Exhibit 10.40
CONFIDENTIAL TREATMENT REQUESTED
PURSUANT TO RULE 406
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LOAN AGREEMENT
(Direct Loans)
(CH-285SK)
between
CHAUTAUQUA AIRLINES, INC.
and
AGENCIA ESPECIAL DE FINANCIAMENTO INDUSTRIAL - FINAME
Dated as of December 27, 2001
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Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 406 of the Securities Act of 1933. The omitted
materials have been filed separately with the Securities and Exchange
Commission.
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS.......................................................1
1.1 Definitional Provisions...........................................1
1.2 Bankruptcy Default................................................2
SECTION 2. AMOUNT AND TERMS OF LOAN..........................................2
2.1 Procedure for Borrowing...........................................2
2.2 Terms of Repayment of the Loan; Interest; Evidence of Debt........2
2.3 Mutilated, Destroyed, Lost or Stolen Notes........................4
2.4 Optional Prepayments..............................................4
2.5 Mandatory Prepayment..............................................4
2.6 Taxes.............................................................4
2.7 Increased Costs..................................................11
2.8 Termination of Security Agreement................................12
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER...................12
3.1 Corporate Existence; Compliance with Law.........................12
3.2 Corporate Authorization..........................................13
3.3 No Violation.....................................................13
3.4 Approvals........................................................13
3.5 Valid and Binding Agreements.....................................13
3.6 Litigation.......................................................13
3.7 Financial Condition..............................................13
3.8 Chief Executive Office...........................................14
3.9 No Default.......................................................14
3.10 No Event of Loss.................................................14
3.11 Compliance With Laws.............................................14
3.12 Title; Security Agreement........................................14
3.13 Section 1110.....................................................14
3.14 No Withholding...................................................15
SECTION 4. CONDITIONS PRECEDENT TO THE LENDER'S OBLIGATIONS.................15
4.1 Operative Agreements, etc........................................15
4.2 Recordation and Filing...........................................15
4.3 Closing Certificates.............................................16
4.4 Legal Opinions...................................................17
4.5 Insurance........................................................17
4.6 Violation of Law.................................................17
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4.7 Representations and Warranties of the Borrower...................17
4.8 No Termination of Commitments....................................18
4.9 Purchase Agreement Amendments....................................18
4.10 Acceptance of Aircraft...........................................18
4.11 Section 1110.....................................................18
4.12 No Default; No Event of Loss; No Other Defaults..................18
4.13 Title............................................................18
4.14 Security Trustee Certificate.....................................18
4.15 Airworthiness; Type..............................................19
4.16 Aircraft Price; Manufacturer's Invoice...........................19
4.17 No Material Adverse Change; Code-Share Agreements................19
4.18 No Proceedings...................................................19
4.19 Governmental Action..............................................19
4.20 No Sales Tax.....................................................19
4.21 Origination Fee..................................................19
4.22 Bridge Loan Release..............................................19
SECTION 5. CONDITIONS PRECEDENT TO THE BORROWER'S OBLIGATIONS...............19
5.1 Operative Agreements.............................................20
5.2 Recordation......................................................20
5.3 Registration.....................................................20
5.4 Closing Certificates.............................................20
5.5 Legal Opinions...................................................20
5.6 Security Trustee Certificate.....................................21
5.7 Representations and Warranties of the Lender.....................21
5.8 Agent for Service of Process.....................................21
5.9 Violation of Law.................................................21
5.10 No Proceedings...................................................21
5.11 Governmental Action..............................................21
5.12 Acceptance of Aircraft...........................................21
5.13 No Event of Loss.................................................22
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE LENDER..........22
6.1 Existence; Compliance with Law...................................22
6.2 Power; Authorization; Enforceable Obligations....................22
6.3 No Legal Bar.....................................................22
6.4 No Immunities....................................................22
6.5 Quiet Enjoyment..................................................23
6.6 Agreement Regarding Engines......................................23
6.7 ERISA............................................................23
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SECTION 7. COVENANTS OF THE BORROWER........................................23
7.1 Financial Statements.............................................23
7.2 Recordation Opinion..............................................24
7.3 Perfection.......................................................24
7.4 Conduct of Business and Maintenance of Existence.................25
7.5 Maintenance of Process Agent.....................................25
7.6 Further Assurances...............................................25
7.7 Consolidation and Merger.........................................25
SECTION 8. EVENTS OF DEFAULT................................................27
8.1 Events of Default................................................27
8.2 Rescission of Acceleration.......................................29
SECTION 9. MISCELLANEOUS....................................................29
9.1 Amendments and Waivers...........................................29
9.2 Notices..........................................................29
9.3 No Waiver; Cumulative Remedies...................................31
9.4 Survival of Representations and Warranties.......................31
9.5 Successors and Assigns...........................................31
9.6 [omitted]........................................................36
9.7 Contractual Currency.............................................36
9.8 Severability.....................................................37
9.9 Integration......................................................37
9.10 GOVERNING LAW....................................................37
9.11 Submission to Jurisdiction; Waivers..............................37
9.12 Waiver of Immunities.............................................38
9.13 WAIVERS OF JURY TRIAL............................................39
9.14 Confidentiality..................................................39
9.15 Payment of Expenses and Costs....................................39
9.16 General Indemnity................................................40
9.17 Instruction to Security Trustee..................................44
9.18 Notices, Instructions, Consents, Execution and Waiver............44
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SCHEDULES
Schedule 1: Payment Dates and Amounts
ANNEXES
Annex A: Defined Terms
Annex B-1: Form of Note A
Annex B-2: Form of Note B
Annex C: [omitted]
Annex D-1: Form of Certificate of the Borrower as to Representations and
Warranties
Annex D-2: Form of Certificate of the Lender as to Representations and
Warranties
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LOAN AGREEMENT (CH-285SK), dated as of December 27, 2001, between
CHAUTAUQUA AIRLINES, INC., a
New York corporation (the "BORROWER"), and AGENCIA
ESPECIAL DE FINANCIAMENTO INDUSTRIAL, a Brazilian Federal public company, with
its main offices in the City of Rio de Janeiro, State of Rio de Janeiro, at
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇-▇▇ andar, registered in the General Register
of Taxpayers under the number 33.660.564/0001-00 (the "LENDER" or "FINAME").
WHEREAS, Solitair and Embraer-Empresa Brasileira de Aeronautica S.A.
(the "MANUFACTURER") have entered into the Purchase Agreement pursuant to which
the Manufacturer has agreed to manufacture and sell to Solitair, and Solitair
has agreed to purchase and take delivery, of, among other things, an EMB-145LR
jet aircraft, bearing U.S. registration No. 145435 and equipped with two ▇▇▇▇▇▇▇
AE3007A1P engines, and Solitair has assigned its rights to purchase the Aircraft
to the Borrower and the Borrower has purchased such aircraft;
WHEREAS, reference is hereby made to the recitals of the Funding
Agreement for the purposes of this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
herein or therein, all capitalized terms used in this Agreement, the Notes or
any certificate or other document made or delivered pursuant hereto shall have
the meanings set forth in Annex A hereto.
(b) As used herein and in the Notes, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Borrower (and its Subsidiaries, if applicable), to the
extent not otherwise defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, subsection, Annex, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms.
(e) References to any Person shall include such
Person's successors and assigns subject to any limitations provided for herein
or in the other Operative Agreements.
(f) References to agreements shall include such
agreements as amended, modified or supplemented.
1.2 BANKRUPTCY DEFAULT.
For purposes of each Operative Agreement, the occurrence and
continuance of a Bankruptcy Event shall not be deemed to prohibit the Borrower
from taking any action or exercising any right that is conditioned on no
Bankruptcy Default, Default or Event of Default having occurred and be
continuing if such Bankruptcy Default, Default or Event of Default consists of
the institution of reorganization proceedings with respect to Borrower under
Chapter 11 of the Bankruptcy Code and the trustee or debtor-in-possession in
such proceedings shall have entered into a Section 1110 Agreement and thereafter
shall have continued to perform such obligations so that it is entitled to
retain possession of the Aircraft in accordance with Section 1110.
SECTION 2. AMOUNT AND TERMS OF LOAN
2.1 PROCEDURE FOR BORROWING. On the Borrowing Date, the Lender
shall make the Loan A to the Borrower in Dollars in the amount of [*] and the
Loan B to the Borrower in Dollars in the amount of [*] . The closing (the
"Closing") of the Loan shall take place no later than 12:30 P.M., Rio de Janeiro
time, on the Borrowing Date at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
New
York,
New York, or at such other time and place as the parties hereto shall have
agreed in writing.
The Lender shall advance the Loan to the Borrower by
transferring the amount thereof in the Brazilian Currency Equivalent (as
hereinafter defined) of the Loan in immediately available funds to the
Manufacturer on the date aforesaid. Such advance may be made during banking
hours in Rio de Janeiro on the date of Closing; provided that the Lender
irrevocably agrees to make such advance at the time of Closing. The "BRAZILIAN
CURRENCY EQUIVALENT" of the amount of a borrowing denominated in Dollars means
an amount in the legal currency of Brazil computed by multiplying such Dollar
amount by the buying rate of exchange of Dollars into the legal currency of
Brazil made public by the Central Bank of Brazil for commercial transactions
under the Code PTAX 800 of SISBACEN for the Business Day immediately prior to
the relevant Borrowing Date.
As a condition to the advance, the Borrower shall pay to the
Lender (directly and not through the Security Trustee) an origination fee at
Closing in the amount of [*] (the "ORIGINATION FEE").
2.2 TERMS OF REPAYMENT OF THE LOAN; INTEREST; EVIDENCE OF
DEBT. (a) The Borrower hereby unconditionally promises to pay to the Lender (i)
the principal amount of and interest on the Loan A in installments consisting of
principal and interest as set forth on Schedule 1 hereto, each such installment
to be payable on the respective Payment Date set forth on Schedule 1 hereto and
(ii), subject to Section 2.2(h), the principal amount of Loan B in a single
installment on the Loan B Maturity Date as set forth on Schedule I hereto.
Payment of each installment and all other amounts due to the Lender from the
Borrower hereunder or under the Notes shall be payable by the Borrower in
Dollars in immediately available funds to the Security Trustee by wire transfer
to: [*] or to such other account as is specified by the Security Trustee (with
the consent of the Lender, which consent will not be unreasonably withheld) for
the
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account of the Lender no later than 12:30 P.M.,
New York time, on the due date
therefor. Payments made by the Borrower to the Security Trustee as aforesaid for
the account of the Lender shall constitute payment by the Borrower to the
Lender. Each such payment shall be made on the date such payment is due and
without presentment or surrender of the Notes except that at or promptly
following the final payment with respect to a Note, such Note shall be
surrendered by the Lender to the Borrower for cancellation. Upon payment in full
by the Borrower of the principal of, and interest on, the Note A and all other
amounts then due and owing by the Borrower to the Lender under any Operative
Agreement, the Lender shall give written direction to the Security Trustee to
execute and deliver to the Borrower pursuant to Section 11.1 of the Security
Agreement an appropriate instrument or instruments (in due form for recording)
releasing the Aircraft and the balance of the Collateral from the Lien of the
Security Agreement.
(b) Loan A shall bear interest at [*] per annum (the
"DEBT RATE"). Loan B shall bear interest [*] The amounts of the installments of
principal with respect to Loan B and of principal and interest with respect to
Loan A, set forth separately for principal and for interest and in the aggregate
for both principal and interest, are set forth on Schedule I hereto.
(c) [Intentionally omitted].
(d) The Borrower agrees to execute and deliver to the
Lender on the Borrowing Date Note A and Note B. The Lender is hereby authorized
to record on the schedule annexed to and constituting part of the Notes
indebtedness of the Borrower resulting from the Loan from time to time,
including the amounts of principal and interest payable and paid from time to
time under this Agreement. The Notes shall have a maturity date equal to the
Loan A Maturity Date, in the case of Note A, and the Loan B Maturity Date, in
the case of Note B.
(e) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day without additional interest.
(f) If all or a portion of (i) any principal of Loan
A, (ii) any interest payable thereon or (iii) any other amount relating to Loan
A payable by the Borrower to the Lender hereunder or under any other Operative
Agreement shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), to the extent permitted by applicable Law, the
amount of such overdue principal, interest or other amount shall bear interest
at a rate per annum which is equal to the Default Rate, in each case from the
date of such non-payment until such overdue principal, interest or other amount
is paid in full (as well after as before judgment). Interest accruing pursuant
to the preceding sentence of this Section 2.2(f) shall be payable from time to
time on demand.
(g) Interest shall be calculated on the basis of a
360-day year consisting of 12 months of 30 days each.
(h) On the Loan B Maturity Date (or, if earlier, the
date that the maturity of the Loan A is accelerated or such maturity is
automatically accelerated, deemed accelerated or required to be prepaid) the
entire balance on deposit under the Security Deposit Agreement shall
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be disbursed to the Security Trustee in payment of Loan B and all liabilities
relating to Loan B, and any surplus funds that may then exist under the Security
Deposit Agreement shall also be disbursed to the Security Trustee for the
account of the Lender. Lender and Borrower agree that any gain and any interest
or earnings thereon or loss on investments of amounts on deposit under the
Security Deposit Agreement shall be for the account of Lender and in no event
will Lender or Security Deposit Trustee have any recourse against Borrower for
or with respect to any such loss on investments. [*] .
2.3 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If a Note
becomes mutilated, destroyed, lost or stolen, the Borrower shall, upon the
written request of the Lender, execute and deliver in replacement thereof, a new
Note, in the same principal amount, dated the date of the Note being replaced
and designated as issued under this Agreement and the Security Agreement. If the
Note being replaced has become mutilated, such Note shall be surrendered to the
Borrower. If the Note being replaced has been destroyed, lost or stolen, the
Lender shall furnish to the Borrower and the Security Trustee such security or
indemnity as may be required by the Borrower or the Security Trustee to save the
Borrower harmless and evidence satisfactory to the Borrower and the Security
Trustee of the destruction, loss or theft of such Note.
2.4 OPTIONAL PREPAYMENTS. The Borrower may, at any time,
prepay the Loan, in whole (but not in part, except as permitted in the Security
Agreement, as agreed in any Operative Agreement or as otherwise agreed by the
Lender), without premium or penalty, upon at least 30 days' revocable written
notice to the Lender and the Security Trustee specifying the date of such
prepayment. If any such notice is given, an amount equal to (i) the outstanding
principal amount of the Loan plus (ii) interest accrued on such amount to the
date of prepayment shall be due and payable on the date specified therein
(subject, in the case of Loan B, to Section 2.2(h)).
2.5 MANDATORY PREPAYMENT. The Loan shall be prepaid by the
Borrower (subject, in the case of Loan B, to Section 2.2(h)) in whole (but not
in part) without premium or penalty, at a prepayment price equal to the
outstanding principal amount of the Loan plus interest accrued thereon to the
date of prepayment (x) in connection with an Event of Loss with respect to the
Airframe (unless pursuant to Section 3.4(c) of the Security Agreement a
Replacement Aircraft or Replacement Airframe shall have been substituted for the
Airframe subject to such Event of Loss) on the Loss Payment Date and (y) on such
other date on which a sale of the Aircraft occurs which sale is permitted by the
terms of an Operative Agreement. Amounts prepaid pursuant to this Section 2.5
may not be reborrowed.
2.6 TAXES
(a) All payments made by the Borrower to or on behalf
of the Lender under this Agreement or the other Operative Agreements shall be
made without deduction or withholding for or on account of any present or future
Indemnified Taxes unless such deduction or withholding is required by law. If
any Indemnified Taxes are required to be deducted or withheld from any amounts
payable to the Lender hereunder with respect to Loan A (whether by the Borrower
or by the Security Trustee), the amounts so payable to the Lender shall be
increased by the Borrower to the extent necessary so that the net amount
actually received (whether directly or through the Security Trustee) by the
Lender (after deduction or withholding of all such Indemnified Taxes) will be
equal to the full amount the Lender would have received
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under this Agreement or the other Operative Agreements, as the case may be, had
no such deduction or withholding been required. In addition, the Borrower shall
pay any Indemnified Taxes to the relevant Government Entity in accordance with
applicable Law.
(b) The Borrower shall indemnify the Lender, within
10 days after written demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Lender, with respect to payments
made with respect to Loan A under this Agreement or the other Operative
Agreements and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Government Entity. A certificate as
to the amount of such payment or liability delivered to the Borrower by the
Lender shall be conclusive absent manifest error.
(c) Whenever any Indemnified Taxes are payable by the
Borrower pursuant to this Section 2.6, as promptly as practicable thereafter the
Borrower shall send to the Lender a certified copy of an original official
receipt, if such receipt is received by the Borrower, or other evidence
available to the Borrower, showing payment thereof. If the Borrower fails to pay
any Indemnified Taxes with respect to Loan A when due to the appropriate taxing
authority the Borrower shall indemnify the Lender for such Indemnified Taxes and
any interest or penalties that may become payable by the Lender as a result of
any such failure.
