
unincorporated association.
5. PURCHASE OF OWN SHARES
Save as disclosed or as may arise in connection with the Related Documents,
none of the Irish Companies has purchased, redeemed or repaid any share
capital or given any financial assistance in connection with any
acquisition of share capital as would fall within Section 60 of the
Companies ▇▇▇ ▇▇▇▇ and Part XI of the Companies ▇▇▇ ▇▇▇▇, and AerFi Belgium
has not purchased, redeemed or repaid any share capital or given any
financial assistance in connection with any acquisition of share capital
which would fall within the equivalent provisions under the laws of
Belgium.
6. SHARES
The Minister has not made:
(a) any request under Section 15 of the Companies ▇▇▇ ▇▇▇▇ to any person
in respect of the ownership of the Shares or any of them;
(b) any direction under Section 16 of that Act in respect of the Shares or
any of them; or
(c) any direction to either of the Irish Companies under Section 19(1) of
that Act.
7. DIRECTORS
(a) The only directors of the Irish Companies and AerFi Belgium are the
persons whose names are listed in Schedule 2.
(b) In regard to the Irish Companies, no other individual is a shadow
director (within the meaning of Section 27 of the Companies Act 1990).
8. COMPANIES FILINGS
All documents relating to the Irish Companies required to be filed with the
Registrar of Companies pursuant to the Companies Acts, 1963 to 1990 and
the European Communities (Companies) Regulations 1973, and all documents
relating to AerFi Belgium which require to be filed under the equivalent
Belgian
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legislation, have been duly filed and all statutory records required to be
kept by the Irish Companies and AerFi Belgium have been properly kept and
will be so kept until Closing.
9. MISCELLANEOUS
(a) None of the Irish Companies or AerFi Belgium has at any time been
struck off the register maintained by the Registrar of Companies in
the relevant jurisdiction.
(c) None of the Irish Companies has at any time:
(i) had a notice served on it by its auditors under Sections 185 or
194 of the Companies ▇▇▇ ▇▇▇▇;
(ii) entered into any transaction or arrangement within the terms of
Section 29 of the Companies ▇▇▇ ▇▇▇▇; and
(iii) entered into any transaction or arrangement within the terms of
Section 31 of the Companies ▇▇▇ ▇▇▇▇ or which would, but for
Section 32 to 37 of that Act, be prohibited by Section 31.
10. ACCOUNTS AND BALANCE SHEET
10.1 THE ACCOUNTS
(a) True and complete copies of the AerFi Accounts have been delivered by
the Sellers to the Purchaser.
(b) Each of the Irish Companies was incorporated on 21 November 1997 and
no statutory accounts have been prepared in respect of either of them.
10.2 REFERENCE BALANCE SHEETS
The Reference Balance Sheets represent fairly in all material respects the
financial positions of each of the Irish Companies and AerFi Belgium as
they would have been at 31 March 1998, had the transfers of shares and
aircraft, and the lease novations, assignments and amendments, contemplated
by the Aircraft Sale Agreement, the Lease Novations been completed as at
that date, and had AerFi Belgium been a subsidiary of AerCo Ireland II at
that date, and are prepared on a basis consistent with the accounting
policies of the Seller Group at the Reference Balance Sheet Date.
10.3 RECORDS
The books of account and other financial records of the Irish Companies and
AerFi Belgium:
(a) contain proper records of all matters required to be entered therein
by, in the case of the Irish Companies, the Companies Acts, 1963 to
1990 and
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any other Acts or regulations or orders for the time being in force
and, in the case of AerFi Belgium, the equivalent Belgian
legislation;
(b) do not contain or reflect any inaccuracies or discrepancies which
will, taken together, have a Material Adverse Effect; and
(c) have been maintained in accordance with good business and accounting
practices.
10.4 No guarantee has been executed or filed by either of the Irish Companies
with the Registrar of Companies pursuant to Section 17 of the Companies
(Amendment) ▇▇▇ ▇▇▇▇.
10.5 LIABILITIES
There are no Liabilities of the Irish Companies or AerFi Belgium other
than Liabilities (a) reflected or reserved against on the AerFi Accounts
or the Reference Balance Sheets, (ii) disclosed in the disclosure Letter
or (iii) Liabilities not being Liabilities in respect of borrowed monies)
incurred since the date of the Reference Balance Sheet in the ordinary
course of business and consistent with the past practice of the Companies
and which do not have a Material Adverse Effect or (iv) the Intra Group
Debt. Reserves are reflected on the Reference Balance Sheet against all
Liabilities of the Companies in amounts that have been established on a
basis consistent with the past practices of the Seller Group.
11. COMPETITION LAW
None of the Irish Companies or AerFi Belgium is or has been a party to, or
engaged in, any agreement, arrangement, decision, concerted practice, or
activity which contravenes the provisions of any competition, anti-trust,
anti-monopoly or anti-cartel law of any jurisdiction, including without
limitation Article 85 of the Treaty of Rome and the provisions of the
Competition ▇▇▇ ▇▇▇▇.
12. MERGER CONTROL LEGISLATION
None of the Irish Companies has been involved in any merger or take-over
prior to the date of this Agreement nor been the object of a report of the
Competition Authority under Section 8(1) of the Mergers Act or its Belgian
equivalent or has been involved in any arrangement or transaction or
agreement which is or was a concentration with a community dimension
within the meaning of Council Regulation (EEC) No. 4064/89 of 21 December
1989 on the control of concentrations between undertakings (the "MERGER
CONTROL REGULATION") and none of the Irish Companies is or has been
involved prior to or at the date of this Agreement in any arrangement or
transaction or agreement which at the request of a Member State has been
the subject of findings or decisions of the Commission of the European
Communities pursuant to Article 22 of the Merger Control Regulation.
13. RECEIVERS/EXAMINERS/LIQUIDATORS
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(a) No distress, execution or other process has been levied in respect
of either of the Irish Companies or AerFi Belgium which remains
undischarged and there is no unfulfilled or unsatisfied judgment or
Court order outstanding against either of the Irish Companies or
AerFi Belgium.
(b) No receiver or manager or, (as regards AerFi Belgium), special
administrator or equivalent officer has been appointed of the whole
or any part of the assets or undertaking of either of the Irish
Companies or AerFi Belgium.
(c) None of the Irish Companies nor AerFi Belgium is insolvent nor has
any of them stopped or suspended payment of its debts or sought
from its creditors significant extensions of time for the payment
of its debts and AerFi Belgium has not applied for a composition
with its creditors.
(d) No meeting has been convened at which a resolution will be
proposed, no resolution has been passed, no petition has been
presented and no order has been made for the winding-up of either
of the Irish Companies or AerFi Belgium.
(e) No arrangement or reconstruction has been proposed under Section
201 of the Companies ▇▇▇ ▇▇▇▇ in respect of either of the Irish
Companies.