(d) [*] Lender shall provide prior to the Borrowing
Date (and at such times thereafter as reasonably requested in writing by the
Borrower and necessary to establish exemption) a properly completed IRS form
W8[*] (or successor form). In addition, [*] as a result of a change to the Code
or regulations thereunder, [*] , each relevant [*]Lender shall provide a
properly completed IRS form W-8[*] (or successor form) but only if and to the
extent that such [*]Lender is entitled under applicable Law to furnish such form
and eligible to claim a reduction or exemption from withholding in connection
therewith, and only to the extent such form may be filed by such [*]Lender
without adverse consequences to the [*]Lender or any of its Affiliates, or risk
thereof, as reasonably determined by such [*] Lender in good faith.
(e) [*] .
(f) In the event that withholding Taxes are imposed
by a Government Entity of or within the United States (or the IRS asserts that
the Lender is subject to withholding Taxes on interest payments) with respect to
any Loan A pursuant to the Funding Agreement or any similar transaction at any
time during the term of the Funding Agreement, the Borrower and the Lender
shall, each acting reasonably and in good faith, endeavor to restructure this
Loan A in such a manner as to reduce or eliminate the withholding Tax, which
restructuring may involve a defeasance, cash out of benefits or transfer of the
debt to an institution in the U.S. or otherwise, provided that such
restructuring shall not put the party that would not be responsible for such
withholding Tax in a worse economic position than it would have been in if no
withholding Tax had been imposed and no restructuring had been undertaken. The
cost of any such restructuring shall be borne by the party that would be
responsible for such withholding Tax.
(g) If following the imposition of withholding Taxes
by a Government Entity of or within the United States or an IRS assertion that
the Lender is subject to withholding
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Taxes by a Government Entity of or within the United States with respect to any
Loan A pursuant to the Funding Agreement or any similar transaction,
notwithstanding the good faith efforts of the parties to restructure, the
parties are unable to agree upon a satisfactory restructuring which would
eliminate such withholding Taxes within 60 days of learning of the possible
imposition of withholding Taxes, then (A) if the Borrower shall be responsible
for such withholding Taxes, the Borrower shall, at its election either (i) be
responsible for such withholding Taxes in accordance with this Section 2.6 or
(ii) prepay the entire Loan A in full, together with accrued interest thereon,
or (B) if the Lender would be responsible for such withholding Taxes in
accordance with this Section 2.6, the Lender shall continue to be responsible
for such withholding Taxes.
(h) In the event that the Loan A is transferred by
the Lender, [*] such transferee shall not be entitled to any greater payments
with respect to withholding Tax than the initial [*] Lender would have been
entitled to absent the transfer, provided, however, that in the case of a Lender
organized in a Tax Treaty Country, the transferee shall be entitled to
indemnification for withholding Taxes with respect to the Loan A which would be
Indemnified Taxes absent this Section 2.6(h) and are imposed as a result of a
change in law after the transfer date, provided that (A) such Lender delivers
(upon written request of the Borrower) a properly completed IRS Form W-8BEN or
W-8ECI (or successor forms) evidencing an exemption from U.S. Withholding Tax
unless such Lender is not entitled to deliver such form due to a change in law
after the date of the transfer, and (B) a change in the income tax treaty
between the United States and such country which had been proposed prior to the
transfer date or a change in the nature of an anti-treaty shopping or limitation
on benefits provision, shall not constitute a change in law and provided,
further, that, [*]to the extent such transferee would be subject to U.S.
Withholding Taxes on the date of the transfer, the Borrower shall not be liable
for such U.S. Withholding Taxes.
(i) Calculation of Indemnity Payments
(i) Any payment which Borrower shall be
required to make to or for the account of any Lender with
respect to any Tax which is subject to indemnification under
this Section 2.6 shall be made on an After-tax Basis (without
regard to the exclusions therein).
(ii) [*]if by reason of any payment with
respect to Taxes made by or on behalf of Borrower to or for
the account of [*] Lender pursuant to this Section 2.6, such
Lender subsequently realizes Tax savings not previously taken
into account in computing such payment, such Lender shall
promptly pay to Borrower an amount equal to the sum of the
actual net reduction in Taxes, if any, realized by such Lender
which is attributable to such Tax savings and the actual
reduction in any Taxes realized by such Lender as the result
of any payment made by such Lender pursuant to this sentence,
provided, that such Lender shall not be obligated to pay any
such amount if an Event of Default shall have occurred and be
continuing or to the extent that such amount would exceed (x)
the aggregate amount of all prior payments by Borrower to such
Lender under this Section 2.6 (including the payment of any
amount necessary for such payments to be on an After-tax
Basis) less (y) the aggregate amount of all prior payments by
such
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Lender to Borrower pursuant to this Section 2.6, and provided,
further, that, subject to Section 2.6(i) hereof, that any
amount not paid to Borrower pursuant to the foregoing
limitation shall be carried forward to reduce pro tanto any
future payments that Borrower may be required to make to such
Lender pursuant to this Section 2.6.
(iii) Any Taxes that are imposed on a Lender
as a result of the disallowance or reduction of any Tax
savings paid to Borrower pursuant to this Section 2.6(i) shall
be treated as a Tax for which Borrower is obligated to
indemnify such Lender subject to the provisions of Section 2.6
provided that such Lender shall use reasonable good faith
efforts to reclaim and retain the allowance of such Tax
savings.
(iv) [*]in determining the order in which
such Lender utilizes any foreign Taxes as a credit against
such Lender's home country Income Taxes, such Lender shall be
deemed to utilize (i) first, all foreign Taxes other than
those described in clause (ii) below; (ii) then, all foreign
Taxes with respect to which such Lender is entitled to obtain
indemnification pursuant to an indemnification provision
contained in any lease,
loan agreement, financing document,
participation agreement, or indemnification agreement
(including this Agreement),
(j) Contests
(i) In General
(1) Except as provided in (ii) below, if a written
claim shall be made against and received by any Lender for any
Tax for which Borrower is obligated to indemnify pursuant to
this Section 2.6, such Lender shall notify Borrower in writing
of such claim within 30 days after its receipt, and shall
provide Borrower such information regarding such claim as
Borrower may reasonably request; provided, however, that the
failure to provide such notice within such 30 days shall not
release Borrower from any of its obligations to indemnify
under this Section 2.6 unless, and only to the extent that,
such failure has a material adverse effect on the conduct of
such contest. To the extent permitted under applicable law,
such Lender will not make any payments with respect to such
claim for at least 30 days after giving notice of such claim
to Borrower.
(2) If requested by Borrower in writing within 30
days after its receipt of such notice, such Lender shall, at
the expense of Borrower and subject to subsection (3) below,
contest the validity, applicability or amount of such Taxes
by, in the case of a "Lender-Controlled Contest" (which shall
mean any contest other than a Borrower-Controlled Contest (as
defined below)), in such Lender's sole discretion or, in the
case of a "Borrower-Controlled Contest" (which shall mean any
contest which such Lender agrees in its sole discretion to
allow Borrower to control or involving only Taxes with respect
to which participation by neither the Lender nor any Affiliate
of the Lender is required (it being
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understood that any contest involving Taxes in the nature of
Income Taxes or any contest conducted in the name of such
Lender is a contest requiring the participation of such
Lender) and no tax return of the Lender or any of its
Affiliates is held open with respect to which any Lender may
reasonably be viewed as having an actual or potential material
liability for Taxes not indemnified against by Borrower), in
Borrower's sole discretion, resisting payment thereof if
practicable, not paying such Tax except under protest, if
protest is necessary and proper, if payment of such Tax is
made, using reasonable efforts to obtain a refund thereof, in
appropriate administrative and judicial proceedings, and in
the case of a Lender-Controlled Contest, considering in good
faith any other reasonable action as Borrower and Borrower's
counsel may reasonably request. Each Lender shall consult in
good faith with Borrower and Borrower's counsel concerning the
forum in which the contest is most likely to be favorably
resolved and whether such contest shall be by (x) resisting
payment of such Tax, (y) paying such Tax under protest or (z)
paying such Tax and seeking a refund or other repayment
thereof. In the case of a Lender-Controlled Contest, such
Lender shall (i) keep Borrower reasonably informed regarding
the progress of such contest, and (ii) consult with Borrower
in good faith regarding the manner of contesting such claim,
PROVIDED, HOWEVER, that the Lender shall have ultimate control
over such contest and its decisions with respect to such
contest shall be conclusive and binding. If requested to do so
by Borrower, the Lender shall appeal any adverse
administrative or judicial decision, [*].
(3) In no event shall a Lender be required, or
Borrower be permitted, to contest the imposition of any Tax
for which Borrower is obligated pursuant to this Section 2.6
unless (A) Borrower shall have agreed to pay and shall
promptly on request pay on an After-tax Basis all reasonable
out of pocket costs and expenses that such Lender incurs in
contesting such claim or arising out of or relating to such
contest and which are reasonably allocable to such claim
(including legal fees and disbursements, including those on
appeal, if any); (B) (unless Borrower has provided to the
relevant Lender a bond or other security in form and substance
acceptable to such Lender in its sole discretion) such contest
is not reasonably likely to result in a material danger of the
sale, seizure, forfeiture or loss of the Aircraft, or the
creation of any Lien thereon other than Liens for Taxes either
not yet due or being contested in good faith by appropriate
proceedings and for which such reserves, if any, as are
required to be provided under GAAP have been provided by
Borrower; (C) if such contest shall be conducted in a manner
requiring the payment of the claim, Borrower shall have
advanced sufficient funds, on an interest-free basis, to make
the payment required, and shall have agreed to indemnify the
Lender against any additional net After-tax cost to such
Lender of such advance; (D) if requested by the Lender in
writing, such Lender shall have received an opinion of
independent Tax counsel selected by Borrower and reasonably
acceptable to such Lender and furnished at Borrower's sole
expense to the effect that a "Realistic Possibility of
Success" (which shall mean the standard upon which an attorney
may properly advise the taking of a position on a tax return
as set forth in ABA Formal Opinion 85-352) exists for
contesting such claim (or, in the case of an appeal of an
adverse judicial
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8
determination, a written opinion from such independent Tax
counsel to the effect there is a Realistic Possibility of
Success such adverse judicial determination will be reversed
or substantially modified); (E) Borrower shall have delivered
to such Lender a written acknowledgment of Borrower's
obligation to indemnify such Lender to the extent that the
contest is not successful, provided, however, that Borrower
will not be bound by its acknowledgment of liability if the
contest is resolved on a clear and unambiguous basis showing
no such liability under this Section 2.6 with respect to such
Tax; (F) if an Event of Default shall have occurred and be
continuing, Borrower shall have provided security for its
obligation hereunder satisfactory to the Lender by placing in
escrow sufficient funds to cover any such contested Tax and
the reasonably expected expenses of such contest on an
After-tax Basis, or otherwise providing satisfactory (as
determined in such Lender's sole discretion) provisions for
payment of such amounts; (G) the aggregate amount of all
indemnity payments that Borrower may [*] and (H) the claim is
not for a Tax the imposition of which has been previously
contested by Borrower hereunder, and such previous contest
(including all allowable appeals) was decided adversely to
Borrower, unless Borrower has delivered an opinion of
independent Tax counsel selected by Borrower and reasonably
acceptable to the Lender to the effect that, on the basis of
(i) a change in applicable Law, or (ii) a difference in the
underlying facts, there is currently a Realistic Possibility
of Success for contesting such claim.
(4) [*] if [*]Lender shall obtain a refund of all or
any part of any Tax paid, advanced or indemnified by Borrower
(or of an amount which otherwise would have been a refund was
used to offset another liability of such Lender not
indemnified by Borrower hereunder (an "Applied Amount")), such
Lender shall pay Borrower, but not before Borrower shall have
made all payments theretofore due to such Lender pursuant to
this Section 2.6 and any other payments theretofore due to
such Lender under any of the Operative Agreements, an amount
equal to the amount of such refund (or such Applied Amount),
including interest received or credited and attributable
thereto plus, if Borrower has paid an amount on an After-tax
Basis, any net Tax benefit (or minus any net Tax detriment)
realized by such Lender as a result of any refund (or Applied
Amount) received, and payment made, by such Lender pursuant to
this sentence, provided, that the Lender shall not be
obligated to pay any amount under the preceding sentence to
the extent that such amount (other than that portion
attributable to interest) would exceed the amount of Taxes
paid, reimbursed or advanced by Borrower to such Lender plus
any other payment in respect of such Taxes paid, reimbursed or
advanced, provided, further, that any amount not paid to
Borrower pursuant to the foregoing limitation shall be carried
forward to reduce pro tanto any future payments that Borrower
may be required to make to such Lender pursuant to this
Section 2.6. If any Lender shall have paid Borrower any refund
(or Applied Amount) of all or part of any Tax paid by Borrower
and it is subsequently determined pursuant to a contest
conducted in accordance with this Section 2.6(j) that such
Lender was not entitled to the refund, such determination
shall be treated as the imposition of a Tax for which Borrower
is obligated to indemnify such Lender pursuant to the
provisions of this Section 2.6. [*] if a
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9
Lender receives an award of attorneys fees in a contest for
which the Borrower has paid an allocable portion of the
contest expenses, such Lender shall pay to the Borrower the
same proportion of the amount of such award as the amount of
such Lender's attorneys fees paid or reimbursed by the
Borrower bears to the total amount of attorneys fees actually
incurred by such Lender in conducting such contest, up to the
amount of attorneys fees paid or borne by the Borrower in
connection with such contest. [*]Lender shall have the right
to settle or compromise a contest that it is otherwise
required to pursue pursuant to this Section 2.6(j) if the
applicable Lender has provided Borrower a reasonable
opportunity to review a copy of that portion of the settlement
or compromise proposal which relates to the Tax for which the
applicable Lender is seeking indemnification hereunder;
provided that, if (i) the applicable Lender fails to provide
the Borrower such a reasonable opportunity to review such
portion of such proposal or (ii) after such reasonable
opportunity to review such proposal the Borrower in writing
reasonably withholds its consent to all or part of such
settlement or compromise proposal, the Borrower shall not be
obligated to indemnify such Lender hereunder to the extent of
the amount attributable to the Tax to which such settlement or
compromise relates as to which the Borrower has reasonably
withheld its consent and with respect to any other Tax for
which a successful contest is foreclosed because of such
settlement or compromise as to which the Borrower has withheld
its consent. If the applicable Lender effects a settlement or
compromise of such contest, notwithstanding that the Borrower
has reasonably withheld its consent thereto, such Lender shall
repay to the Borrower such amounts theretofore advanced by the
Borrower pursuant to this Section 2.6(j) and the amount of any
Tax subject to such contest paid or reimbursed by Borrower, to
the extent the Borrower has reasonably withheld its consent to
the settlement or compromise thereof (together with interest
at the rate applicable to refunds of such Tax on any such
amount paid by the Borrower from the date paid by the Borrower
to the date repaid by such Lender).
(5) [*] Lender shall obtain a refund of all or any
part of any Tax paid, advanced or indemnified by Borrower (or
if an amount which otherwise would have been a refund was used
to offset another liability of the Lender not indemnified by
Borrower hereunder (an "Applied Amount")), such Lender shall
pay Borrower, but not before Borrower shall have made all
payments theretofore due to the Lender pursuant to this
Section 2.6 and any other payments theretofore due the Lender
under any of the Operative Agreements, an amount equal to the
amount of such refund (or such Applied Amount), including
interest received or credited and attributable thereto plus,
if Borrower has paid an amount on an After-tax Basis, any net
Tax benefit (or minus any net Tax detriment) realized by such
Lender as a result of any refund (or Applied Amount) received,
and payment made, by such Lender pursuant to this sentence,
PROVIDED, that such Lender shall not be obligated to pay any
amount under the preceding sentence [*](ii) to the extent that
such amount (other than that portion attributable to interest)
would exceed the amount of Taxes paid, reimbursed or advanced
by Borrower to such Lender plus any other payment in respect
of such Taxes paid, reimbursed or advanced. If such Lender
shall have paid Borrower any refund (or Applied
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10
Amount) of all or part of any Tax paid by Borrower and it is
subsequently determined pursuant to a contest conducted in
accordance with this Section 2.6(j) that the Lender was not
entitled to the refund, such determination shall be treated as
the imposition of a Tax for which Borrower is obligated to
indemnify the Lender pursuant to the provisions of this
Section 2.6. If such Lender receives an award of attorneys
fees in a contest for which the Borrower has paid an allocable
portion of the contest expenses, the Lender shall pay [*]to
the Borrower the same proportion of the amount of such award
as the amount of the Lender's attorneys fees paid or
reimbursed by the Borrower bears to the total amount of
attorneys fees actually incurred by the Lender in conducting
such contest, up to the amount of attorneys fees paid or borne
by the Borrower in connection with such contest.
(6) Nothing contained in this Section 2.6(j) shall
require any Lender to contest, or permit Borrower to contest
in the name of such Lender, a claim which such Lender would
otherwise be required to contest pursuant to this Section
2.6(j) if such Lender shall waive payment by Borrower of any
amount that might otherwise be payable by Borrower under this
Section 2.6 in connection with such claim (and any other claim
for which a successful contest would be foreclosed because of
the absence of, or the failure to pursue, such contest) and
promptly (upon the prior written approval of the Central Bank
of Brazil, if such approval is required) pay to Borrower an
amount equal to all funds advanced with respect to such
contest by Borrower.
(7) Withholding Taxes. Notwithstanding anything to
the contrary herein, in the event a U.S. Withholding Tax is
imposed or required to be withheld from any payment to Lender
under the Operative Agreements, the provisions of Section
2.6(j)(i) regarding contests shall govern [*](1) such Lender
or the Borrower, as the case may be, promptly and in writing
shall notify each other immediately upon being informed of
such imposition or requirement (unless such party is so
informed by the other), [*](3) any contest concerning the
imposition of a U.S. Withholding Tax shall in all events be
controlled by such Lender and [*].
(k) The agreements in this Section 2.6 shall survive
the termination of this Agreement or the other Operative Agreements and the
payment of the Loan and all other amounts payable hereunder and thereunder.
[*]
2.7 2. INCREASED COSTS. If (1) the adoption, after the date
hereof, of any applicable Law, rule or regulation regarding capital adequacy,
(2) any change, after the date hereof, in the interpretation or administration
of any such law, rule or regulation by any central bank or other Government
Entity charged with the interpretation or administration thereof or (3)
compliance by a Lender or any corporation or bank controlling a Lender with any
applicable guidelines or requests of general applicability, issued after the
date hereof, by any central bank or other Government Entity (whether or not
having the force of law) that constitutes a change of the nature described in
clause (2), has the effect of (x) requiring an increase in the amount of capital
required to be maintained by a Lender or any corporation or bank controlling a
Lender or (y)
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11
reducing the rate of return on assets or capital of such Lender (or such
corporation or bank) and such adoption, change or compliance, as the case may
be, relates to a category of claims or assets that includes such Lender's Loans,
the Borrower shall pay to such Lender from time to time such additional amount
or amounts as are necessary to compensate such Lender for such portion of such
increase or reduction as shall be reasonably allocable to such Lender's Loans or
obligations to the Borrower hereunder; PROVIDED, that no such amounts shall be
payable by the Borrower to any Lender pursuant to this Section unless such
Lender certifies to the Borrower that, such Lender is assessing to its other
borrowers (of loans similar to the Loans) comparable allocable costs, PROVIDED,
FURTHER, that the Borrower shall have no obligations under this Section after
consummation of any Assignment of the Loans, in whole or in part, except with
respect to any part retained by a Brazilian Lender.
Each Lender will notify the Borrower of any event occurring
after the date of this Agreement that will entitle such Lender to compensation
pursuant to this Section as promptly as practicable but in any event within 90
days, after such Lender obtains Actual Knowledge thereof; PROVIDED, HOWEVER,
that if any Lender fails to give such notice within 90 days after it obtains
Actual Knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section in respect of any costs resulting
from such event, be entitled to payment under this Section only for costs
incurred from and after the date 90 days prior to the date that such Lender does
give such notice. Such notice shall describe in reasonable detail the
calculation of the amounts owed under this Section. Determinations by a Lender
for purposes of this Section of the effect of any increase in the amount of
capital required to be maintained by the bank and of the amount allocable to
such Lender's obligations to the Borrower hereunder shall be PRIMA FACIE
evidence of the amounts owed under this Section.
2.8 TERMINATION OF SECURITY AGREEMENT. Upon payment in full of
the principal of, and interest on, the Note A and all other amounts then due and
owing under any Operative Agreement (excluding amounts with respect to the Loan
B), the Lender shall direct the Security Trustee to release the Collateral from
the Lien of the Security Agreement pursuant to Section 11.1 of the Security
Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
To induce the Lender to enter into this Agreement and to make the Loan,
the Borrower hereby represents and warrants to the Lender that:
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Borrower is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of
New York and has the corporate power and authority to
conduct the business in which it is currently engaged and to own or hold under
lease its properties and to enter into and perform its obligations under the
Operative Agreements to which it is a party. Borrower is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
the nature and extent of the business conducted by it, or the ownership of its
properties, requires such qualification, except where the failure to be so
qualified would not give rise to a Material Change to it.
12
3.2 CORPORATE AUTHORIZATION. Borrower has taken, or caused to
be taken, all necessary corporate action to authorize the execution and delivery
of the Operative Agreements and the performance of its obligations thereunder.
3.3 NO VIOLATION. The execution and delivery by Borrower of
the Operative Agreements to which it is a party, the performance by Borrower of
its obligations thereunder and the consummation by Borrower on the Borrowing
Date of the transactions contemplated thereby, do not and will not (a) violate
any provision of its Certificate of Incorporation or By-Laws, (b) violate any
Law applicable to or binding on Borrower or (c) violate or constitute any
default under (other than any violation or default that would not result in a
Material Change to it), or result in the creation of any Lien (other than as
permitted under the Security Agreement) upon the Aircraft or the other
Collateral under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which Borrower is a party or by which Borrower or any of its
properties is bound.
3.4 APPROVALS. The execution and delivery by Borrower of the
Operative Agreements to which it is a party, the performance by Borrower of its
obligations thereunder and the consummation by Borrower on the Borrowing Date of
the transactions contemplated thereby do not and will not require the consent or
approval of, or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any other action in
respect of, (a) any trustee or other holder of any Debt of Borrower and (b) any
Government Entity, other than the filings and recordings referred to in Section
3.12 (and Uniform Commercial Code continuation statements periodically) and (y)
filings, recordings, notices or other ministerial actions pursuant to any
routine recording, contractual or regulatory requirements applicable to
Borrower.
3.5 VALID AND BINDING AGREEMENTS. The Operative Agreements to
which it is a party have been duly authorized, executed and delivered by
Borrower and, assuming the due authorization, execution and delivery thereof by
the other party or parties thereto, constitute the legal, valid and binding
obligations of the Borrower and are enforceable against Borrower in accordance
with the respective terms thereof, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar Laws affecting the rights of creditors generally and general principles
of equity, whether considered in a proceeding at law or in equity.
3.6 LITIGATION. Except as disclosed in the financial
statements referred to in Section 3.7, no action, claim or proceeding is now
pending or, to the Actual Knowledge of Borrower, threatened, against Borrower,
before any court, governmental body, arbitration board, tribunal or
administrative agency, which is reasonably likely to be determined adversely to
Borrower and if determined adversely to Borrower would result in a Material
Change to Borrower.
3.7 FINANCIAL CONDITION. The audited balance sheet of Borrower
as of December 31, 2000, and the related statements of operations and cash flows
for the period ended have been prepared in accordance with GAAP and fairly
present in all material respects the financial condition of Borrower as of such
date and the results of its operations and cash flows for such
13
period, and since the date of such balance sheet, there has been no Material
Change to the Borrower.
3.8 CHIEF EXECUTIVE OFFICE. The chief executive office (as
such term is defined in Article 9 of the UCC) of Borrower is located at ▇▇▇▇ ▇.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
3.9 NO DEFAULT. No event which constitutes a Default or an
Event of Default has occurred and is continuing.
3.10 NO EVENT OF LOSS. No Event of Loss has occurred with
respect to the Airframe or any Engine, and, to the Actual Knowledge of the
Borrower, no circumstance, condition, act or event has occurred that, with the
giving of notice of lapse of time or both gives rise to or constitutes an Event
of Loss with respect to the Airframe or any Engine.
3.11 COMPLIANCE WITH LAWS. (a) Borrower is a Citizen of the
United States, a U.S. Air Carrier, and a Section 1110 Air Carrier.
(b) Borrower holds all licenses, permits and
franchises from the appropriate Government Entities necessary to authorize it to
lawfully engage in air transportation and to carry on scheduled commercial
passenger service as currently conducted, except where the failure to so hold
any such license, permit or franchise would not give rise to a Material Change
to it.
(c) Borrower is not an "investment company" or a
company controlled by an "investment company" required to be registered under
the Investment Company Act of 1940, as amended.
3.12 TITLE; SECURITY AGREEMENT. Except for (a) the
registration of the Aircraft with the FAA pursuant to the Federal Aviation Code,
(b) the filing for recordation (and recordation) pursuant to the Federal
Aviation Code of the FAA ▇▇▇▇ of Sale and the Security Agreement (with the
Security Agreement Supplement covering the Aircraft attached) and the Bridge
Loan Release, (c) the filing of a financing statement in respect of such
security interest under Article 9 of the Uniform Commercial Code as in effect in
the State of
New York and the filing of continuation statements with respect
thereto under such Uniform Commercial Code and the filing of termination
statements relating to the UCC financing statements for the Bridge Loan, (d) the
affixation of the nameplates referred to in Section 3.3(c) of the Security
Agreement, no further filing or recording of any document (including, without
limitation, any financing statement in respect thereof under Article 9 of the
Uniform Commercial Code of any applicable jurisdiction) is necessary under the
laws of the United States or any State thereof as of the Borrowing Date in order
to establish and perfect the security interest in the Aircraft created under the
Security Agreement in favor of the Security Trustee as against the Borrower and
any third parties in any applicable jurisdiction in the United States. On the
Borrowing Date, the Security Agreement will have created in favor of the Lender
a valid and duly perfected security interest in the Aircraft and the other
Collateral, subject to no Liens other than Permitted Liens.
3.13 SECTION 1110. The Security Trustee, on behalf of the
Lender, is entitled to the benefits of Section 1110 (as currently in effect)
including to the right to take possession of
14
the Airframe and Engines in compliance with the Security Agreement in the event
of a case under Chapter 11 of the Bankruptcy Code in which the Borrower is a
debtor.
[*]
3.15 ERISA. (a) No condition exists with respect to any Plan
maintained, sponsored or contributed (or required to be contributed) to by
Borrower or any Commonly Controlled Entity which could result in a Material
Change to Borrower.
(b) No part of the funds to be used by the Borrower
in connection with any payment under the Operative Agreements directly or
indirectly constitutes assets of a Plan.
3.16 BROKER'S FEES. No Person acting on behalf of the Borrower
is or will be entitled to any broker's fee, commission or finder's fee in
connection with the transactions contemplated by this Agreement and the other
Operative Agreements (other than The Seabury Group LLC).
SECTION 4. CONDITIONS PRECEDENT TO THE LENDER'S OBLIGATIONS
The agreement of the Lender to make the Loan requested to be made by it
to the Borrower on the Borrowing Date is subject to the satisfaction, or waiver
by the Lender, of the following conditions precedent prior to or concurrently
with the making of the Loan:
4.1 OPERATIVE AGREEMENTS, ETC. On or before the Borrowing
Date, the Lender shall have received (a) an originally executed copy, duly
authorized and delivered by the respective party or parties thereto (other than
the Lender), of (i) this Agreement and the Security Agreement and Security
Agreement Supplement No. 1 each covering the Aircraft, and (ii) the Notes to
evidence the Loan conforming to the requirements hereof, (b) a copy, certified
by the Manufacturer of any amendments to the Purchase Agreement since the date
of the Funding Agreement that have not previously been delivered to Lender,
except for any amendments which are not requested by Lender after being informed
of their substance, and (c) a copy of (i) the FAA ▇▇▇▇ of Sale and the Warranty
▇▇▇▇ of Sale, (ii) the FAA Application for Aircraft Registration covering the
Aircraft, (iii) the Purchase Agreement Assignment, (iv) the Engine Warranty
Agreement, and (v) the Airframe Warranty Agreement.
4.2 RECORDATION AND FILING. The Security Agreement, Security
Agreement Supplement No.1, and the FAA ▇▇▇▇ of Sale relating to the Aircraft
will have been duly filed for recordation (or shall be in the process of being
so duly filed) pursuant to and in accordance with the Federal Aviation Code.
Application for registration of the Aircraft in the name of the Borrower shall
have been duly made with the FAA. A Uniform Commercial Code financing statement
or statements covering the security interest created by the Security Agreement
shall have been executed and delivered by the Borrower, as debtor, and by the
Security Trustee, as secured party, and such financing statement or statements
shall have been duly filed in all places necessary within the State of
New York
(and all other applicable jurisdictions, if any) (and evidence thereof,
reasonably satisfactory to the Lender, shall have been provided to the Lender).
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On the Borrowing Date, the Aircraft shall have been duly certified as to
airworthiness by the Brazilian aviation authority.
4.3 CLOSING CERTIFICATES. The Lender shall have received
executed counterparts of the following instruments, certificates or documents,
and such counterparts (i) shall have been duly authorized, executed and
delivered by the respective party or parties thereto, (ii) shall be reasonably
satisfactory in form and substance to the Lender and (iii) shall be in full
force and effect:
(a) an Officer's Certificate of the Borrower, dated
as of the Borrowing Date, stating that: (i) its representations and warranties
contained in Section 3 are true and accurate on and as of the Borrowing Date
(unless such representation and warranty shall have been made with reference to
a specified date, in which case such representation and warranty shall be true
and accurate as of such specified date); (ii) all covenants and conditions
required to be performed or fulfilled by it prior to or on the Borrowing Date
have been performed or fulfilled; (iii) as of the Borrowing Date, both before
and after giving effect to the transactions contemplated by this Agreement, no
Event of Default shall have occurred and be continuing; (iv) absent a Change in
U.S. Tax Law, or being requested to do so by any appropriate Governmental
Entity, and subject to the receipt of an IRS form W8-EXP, and subject to Section
2.7.1 hereof, the Borrower has no present intention to withhold (or cause to be
withheld) Taxes on payments of interest on the Loan A; and (v) no event has
occurred and is continuing that constitutes a Material Adverse Change with
respect to the Borrower;
(b) a certificate of the Secretary or an Assistant
Secretary of the Borrower, dated as of the Borrowing Date, (A) stating that the
copy of the resolutions of the Board of Directors of the Borrower (attached to
the certificate) authorizing the execution, delivery and performance of this
Agreement and the other Operative Agreements to which the Borrower is a party or
will be a party as contemplated by this Agreement is true and accurate, and that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded; (B) stating that the copies of the certificate of incorporation and
by-laws of the Borrower (which are attached to the certificate), are true and
complete copies thereof, (C) stating that the copy of the long-form good
standing certificate (attached to the certificate and certified as of a recent
date by the Secretary of State of the Borrower's jurisdiction of incorporation)
is a true and complete copy thereof, and (D) certifying to the incumbency and
signature of the officers of the Borrower executing this Agreement;
(c) a certificate of the Secretary or an Assistant
Secretary of the Borrower, dated as of the Borrowing Date that certifies to the
following: (A)(i) that attached to the certificate are accurate and true copies
of each Code-Share Agreement and amendment to a Code-Share Agreement entered
into by the Borrower since the most recent advance of a Direct Loan under the
Funding Agreement or, if no Direct Loan has been advanced under the Funding
Agreement, since the Financial Closing Date (as defined in the Funding
Agreement), or (ii) that Borrower has not entered into any Code-Share Agreement
or amendment to a Code-Share Agreement since the most recent advance of a Direct
Loan under the Funding Agreement or, if no Direct Loan has been advanced under
the Funding Agreement, since such Financial Closing Date, and (B) listing all
Code-Share Agreements which are in effect and further indicating any Code-Share
Agreement which is in effect but not listed in Schedule III to the Funding
16
Agreement as well as any Code-Share Agreement which is listed in Schedule III to
the Funding Agreement but has terminated;
(d) a certificate of the Manufacturer, representing
and warranting to and for the benefit of the Borrower, the Lender and Security
Trustee that title to the Aircraft, free and clear of all Liens arising from,
through or under the Manufacturer, has been conveyed to the Borrower pursuant to
the Warranty ▇▇▇▇ of Sale, and agreeing to defend such title forever against the
claims and demands of all Persons; and
(e) the certificate of the Borrower referred to in
Section 5.3 of the Funding Agreement.
4.4 LEGAL OPINIONS. The Lender and the Security Trustee shall
have received the following executed legal opinions in each case in form and
substance satisfactory to them:
(a) the executed legal opinion of Inside Counsel to
Borrower;
(b) the executed legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, special counsel for Borrower ;
(c) the executed legal opinion of Daugherty, Fowler,
Peregin & ▇▇▇▇▇▇, P.C.;
(d) the executed legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel to the Lender;
(e) the executed legal opinion of ▇▇▇▇▇▇▇▇ Neto,
Advogados, counsel to the Lender;
(f) the executed legal opinion of special counsel to
the Security Trustee; and
(g) the executed legal opinion of counsel to
Manufacturer.
4.5 INSURANCE. The Lender shall have received an independent
insurance broker's report and the related certificate of insurance in form and
substance reasonably satisfactory to it that all requirements of Section 3.3(k)
of the Security Agreement shall have been satisfied.
4.6 VIOLATION OF LAW. No change shall have occurred after the
date of this Agreement in any applicable Law that makes it a violation of Law
for any party to this Agreement to execute, deliver and perform this Agreement
and any other Operative Agreements to which any of them is a party.
4.7 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
representations and warranties of the Borrower made, in each case, in this
Agreement and in any other Operative Agreements to which it is a party, shall be
true and accurate in all material respects as of the Borrowing Date (unless such
representation and warranty shall have been made with reference to a specified
date, in which case such representation and warranty shall be true and accurate
as of
17
such specified date) and the Borrower shall have performed and observed, in all
material respects, all of its covenants, obligations and agreements in this
Agreement and in any other Operative Agreements to which it is a party to be
observed or performed by it as of the Borrowing Date.
4.8 NO TERMINATION OF COMMITMENTS. No Commitment Termination
Event (as defined in the Funding Agreement) shall have occurred and be
continuing.
4.9 PURCHASE AGREEMENT AMENDMENTS. The Lender shall be
satisfied that none of the amendments to the Purchase Agreement delivered
pursuant to Section 4.1 could reasonably be expected to result in any material
increase in the Lender's obligations or material diminution in the Lender's
rights hereunder or under any other Operative Agreements.