(f) No examiner is, or has been, appointed to any of the Companies
under the Companies (Amendment) ▇▇▇ ▇▇▇▇ and there is no petition
pending or threatened in respect of such an appointment.
(g) No order has been made or circumstances arisen which could give
rise to any order being made against the Companies or any of them
under Section 140 of the Companies Act, 1990.
(h) None of the Companies has at any time acquired any property in
circumstances which may lead to an application under Section 139 of
the Companies ▇▇▇ ▇▇▇▇ for an order of the Court on terms
contemplated by that Section.
(i) No event analogous to any of the foregoing has occurred outside
Ireland.
(j) No circumstances have arisen which entitle any person to take any
action, appoint any person, commence proceedings or obtain any
order of the type mentioned in any part of this paragraph 13.
14. Taxation - Irish Companies
General
14.1 All taxation of any nature whatsoever or other sums imposed charged
assessed levied or payable under the provisions of applicable legislation
relating to taxation for which either of the Irish Companies is liable as
a result of any act or omission by such Company prior to Closing will if,
and in so far as such taxation or other sums ought to be paid prior to or
on Closing, have been paid at or before Closing
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and in particular, but, without prejudice to the generality of the
foregoing, at Closing, all amounts due for payment to the Revenue
Commissioners in respect of excise duty and of Value Added Tax in respect
of goods or services supplied prior to Closing or goods imported prior to
Closing will have been paid so that neither of the Irish Companies will
have any liability in respect thereof.
14.1A Neither of the Irish Companies pays emoluments to its directors.
14.2 Neither of the Irish Companies has acquired or disposed of any asset or
entered into any transaction otherwise than by way of bargain at arm's
length.
14.3 There is no appeal by either of the Irish Companies pending against any
assessment to tax and neither of the Irish Companies is in default in
payment of any tax within the period prescribed for payment thereof.
14.4 Neither of the Irish Companies has committed any act nor made any omission
which might constitute an offence under Section 1078 of the TCA. [aiding,
abetting, assisting etc. tax evasion]
14.5 Neither of the Irish Companies has been at any time, for taxation
purposes, resident in any jurisdiction other than Ireland nor has it been
at any time managed or controlled in or from any country other than
Ireland and neither of the Irish Companies has at any time carried on any
trade in any other country.
14.6 Each of the Irish Companies has for each accounting period up to and
including the accounting period ending on the Reference Balance Sheet Date
furnished such Company's Inspector of Taxes with full and accurate
particulars relating to the affairs of any of the Irish Companies, and
also has properly and within the prescribed periods of time made all
returns and given or delivered all notices, accounts and information
required for the purpose of taxation, and all such have been correct in
all material respects and on a proper basis and none such are disputed by
the Revenue Commissioners or other authority concerned, there are no
grounds or circumstances which might cause any such dispute and any of the
Irish Companies has made all claims which would be of benefit to it within
the time limits laid down in the relevant legislation.
14.7 To the best of the knowledge and belief of the Sellers, neither of the
Irish Companies has entered into or been a party to any schemes or
arrangements designed partly or wholly for the purpose of avoiding
taxation. Neither of the Irish Companies has been involved in any "tax
avoidance transaction" within the meaning of Section 811 of the TCA and no
provisions of that Section apply to either of the Irish Companies in
respect of any event (whether or not involving either of the Irish
Companies) which took place before Closing or in respect of any series of
events (whether or not such events or any of them involve any of the Irish
Companies) taking place partly before Closing and partly after Closing.
[transactions to avoid tax liability]
14.8 No act or transaction has been effected in consequence of which any of the
Irish Companies is liable for any taxation primarily chargeable against
some other company.
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14.9 The making of returns, payment of preliminary tax and all other
requirements of Part 41 of the TCA have been complied with fully by each
of the Irish Companies.
14.10 No surcharge for late submission of returns under Section 1084 of the TCA
has or will become payable by either of the Irish Companies in respect of
any period prior to Closing.
14.11 No notice of attachment has been served on either of the Irish Companies
or in relation to any funds of either of the Irish Companies under section
1002 of the TCA. [attachment of defaulter's funds]
CORPORATION TAX
14.12 (a) Neither of the Irish Companies has paid remuneration to its directors;
and
(b) Neither of the Irish Companies has paid or agreed to pay remuneration
or compensation for loss of office or made or agreed to make any
gratuitous payment or any other payment in respect of management or
other services rendered or to be rendered to either of the Irish
Companies to any of its directors.
14.13 Neither of the Irish Companies has, within the meaning of Part 18, 1 of
the TCA, received payment in respect of professional services from an
accountable person. [withholding tax on professional fees]
14.14 Each of the Irish Companies has duly complied with the requirements of
Section 239 of the TCA [payments made under deduction of tax] and with the
requirements of all other provisions relating to the deduction and
withholding of tax at source up to the date hereof and all such tax which
has become due to the Revenue Commissioners has been paid to the Revenue
Commissioners.
14.15 The limitation on the meaning of "distribution" provided for by Sections
133 and 134 of the TCA does not apply to any financial arrangements of
either of the Irish Companies. [limitation on use of Section 130 finance]
14.16 Neither of the Irish Companies has effected or entered into any act
transaction or arrangement of any nature whereby it has incurred or may
hereafter incur any liability under or by virtue of any of Sections 98,
99, 100 and 103 of the TCA. [treatment of premiums on rental income]
14.17 Neither of the Irish Companies is liable to make a subvention payment or
any other payment for an amount surrendered by any other company under or
in connection with the provisions of Section 411 of the TCA. [payment for
group relief]
14.18 Neither of the Irish Companies has at any time:-
(a) repaid or redeemed or agreed to repay or redeem any shares of any
class of its share capital or otherwise reduced or agreed to reduce
its issued share capital or any class thereof; or
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(b) capitalised or agreed to capitalise in the form of shares, debentures
or other securities or in paying up any amounts unpaid on any shares
debentures or other securities any profits or reserves of any class
or description or passed or agreed to pass any resolution to do so;
or
(c) provided capital to any company on terms whereby the company so
capitalised has in consideration thereof issued shares loan stock or
other securities where the terms of any such capitalisation were
otherwise than by way of a bargain made at arm's length or where the
shares loan stock or other securities acquired are shown in [any
relevant accounts] at a value in excess of their market value at the
time of acquisition.
14.19 No allowable loss which has arisen or which may hereafter arise on the
disposal by either of the Irish Companies of shares in or securities of
any company is liable to be disallowed in whole or in part by virtue of
the application of Section 621 [transactions in a group] or Section 622
[dividend stripping] of the TCA. [anti avoidance provisions]
14.20 No change of ownership of either of the Irish Companies has taken place in
circumstances such that Section 401 of the TCA [change in ownership of
Company; disallowance of trading losses] has or may be applied to deny
relief for a loss or losses incurred by either of the Irish Companies.