4.10 ACCEPTANCE OF AIRCRAFT. (a) The Manufacturer shall have
delivered the Aircraft under the Purchase Agreement, the Aircraft shall have
been unconditionally and irrevocably accepted by or on behalf of the purchaser
or its assignee under the Purchase Agreement in Fly-Away-Factory Condition, and
copies of the acceptance certificate evidencing such delivery and acceptance,
shall have been furnished to the Lender.
(b) In connection with such delivery and acceptance
the Lender shall have received by 7:00 p.m. Rio de Janeiro time on the first day
prior to the Closing a copy of the printout of the screen of the Register of
Credit Operation - RC, and of the Register of Export - RE, both obtained through
the SISCOMEX (Bureau of Foreign Trade) System, evidencing the authorization for
export of the Aircraft, and indicating the Lender as lender/creditor under this
Agreement.
4.11 SECTION 1110. The Lender is entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines in the event of a case under Chapter 11
of the Bankruptcy Code in which the Borrower is a debtor.
4.12 NO DEFAULT; NO EVENT OF LOSS; NO OTHER DEFAULTS. (a) No
Default or Event of Default shall have occurred and be continuing.
(b) No Event of Loss shall have occurred.
(c) The Borrower shall not be in payment default or
other material default under any loan or lease made under the Funding Agreement
or in any other agreement with the Lender or BNDES.
4.13 TITLE. The Borrower shall hold title to the Aircraft,
free and clear of all Liens, other than Permitted Liens.
4.14 SECURITY TRUSTEE CERTIFICATE. The Lender shall have
received a certificate from the Security Trustee dated the Borrowing Date signed
by an authorized officer of the Security Trustee certifying that no Security
Trustee Liens exist and further certifying as to the correctness of the matters
stated in Section 7.3 of the Security Agreement.
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4.15 AIRWORTHINESS; TYPE. (a) The Borrower shall have received
an FAA certificate of airworthiness for any jet aircraft financed pursuant to
the Funding Agreement 30 or more days prior to the Borrowing Date. Such
certificate shall be delivered by the later of (i) the Borrowing Date and (ii)
30 days after the import of such aircraft into the United States.
(b) The Lender shall have received evidence that the
Aircraft has been certified as to type by the FAA.
4.16 AIRCRAFT PRICE; MANUFACTURER'S INVOICE. (a) The principal
amount of the Loan shall not exceed the amount permitted by Section 2.1 of the
Funding Agreement.
(b) The Lender shall have received a copy (certified
as to accuracy by the Manufacturer) of the Manufacturer's Invoice for the
Aircraft.
4.17 NO MATERIAL ADVERSE CHANGE; CODE-SHARE AGREEMENTS. On the
Borrowing Date, no Material Adverse Change shall have occurred with respect to
the Borrower (including, without limitation, with respect to Code-Share
Agreements).
4.18 NO PROCEEDINGS. No action or proceeding shall have been
instituted, nor shall any action be threatened in writing, before any Government
Entity, nor shall any order, judgment or decree have been issued or proposed to
be issued by any Government Entity, to set aside, restrain, enjoin or prevent
the completion and consummation of this Agreement or any other Operative
Agreement or the transactions contemplated hereby or thereby.
4.19 GOVERNMENTAL ACTION. All appropriate action required to
have been taken prior to the Borrowing Date by the FAA or any other Government
Entity of the United States or Brazil, in connection with the transactions
contemplated by this Agreement shall have been taken, and all orders, permits,
waivers, authorizations, exemptions and approvals of such Government Entities
required to be in effect on the Borrowing Date in connection with the
transactions contemplated by this Agreement shall have been issued.
4.20 NO SALES TAX. The Lender shall be satisfied that no
sales, use, value added, goods, services or like Tax, and no stamp duty, is
payable with respect to the delivery of any Aircraft to the Borrower either on
the Date of Actual Delivery or, if different, on the Borrowing Date.
4.21 ORIGINATION FEE. The Borrower shall have paid to the
Lender the Origination Fee.
4.22 BRIDGE LOAN RELEASE. The Lender shall have received the
Bridge Loan Release, in form and substance satisfactory to it, and related UCC
termination statements.
SECTION 5. CONDITIONS PRECEDENT TO THE BORROWER'S OBLIGATIONS
The agreement of the Borrower to borrow the amount of the Loan from the
Lender is subject to the satisfaction, or waiver by the Borrower, on or prior to
the Borrowing Date of the
19
following conditions precedent prior to or concurrently with the making of the
Loan (such satisfaction or waiver to be evidenced by the Borrower's execution
and delivery of the Notes):
5.1 OPERATIVE AGREEMENTS. On or before the Borrowing Date, the
Borrower shall have received an originally executed copy, duly authorized,
executed and delivered by the respective party or parties thereto (other than
the Borrower) of (i) this Agreement, (ii) the Security Agreement and Security
Agreement Supplement No.1 covering the Aircraft, (iii) FAA ▇▇▇▇ of Sale, (iv)
the Warranty ▇▇▇▇ of Sale, (v) the Purchase Agreement Assignment, (vi) the
Engine Warranty Agreement, (vii) the Airframe Warranty Agreement, and (viii)
each other Operative Agreement, if any.
5.2 RECORDATION. The FAA ▇▇▇▇ of Sale, the Security Agreement
and Security Agreement Supplement No. 1 covering the Aircraft shall have been
duly filed for recordation (or shall be in the process of being so duly filed
for recordation) with the FAA pursuant to the Federal Aviation Code.
5.3 REGISTRATION. Application for registration of the Aircraft
in the name of the Borrower shall have been duly made with the FAA.
5.4 CLOSING CERTIFICATES. The Borrower shall have received
executed counterparts of the following instruments, certificates or documents,
and such counterparts (i) shall have been duly authorized, executed and
delivered by the respective party or parties thereto, (ii) shall be reasonably
satisfactory in form and substance to the Borrower and (iii) shall be in full
force and effect:
(1) an Officer's Certificate of the Lender, dated as
of the Borrowing Date, stating that its representations and
warranties contained in Section 6 are true and accurate on and
as of the Borrowing Date and (ii) all covenants and conditions
required to be performed or fulfilled by it prior to or on the
Borrowing Date have been performed or fulfilled; and
(2) a certificate of the Secretary or an Assistant or
Attesting Secretary (or the equivalent) of the Lender, dated
as of the Borrowing Date, (A) stating that the copy of the
resolutions of the Board of Directors of the Lender (attached
to the certificate) authorizing the execution, delivery and
performance of this Agreement and the other Operative
Agreements to which the Lender is a party or will be a party
as contemplated by this Agreement is true and accurate, and
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and (B) certifying to the
incumbency and signature of the officers of the Lender
executing this Agreement.
5.5 LEGAL OPINIONS. The Borrower shall have received (a) the
executed legal opinion of special FAA counsel in Oklahoma City, Oklahoma, in
form and substance satisfactory to it, and (b) the executed legal opinion of
special counsel to the Security Trustee, in form and substance satisfactory to
it, each addressed to the Borrower or accompanied by a letter from the counsel
rendering such opinion authorizing the Borrower to rely on such opinion as if it
were addressed to the Borrower.
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5.6 SECURITY TRUSTEE CERTIFICATE. The Borrower shall have
received a certificate from the Security Trustee, dated the Borrowing Date,
signed by an authorized officer of the Security Trustee, certifying that no
Security Trustee Liens exist, and further certifying as to the correctness of
the matters stated in Section 7.3 of the Security Agreement.
5.7 REPRESENTATIONS AND WARRANTIES OF THE LENDER. The
representations and warranties of the Lender made, in each case, in this
Agreement and in any other Operative Agreements to which it is a party, shall be
true and accurate in all material respects as of the Borrowing Date (unless such
representation and warranty shall have been made with reference to a specified
date, in which case such representation and warranty shall be true and accurate
as of such specified date) and the Lender shall have performed and observed, in
all material respects, all of its covenants, obligations and agreements in this
Agreement and in any other Operative Agreements to which it is a party to be
observed or performed by it as of the Borrowing Date.
5.8 AGENT FOR SERVICE OF PROCESS. The Borrower shall have
received a letter from National Registered Agents, Inc, substantially in the
form of Exhibit D to the Funding Agreement, confirming its agreement to act as
the agent for service of process of the Lender.
5.9 VIOLATION OF LAW. No change shall have occurred after the
date of this Agreement in any applicable Law that makes it a violation of Law
for any party to this Agreement to execute, deliver and perform this Agreement
and any other Operative Agreements to which any of them is a party.
5.10 NO PROCEEDINGS. No action or proceeding shall have been
instituted, nor shall any action be threatened in writing, before any Government
Entity, nor shall any order, judgment or decree have been issued or proposed to
be issued by any Government Entity, to set aside, restrain, enjoin or prevent
the completion and consummation of this Agreement or any other Operative
Agreements or the transactions contemplated hereby or thereby.
5.11 GOVERNMENTAL ACTION. All appropriate action required to
have been taken prior to the Borrowing Date by the FAA or any other Government
Entity of the United States or Brazil, in connection with the transactions
contemplated by this Agreement shall have been taken, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities required to
be in effect on the Borrowing Date in connection with the transactions
contemplated by this Agreement shall have been issued.
5.12 ACCEPTANCE OF AIRCRAFT. The Manufacturer shall have
delivered the Aircraft under the Purchase Agreement and the purchaser or its
assignee under the Purchase Agreement shall have unconditionally and irrevocably
accepted the Aircraft in Fly-Away-Factory Condition.
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5.13 NO EVENT OF LOSS. No Event of Loss shall have occurred.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE LENDER
The Lender hereby represents and warrants to the Borrower (and in the
case of Sections 6.5 and 6.6 covenants with the Borrower) that:
6.1 EXISTENCE; COMPLIANCE WITH LAW. The Lender (a) is duly
organized, validly existing and in good standing under the laws of Brazil and
(b) has the power and authority, and the legal right, to conduct the business in
which it is currently engaged.
6.2 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Lender
has the power and authority, and the legal right, to make, deliver and perform
this Agreement and the other Operative Agreements to which it is a party and to
make the Loan hereunder and has taken all necessary action to authorize the Loan
on the terms and conditions of this Agreement and the other Operative Agreements
to which it is a party and to authorize the execution, delivery and performance
of the Operative Agreements to which it is a party. No consent or authorization
of, filing with, notice to or other act (including any approval) by or in
respect of, any Government Entity or any other Person which has not been
obtained and continues in full force and effect is required on the part of the
Lender in order for it to validly execute, deliver and perform this Agreement
and the Operative Agreements to which it is a party, except as expressly
provided in any such Operative Agreements. Each of this Agreement and the other
Operative Agreements to which the Lender is a party has been duly executed and
delivered on behalf of the Lender. Each of this Agreement and the other
Operative Agreements to which the Lender is a party are in proper legal form
under the laws of Brazil for enforcement thereof in Brazil against the Lender
(except, however, that a sworn translation into Portuguese and registration of
such document with the recorder of deeds will be necessary for purposes of
enforcement). Each of this Agreement and the other Operative Agreements to which
the Lender is a party constitutes a legal, valid and binding obligation of the
Lender enforceable against the Lender in accordance with its terms, subject to
the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and to general
equitable principles (whether considered in a proceeding in equity or at law).
6.3 NO LEGAL BAR. The execution, delivery and performance by
the Lender of the Operative Agreements to which the Lender is a party and the
making of the Loan hereunder will not result in a violation by the Lender of any
material Requirement of Law or material Contractual Obligation of the Lender
that may impair the ability of the Lender to comply with its obligations
hereunder.
6.4 NO IMMUNITIES. Under Brazilian law and, after giving
effect to the provisions of Section 9.12 hereof, under United States law, the
Lender is subject to civil and commercial law with respect to its obligations
under this Agreement and the other Operative Agreements to which it is a party.
Neither the Lender nor any of its property, whether or not held for its own
account, have any immunity (sovereign or otherwise) from any suit or proceeding,
from jurisdiction of any court or from set-off or any legal process (whether
service or notice,
22
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) under the laws of any Government Entity of
Brazil or (after giving effect to the provisions of Section 9.12 hereof) under
the laws of any Government Entity of the United States or the State of
New York
in respect of its obligations under this Agreement or any other Operative
Agreements.
6.5 QUIET ENJOYMENT. The Lender agrees that so long as no
Event of Default shall have occurred and be continuing, it shall not (and shall
not permit any of its Affiliates or any Person claiming by, through or under it
to) take any action contrary to, or otherwise in any way interfere with or
disturb, the quiet enjoyment of the use and possession of the Aircraft, the
Airframe or any Engine by the Borrower or any transferee of any interest in any
thereof permitted under the Security Agreement.
6.6 AGREEMENT REGARDING ENGINES. The Lender agrees, for the
benefit of each of the lessor, conditional seller, mortgagee or secured party of
any airframe or engine leased to or owned by, the Borrower (or a Permitted
Lessee) subject to a lease, conditional sale, trust indenture or other security
agreement that it will not acquire or claim, as against such lessor, conditional
seller, mortgagee or secured party, any right, title or interest in any engine
as the result of such engine being installed on any airframe subject to the Lien
of the Security Agreement at any time while such engine is subject to such
lease, conditional sale, trust indenture or other security agreement and owned
by such lessor or conditional seller or subject to a trust indenture or security
interest in favor of such mortgagee or secured party.
6.7 ERISA
No part of the funds used by Lender to make or hold the Loan
under the Operative Agreements constitutes, or may be deemed under the Code or
ERISA or any regulations or rules thereunder to constitute, assets of a Plan
subject to Title I of ERISA or Section 4975 of the Code.
SECTION 7. COVENANTS OF THE BORROWER
The Borrower hereby agrees that, so long as the Loan A is owing to the
Lender hereunder, the Borrower shall:
7.1 FINANCIAL STATEMENTS. Furnish to the Lender and to the
Security Trustee:
(a) within 120 days after the end of each fiscal year
of the Borrower, a copy of its audited balance sheet (consolidated, if
applicable) and related statements of operations, stockholders' equity and cash
flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
the Borrower's independent public accountants of recognized national standing to
the effect that such financial statements present fairly in all material
respects the financial condition and results of operations of the Borrower (on a
consolidated basis, if applicable) in accordance with GAAP;
(b) within 90 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, its balance sheet
(consolidated, if applicable) and related
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statements of operations and cash flows as of the end of and for such fiscal
quarter (in the case of the statement of operations) and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as the end of) the previous fiscal year, prepared in accordance
with GAAP, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial
statements under clause (a) above, a certificate of an officer of the Borrower
certifying (i) that he is familiar with or has reviewed the relevant terms of
this Agreement and has made, or caused to be made under his supervision, a
review of the transactions and conditions of the Borrower during the preceding
year and (ii) as to whether the Borrower has Actual Knowledge that an Event of
Default has occurred and is continuing and, if so, specifying the details
thereof and any action taken or proposed to be taken with respect thereto;
(d) if requested by Lender in connection with a
Securitization at any time when the Borrower is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, such other additional
information with respect to the Borrower that would be within the scope of Rule
144A(d)(4) under the Securities Act of 1933 assuming for this purpose only that
the securities issued in the Securitization were deemed to be issued by the
Borrower; and
(e) promptly following any request therefor, such
other nonconfidential information regarding the Aircraft, the operations,
business affairs and financial condition of the Borrower or any Subsidiary, or
compliance with the terms of the Operative Agreements, as Lender or Security
Trustee from time to time reasonably request.
7.2 RECORDATION OPINION. Promptly upon the registration of the
Aircraft and the recording of the Security Agreement covering the Aircraft with
the FAA, the Borrower will deliver to the Lender and the Security Trustee an
opinion of special FAA counsel in Oklahoma City, Oklahoma, reasonably acceptable
to the Lender, as to the due registration of the Aircraft in the name of the
Borrower, and the due recording of the FAA ▇▇▇▇ of Sale for the Aircraft and the
Security Agreement.
7.3 PERFECTION. Borrower, at its sole cost and expense, will
promptly cause each of the documents listed in Section 4.2, any subsequent
Security Agreement Supplements, amendments to the Security Agreement or
Permitted Leases required to be recorded pursuant to the Security Agreement, all
Uniform Commercial Code continuation statements, all Uniform Commercial Code
financing statement amendments (necessitated by any combination, consolidation
or merger of the Borrower, any relocation of its chief executive office, or any
change in its corporate name or jurisdiction of incorporation) and any
additional recordings, filings, re-recordings or refilings necessary to maintain
the perfection of the Liens created thereby to be prepared and, subject only to
the execution and delivery thereof by the Security Trustee, duly and timely
filed and recorded or filed for recordation, to the extent permitted under the
Federal Aviation Code (with respect to FAA-filed documents) or the Uniform
Commercial Code of any applicable jurisdiction (with respect to such other
documents) and except to the extent that any such acts or filings are
necessitated by the combination, consolidation or merger of the Security
Trustee. Borrower will give Security Trustee timely written notice (but in any
event within 30 days prior to the expiration of the period of time specified
under applicable Law
24
to prevent lapse of perfection) of any relocation of its chief executive office
(as such term is defined in Article 9 of the UCC) from its then present
location, or of any change in its corporate name, or of any change in its
jurisdiction of incorporation (and will provide in such notice, if applicable,
the identification number assigned to it by the new jurisdiction).
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Maintain
its corporate existence, except as otherwise permitted pursuant to Section 7.7
and Section 9.5 hereof, and at all times remain a U.S. Air Carrier. Borrower
shall at all times be certificated and registered to the extent necessary to
entitle the Security Trustee to the benefits of Section 1110 (as currently in
effect) including the right to take possession of the Airframe and Engines in
compliance with the Security Agreement in the event of a case under Chapter 11
of the Bankruptcy Code in which the Borrower is a debtor.
7.5 MAINTENANCE OF PROCESS AGENT. Maintain in
New York City a
Person acting as agent to receive on its behalf service of process.
7.6 FURTHER ASSURANCES. Upon the reasonable request of the
Lender, promptly perform or cause to be performed any and all acts and execute
or cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Federal Aviation Code, the Uniform Commercial Code or any
other Law which are necessary to maintain in favor of the Security Trustee, for
the benefit of the Lender, Liens required to be maintained under the Security
Agreement on the Collateral that are duly perfected in accordance with all
applicable requirements of Law; PROVIDED, that any documentation or act
requested hereunder shall not expand any obligation or limit any rights of the
Borrower.
7.7 CONSOLIDATION AND MERGER. (a) Not consolidate or merge
with or into any other Person or sell, convey, transfer, lease or otherwise
dispose of substantially all of its assets in one or a series of transactions to
any Person (a "CHAUTAUQUA MERGER TRANSACTION"), except as follows:
(1) After giving effect to any such Chautauqua Merger
Transaction, Borrower (or its successor or assignee or
transferee (the "CHAUTAUQUA SUCCESSOR", if any) (1) is a
Citizen of the United States, (2) is a U.S. Air Carrier and a
Section 1110 Air Carrier, (3) is not the subject of a
Bankruptcy Event or of bankruptcy or insolvency proceedings in
any jurisdiction, and (4) is not an airframe manufacturer or
an affiliate thereof;
(2) Security Trustee, under the Security Agreement,
shall be entitled to the benefits of Section 1110 with respect
to the Aircraft to the same extent that the benefits of
Section 1110 were available immediately preceding such
Chautauqua Merger Transaction;
(3) The Chautauqua Successor, if any, shall execute
and deliver to Lender and Security Trustee a duly authorized,
valid, binding and enforceable agreement in form and substance
reasonably satisfactory to Lender and Security Trustee
25
containing an assumption by such Person of this Agreement and
the other Operative Agreements to which the Borrower is a
party;
(4) Immediately after giving effect to such
Chautauqua Merger Transaction, the tangible net worth of the
Borrower (or Chautauqua Successor, if any) shall be equal to
or greater than 100% of the tangible net worth of the Borrower
immediately prior to the Chautauqua Merger Transaction;
(5) Immediately after giving effect to such
Chautauqua Merger Transaction no Payment Default, Bankruptcy
Default or Event of Default shall have occurred and be
continuing and no material adverse change in the financial
condition of the Borrower (or Chautauqua Successor, if any)
shall occur as a result of such Chautauqua Merger Transaction;
(6) If such Chautauqua Merger Transaction is closed
before the earlier of (i) the expiration of the Commitment
Period and of the Additional Commitment Period, and (ii) the
transfer, by means of an Assignment or Securitization, of all
or a Substantial Part of the Loan A by Lender, other than to a
Brazilian Lender, then (A) the Borrower (or Chautauqua
Successor, if any) shall have a tangible net worth of not less
than $50,000,000 (on a pro forma basis) or shall be a Group
III air carrier under 14CFR241 (or if such determination has
not been made has annual operating revenues of at least $1
billion in its most recently completed fiscal year on a pro
forma basis), and (B) the Borrower (or Chautauqua Successor)
shall not be in payment or other material default under any
lease, loan or other transaction with Lender, and (C) no
lending limit binding upon Lender under applicable Law shall
be exceeded as a result of such transaction nor shall Lender
then be subject to any mandatory prohibition under applicable
Law preventing it from engaging in the transactions
contemplated by this Agreement and the other Operative
Agreements with the Chautauqua Successor (if any); PROVIDED,
HOWEVER, in the event that the aforesaid legal lending limit
or mandatory prohibition under applicable Law would be
violated by reason of any Chautauqua Merger Transaction,
Lender agrees to endeavor in good faith to restructure
Lender's participation in the overall transaction on a basis
reasonably acceptable to Lender; and
(7) the Borrower shall (1) at least 30 days prior to
such Chautauqua Merger Transaction have given written notice
of such Chautauqua Merger Transaction to Security Trustee and
Lender and (2) have delivered to Security Trustee and Lender
(A) a certificate signed by the President or any Vice
President of Borrower stating that such Chautauqua Merger
Transaction and the assumption agreement mentioned in CLAUSE
(3) of Section 7.7(a) above (if any) comply with this Section
and that all conditions precedent herein provided for relating
to such transaction have been complied with and (B) an opinion
of counsel (which shall be reasonably satisfactory to Lender
and Security Trustee) to the effect that the assumption
agreement mentioned in CLAUSE (3) of Section 7.7(a) above is,
subject
26
to normal assumptions, qualifications and exceptions, the duly
authorized, valid and binding agreement of the Chautauqua
Successor.
(b) Upon closing of the Chautauqua Merger Transaction
made in accordance with this Section 7.7, the Chautauqua Successor (if any)
shall succeed to, and be substituted for, and may exercise every right and power
of, the Borrower under this Agreement and the other Operative Agreements to
which the Borrower is a party with the same effect as if such Chautauqua
Successor had been named as Borrower originally. No Chautauqua Merger
Transaction shall have the effect of releasing Borrower or any Chautauqua
Successor from liability in respect of this Agreement or any other Operative
Agreements to which it is a party.
(c) The Borrower agrees that no Change in Control
shall occur before the earlier of (i) the expiration of the Commitment Period
and of the Additional Commitment Period, and (ii) the transfer, by means of an
Assignment or Securitization, of all or a Substantial Part of the Loan A,
unless:
(1) the conditions specified in clauses (1), (2) and
(5) of Section 7.7(a) are satisfied; and
(2) either (x) Lender consents thereto, or (y) the
acquiring or controlling Person meets the requirements of
sub-clauses (A) and (B) of clause (6) of Section 7.7(a).
The Borrower shall provide written notice of a Change in
Control transaction to Security Trustee and Lender at least thirty (30) days
prior to the closing of such transaction, such notice to be accompanied by a
certificate signed by the President or any Vice President of the Borrower to the
effect that such transaction will comply with this Section and that all
conditions precedent provided for herein relating to such transaction will be
complied with.
As used in this Section 7.7(c): "CHANGE IN CONTROL" means (a)
the acquisition of ownership, directly or indirectly, beneficially or of record,
by any Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof), of shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; (b) occupation after the date hereof of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower as of the date hereof nor (ii) nominated by directors so nominated;
or (c) Wexford Capital LLC ceases to be in Control of Borrower. "CONTROL" means
the possession, direct or indirect, of the power to direct or to cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise.
SECTION 8. EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. If any of the following events shall
occur and be continuing (an "EVENT OF DEFAULT"):
27
(a) (i) the Borrower shall fail to make any payment
of principal of or interest on the Loan A within 5 Business Days after the same
shall become due; or (ii) the Borrower shall fail to make any payment when the
same shall become due of any other amount due under this Agreement or the
Security Agreement and such failure shall continue unremedied for 10 Business
Days after the receipt by the Borrower of written notice from the Lender or the
Security Trustee, as the case may be, of the failure to make such payment when
due; or
(b) the Borrower shall fail to carry and maintain or
cause to be carried and maintained insurance on or with respect to the Aircraft
in accordance with the provisions of Section 3.3(k) of the Security Agreement;
or
(c) the Borrower shall fail to perform or observe any
other covenant or agreement to be performed or observed by it under this
Agreement or any other Operative Agreements, and, in any such case, such failure
shall continue unremedied for a period of 30 days after receipt by the Borrower
of written notice thereof by the Lender or the Security Trustee, as the case may
be; PROVIDED, HOWEVER, that if such failure is capable of being remedied, no
such failure shall constitute an Event of Default for a period of 120 days after
such notice so long as the Borrower is diligently proceeding to remedy such
failure; or
(d) any representation or warranty made or deemed
made by the Borrower in, or pursuant to, any Operative Agreements shall prove to
have been incorrect in any material respect on or as of the time made or deemed
made, and such incorrectness shall continue to be material to the transactions
contemplated hereby and unremedied for a period of 30 days after receipt by the
Borrower of written notice thereof by the Lender or the Security Trustee, as the
case may be; or
(e) a Bankruptcy Event shall have occurred and be
continuing with respect to the Borrower; or
(f) the Borrower shall default in making any payment
when due of any principal or interest or other amount under any Loan A (other
than the Loan A) made pursuant to the Funding Agreement which is held in
Substantial Part by a Brazilian Lender and as a result of such default such Loan
A may be accelerated, unless both (i) such loan is no longer
cross-collateralized by being included as a Secured Obligation under the
Security Agreement and (ii) a Brazilian Lender no longer holds a Substantial
Part of the Loan A; or
(g) with respect to a Leveraged Leasing Loan, the
Borrower shall default in the making of any payment when due of any Rent (as
defined in any Relevant Lease Agreement under any Leveraged Leasing Loan) or
other amount under any lease entered into pursuant to the Funding Agreement so
long as such lease is collateral for a loan made under the Funding Agreement,
which loan is then held in whole or in part by a Brazilian Lender and as a
result of such default the loan secured by such lease may be accelerated and so
long as a Brazilian Lender holds a Substantial Part of the Loan.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (e) of this Section 8.1, the Loan (with accrued interest thereon) and
all other amounts owing under this Agreement and the Notes shall immediately
become due and payable, and (B) if such event is
28
another Event of Default, the Lender may, by written notice to the Borrower,
declare the Loan (with accrued interest thereon) and all other amounts owing
under this Agreement and the Notes to be due and payable forthwith, whereupon
the same shall immediately become due and payable and the Lender and/or the
Security Trustee may exercise the rights and remedies provided in the Security
Agreement and the other Operative Agreements. Except as expressly provided above
in this Section 8.1, presentment, demand, protest and all other notices of any
kind are hereby expressly waived. Notwithstanding anything to the contrary
contained in this Section 8.1, any failure of the Borrower to perform or observe
any covenant, condition or agreement shall not constitute an Event of Default if
such failure or error is caused solely by reason of an event referred to in the
definition of Event of Loss so long as the Borrower is continuing to comply with
all of the terms of Section 3.4 of the Security Agreement.
8.2 RESCISSION OF ACCELERATION. At any time after the Lender
has declared the unpaid principal amount of the Notes to be due and payable and
prior to the sale of any part of the Collateral pursuant to Section 5 of the
Security Agreement, the Lender, by written notice to the Borrower and the
Security Trustee, may rescind and annul such declaration and its consequences
if: (i) there has been paid to or deposited with the Security Trustee an amount
sufficient to pay all overdue installments of principal of, and interest on, the
Notes and all other amounts owing by the Borrower under the other Operative
Agreements, that have become due otherwise than by such declaration of
acceleration, and (ii) all other Events of Default, other than nonpayment of
principal or interest on the Notes that have become due solely because of such
acceleration, have been cured or waived.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. This Agreement or any terms hereof
may only be amended, supplemented or modified with the prior written consent of
Borrower and the Lender and, to the extent such amendment affects the interests
of the Security Trustee, the Security Trustee. The Lender or the Security
Trustee (acting at the direction of the Lender) may, from time to time, waive,
on such terms and conditions as the Lender or the Security Trustee, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or any Event of Default and its consequences. In the case of any
waiver the Borrower and the Lender shall be restored to their former positions
and rights hereunder, and any Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent on such subsequent or other
Event of Default. Any amendment or waiver effected in accordance with this
Section 9.1 shall be binding upon the Lender and any subsequent Lender, the
Security Trustee and the Borrower.
9.2 NOTICES. (a) Any notice or communication of any kind in
respect of this Agreement shall be deemed to have been received:
(i) if made by airmail letter, ten days
after the relevant letter has been dispatched by registered
airmail (postage prepaid) or on the date shown in the relevant
receipt, whichever is earlier;
29
(ii) if made by fax, upon receipt by the
sender of transmission confirmation; or
(iii) if sent by overnight delivery service,
courier or in person (and a signed acknowledgment of receipt
is obtained), when delivered.
(b) Any such notice or communication to a party
hereto shall be made in English, in writing, by registered mail, fax, telex or
cable, as permitted under applicable Law, and shall be given as follows:
Borrower: Chautauqua Airlines, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Wexford Capital LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Lender: Agencia Especial de Financiamento Industrial - FINAME
▇/▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇ do Chile, No. 100-18 andar
CEP ▇▇▇▇▇-▇▇▇ - ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ - ▇▇
▇▇▇▇▇▇ ▇▇-▇▇▇-▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ -Gerente Executivo
de Exportacoes
Tel: (▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇▇
with a copy to
the Manufacturer: Embraer - Empresa Brasileira de Aeronautica S.A.
▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
12227-901 Sao ▇▇▇▇ do ▇▇▇▇▇▇, ▇▇
Brazil
Attention: Senior Manager - Contracts
Tel: (▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇▇
30
Security Trustee: JPMorgan Chase Bank
Institutional Trust Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
Attention: ▇▇▇▇▇ ▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/8159/8160
(c) Any party listed above may change its address and
the transmission numbers for notices by notice in the manner provided in this
Section 9.2.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of any party, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any document or certificate
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loan hereunder.
9.5 SUCCESSORS AND ASSIGNS. (a) (1) This Agreement shall
be binding upon and inure to the benefit of the Borrower, the Lender and their
respective successors and permitted assigns. Neither the Borrower nor the Lender
shall assign or transfer (by operation of law or otherwise, directly or
indirectly, including by merger, consolidation, or conveyance of substantially
all of its assets) their respective rights or obligations under this Agreement
or the Notes, including any participation in the Notes involving the transfer by
the Lender of voting rights to, or the creation of contractual privity between
the Borrower and any such participant in the Notes.
(2) Nothwithstanding the foregoing, the Borrower may assign or
transfer (as aforesaid) all (but not less than all) of its rights and
obligations under this Agreement and the other Operative Agreements in
connection with a transaction of merger, consolidation or transfer of all or
substantially all its assets made in compliance with all of the conditions set
forth in Section 7.7 hereof.
(b) (1) Notwithstanding paragraph (a)(1) of this
Section 9.5, the Lender may assign or transfer (as aforesaid) all (but not
less than all) of its rights and obligations under this Agreement and the
other Operative Agreements if all of the following conditions are met: (i)
such assignment is to another entity of, or owned or controlled, either
directly or indirectly, by, the federal government of Brazil in connection
with a reorganization initiated by the federal government of Brazil or by the
board of executive directors of BNDES pursuant to which the material
functions of the Lender which include this transaction are transferred to
such entity, (ii) the Lender concurrently assigns to the assignee of this
Agreement all of its rights and obligations under the other Operative
Agreements to which it is a party, (iii) the Borrower will not be obligated
to pay any amount under any Operative Agreements in excess of the amount that
would have been payable to the Lender had such assignment not occurred, (iv)
the assignee enters into an assumption agreement or agreements whereby the
assignee confirms that it shall be deemed a party to such Operative
Agreements and agrees to be bound by all of the terms of, and to undertake
all of the obligations of, the Lender contained in the Operative Agreements,
and in
31
which the assignee makes representations and warranties as to immunities
substantially equivalent to those of the Lender contained herein, (v) unless an
Event of Default has occurred and is continuing, the Borrower is given 30 days
written notice in advance of such assignment or transfer (or such lesser period
of notice as is reasonably practicable under the circumstances), (vi) the Lender
delivers to the Borrower on or prior to the date of such assignment the
certificate of a duly authorized Director or the President of the Lender to the
effect that each of the conditions set forth in clauses (i), (ii), (iii), (iv)
and (v) of this paragraph (b) has been complied with as of the date of such
assignment, (vii) the Lender delivers to the Borrower an opinion or opinions of
counsel reasonably acceptable to the Borrower to the effect that the assumption
agreement referred to in clause (iv) has been duly authorized, executed and
delivered by the assignee and is enforceable against the assignee in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally or by
general principles of equity and (viii) unless an Event of Default has occurred
and is continuing, the Lender agrees to reimburse the Borrower for all
reasonable and documented out-of-pocket costs and expenses incurred by it in
connection with such assignment or transfer by the Lender.