14.21 The restrictions on the use of capital allowances for certain leased
assets as set out in Section 403 of the TCA do not have application to any
transactions entered into by either of the Irish Companies. [use of
capital allowances against leasing income only]
14.22 Neither of the Irish Companies has received notice under Section 445(4) or
(5) of the TCA and GPA has not received notice under section 445(4) or (5)
of the TCA in respect of any certificate relevant to, or the revocation of
which would adversely affect, the Irish Companies. [▇▇▇▇▇▇▇ Airport:
revocation of certain certificates]
14.23 The provisions of Section 1013 of the TCA do not apply to any transaction
entered into by either of the Irish Companies. [limited partnerships:
relief restrictions]
14.24 Neither of the Irish Companies has entered into any transaction as a
result of which it could be assessed to tax under Part 22, Chapter 1 of
the TCA. [transactions in land]
14.25 No allowance in respect of capital expenditure is or may be restricted by
virtue of Part 9 of, or paragraph 9 of Schedule 32 to, the TCA.
[limitation on 100% write off]
14.26 Neither of the Irish Companies has entered into or taken any steps the
object of which is a transaction which comes or may come within Section
817 of the TCA. [schemes to avoid liability to tax under Schedule F]
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14.27 Neither of the Irish Companies beneficially owns nor has it ever
beneficially owned shares to which Sections 155 and 489(14) of the TCA
apply or may have applied. [removal of tax free status from certain
dividends].
14.28 Neither of the Irish Companies owns or has ever owned an asset which
constitutes a material interest in an off-shore fund which is or has at
any time been a non qualifying off-shore fund within the terms of Part
27, Chapter 2 of the TCA [off-shore funds].
ADVANCE CORPORATION TAX ("ACT")
14.29 Neither of the Irish Companies has any liability to ACT under Part 6,
Chapter 8 of the TCA.
14.30 Neither of the Irish Companies has made an election under Section 165
[group dividends], and no surrender has been made under Section 166
[surrender of ACT], of the TCA.
14.31 Neither of the Irish Companies is affected by the provisions of Section
167 [carrying forward of ACT where change in ownership of company] or
Section 170 of the TCA. [application of ACT to interest on certain loans
- transitional provisions re S.130 loans]
CAPITAL GAINS TAX
14.32 Neither of the Irish Companies has made any claim under Section 597 of
the TCA [replacement of business assets: roll over relief] as respects
the consideration for the disposal of or of its interest in any assets
which are defined in the said Section 28 (amended as aforesaid) as "the
old assets".
14.33 Neither of the Irish Companies has made any such transfer as is referred
to in Section 589 of the TCA [transfers at undervalue] or received any
asset by way of gift as mentioned in Section 987 of the TCA.
14.34 Neither of the Irish Companies has been a party to or involved in any
share for share exchange nor any scheme of reconstruction or amalgamation
such as are mentioned in Sections 583 to 588 or 615 of the TCA under
which shares or debentures have been issued or any transfer of assets
effected.
14.35 Neither of the Irish Companies has entered into any transaction which
has, will or may give rise to a charge to tax under the provisions of the
TCA relating to companies' capital gains or under the provisions of the
Capital Acquisitions Tax ▇▇▇ ▇▇▇▇.
14.36 Neither of the Irish Companies has made any claim under Section 1005 of
the TCA [unremittable profits made abroad] and no tax liability has been
deferred under any other provision of the TCA including Sections 563 and
981. [e.g. instalment sales]
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14.37 Neither of the Irish Companies has entered into any transactions which
give rise to a liability under Sections 590(11), 616, 623, 625 or 626 of
the TCA. [capital gains tax group relief]
14.38 There have been no claims under Section 538(2) of the TCA. [capital losses
allowed where no sale]
14.39 Neither of the Irish Companies has entered into or taken any steps the
object of which is a transaction which comes within or might come within
Section 549 of the TCA [creation of capital gains tax losses].
STAMP/CAPITAL DUTY
14.40 All documents in the possession or under the control of either of the
Irish Companies which attract stamp duty have been properly stamped.
14.41 No relief, exemption or reduction has been obtained from Irish Companies
capital duty or stamp duty and without prejudice to the generality of the
foregoing no relief, exemption or reduction has been obtained from Irish
Companies capital duty or stamp duty under Section 72 of the Finance ▇▇▇
▇▇▇▇ [reconstruction or amalgamation] or from stamp duty under Section 19
of the Finance ▇▇▇ ▇▇▇▇ or Statutory Instrument No. 244 of 1979 or
Statutory Instrument No. 272 of 1981 [associated company relief] or
Section 31 of the Finance ▇▇▇ ▇▇▇▇ [relief from capital and stamp duty in
certain cases] which (a) has become liable to forfeiture or (b) may be
forfeited in the future.
14.42 All capital duty and/or stamp duty payable by either of the Irish
Companies in respect of any of the transactions referred to in the
following sections of the Finance ▇▇▇ ▇▇▇▇ has been duly and promptly paid
by such Company so that there is no liability in respect thereof or any
interest thereon;
(a) section 63 [stamp duty on security documents];
(b) section 64 [replacement of headings in ▇▇▇▇▇ ▇▇▇ ▇▇▇▇];
(c) section 68 [capital duty]; and
(d) sections 69 and 70 [stamp duty on certain Irish Companies Registration
Office statements].
14.43 All other capital and/or stamp duty howsoever arising or payable has been
paid by either of the Irish Companies and there is no outstanding
liability therefor or interest thereon.
VALUE ADDED TAX
14.44 Each of the Irish Companies is a registered and taxable person for the
purposes of the Value Added Tax Acts and has complied in all respects with
such legislation and all regulations made or notices issued thereunder and
has maintained full complete correct and up to date records, invoices and
other
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documents (as the case may be) appropriate or requisite for the purposes
thereof.
14.45 Neither of the Irish Companies is in arrears with its payments or returns
or notifications under the Value Added Tax Acts regulations or notices or
liable to any abnormal or non routine payment or any forfeiture or penalty
or to the operation of any penal provisions contained therein.
14.46 Neither of the Irish Companies has been required by appropriate fiscal
authorities to give security under the Value Added Tax Acts.
14.47 No arrangement exists or has existed whereby pursuant to Section 8(8) of
the Value Added Tax ▇▇▇ ▇▇▇▇ and Regulation 5 of the Value Added Tax
Regulation 1979 (as amended) the business activities of either of the
Irish Companies are or were deemed to be carried on by any other person or
the business activities of any other person are or were deemed to be
carried on by either of the Irish Companies. [membership of a group of VAT
purposes]
CAPITAL ACQUISITIONS TAX
14.48 There is no unsatisfied liability to capital acquisitions tax attached or
attributable to the Shares and the Shares are not subject to a charge in
favour of the Revenue Commissioners.
14.49 No person is liable to capital acquisitions tax attributable to the value
of any of the Shares and in consequence no person has the power to raise
the amount of such tax by sale or mortgage of or by a terminable charge on
any of the Shares.
14.50 Neither of the Irish Companies has entered into or taken any steps the
object of which is a transaction which comes within Section 90 of the
Finance ▇▇▇ ▇▇▇▇ [arrangements reducing value of company's shares].
15. TAXATION -- AERFI BELGIUM
In respect of AerFi Belgium, the statements in paragraph 14 are true and
accurate as though references therein to the Irish Companies were to AerFi
Belgium and references to specific provisions of Irish statutes or
regulations were references to the equivalent statutes or regulations in
Belgium.
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PART 3 -- AERCO USA
1. ORGANISATION, AUTHORITY AND QUALIFICATION OF AERCO USA
AerCo USA is a corporation duly organised, validly existing and in good
standing under the laws of the State of Delaware and has all the necessary
power and authority to own, operate or lease the properties and assets now
owned, operated or leased by it and to carry on its business as it has been
and is currently conducted. AerCo USA is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes
such licensing or qualification necessary and all such jurisdictions are
set forth in Part 3 paragraph 1 of the Disclosure Letter. All corporate
actions taken in connection with this Agreement by AerCo USA have been duly
authorised, and AerCo USA has not taken any action that in any respect
conflicts with, constitutes a default under or results in a violation of
any provision of its Certificate of Incorporation or by-laws. True and
correct copies of the Certificate of Incorporation and by-laws of AerCo
USA, each as in effect on the date hereof, have been delivered by GPA to
the Purchaser.
2. CAPITAL STOCK OF AERCO USA
The authorised capital stock of AerCo USA consists of 10,000 shares of
Common Stock. As of the date hereof, 10,000 shares of Common Stock ("the
AERCO USA SHARES") are issued and outstanding, all of which are validly
issued, fully paid and nonassessable. None of the issued and outstanding
shares of Common Stock was issued in violation of any preemptive rights.
There are no options, warrants, convertible securities or other rights,
agreements, arrangements or commitments or any character relating to the
capital stock of AerCo USA or obligating GPA, the Voting Trustee or AerCo
USA to issue or sell any shares of capital stock of, or any other interest
in, AerCo USA. There are no outstanding contractual obligations of AerCo
USA to repurchase, redeem or otherwise acquire any shares of Common Stock.
The AerCo Stock constitutes all the issued and outstanding capital stock of
AerCo USA and is owned of record by the Voting Trustee and beneficially
solely by GPA free and clear of all Liens, except for the Voting Trust,
which is to be terminated on Closing; and at Closing, following the
termination of the Voting Trust and transfer of the shares of stock
previously held of record by the Voting Trustee to the name of GPA as
record owner on the books of AerCo USA, GPA will be the owner of record of
the AerCo USA Stock and will transfer and deliver to the Purchaser the
legal and beneficial ownership of the right, title and interest in the
AerCo USA Stock free and clear of all Liens. Immediately upon Closing, the
AerCo USA Stock will be fully paid, nonassessable and will be legally and
beneficially owned by the Purchaser free and clear of all Liens. There are
no voting trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of
the shares in the AerCo USA Stock, except (prior to Closing) the Voting
Trust.
The Stock register of AerCo USA accurately records: (i) the name and
address of each Person owning shares of capital stock of AerCo USA and (ii)
the certificate number of each certificate evidencing shares of capital
stock issued by AerCo
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USA, the number of shares evidenced by each such certificate, the date of
issuance thereof and, in the case of cancellation, the date of
cancellation.
3A. SUBSIDIARIES
AerCo USA has no Subsidiaries.
3. THE VOTING TRUST
A true and complete copy of the Voting Trust Agreement has been provided to
the Purchaser. No fees, expenses or other amounts are due and owing to the
Voting Trustee under the Voting Trust. GPA is duly registered as the holder
of all the Voting Trust Certificates.
4. CORPORATE BOOKS AND RECORDS
Complete and accurate copies of the minute books and of the stock register
of AerCo USA have been provided by GPA to the Purchaser. All statutory
records required to be kept by AerCo USA have been properly kept and will
be so kept until Closing.
5. FINANCIAL INFORMATION, SOLVENCY, BOOKS AND RECORDS ETC
(a) No audited accounts have been prepared in respect of AerCo USA. The
Reference Balance Sheet represents fairly in all material respects the
financial position of AerCo USA at the Reference Balance Sheet Date
and has been prepared on a basis consistent with the accounting
policies of the Seller Group at 31 May 1998.
(b) AerCo USA is Solvent.
(c) The books of account and other financial records of AerCo USA: (i)
reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with and applied on a
basis consistent with the past practices of the Seller Group's U.S.
members, (ii) are complete and correct, and do not contain or reflect
any material inaccuracies or discrepancies and (iii) have been
maintained in accordance with good business and accounting practices.
7. NO UNDISCLOSED LIABILITIES
There are no Liabilities of AerCo USA other than Liabilities (i) reflected
or reserved against on the Reference Balance Sheet, (ii) disclosed in Part
3 paragraph 7 of the Disclosure Letter or (iii) Liabilities (not being
Liabilities in respect of borrowed monies) incurred since the Reference
Balance Sheet Date in the ordinary course of business and consistent with
the past practice of Seller Group's U.S. members and which do not have a
Material Adverse Effect or (iv) the Intra-Group Debt. Reserves are
reflected on the Reference Balance Sheet against all Liabilities of AerCo
USA in amounts that have been established on a basis consistent with the
past practices of the Seller Group's U.S. members.
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8. CONDUCT IN THE ORDINARY COURSE: ABSENCE OF CERTAIN CHANGES, EVENTS AND
CONDITIONS.
Since the Reference Balance Sheet Date, the business of AerCo USA has been
conducted in the ordinary course and consistent with past practice and
AerCo USA has not suffered any change or occurrence which would be
reasonably expected to result in a Material Adverse Effect.
9. IDENTITY OF DIRECTORS
The details of the directors and officers of AerCo USA set out in Schedule
2 are correct.
10. AERCO USA TAX REPRESENTATIONS
(a) all tax returns, statements, reports and forms (including estimated tax
or information returns and reports) required to be filed with any taxing
authority with respect to any pre-closing tax period by or on behalf of
AerCo USA (collectively, the "RETURNS") have, to the extent required to be
filed on or before the date hereof been or will be filed when due in
accordance with all applicable laws; (b) as of the time of filing, the
Returns, if any, correctly reflected (and, as to any Returns not filed as
of the date hereof, will correctly reflect) the facts regarding the income,
business, assets, operations, activities and status of AerCo USA and any
other information required to be shown therein; (c) all taxes shown as due
and payable on the Returns that have been filed, if any, have been timely
paid, or withheld and remitted to the appropriate taxing authority; (d)
AerCo USA is not delinquent in the payment of any tax and has not requested
any extension of time within which to file any Return which has not yet
been filed; (e) AerCo USA has not granted any extension or waiver of the
statue of limitations period applicable to any Return, which period (after
giving effect to such extension or waiver) has not yet expired; (f) there
is no claim, audit, action, suit, proceeding or investigation now pending
or threatened against or with respect to AerCo USA in respect of any tax;
(g) AerCo USA has not been a member of an affiliated, consolidated,
combined or unitary group.