(2) Notwithstanding paragraph (a)(1) of this Section 9.5
and subject to Section 9.5(d)(iv), the Lender may assign or transfer (as
aforesaid) in whole or in part its rights and obligations under this
Agreement and the other Operative Agreements (any such transaction, an
"ASSIGNMENT"); PROVIDED that all the conditions under this clause (2) are
met. Any such Assignment may be made by the Brazilian Lender to an assignee
as part of a securitization transaction involving the Loan in whole or in
part (a "SECURITIZATION"). With respect to any Assignment:
(i) each party hereto agrees that, with
respect to a Securitization, a special purpose entity (an
"SPV") organized in a manner acceptable to the placement
agents, rating agencies and other participants in the
transaction shall be an acceptable successor Lender under the
Operative Agreements (it being understood that such SPV may
only have nominal capitalization) with the result that neither
Lender nor BNDES will be responsible for the performance of
the obligations of the Lender under the Operative Agreements
with respect to the period after the date of assignment to the
extent the SPV assumes such obligations;
(ii) The Borrower agrees that, with respect
to a Securitization, solely involving loans made under the
Funding Agreement, in connection with an optional prepayment
of the Loan A by the Borrower after the date of such
Securitization the Borrower will agree to pay, to the extent
that the principal amount of the Loan A is insufficient to
repay the principal amount of the SPV's securities
corresponding to such principal amount of the Loan A plus a
market-based make-whole premium (calculated with a discount
rate not less than the prevailing yield on U.S. Treasury
securities having approximately the same average life as the
average life of the SPV's securities without any margin) on
such principal amount of the SPV's securities, an amount equal
to such deficiency;
32
(iii) each party hereto agrees that the
Operative Agreements, closing documents and legal opinions may
be disclosed to the rating agencies, underwriters, investors,
agents and trustees and other parties in the Assignment, and
their respective counsel, insurance brokers, auditors, agents
and advisors who agree to hold such information confidential;
(iv) each party hereto agrees that the
transaction may be structured in a manner determined by the
Lender and its advisors within the parameters of this clause
(b)(2) to include the possibility in a Securitization of a
pre-funded structure in which the Lender continues to
initially finance the Loan;
(v) each party hereto agrees that the SPV
may create a perfected lien on the
Loan Agreement and related
Operative Agreements to secure the indebtedness of the SPV to
its lenders; and
(vi) The Borrower agrees to name the SPV (or
other successor Lender) an additional insured on liability
insurance and as an indemnitee with respect to
indemnifications contained in the Operative Agreements, and to
continue to name the Security Trustee as loss payee on hull
insurance.
(3) At the request of Lender, the Borrower agrees to
cooperate reasonably with any Assignment that is structured and proposed to
be documented reasonably in light of market standards, PROVIDED that (i) the
Borrower's obligations under the Operative Agreements shall not be increased
as a result of any such transaction (except to the extent provided in
paragraph d(iv) below), (ii) the Lender pays all reasonable out-of-pocket
costs and expenses of the Borrower (including reasonable fees and
disbursements of outside counsel to the Borrower, subject to such counsel
providing estimate and periodic reports and invoices) in connection with an
Assignment, and (iii) in a Securitization, the Brazilian Lender agrees to
indemnify the Borrower for any liabilities, obligations, losses or damages
incurred by the Borrower as a result of such Assignment (except to the extent
provided in paragraph d(iv) below), subject to normal exceptions. The
Borrower's agreement to cooperate reasonably with Assignments that are
structured and proposed to be documented reasonably in light of market
standards shall include the following, in each case with respect to not more
than one Assignment per calendar year:
(A) to make available to the underwriters
(or investors, as applicable) a reasonable
opportunity to conduct customary due diligence with
respect to the Borrower (and its Subsidiaries, if
applicable);
(B) if requested by the Lender, to provide
customary legal opinions and accountants' comfort
letters and to consider in good faith such amendments
to the Operative Agreements as may be reasonably
requested by the Lender in order to close the
Assignment in the then current market conditions,
such possible amendments to include adjustments of
payment dates to facilitate the Assignment; and
33
(C) to make good faith efforts to
accommodate the timing of such Assignment proposed by
the Lender, PROVIDED that the Borrower shall not be
obligated to cooperate in any such Assignment if
Lender's proposed timing would interfere with another
similar financing transaction proposed by the
Borrower, PROVIDED, FURTHER, that the Borrower shall
be available to cooperate in at least one such
Assignment per calendar year on a timing basis
reasonable for such an Assignment.
(c) With respect to the non-economic covenants of the
Borrower in the Operative Agreements, it is agreed by the parties hereto that
such provisions shall be amended, at the request of the Lender, prior to any
Assignment involving an assignment or transfer of the Loan A in its entirety, in
order to reflect either the agreement of the parties with respect to such
provision after an Assignment as set forth in the Operative Agreements, or if no
such agreement is set forth in the Operative Agreements, the then current market
standard for transactions similar to the proposed Assignment which have been
closed by the Borrower within twelve (12) months prior to the proposed
Assignment.
(d) (i) The Lender may, in the ordinary course of its
business and in accordance with applicable Law, at any time
sell to one or more banks or other entities ("LOAN
PARTICIPANTS") participating interests in any Note issued to
Lender, and such Lender's related rights and/or obligations
under the other Operative Agreements. In the event of any such
sale by a Lender of a participating interest to a Loan
Participant, such Lender's obligations under the other
Operative Agreements to the other parties thereto shall remain
unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of
such Note for all purposes under the Operative Agreements, and
the Borrower and the Security Trustee shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under the Operative
Agreements.
(ii) The Lender further agrees that any Assignment
will be subject to the provisions of clauses (iv) (with
respect to the Loan, or the portion thereof transferred, as
the case may be), (v), (vi) (as to clauses (iv) and (v)) and
(viii) of Subsection 9.5(b)(1); PROVIDED, HOWEVER, that no
transferee (in an Assignment or Securitization) will be
obligated to assume the liabilities of the transferring Lender
with respect to its indemnities, misrepresentations or failure
to perform covenants hereunder or under the other Operative
Agreements . Notwithstanding the preceding proviso, each
transferring Lender (including a Brazilian Lender) will retain
and will not be relieved of any of its liabilities referred to
in the preceding proviso.
(iii) The Lender further agrees that it will not
transfer the Loan or the Notes or interest therein in
violation of the U.S. federal or applicable state or foreign
securities Law. The Lender agrees that it will not sell,
assign, convey, exchange or otherwise transfer the Loan or the
Notes or any interest in, or represented by, the Loan or Notes
unless (it being understood that if the transferee is the SPV,
this provision shall not apply to the transfer to the SPV, but
rather to the acquiror of securities issued by the SPV) (the
"SPV SECURITIES"):
34
(A) the proposed transferee either (w) provides a written
representation to the Borrower, or (x) is deemed to represent by
acquisition of the SPV Securities or the Notes or interest therein that
either (a) no portion of the funds it uses to purchase, acquire and
hold the Notes or interest therein or SPV Securities (as applicable)
constitutes, or may be deemed under the Code or ERISA or any
regulations or rules thereunder to constitute, the assets of any Plan
subject to Title I of ERISA or Section 4975 of the Code, or (b) the
transfer and subsequent holding of the Notes or interest therein or SPV
Securities (as applicable) shall not involve and or give rise to a
transaction that constitutes a prohibited transaction within the
meaning of Section 406(a) of ERISA or Section 4975(c)(1)(A)-(D) of the
Code involving the Borrower (other than a transaction that is exempted
from the prohibitions of such sections by applicable provisions of
ERISA or the Code or administrative exemptions or regulations issued
thereunder); and
(B) each subsequent transferee is obligated to also make the
representation or deemed representations described in clause (A) above.
Notwithstanding the foregoing, a proposed transferee shall only be
permitted to make the "deemed" representation described above, rather than the
"written" representation described above, if the proposed transferee is
acquiring the SPV Securities or the Notes or interest therein (as applicable)
(y) in connection with a registered public offering or an offering pursuant to
Securities Act of 1933 Rule 144A (or any successor rules) (a "BROAD BASED
OFFERING") (as distinguished from a privately negotiated private placement) or
(z) in connection with a subsequent transfer of such SPV Securities or the Notes
or interest therein (as applicable) following a previous Broad Based Offering.
If the proposed transferee is the SPV, the SPV shall provide the
Borrower with a written representation to the effect that, based upon, and
subject to the accuracy of the representations made by the acquirors of the SPV
Securities described above, either (a) no portion of the funds it uses to
purchase, acquire and hold the Notes or interest therein constitutes, or may be
deemed under the Code or ERISA or any regulations or rules thereunder to
constitute, the assets of any Plan subject to Title I of ERISA or Section
4975(c)(1) of the Code or (b) the transfer and subsequent holding of the Notes
or interest therein shall not involve or give rise to a transaction that
constitutes a prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975(c)(1) of the Code involving the Borrower (other than a
transaction that is exempted from the prohibitions of such sections by
applicable provisions of ERISA or the Code or administrative exemptions or
regulations issued thereunder).
(iv) In the event that the Loan is
transferred by the Lender to a transferee that
is not a Brazilian Lender, such transferee shall not be
entitled to any greater payments with respect to
withholding Tax than the Lender would have been entitled to
absent the transfer, PROVIDED, HOWEVER, that in the case of
a Lender organized in a Tax Treaty Country, the transferee
shall be entitled to indemnification for withholding Taxes
that would be subject to indemnification absent this
Section 9.5(d)(iv) and are imposed as a result of a change
in law after the transfer date, PROVIDED that (A) such
Lender delivers (upon written request of the Borrower) a
properly completed IRS Form W-8BEN or W-8ECI (or successor
forms) evidencing an exemption from U.S. Withholding Tax
unless such Lender is not entitled to deliver such form due
to a change in law after the date of the transfer, and (B)
a change in the income tax treaty
35
between the United States and such country which had been
proposed prior to the transfer date or a change in the
nature of an anti-treaty shopping or limitation on benefits
provision, shall not constitute a change in law and
PROVIDED, FURTHER, that, with respect to a transferee other
than a Brazilian Lender, to the extent such transferee
would be subject to U.S. Withholding Taxes on the date of
the transfer, the Borrower shall not be liable for such
U.S. Withholding Taxes.
(v) the Borrower or its agent shall maintain
a register (the "REGISTER") for the recordation of the names
and addresses of the owners of the Loan and the promissory
notes thereunder and the principal amounts owing to such
owners. Pursuant to the Security Agreement the Security
Trustee agrees to maintain the Register as agent for and on
behalf of the Borrower. The entries in the Register shall be
conclusive, in the absence of manifest error, and the
Borrower, its agent and the Lender may treat any person whose
name is recorded in the Register as the owner of any interest
in the Loan and the promissory notes thereunder recorded
therein for all purposes of this
Loan Agreement and the other
Operative Agreements. Upon the receipt of notice from any
owner of any interest in the Loan and the promissory notes
thereunder of any transfer of any such interest in the Loan
and the promissory notes thereunder in compliance with the
provisions of this Section 9.5, the Borrower or its agent
shall record such transfer in the Register and give notice of
such recordation to the owner and transferee of any such
interest in the Loan and the promissory notes thereunder.
Notwithstanding the foregoing, the Security Trustee shall not
be required to register the transfer of the Loan (in whole or
in part) and the applicable promissory notes thereunder unless
it shall have received a certificate from the Borrower or the
Lender to the effect that all conditions to such transfer set
forth in Section 9.5 hereof have been complied with (provided
that this sentence shall in no way diminish Lender's
obligations under this Section 9.5 with respect to any
transfer).
The transfer of the right to principal of, and interest on,
the Loan will be effective only upon (i) notice to the
Borrower or its agent of such transfer and (ii) recordation of
such transfer in the Register.
9.6 [OMITTED]
9.7 CONTRACTUAL CURRENCY. (a) This is an international
transaction in which the specification of the currency of payments is of the
essence. Except as otherwise provided herein, each payment under this Agreement
will be made in Dollars (the "CONTRACTUAL CURRENCY"). Any obligation to make
payments under this Agreement or any other Operative Agreements in the
Contractual Currency will not be, to the extent permitted by applicable Law,
discharged or satisfied by any tender in any currency other than the Contractual
Currency (unless otherwise specified herein or therein).
36
(b) To the extent permitted by applicable Law, rule
or regulation, if any judgment or order expressed in a currency other than the
Contractual Currency is rendered for the payment of any amount owing in respect
of this Agreement or any other Operative Agreements or in respect of a judgment
or order of another court for the payment of any amount owing in respect of this
Agreement or any other Operative Agreements, the party to which such payment is
owed, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency (and will refund promptly to the other party any excess of the
Contractual Currency received by such party) if such shortfall (or such excess)
arises or results from any variation between (i) the rate of exchange at which
the currency of the judgment or order is converted into the Contractual Currency
on the date of entry of such judgment or order and (ii) the rate of exchange at
which such party is able to purchase the Contractual Currency with the amount of
the currency of the judgment or order actually received by such party. The term
"rate of exchange" includes any premiums and costs of exchange payable in
connection with the purchase of or conversion into the Contractual Currency.
9.8 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
to the extent permitted by law, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
9.9 INTEGRATION. This Agreement and the other Operative
Agreements represent the agreement of the Borrower and the Lender with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Borrower or the Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Operative Agreements.
9.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
9.11 SUBMISSION TO JURISDICTION; WAIVERS. (a) Each of the
Borrower and the Lender hereby irrevocably and unconditionally:
(i) submits for itself and its property in
any legal action or proceeding relating to this Agreement and
the other Operative Agreements to which it is a party to the
jurisdiction of the Courts of the State of New York sitting in
the City of New York, the courts of the United States of
America for the Southern District of New York, and appellate
courts from any thereof;
(ii) agrees that any suit, action or
proceeding with respect to this Agreement or the transactions
contemplated hereby may be brought only in such courts and
waives any objection that it may now or hereafter have to the
jurisdiction or venue of any such action or proceeding in any
such court or that
37
such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same by way of motion as
a defense or otherwise;
(iii) agrees that nothing herein shall
affect the right to effect service of process in any manner
permitted by law in addition to the provisions of Section
9.11(b);
(iv) waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover
in any legal action or proceeding with respect to this
Agreement or the transactions contemplated hereby any special,
exemplary, punitive or consequential damages; and
(v) agrees that, to the fullest extent
permitted by applicable law, a final judgment in any such
action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) The Lender hereby irrevocably and unconditionally
appoints, at the Borrower's expense, National Registered Agents, Inc. (the
"LENDER PROCESS AGENT"), located at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, as its agent to receive on behalf of the Lender and its property
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding in any court of the State of New York
sitting in the City of New York or court of the United States of America for the
Southern District of New York and, if for any reason such Lender Process Agent
(or any successor Lender Process Agent) is unable to act as such, will promptly
notify the Borrower and will within 30 days appoint a successor Lender Process
Agent in the City of New York (which successor Lender Process Agent shall accept
such appointment in a writing reasonably satisfactory to the Borrower prior to
the termination for any reason of the appointment of the predecessor Lender
Process Agent). In any action or proceeding in any court of the State of New
York sitting in the City of New York or court of the United States of America
for the Southern District of New York, such service may be made on the Lender by
delivering a copy of such process to the Lender in care of the appropriate
Lender Process Agent at such Lender Process Agent's address. The Lender hereby
also irrevocably and unconditionally authorizes and directs such Lender Process
Agent to accept such service on its behalf.
(c) The Borrower hereby irrevocably and
unconditionally agrees that service of process upon it in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 hereof or at such other address
of which the Lender shall have been notified pursuant thereto.
9.12 WAIVER OF IMMUNITIES. The Lender agrees that, to the
extent that the Lender or any of its property is or becomes entitled at any time
to any immunity on the grounds of sovereignty or otherwise from (a) any legal
action, suit, arbitration proceeding or other proceeding, (b) set-off or
counterclaim, (c) the jurisdiction of any court of competent jurisdiction, (d)
service of process, (e) relief by way of injunction, order for specific
performance or for recovery of property, (f) attachment of its assets prior to
judgment or after judgment,
38
(g) attachment in aid of execution or levy, (h) execution or enforcement of any
decree or judgment, (i) judgment or jurisdiction or from any other legal process
in any jurisdiction, the Lender, for itself and its property, does, to the full
extent permitted by applicable law, rule or regulation, hereby irrevocably and
unconditionally waive all rights to, and agrees not to plead or claim, any such
immunity with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement or the other Operative
Agreements, or the subject matter hereof or thereof. Such agreement shall be
irrevocable and not subject to withdrawal in any and all jurisdictions or under
any statute, including the Foreign Sovereign Immunities Act of 1976 of the
United States of America. The foregoing waiver shall constitute a present waiver
of immunity at any time any action is initiated against the Lender with respect
to this Agreement.
9.13 WAIVERS OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENTS AND FOR
ANY COUNTERCLAIM THEREIN.
9.14 CONFIDENTIALITY. Each of the Borrower and the Lender
agrees to keep confidential all non-public information provided to it pursuant
to or in connection with this Agreement, the other Operative Agreements and the
transactions contemplated hereby or thereby ("CONFIDENTIAL INFORMATION");
PROVIDED that nothing herein shall prevent either party hereto from disclosing
any such information (i) to its employees, directors, agents, attorneys,
accountants and other professional advisors in which case such persons will be
advised of the confidential nature of the information so disclosed and will be
required to keep such information confidential; (ii) to the Manufacturer,
Security Trustee, or BNDES, following the occurrence of an Event of Default or
as otherwise provided in the Operative Agreements, (iii) upon the demand of any
Government Entity having jurisdiction over such party, or in response to any
order of any court or other Government Entity or as may otherwise be required
pursuant to any requirement of Law, after providing the other party with prompt
notice of such request, demand, order or other requirement so that such party
may seek an appropriate protective order and after making reasonable efforts to
resist disclosure, (iv) in connection with the exercise of any remedy hereunder
or under the other Operative Agreements, (v) as permitted in Section 9.5(b) in
connection with an Assignment or Securitization, (vi) in the situations foreseen
in article 38 of Law 4,595 of December 31, 1964 of Brazil or at the request of
the Federal Public Administration or the Accounting Court of Brazil (TRIBUNAL DE
CONTAS DA UNITAO), in which case the requesting entities will be advised of the
confidential nature of the information so disclosed, (vii) if required by the
terms of any Operative Agreements or (viii) if the other party gives its prior
written consent.