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SCHEDULE 4 - PURCHASER'S REPRESENTATIONS AND WARRANTIES
1. CAPACITY AND AUTHORITY
1.1 PURCHASER
The Purchaser is duly incorporated and validly existing under the laws of
Jersey, Channel Islands and has all necessary corporate power and
authority to enter into and perform its obligations under this Agreement
which constitute legal, valid, binding obligations on the Purchaser
enforceable in accordance with its terms. The execution, delivery and
performance by the Purchaser of this Agreement has been duly authorised
by all requisite action on its part. This Agreement has been duly
executed and delivered by the Purchaser and (assuming due authorisation,
execution and delivery by the Sellers) this Agreement constitutes a
legal, valid and binding obligation of the Purchaser enforceable against
in accordance with its terms.
1.2 NO CONFLICTS
Assuming the making and obtaining of all filings, notifications,
consents, approvals, authorisations and other actions referred to in
paragraph 1.3 below, except as may result from any facts or circumstances
relating solely to the Sellers, the execution, delivery and performance
of this Agreement by the Purchaser does not and will not:-
(a) violate, conflict with or result in the breach of any provision
of any constitutional document of the Purchaser, which conflict
with or breach would materially impair the Purchaser's ability to
perform its obligations under this Agreement;
(b) conflict with or violate any Law or Government Order applicable
to the Purchaser, which conflict or violation would materially
impair the ability of the Purchaser to perform its obligations
under this Agreement; or
(c) conflict, result in any breach of, constitute a default (or event
with the giving of notice or lapse in time or both would become a
default) under, or result in the creation of any Lien on any of
the assets or properties of the Purchaser pursuant to any note,
bond, mortgage, or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which the Purchaser is a party or by which any of
its assets or properties are bound or affected, which conflict,
breach or default would materially impair the Purchaser's ability
to perform its obligations under this Agreement.
1.3 GOVERNMENT CONSENTS AND APPROVALS
The execution, delivery and performance by the Purchaser of this
Agreement does not and will not require any consent, approval,
authorisation or other order of, action by, filing with or notification
to any governmental authority, except as described in writing given to
the Sellers by the Purchaser on or prior to Closing.
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2. PURCHASE FOR INVESTMENT
Purchase for investment
The Purchaser is buying the Shares and AerCo USA Stock for investment for
its own account and not with a view to, or for sale in connection with, any
distribution thereof.
3. LITIGATION
There is no action, suit, investigation or proceeding pending against, or
to the knowledge of Purchaser, threatened against or affecting, Purchaser
before any court or arbitrator or any governmental body, agency or official
which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement and the
Other Transaction Documents or the Related Documents.
4. NO IMPLIED WARRANTIES
The Purchaser has not relied upon any express or implied warranties of any
nature made by or on behalf of or imputed to the Sellers except as
expressly set out in this Agreement.
5. TRANSFER
Full and final transfer
The Purchaser intends that the sale of the Shares and AerCo USA Stock
contemplated hereby shall constitute a full and final transfer of the legal
and beneficial ownership of the Shares and AerCo USA Stock and after
Closing the Sellers shall retain no right, title or interest therein.
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SCHEDULE 5 - DEED OF TAX INDEMNITY
THIS DEED OF INDEMNITY is made on 1998
BETWEEN
(1) GPA GROUP PLC ("GPA"), a public limited company incorporated in Ireland and
having its registered office at GPA House, Shannon, Co Clare, Ireland
("GPA") and (2) SKYSCAPE LIMITED, ("SKYSCAPE"), a limited liability company
incorporated in Ireland and having its registered office at GPA House,
Shannon, Co ▇▇▇▇▇ (together the "COVENANTORS"); and
(2) AERCO LIMITED, a company incorporated in Jersey and having its registered
office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
(the "PURCHASER" which expression shall unless the context does not so
permit include its successors in title).
RECITALS
By Share Purchase Agreement dated 15 July 1998 between the Covenantors and the
Purchaser (the "AGREEMENT"), the Purchaser agreed to purchase, and the
Covenantors agreed to sell, all of the issued shares (the "SHARES") in the
capital of the Irish Companies and AerCo USA (as defined below). The
Covenantors have agreed to indemnify the Purchaser in respect of certain
liabilities of the Companies and their subsidiaries on the terms and conditions
contained herein.
NOW IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: In this Deed unless the context otherwise requires:
"AERCO USA" means AerCoUSA Inc;
"AERFI" means AerFi Belgium N.V.;
"AERFI ACCOUNTS" means the audited balance sheets of a AerFi as at 31 March
1998 and its audited profit and loss accounts of the financial year ended
on 31 March 1998;
"CLOSING" means completion of the sale and purchase of the Shares in
accordance with the Agreement;
"COMPANIES" means (i) AerCo Ireland Limited ("AERCO IRELAND"), a company
incorporated in Ireland and having its registered office at GPA House,
Shannon, Co Clare, (ii) AerCo Ireland II Limited ("AERCO IRELAND II" and,
together with AerCo Ireland, the "IRISH COMPANIES"), a company incorporated
in Ireland and having its registered office at GPA House, Shannon, Co
Clare, (iii) AerFi and (iv) AerCo USA;
"CLAIM" includes any demand notice letter or other document issued or
action taken by or on behalf of any person or authority (whether within or
outside
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Ireland) from which it appears that any Company is liable or is sought to
be made liable to make any payment or a tax liability is likely to be
imposed on any Company;
"LIBOR" means the per annum offered rate for deposits in US dollars for a
period of one month that appears on the display designated as page 3750 on
the Telerate Monitor (or such other page or service as may replace it for
the purpose of displaying LIBOR of major banks for US dollar deposits) at
approximately 11:00 am (London time):
"TAX ASSESSMENT" includes any assessment demand or other similar formal
notice of a tax liability issued by or on behalf of any taxing or other
competent authority or estimates and amounts which are due and payable
without any formal demand or notice by or on behalf of any taxing or other
competent authority (whether within or outside Ireland) by virtue of which
any Company is or will with the passing of time become liable to make a
payment of tax;
references to any tax liability of any Company shall include not only
liabilities of the Company to make payments of or in respect of tax but
also:
(a) the loss or setting off against income profits or gains of any relief
allowance or credit in respect of any tax which would (were it not for
the said loss or setting off) have been available to the Company and
has been taken into account in computing (and so reducing) any
provision for deferred taxation which appears (or which but for such
relief allowance or credit would have appeared) in the Reference
Balance Sheet;
(b) the loss or setting off against any tax liability (for which no
provision has been made in preparing the Reference Balance Sheet) of a
right to repayment of tax which has been treated as an asset of the
Company in preparing the Reference Balance Sheet; and
(c) the setting off against income profits or gains earned accrued or
received on or before Closing of any relief allowance or credit which
is not available before Closing but arises in respect of any event
occurring after Closing in circumstances where but for such setting
off the Company would have had an actual tax liability in respect of
which it or the Purchaser would have been able to make a claim against
the Covenantor under this Deed and in such a case the amount of the
relief allowance or credit so lost or set off (or if such relief
allowance or credit is a deduction from or offset against gross income
or profits the amount of tax which would (in the case of a lost relief
allowance or credit and on the basis of the tax rates current at the
date of such loss) have been saved thereby but for such loss or in the
case of a set off relief allowance or credit the amount of tax which
has been saved thereby in consequence of such set off) or the amount
of the repayment which would otherwise have been obtained shall be
treated for the purposes of this Deed as a tax liability of the
Company;
"TAX" includes (without prejudice to the generality of the expression):
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(a) within Ireland all taxes including (without limitation) income tax,
corporation tax (including any additional duty of corporation tax and
any surcharge), advance corporation tax, capital gains tax, capital
acquisition tax, value added tax, stamp duty, capital duty, excise
duty, customs and other import duties, PAYE deductions, pay related
social insurance (PRSI) social welfare and social insurance
contributions, payroll taxes generally, general rates and water
rates, withholding tax, deposit interest retention tax and any other
tax, levy, duty or impost whether similar to, replaced by or
replacing any of them or otherwise and any penalty, charge and
interest included in or relating to any tax assessment therefor; and
(b) outside Ireland all taxes including (without limitation) taxes on
gross or net income profits or gains, receipts, sales, use,
occupation, franchise, value added, personal property and any other
tax, levy, impost, excise duty, duty, charge or withholding of any
nature whatsoever PAYE deductions, payroll taxes and contributions
generally and any penalty, charge and interest included in or
relating to any tax assessment therefor, in either case regardless of
whether such taxes penalties charges and interest are directly or
primarily chargeable against or attributable to any Company or any
other person firm or company;
References to:
(i) income or profits or gains earned accrued or received on or before a
particular date or in respect of a particular period shall include
income or profits or gains which have been deemed to have been earned
accrued or received at or before that date or in respect of that
period for the purposes of any tax assessment;
(ii) any payment or distribution made on or before a particular date shall
include:
(A) any payment or distribution which on or before that date has
fallen due to be made; and
(B) any act or transaction which has occurred on or before that date
and is or has been deemed to be a payment or distribution for
the purposes of any tax assessment; and
(iii) any dividend shall include anything which has been deemed to be a
dividend or distribution to shareholders or others for the purposes
of any tax assessment;
"EVENT" includes (without limitation) the death of any person any
transaction action or omission and a failure to make sufficient dividend
payments to avoid any apportionment or deemed distribution of income or
notional and deemed events which give rise to tax liabilities or an
additional duty of corporation tax or overcharge; and
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1.2 TERMS DEFINED IN THE AGREEMENT: Unless otherwise indicated, words and
expressions used but not defined in this Deed shall have the same meaning
as in the Agreement.
2. INDEMNITY
2.1 NATURE OF INDEMNITY: The Covenantors hereby jointly and severally covenant
to hold the Purchaser (without prejudice to any other rights which the
Purchaser may have) indemnified and to keep the Purchaser indemnified
against:
(a) any claim for tax on and any tax liability of any Company arising:
(i) as a consequence of any event which occurred on or before
Closing; or
(ii) in respect of or with reference to any income profits or gains
which were earned accrued or received on or before or in respect
of a period ending on or before Closing;
(b) any claim for tax on and any tax liability of any Company resulting
from or made by reference to any of the following events:
(i) the disposal of any asset (including trading stock) in
circumstances where the cash consideration actually received for
such disposal is less than the consideration deemed to have been
received for taxation purposes; or
(ii) the supply of any service or business facility of any kind for a
consideration which was less than might reasonably have been
regarded as the open market value of such service or business
facility; or
(iii)any other act or transaction which gives rise to a tax liability
on deemed (as opposed to actual) income profits or gains by the
operation of the Tax Acts (as defined in section 1(2) of the
Taxes Consolidation Act, 1997) or which results in any Company
becoming liable to pay or bear a tax liability directly or
primarily chargeable against or attributable to another person
firm or company (other than a Company) but only where the
relevant event occurred on or before Closing; and
(c) any interest and any costs and expenses reasonably and properly
incurred by the Purchaser and the Companies in connection with any
such liability (or claim therefor) or in taking or defending any
action under this Deed.
3. LIMITATIONS ON INDEMNITY
3.1 CERTAIN TAX LIABILITIES EXEMPTED: The indemnity given by Clause 2 of this
Deed shall not cover any tax liability:
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(a) to the extent that provision or reserve in respect of such tax
liability was made in the Reference Balance Sheets; or
(b) to the extent that the liability of the Covenantors arising by reason
of any claims hereunder when aggregated to the liability of the
Covenantors and their Affiliates in respect of any claims under or
pursuant to (i) the Warranties and (ii) the Seller Indemnity would
exceed US$185 million at the time payment of such amount is made; or
(c) to the extent that the aggregate liability of the Sellers and their
Affiliates for such claims when aggregated with any liability of the
Sellers and/or such Affiliates in respect of claims under or pursuant
to (i) the Warranties and (ii) the Seller Indemnity would not exceed
in aggregate US$5 million; or
(d) to the extent that the Purchaser waives or surrenders after Closing
any exemption, relief, allowance, credit, deduction or set-off
available to the Companies or any of them at the date hereof relevant
to the computation of any liability to taxation or any credit against
taxation; or
(e) with respect to and to the extent attributable to the passing of any
primary or subordinate legislation or any judicial decision altering
the generally accepted interpretation of existing legislation or
making of any other government regulation, not in force at the date
hereof, or the withdrawal or alteration after the date hereof of any
published or unpublished extra statutory concession made by any fiscal
authority and presently in operation; or
(f) which would not have arisen but for (or if the same is increased by
reason of) a breach by the Purchaser of its obligations hereunder; or
(g) which would not have arisen but for a voluntary act or transaction not
contemplated by this Deed, the Agreement, the Other Transaction
Documents or the Related Documents (as defined in the Indentures)
carried out by any Company after Closing and otherwise than in the
ordinary course of business.
3.2 LIABILITY OF SKYSCAPE: The Purchaser hereby acknowledges that Skyscape is a
party to this Deed in its capacity only as holder of one Ordinary Share in
each of the Irish Companies as nominee for GPA. Skyscape's maximum
liability to the Purchaser in respect of any claims under or pursuant to
this Deed of Tax Indemnity shall be limited to IR(pound)1.