9.15 PAYMENT OF EXPENSES AND COSTS. Except as provided in
Section 9.5(b), the Borrower agrees (a) to pay or reimburse the Lender and the
Security Trustee for all their reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and the other Operative Agreements, and any amendment,
supplement or modification of this Agreement or any other Operative Agreements
requested by the Borrower, including, without limitation, the reasonable fees
and disbursements of counsel to the Lender and the Security Trustee and
translation and registration fees, and (b) to pay or reimburse the Lender and
the Security Trustee on demand for all their reasonable and documented costs and
expenses incurred in connection with the enforcement of
39
any rights under this Agreement and the other Operative Agreements to which the
Borrower is a party, including, without limitation, any translation and
registration costs necessary for the enforcement of any Operative Agreements to
which the Borrower is a party, and the reasonable fees and disbursements of
counsel to the Lender and of counsel to the Security Trustee and (c) to pay,
indemnify, and hold the Lender and the Security Trustee harmless from any and
all United States recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, such United States recording
and filing fees, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement and the other
Operative Agreements to which the Borrower is a party. Anything in this Section
9.15 notwithstanding, if any loan fails to be disbursed as a result of the
failure of the Lender to act in good faith to fulfill its obligations or
otherwise to comply with the terms of this Agreement or any other Operative
Agreements, the Lender shall bear and pay its own fees, costs and expenses
(including, without limitation, the fees and expenses of its counsel) relating
to such loan.
9.16 GENERAL INDEMNITY. (a) INDEMNITY. Borrower shall
indemnify, protect, defend and hold harmless each Indemnitee from, against and
in respect of, and shall pay on an After-tax Basis, any and all Expenses of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against any Indemnitee, relating to, resulting from, or arising out of or in
connection with, any one or more of the following:
(i) The Operative Agreements, the
transactions contemplated thereby, and the enforcement of any
of the terms thereof;
(ii) The Aircraft, the Airframe, any Engine
or any Part, including, without limitation, with respect
thereto, (i) the manufacture, design, purchase, acceptance,
non-acceptance or rejection, ownership, registration,
re-registration, deregistration, delivery, non-delivery,
lease, sublease, assignment, possession, use or non-use,
operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage,
airworthiness, replacement, repair, sale, substitution,
return, abandonment, redelivery or other disposition of the
Aircraft, any Engine or any Part, (ii) any claim or penalty
arising out of violations of applicable Laws by Borrower (or
any Permitted Lessee), (iii) tort liability, whether or not
arising out of the negligence of any Indemnitee (whether
active, passive or imputed), (iv) death or property damage of
passengers, shippers or others, (v) environmental control,
noise or pollution and (vi) any Liens in respect of the
Aircraft, any Engine or any Part; and
(iii) Any breach of or failure to perform or
observe, or any other noncompliance with, any covenant or
agreement or other obligation to be performed by Borrower
under any Operative Agreements, or the falsity of any
representation or warranty of Borrower in any Operative
Agreements.
(b) Exceptions. Notwithstanding anything contained in
Section 9.16(a), Borrower shall not be required to indemnify, protect, defend
and hold harmless any Indemnitee pursuant to Section 9.16(a) in respect of any
Expense of such Indemnitee:
40
(i) For any Taxes or a loss of Tax benefit,
whether or not Borrower is required to indemnify therefor
pursuant to the Operative Agreements provided, however, this
Section 9.16(b)(i) shall not apply to any Taxes taken into
account in making any payment on a net After-tax Basis or any
claims of the Security Trustee (other than claims with respect
to Taxes on fees payable to the Security Trustee);
(ii) With respect to any Indemnitee (other
than the Security Trustee) except to the extent attributable
to acts or events occurring prior thereto, acts or events
(other than acts or events related to the performance or
failure to perform by Borrower of its obligations pursuant to
the terms of the Operative Agreements) that occur after the
Lender is required to direct the Security Trustee to release
the Collateral pursuant to Section 2.8 of this Agreement.
(iii) [*]
(iv) [*]
(v) [*]
(vi) [*]
(vii) [*]
(viii) [*]
(ix) [*]
(x) [*]
(xi) [*]
(xii) If another provision of a Operative
Agreements specifies the extent of Borrower's responsibility
or obligation with respect to such Expense, to the extent
arising from other than failure of Borrower to comply with
such specified responsibility or obligation;
(xiii) To the extent it is an expense
dealt with in Section 9.15;
(xiv) [*]
(xv) With respect to any Indemnitee (other
than the Security Trustee) to the extent attributable to a
Lender Lien or with respect to any Indemnitee to the extent
attributable to a Security Trustee Lien; and
(xvi) [*].
For purposes of this Section 9.16, a Person shall be considered a
"related" Indemnitee with respect to an Indemnitee if such Person is an
Affiliate or employer of such Indemnitee, a
---------
* Confidential
41
director, officer, employee, agent, or servant of such Indemnitee or any such
Affiliate or a successor or permitted assignee of any of the foregoing.
(c) SEPARATE AGREEMENT. This Agreement constitutes a
separate agreement with respect to each Indemnitee and is enforceable directly
by each such Indemnitee.
(d) NOTICE. If a claim for any Expense that an
Indemnitee shall be indemnified against under this Section 9.16 is made, such
Indemnitee shall give prompt written notice thereof to Borrower. Notwithstanding
the foregoing, the failure of any Indemnitee to notify Borrower as provided in
this Section 9.16 shall not release Borrower from any of its obligations to
indemnify such Indemnitee hereunder, except to the extent that such failure
results in an additional Expense to Borrower (in which event Borrower shall not
be responsible for such additional Expense) or materially impairs Borrower's
ability to contest such claim.
(e) Notice of Proceedings; Defense of Claims;
Limitations.
(i) In case any action, suit or proceeding
shall be brought against any Indemnitee for which Borrower is
responsible under this Section 9.16, such Indemnitee shall
notify Borrower of the commencement thereof and Borrower may,
at its expense, participate in and to the extent that it shall
wish (subject to the provisions of the following paragraph),
assume and control the defense thereof and, subject to Section
9.16(e)(iii), settle or compromise the same.
(ii) Borrower or its insurer(s) shall have
the right, at its or their expense, to investigate or, if
Borrower or its insurer(s) shall agree in writing not to
dispute liability to the Indemnitee giving notice of such
action, suit or proceeding under this Section 9.16 for
indemnification hereunder or under any insurance policies
pursuant to which coverage is sought, control the defense of,
any action, suit or proceeding, relating to any Expense for
which indemnification is sought pursuant to this Section 9.16,
and each Indemnitee shall cooperate with Borrower or its
insurer(s) with respect thereto; PROVIDED, that Borrower shall
not be entitled to control the defense of any such action,
suit, proceeding or compromise any such Expense (i) during the
continuance of any Event of Default (except during the Section
1110 Period), (ii) if such proceedings would entail a material
risk of the sale, forfeiture or loss of the Aircraft, (iii) if
such proceedings would entail a risk of criminal liability or
greater than de minimis risk of material civil penalties being
imposed on such Indemnitee, or (iv) if an actual or potential
material conflict of interest exists making it advisable in
the good faith opinion of such Indemnitee (on the basis of
prevailing standards of professional responsibility) for such
Indemnitee to be represented by separate counsel In connection
with any such action, suit or proceeding being controlled by
Borrower, such Indemnitee shall have the right to participate
therein, at its sole cost and expense, with counsel reasonably
satisfactory to Borrower; PROVIDED, that such Indemnitee's
participation does not, in the reasonable opinion of the
independent counsel appointed by the Borrower or its insurers
to conduct such proceedings, interfere with the defense of
such case.
42
(iii) In no event shall any Indemnitee enter
into a settlement or other compromise with respect to any
Expense without the prior written consent of Borrower, which
consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with
respect to such Expense under this Section 9.16.
(iv) In the case of any Expense indemnified
by the Borrower hereunder which is covered by a policy of
insurance maintained by Borrower pursuant to the Security
Agreement, at Borrower's expense, each Indemnitee agrees to
cooperate with the insurers in the exercise of their rights to
investigate, defend or compromise such Expense as may be
required to retain the benefits of such insurance with respect
to such Expense.
(v) If an Indemnitee is not a party to this
Agreement, Borrower may require such Indemnitee to agree in
writing to the terms of this Section 9.16 prior to making any
payment to such Indemnitee under this Section 9.16.
(vi) Nothing contained in this Section 9.16
shall be deemed to require an Indemnitee to contest any
Expense or to assume responsibility for or control of any
judicial proceeding with respect thereto.
(f) INFORMATION. Borrower will provide the relevant
Indemnitee with such information not within the control of such Indemnitee, as
is in Borrower's control or is reasonably available to Borrower, which such
Indemnitee may reasonably request and will otherwise cooperate with such
Indemnitee so as to enable such Indemnitee to fulfill its obligations under
Section 9.16. The Indemnitee shall supply Borrower with such information not
within the control of Borrower, as is in such Indemnitee's control or is
reasonably available to such Indemnitee, which Borrower may reasonably request
to control or participate in any proceeding to the extent permitted by Section
9.16.
(g) EFFECT OF OTHER INDEMNITIES; SUBROGATION; FURTHER
ASSURANCES. Upon the payment in full by Borrower of any indemnity provided for
under this Agreement, Borrower, without any further action and to the full
extent permitted by Law, will be subrogated to all rights and remedies of the
person indemnified (other than with respect to any of such Indemnitee's
insurance policies) in respect of the matter as to which such indemnity was
paid. Each Indemnitee will give such further assurances or agreements and
cooperate with Borrower to permit Borrower to pursue such claims, if any, to the
extent reasonably requested by Borrower and at Borrower's expense.
(h) EXPENSES. For the purposes of this Section 9.16,
"EXPENSES" shall mean any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs or expenses of whatsoever kind and
nature and shall include all reasonable out-of-pocket costs, disbursements and
expenses (including reasonable fees and disbursements of legal counsel,
accountants, appraisers, inspectors or other professionals, and costs of
investigation).
(i) [*].
---------
* Confidential
43
(j) PRIMARY OBLIGOR. The Borrower's obligations under
this Section 9.16 shall be those of a primary obligor whether or not the Person
indemnified shall also be indemnified with respect to the same matter under the
terms of this
Loan Agreement, or any other document or instrument, and the
Person seeking indemnification from the Borrower pursuant to any provision of
this
Loan Agreement may proceed directly against the Borrower without first
seeking to enforce any other right of indemnification.
(k) WAIVER OF CERTAIN CLAIMS. The Borrower hereby
waives and releases any Expense now or hereafter existing against any Indemnitee
arising out of death or personal injury to personnel of the Borrower, loss or
damage to property of the Borrower, or the loss of use of any property of the
Borrower, which results from or arises out of the condition, use or operation of
the Aircraft, including, without limitation, any latent or patent defect whether
or not discoverable.
(l) REFUNDS. If an Indemnitee receives any refund, in
whole or in part, with respect to any Expense paid by Borrower hereunder, such
Indemnitee will [*] promptly pay the amount refunded (but not an amount in
excess of the amount Borrower or any of its insurers has paid in respect of such
Expense) over to Borrower unless an Event of Default, Payment Default, or,
except during the Section 1110 Period, Bankruptcy Default shall have occurred
and be continuing, in which case such amounts shall be paid over to the Security
Trustee to hold as security for Borrowers's obligations under the Operative
Agreements or, if requested by Borrower, applied to satisfy such obligations.
9.17 INSTRUCTION TO SECURITY TRUSTEE. The Lender hereby
acknowledges that it is familiar with and agrees to all the terms and provisions
of the Security Agreement and directs the Security Trustee to enter into and
deliver the Security Agreement and to perform its obligations thereunder.
9.18 NOTICES, INSTRUCTIONS, CONSENTS, EXECUTION AND WAIVER.
Whenever the provisions of this Agreement or any Operative Agreements require or
permit notice from or to, instructions from, consent of, execution of any
amendment, supplement, modification, instrument, certificate or other document
by, or a waiver by, the Lender, the notice from or to, instruction from, consent
of, execution by or waiver by, the holders on the date of such notice,
instruction, consent, execution or waiver of more than 50% in interest of the
principal amount of the Note A then outstanding shall be considered notice from
or to, instruction from, consent of, execution by or waiver by, the Lender and
shall be binding upon any present or subsequent Lender; PROVIDED, however, that
without the consent of each holder at the time thereof affected thereby, no
amendment, supplement, consent or waiver shall:
(1) change the final maturity of any Notes, or change
the dates or amounts of payment of any installment of the
principal of or interest on any Notes, or reduce the principal
of or interest on any Notes, or change to a location outside
the United States of America the place of payment where, or
the coin or currency in which, the principal amount of any
Notes is payable; or
---------
* Confidential
44
(2) create any Lien with respect to the Collateral
except such as are permitted by the Security Agreement, or
deprive any such holder of the benefit of the Lien on the
Collateral created by the Security Agreement; or
(3) modify the provisions of this Section 9.18; or
(4) adversely affect any indemnities in favor of
such holder.
9.19 EXECUTION OF FINANCING STATEMENTS. Pursuant to any
applicable Law, the Borrower authorizes the Security Trustee (which shall be
deemed a permissive right and not an obligation) to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of the Borrower in such form and in such
offices as the Security Trustee and the Lender determine appropriate to perfect
the security interests of the Security Trustee under this Agreement and the
other Operative Agreements.
45
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CHAUTAUQUA AIRLINES, INC.
By: ___________________________________
Name:
Title:
AGENCIA ESPECIAL DE FINANCIAMENTO
INDUSTRIAL - FINAME
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
WITNESS:
_________________________
_________________________
46
SCHEDULE I
TO
LOAN AGREEMENT
PAYMENT DATES AND AMOUNTS
NOTE A AND NOTE B
[attached hereto]
ANNEX B-1
TO
LOAN AGREEMENT
[Form of] PROMISSORY NOTE
NOTE A
THIS NOTE A HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE SUCH A REGISTRATION IS IN
EFFECT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SAID ACT
THIS NOTE A IS SUBJECT TO CERTAIN ADDITIONAL
RESTRICTIONS ON TRANSFER SET FORTH IN
SECTION 9.5 OF THE
LOAN AGREEMENT
REFERRED TO BELOW.
ISSUED IN CONNECTION WITH
ONE EMBRAER EMB-145 LR AIRCRAFT WITH
MANUFACTURER'S SERIAL NUMBER 145435
AND INITIALLY BEARING UNITED STATES
FEDERAL AVIATION ADMINISTRATION
REGISTRATION NO. N285SK
AND TWO ▇▇▇▇▇▇▇ AE3007A1P-SERIES ENGINES
[*] New York, New York
January 17, 2002
FOR VALUE RECEIVED, the undersigned, Chautauqua Airlines, Inc., a New
York corporation (the "BORROWER"), hereby unconditionally promises to pay to
Agencia Especial de Financiamento Industrial-Finame (the "LENDER") in lawful
money of the United States of America and in immediately available funds, the
principal amount of [*], or, if less, the unpaid principal amount of Loan A made
by the Lender pursuant to Section 2.1 of the Loan Agreement, as hereinafter
defined. The principal amount of Loan A, and accrued interest thereon, shall be
paid in installments consisting of principal and interest payable on each
Payment Date in the amount in Dollars set forth in Schedule 1 to the Loan
Agreement for such Payment Date, as provided in Section 2.2 of the Loan
Agreement (as amended, supplemented or otherwise modified from time to time, the
"LOAN AGREEMENT"), (CH-285SK) dated as of December 27, 2001, between the
Borrower and the Lender.
The holder of this Note A is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part
---------
* Confidential
hereof the date and amount of the Loan and the date and amount of each payment
or prepayment of principal and each payment of interest with respect thereto.
The failure to make any such endorsement shall not affect the obligations of the
Borrower in respect of the Loan.
This Note A (a) is the Note A referred to in the Loan Agreement, (b)
is subject to the provisions of the Loan Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Loan
Agreement. This Note A is secured as provided in the Operative Agreements.
Reference is hereby made to the Operative Agreements for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security provided, the terms and conditions upon which the
security interests were granted and the rights of the holder of this Note A in
respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note A may be declared to be, or under
certain circumstances shall become, immediately due and payable, all as provided
in the Loan Agreement.
Unless otherwise defined herein, terms defined in the Loan Agreement
and used herein shall have the meanings given to them in the Loan Agreement.
Each holder hereof, by its acceptance of this Note A, agrees to be
bound by and to observe the provisions of the Loan Agreement and the other
Operative Agreements applicable to the Lender.
The Lender may not sell, assign, pledge or otherwise transfer all or
any portion of this Note A or any interest in this Note A including any
participation in this Note A except in connection with an assignment of the Loan
Agreement in accordance with the terms thereof.
2
THIS NOTE A SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
CHAUTAUQUA AIRLINES, INC.