4. CLAIMS
4.1 NOTICE OF PURCHASER: TIME LIMIT ON CLAIMS: No claim shall be brought by the
Purchaser in respect of any claim under this Deed unless notice in writing
of such claim (specifying in reasonable detail (a) the event matter or
default which gives rise to the claim and (b) the amount claimed) has been
given to the Covenantors not later than the expiration of a period of seven
(7) years from Closing. Upon the Purchaser or any Company becoming aware of
such a claim,
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it shall forthwith give written notice thereof to the Covenantors and shall
(if the Covenantors shall indemnify and secure the Company) to its
reasonable satisfaction against all losses costs damages and expenses
including interest on overdue tax which may be incurred thereby) take such
action as the Covenantors may reasonably and promptly by written notice
request to avoid resist appeal or compromise the claim:
Provided that the Company shall not be obliged to appeal against any tax
assessment raised on it if having given the Covenantors' written notice of
the receipt of such tax assessment it has not within 15 days thereafter
received instructions in writing from the Covenantors in accordance with
the preceding provisions of this sub-clause to do so.
5. INTEREST
LATE PAYMENT TO CARRY INTEREST: If any payment due to be made by the
Covenantors under this Deed is not made on the due date for payment thereof
the same shall carry interest from such due date of payment until actual
payment at the rate of 1 per cent per annum above LIBOR.
6. PAYMENTS
6.1 TO BE MADE FREE FROM DEDUCTIONS: All sums payable by the Covenantors to the
Purchaser under this Deed shall be paid free and clear of all deductions or
withholdings whatsoever save only as may required by law. If any such
deductions or withholdings are required by law the Covenantors shall be
obliged to pay to the Purchaser such sums as will after such deduction or
withholding has been made leave the Purchaser with the same amount as it
would have been entitled to receive in the absence of any such requirement
to make a deduction or withholding. If any sum payable by the Covenantors
to the Purchaser under this Deed shall otherwise be subject to tax in the
hands of the Purchaser the same obligation to make an increased payment
shall apply in relation to such tax liability as if it were a deduction or
withholding required by law. The Purchaser and the Covenantors hereby
undertake to co-operate to avoid or to minimise any such grossing up where
possible at no extra cost to the Purchaser or the Covenantors.
6.2 RECOVERY FROM THIRD PARTIES: If the Purchaser recovers any sum from a third
party in respect of or relating to a tax liability which has been the
subject of a successful claim by the Purchaser against any of the
Covenantors or their Affiliates hereunder, the Purchaser shall forthwith
reimburse to the Sellers an amount equal to the sum recovered in respect of
that claim.
7. RIGHTS OF PURCHASER
RIGHT OF PURCHASER TO RELEASE COVENANTOR: The Purchaser and the Companies
may release or compromise the liability of any of the Covenantors hereunder
or grant to any Covenantors time or other indulgences without affecting the
liability of any other covenantor hereunder.
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8. NOTICES
MANNER OF SERVICE: Any notice or demand given under this Deed shall be in
writing and shall be deemed to be duly served if left at or sent by
registered post to the address of the appropriate party set out above or
such other address in Ireland as such party may from time to time notify to
the other parties for the purposes of this Deed. Any such notice or demand
shall be deemed to be given at the time when the same is left at the said
address or if sent by registered post at the commencement of the fifth
business day after the day of posting.
9. GOVERNING LAW
LAW OF IRELAND TO APPLY: This Deed shall be governed by and construed in
accordance with the law of Ireland and each of the parties hereto submits
to the non-exclusive jurisdiction of the Courts of Ireland.
IN WITNESS WHEREOF the parties have executed this Deed on the date written
above.
53
56
SCHEDULE 6A - FORM OF SOLVENCY CERTIFICATE (NON-US COMPANIES)
SOLVENCY CERTIFICATE
OF
[Name of Company]
I HEREBY CERTIFY that the Board of Directors of ___________________ has duly
considered the provisions of Section 214 of the Companies Act, 1963 (as amended)
and Section 2 of the Companies (Amendment) Act, 1990 and, all due enquiries
having been made, and having considered all matters which they considered
relevant to the Company's financial position has determined, to the best of its
knowledge, information and belief, provided that the closings of the current
transactions described in the Offering Memorandum take place that:
(a) the Company is not [, was not at any time in the preceding three months,]*
nor would it be deemed to be unable to pay its debts within the meaning of
Section 214 of the Companies Act, 1963 (as amended) and/or Section 2 of the
Companies (Amendment) Act, 1990; and
(b) the Company would not become unable to pay its debts, nor would be deemed
to be unable to pay its debts, within the meaning of Section 214 of the
Companies Act, 1963 (as amended) and/or Section 2 of the Companies
(Amendment) ▇▇▇, ▇▇▇▇, in consequence of any of the Documents listed in the
Schedule hereto and any other documentation to be entered into by it in
connection therewith or the transactions the subject matter thereof.
_______________________
for and on behalf of
* include only where the company has sold assets over the previous three months.
54
57
SCHEDULE 6B - FORM OF SOLVENCY CERTIFICATE (US COMPANIES)
SOLVENCY CERTIFICATES
of
[Name of Company]
I HEREBY CERTIFY that the Board of Directors of ______________________ having
duly considered all matters which they consider relevant to the Company's
financial position has determined, to the best of its knowledge, information and
belief, provided that the closings of the current transactions described in the
Offering Memorandum take place that:
(a) the fair value of its property is greater than the total amount of its
liabilities, including, without limitation, contingent liabilities;
(b) the present fair saleable value of its assets is not less than the amount
that will be required to pay its probable liability on its debts as they
become absolute and matured;
(c) it does not intent to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay such debts and liabilities as they
mature;
(d) it is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which its property would constitute an
unreasonably small capital;
for the purposes of this paragraph (ii), the amount of contingent
liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability
for and on behalf of
55
58
SCHEDULE 7 -- INTRA-GROUP DEBT AT CLOSING
1. DEBT OWED BY AERCO IRELAND LIMITED
DEBT OWED TO INCURRED IN RESPECT OF AMOUNT
-------------- --------------------------- -----------
GPA Group plc Acquisition of aircraft msn $26,508,000
085 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $23,912,000
23868 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $24,375,000
23979 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $27,182,000
26066 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $31,092,000
22496 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $15,732,000
11341 from GPA Group plc
GPA Group plc Acquisition of aircraft msn $16,278,000
11350 from GPA Group plc
Total AerCo Ireland Limited intra-group debt: US$165,079,000
2. DEBT OWED BY AERCO IRELAND II LIMITED
DEBT OWED TO INCURRED IN RESPECT OF AMOUNT
-------------- --------------------------- -----------
GPA Group plc Acquisition of aircraft msn $13,167,000
240 from GPA Group plc
Total AerCo Ireland II Limited intra-group debt: US$13,167,000
56
59
3. DEBT OWED BY AERCOUSA INC
DEBT OWED TO INCURRED IN RESPECT OF AMOUNT
------------ ---------------------- ------
GPA Group plc Acquisition of aircraft msn US$16,015,000
46064 from GPA Corporation
GPA Group plc Acquisition of aircraft msn US$15,807,000
46040 from AeroUSA II
Total AerCo USA intra-group debt: US$31,822,000
57
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SCHEDULE 8 - PARTICULARS OF THE AIRCRAFT
CURRENT INITIAL
MONTHLY APPRAISED
SERIAL RENTAL VALUE
NO TYPE ENGINES LESSEE DETAILS OF LEASE US$ (US$,000's)
085 Airbus Two CFM International Compagnie nationale Aircraft Lease Agreement dated as 271,580 26,777
A320-200 engines model ▇▇▇▇▇- ▇▇▇ ▇▇▇▇▇▇ of 22 February 1990 between
5A1 serial numbers GPAA Limited and Compagnie
731233 and 731239 nationale Air France (formerly
known as Lignes Aeriennes
Interieures - Air Inter S.A.) as
amended and novated by Aircraft
Lease Amendment and Novation
Agreement dated as of 10 July
1998 between GPAA Limited,
AerCo Ireland and Compagnie
nationale Air France
23868 Boeing Two CFM International BMA Aircraft Lease Agreement dated as 289,225 24,214
737-400 engines model CFM56- of 24 May 1988 between GPA
3C serial numbers and BMA, as amended by three
725122 and 725126 Lease Amending Agreements
dated as of 21 December 1988,
17 April 1991 and 24 June 1991
respectively, as amended by a
Lease Novation and Amendment
Agreement dated as of 28 June
1991 between GPA, BMA and
Midland Montagu Equipment
Finance (UK) Limited and as
further amended and novated by a
Lease Novation and Amendment
Agreement dated as of 9 July
1998 between GPA, BMA and
AerCo Ireland
23979 Boeing Two CFM International Pegasus Aircraft Lease Agreement dated as 271,295 24,667
737-400 engines model CFM56- of 9 April 1997 between GPA and
3C1 serial numbers Pegasus as amended by Letter
725151 and 725283 Agreement dated as of 6 May
1997 and as amended and
novated by Aircraft Lease
Amendment and Novation
Agreement dated as of 2 June
1998 between GPA, Pegasus and
AerCo Ireland
26066 Boeing Two CFM International THY Aircraft Lease Agreement dated as 251,400 28,143
737-400 engines model CFM56- of 5 June 1992 between GPA
3C1 serial numbers Group plc and THY, as
856214 and 857196 supplemented by Side Letter No.1,
Side Letter No.2 and Side Letter
No.3 each dated as of 5 June
1992 and as amended by Aircraft
Lease Amendment Agreement
dated as of 10 June 1993 and as
amended and novated by Aircraft
Lease Amendment and Novation
Agreement dated as of 14 July
1998 between GPA, THY and
AerCo Ireland
22496 Boeing Four ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Tower Air Inc. Aircraft Lease Agreement dated as 301,000 31,270
747-283B engines model JT9D-7Q of 11 December 1997 between
serial numbers 702390, GPA Corporation and Tower Air
702392, 702391 and Inc. and as assigned, assumed and
702385 amended by Aircraft Lease
Assignment, Assumption and
Amendment Agreement dated as
of 14 July 1998 between GPA
Corporation, Tower Air, Inc. and
AerCo USA
Details of Head Lease:
(Lease Agreement dated as of 5
December 1997 between GPA
Group plc and GPA Corporation)
11350 Fokker Two Rolls ▇▇▇▇▇ ▇▇▇ - Aircraft Lease Agreement dated as 137,522 16,710
100 engines model Tay Transportes of 23 October 1997 made
MK650-15 serial Aereos between GPA Fokker 100 Limited
numbers 17359 and Regionais S.A. and TAM - Transportes Aeros
17370 Regionais S.A. as novated and
amended by Aircraft Lease
Novation and Amendment
Agreement dated as of 8 July
1998 made between GPA Fokker
100 Limited, AerCo Ireland Limited,
TAM - Transportes Aereos
Regionais S.A. and Helisul-
Linhas Aereas S.A.
11341 Fokker Two Rolls ▇▇▇▇▇ ▇▇▇ - Aircraft Lease Agreement dated as 137,531 16,163
100 engines model Tay Transportes of 23 October 1997 made
MK650-15 serial Aereos between GPA Fokker 100 Limited
numbers 17352 and Regionais S.A. and TAM - Transportes Aeros
17348 Regionais S.A. as amended by a
Lease Novation and Amendment
Agreement dated as of 8 July
1998 and made between GPA
Fokker 100 Limited, TAM -
Transportes Aereos Regionais S.A.
and AerCo Ireland
240 Airbus Two CFM International Indian Airlines Intra-Group Aircraft Lease 145,000 13,317
A300-B4-200 engines model CFM56- Limited Agreement dated as of 8 May
5A1 serial numbers 1998 between AerCo Ireland II
517827 and 455869 and AerFi Belgium (formerly
known as Guinness Peat Aviation
(Belgium) N.V.) and Aircraft Lease
Agreement dated 9 April 1998
between AerFi Belgium) and Indian
Airlines Limited
46064 ▇▇▇▇▇▇▇▇▇ Four CFM International BAX Aircraft Lease Agreement dated as 161,625 16,020
▇▇▇▇▇▇▇ model CFM56-C1 serial of 22 February 1993, between
DC8-71F numbers 692111, AeroUSA Inc and Burlington Air
693354, 693380 and Express, Inc., as supplemented by
693117 the Certificate of Acceptance
dated 14 April 1993; Lease
Supplement No.1 dated as of 31
August 1993; Supplement No.2
dated as of 26 January 1996;
Aircraft Lease Assignment,
Assumption and Amendment
Agreement dated as of 26 January
1996 between AerUSA, Inc., GPA
Corporation and Burlington Air
Express, Inc.; and Aircraft Lease
Assignment, Assumption and
Amendment Agreement dated as
of 10 July 1998 between GPA
Corporation, BAX Global Inc. and
AerCoUSA.
There is also a sublease in respect
of this Aircraft created by Aircraft
Lease Agreement dated as of 14
April 1993 made between BAX
Global Inc. and Air Transport
International Limited Liability
Company (formerly known as Air
Transport International, Inc.) (as
supplemented by the Certificate of
Acceptance mentioned above)
46040 DC8-71F Four CFM International Aircraft International Aircraft Lease Agreement dated 3 185,000 15,997
engines model CFM56- Leasing Limited July 1998 made between AerCo
2C1 serial numbers USA and Aircraft International
693363, 693367, Leasing Limited
693369, and 693372