Witnesses: By: _________________________________
________________________ Name: _______________________________
________________________ Title: ______________________________
3
Schedule A
to Promissory Note
------------------
THE LOAN AND REPAYMENT OF THE LOAN
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
Payment Date Amount of Loan Amount of Unpaid Principal Amount of Notation
No. Principal Repaid Balance of Loan Interest Paid Made By
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(1)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(2)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(3)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(4)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(5)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(6)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(7)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(8)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(9)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(10)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(11)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(12)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(13)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(14)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(15)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(16)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(17)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(18)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(19)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(20)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(21)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(22)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(23)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(24)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(25)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(26)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(27)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(28)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(29)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(30)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(31)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
(32)
---------------- ------------- ----------------- ----------------- ------------------ ---------------- -------------
ANNEX B-2
TO LOAN AGREEMENT
[Form of] PROMISSORY NOTE
NOTE B
THIS NOTE B HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE SUCH A REGISTRATION IS IN
EFFECT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SAID ACT
THIS NOTE B IS SUBJECT TO CERTAIN ADDITIONAL
RESTRICTIONS ON TRANSFER SET FORTH IN
SECTION 9.5 OF THE LOAN AGREEMENT
REFERRED TO BELOW.
ISSUED IN CONNECTION WITH
ONE EMBRAER EMB-145 LR AIRCRAFT WITH
MANUFACTURER'S SERIAL NUMBER 145435
AND INITIALLY BEARING UNITED STATES
FEDERAL AVIATION ADMINISTRATION
REGISTRATION NO. N285SK
AND TWO ▇▇▇▇▇▇▇ AE3007A1P-SERIES ENGINES
[*] New York, New York
January 17, 2002
FOR VALUE RECEIVED, the undersigned, Chautauqua Airlines, Inc., a New
York corporation (the "BORROWER"), hereby unconditionally promises to pay
(subject to the next sentence) to Agencia Especial de Financiamento
Industrial-Finame (the "LENDER") in lawful money of the United States of America
and in immediately available funds, the principal amount of [*], or, if less,
the unpaid principal amount of Loan B made by the Lender pursuant to Section 2.1
of the Loan Agreement (CH-285SK) dated as of December 27, 2001, between the
Borrower and the Lender (as amended, supplemented or otherwise modified from
time to time, the "LOAN AGREEMENT"). [*]
The holder of this Note B is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date and amount of Loan B and the
date and amount of each payment or prepayment of principal and each payment of
interest with respect thereto. The failure to make any such endorsement shall
not affect the obligations of the Borrower in respect of the Loan.
---------
* Confidential
This Note B (a) is the Note B referred to in the Loan Agreement, (b)
is subject to the provisions of the Loan Agreement and the Security Deposit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Loan Agreement. This Note B is secured as provided in
the Operative Agreements. Reference is hereby made to the Operative Agreements
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security provided, the terms and
conditions upon which the security interests were granted and the rights of the
holder of this Note B in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note B may be declared to be, or under
certain circumstances shall become, immediately due and payable, all as provided
in the Loan Agreement.
Unless otherwise defined herein, terms defined in the Loan Agreement
and used herein shall have the meanings given to them in the Loan Agreement.
Each holder hereof, by its acceptance of this Note B, agrees to be
bound by and to observe the provisions of the Loan Agreement and the other
Operative Agreements applicable to the Lender.
The Lender may not sell, assign, pledge or otherwise transfer all or
any portion of this Note B or any interest in this Note B including any
participation in this Note B except in connection with an assignment of the Loan
Agreement in accordance with the terms thereof.
THIS NOTE B SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
CHAUTAUQUA AIRLINES, INC.
Witnesses: By: _________________________________
________________________ Name: _______________________________
________________________ Title: ______________________________
ANNEX D-1
TO LOAN AGREEMENT
[Form of] CERTIFICATE OF THE BORROWER AS TO
REPRESENTATIONS AND WARRANTIES
Pursuant to Section 5.4 of the Loan Agreement (CH-285SK), dated as of
December 27, 2001 (as the same may be amended, supplemented or otherwise
modified from time to time, the "LOAN AGREEMENT"), between Chautauqua Airlines,
Inc., a New York corporation (the "BORROWER"), and Agencia Especial de
Financiamento Industrial (the "LENDER"), the undersigned officer of the Borrower
hereby certifies in such capacity as follows:
1. The representations and warranties made by the Borrower in Section 3
of the Loan Agreement are true and correct in all material respects on and as of
the date hereof, before as well as after giving effect to the Loan, with the
same effect as if made on the date hereof (except to the extent that such
representations and warranties are expressly stated to relate to an earlier
date, in which case such representations and warranties are true and correct in
all material respects on and as of such earlier dates).
2. All covenants and conditions required to be performed or fulfilled
by it under the Operative Agreements on or prior to the Borrowing Date have been
performed or fulfilled.
Unless otherwise defined herein, capitalized terms which are defined in
the Loan Agreement and used herein are so used as so defined.
IN WITNESS WHEREOF, the undersigned has hereunto set his name.
CHAUTAUQUA AIRLINES, INC.
By: ____________________________
Name:
Title:
Date:
ANNEX D-2
TO LOAN AGREEMENT
[Form of] CERTIFICATE OF THE LENDER AS TO
REPRESENTATIONS AND WARRANTIES
Pursuant to Section 5.4 of the Loan Agreement (CH-285SK), dated as of
December 27, 2001 (as the same may be amended, supplemented or otherwise
modified from time to time, the "LOAN AGREEMENT"), between Chautauqua Airlines,
Inc., a New York corporation (the "BORROWER"), and Agencia Especial de
Financiamento Industrial (the "LENDER"), the undersigned officer of the Lender
hereby certifies in such capacity as follows:
1. The representations and warranties made by the Lender in Section 6
of the Loan Agreement are true and correct in all material respects on and as of
the date hereof, before as well as after giving effect to the Loan, with the
same effect as if made on the date hereof (except to the extent that such
representations and warranties are expressly stated to relate to an earlier
date, in which case such representations and warranties are true and correct in
all material respects on and as of such earlier dates).
2. All covenants and conditions required to be performed or fulfilled
by it under the Operative Agreements on or prior to the Borrowing Date have been
performed or fulfilled.
Unless otherwise defined herein, capitalized terms which are defined in
the Loan Agreement and used herein are so used as so defined.
IN WITNESS WHEREOF, the undersigned has hereunto set his name.
AGENCIA ESPECIAL DE FINANCIAMENTO INDUSTRIAL
By: ____________________________
Name:
Title:
Date:
ANNEX A
TO LOAN AGREEMENT
AND TO SECURITY AGREEMENT
FINANCING OF ONE
EMBRAER EMB-145 LR AIRCRAFT
DEFINITIONS RELATING TO LOAN AGREEMENT (CH-285SK)
AND SECURITY AGREEMENT
(CH-285SK)
"ACTUAL KNOWLEDGE": with respect to any party, except as provided in
Section 6.1 of the Security Agreement, actual knowledge of a President, Vice
President, Director or more senior officer thereof, or any other officer of a
party having responsibility for the transactions contemplated by the Operative
Agreements; PROVIDED that each party shall be deemed to have "Actual Knowledge"
of any matter as to which it has received notice in accordance with Section 9.2
of the Loan Agreement.
"ADDITIONAL COMMITMENT PERIOD" means the period, if any, during which
the Lender is committed by written agreement between Chautauqua and Lender to
provide financing to the Borrower with respect to EMB aircraft to be delivered
under the Purchase Agreement (other than aircraft covered by the Funding
Agreement).
"AFFILIATE": with respect to a specified Person, means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purpose of this definition, "CONTROL"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"AFTER-TAX BASIS": with respect to any payment to be received or
accrued by any Person, the amount of such payment adjusted, if necessary, so
that such payment, after taking into account all Taxes payable to any taxing
authority as a result of the receipt or accrual of such payments and any savings
in Taxes with respect to the indemnified Taxes or other liability in respect of
which such payment is due, shall be equal to the payment to be received or
accrued.
"AIRCRAFT": means, collectively, the Airframe and Engines.
"AIRCRAFT DOCUMENTS": means all technical data, manuals and log books,
and all inspection, modification and overhaul records and other service, repair,
maintenance and technical records that are required by the FAA (or the relevant
Aviation Authority) to be maintained with respect to the Aircraft, Airframe,
Engines or Parts; and such term shall include all additions, renewals, revisions
and replacements of any such materials from time to time made, or required to be
made, by the FAA (or other Aviation Authority) regulations, and in each case in
whatever form and by whatever means or medium (including, without limitation,
microfiche, microfilm, paper or computer disk) such materials may be maintained
or retained by
or on behalf of the Borrower; PROVIDED that all such materials shall be
maintained in the English language.
"AIRCRAFT WARRANTY AGREEMENT": means the Aircraft Warranty Agreement,
dated as of December 27, 2001, between the Manufacturer and the Lender, relating
to each Aircraft listed in Schedule II to the Funding Agreement.
"AIRFRAME": means (A) the Embraer EMB-145 LR aircraft (except the
Engines or engines from time to time installed thereon) listed by manufacturer's
serial number and subjected to the Lien of the Security Agreement pursuant to
the Security Agreement Supplement originally executed and delivered under the
Security Agreement; and (B) any and all Parts so long as the same shall be
incorporated or installed in or attached to such aircraft, or so long as the
same shall be subject to the Lien of the Security Agreement in accordance with
the terms of Section 3.4 thereof after removal from such aircraft. The term
"AIRFRAME" shall include any Replacement Airframe which may from time to time be
substituted pursuant to Section 3.4 of the Security Agreement. At such time as a
Replacement Airframe shall be so substituted and the Airframe for which the
substitution is made shall be released from the Lien of the Security Agreement,
such replaced Airframe shall cease to be an Airframe under the Security
Agreement.
"AIRFRAME INTERCHANGE AGREEMENT" means an agreement between the
Borrower (or a Permitted Lessee) and another air carrier which qualifies as a
Permitted Air Carrier pursuant to which they agree to provide passenger service
to multiple destinations under circumstances where the Airframe may be operated
by and in the possession of such other air carrier for a period not to exceed
seven consecutive days (subject to extension in the event of unforeseen
circumstances).
[*]
[*]
"ASSIGNEE": has the meaning specified in Section 9.6 of the Loan
Agreement.
"ASSIGNMENT": has the meaning specified in Section 9.5(b)(2) of the
Loan Agreement.
"AVIATION AUTHORITY": means the FAA or, if the Aircraft is permitted to
be, and is, registered with any other Government Entity under and in accordance
with Section 3.3 of the Security Agreement, such other Government Entity.
"BANKRUPTCY CODE": means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.
"BANKRUPTCY DEFAULT": a Default under Section 8.1(e) of the Loan
Agreement.
"BANKRUPTCY EVENT": with respect to any Person, any of the following
events:
(a) such Person shall consent to the appointment of or the
taking of possession by the receiver, trustee or liquidator of itself or of
substantially all of its property, or such Person shall admit in writing its
inability to pay its debts generally as they come due, or
---------
* Confidential
does not pay its debts generally as they become due or shall make a general
assignment for the benefit of creditors; or
(b) such Person shall file a voluntary petition in bankruptcy
or a voluntary petition or an answer seeking reorganization, liquidation or
other relief in a proceeding under the Bankruptcy Code (as in effect at such
time) or such Person shall seek relief by voluntary petition, answer, or consent
under the provisions of any other bankruptcy or other similar Law providing for
the reorganization or winding-up of corporations (as in effect at such time) or
such Person's board of directors shall adopt a resolution authorizing any of the
foregoing; or
(c) an order, judgment or decree shall be entered by any court
of competent jurisdiction appointing, without the consent of such Person, a
receiver, trustee or liquidator of such Person or of substantially all of its
property, or sequestering substantially all of the property of such Person, and
any such order, judgment or decree of appointment or sequestration shall remain
in force undismissed, unstayed or unvacated for a period of 60 days after the
date of entry thereof; or
(d) a petition against such Person in a proceeding under the
Bankruptcy Code (as in effect at such time) or any other bankruptcy laws or
other insolvency laws shall be filed and shall not be withdrawn or dismissed
within 60 days thereafter, or, under the provisions of any Law providing for
reorganization or winding-up of corporations which may apply to such Person, any
court of competent jurisdiction shall assume jurisdiction, custody or control of
such Person or of substantially all of its property and such jurisdiction,
custody or control shall remain in force unrelinquished, unstayed or
unterminated for a period of 60 days.
"BFE": means all buyer furnished equipment, if any, installed on the
Aircraft on the Date of Actual Delivery or to be installed thereafter, and
listed in an attachment to the BFE ▇▇▇▇ of Sale.
"BFE ▇▇▇▇ OF SALE": means a ▇▇▇▇ of Sale, if there is any BFE, dated
the Delivery Date executed by the Borrower in favor of the Manufacturer and
covering the BFE for the Aircraft.
"BILLS OF SALE": means the FAA ▇▇▇▇ of Sale and the Warranty ▇▇▇▇ of
Sale.
"BNDES": means Banco Nacional de Desenvolvimento Economico e Social, a
Brazilian Federal public company with its principal place of business in
Brasilia, Distrito Federal, Federative Republic of Brazil, and main offices in
the City of Rio de Janeiro, at Avenida Republica do Chile, ▇▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇-▇▇▇
- ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ - ▇▇, ▇▇▇▇▇▇ ▇▇-▇▇▇-▇▇▇ registered in the General Register of
Taxpayers under the number 33.657.248/0001-89.
"BORROWER": means Chautauqua Airlines, Inc., a New York corporation.
"BORROWING DATE": means the date the Loan is initially made by the
Lender to the Borrower.
"BRAZIL": means the Federative Republic of Brazil.
"BRAZILIAN CURRENCY EQUIVALENT": has the meaning set forth in Section
2.1 of the Loan Agreement.
[*]
[*]
"BREAKAGE COST": as defined in Section 9.1 of the Funding Agreement.
"BRIDGE AIRCRAFT": the four EMB-145 LR Aircraft listed on Schedule II
of the Funding Agreement.
"BRIDGE LOAN": means in the case of each Bridge Aircraft, the loan by
Manufacturer to Chautauqua made on the Delivery Date to finance Chautauqua's
purchase of such Bridge Aircraft.
"BRIDGE LOAN RELEASE": means the release of the Aircraft from the
security interest with respect to the Bridge Loan.
"BROAD BASED OFFERING": has the meaning specified in Section 9.5(b)(2)
of the Loan Agreement.
"BUSINESS DAY": means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York, Indianapolis, Indiana, Rio de Janeiro, Brazil or the city and
state in which the Corporate Trust Department is located.
"CHANGE IN CONTROL" and "CONTROL": as defined in Section 7.7(c) of the
Loan Agreement.
[*]
"CHAUTAUQUA" means Chautauqua Airlines, Inc., a New York corporation.
"CHAUTAUQUA MERGER TRANSACTION": as defined in Section 7.7(a) of the
Loan Agreement.
"CHAUTAUQUA SUCCESSOR": as defined in Section 7.7(a) of the Loan
Agreement.
"CITIZEN OF THE UNITED STATES": is defined in Section 40102(a) (15) of
the Federal Aviation Code and in the FAA Regulations.
"CLOSING": has the meaning set forth in Section 2.1 of the Loan
Agreement.
"CODE": means the United States Internal Revenue Code of 1986, as
amended from time to time.
"CODE-SHARE AGREEMENT" means an agreement of the Borrower pursuant to
which it is entitled to fly under another carrier's Designator Code.
"COLLATERAL": has the meaning specified in Section 2.1 of the Security
Agreement.
---------
* Confidential
"COMMITMENT PERIOD": has the meaning provided in Section 1.1 of the
Funding Agreement.
"COMMITMENT TERMINATION EVENT": as defined in Section 7 of the Funding
Agreement.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"CONFIDENTIAL INFORMATION": has the meaning set forth in Section 9.14
of the Loan Agreement.
"CONTRACTUAL CURRENCY": has the meaning set forth in Section 9.7 of the
Loan Agreement.
"CONTRACTUAL OBLIGATION": means, as to any Person, any provision of any
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"CORPORATE TRUST DEPARTMENT" or "Trust Department": means the Corporate
Trust Department of the Security Trustee located at the principal corporate
trust office of the Security Trustee as specified in Security Trustee's address
for notices under the Relevant Loan Agreement (Direct Loans) (initially, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇), ▇▇ such other department or office at
which the Security Trustee's corporate trust business shall be administered
which the Security Trustee shall have specified by written notice to the
Borrower and the Lender.
"CRAF": means the Civil Reserve Air Fleet Program authorized under 10
U.S.C. Section 9511 et seq. or any substantially similar program under the laws
of the United States.
"DEBT": means any liability for borrowed money, or any liability for
the payment of money in connection with any letter of credit transaction or any
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments.
"DEBT RATE": has the meaning set forth in Section 2.2(b) of the Loan
Agreement.
"DEFAULT": means an event that, with the giving of notice or the lapse
of time or both, would become an Event of Default.
"DEFAULT RATE": means the Debt Rate plus [*] basis points.
"DELIVERY DATE" or "DATE OF ACTUAL DELIVERY": means the date on which
the Aircraft is or was delivered by the Manufacturer to the Borrower.
"DEPARTMENT OF TRANSPORTATION": means the U.S. Department of
Transportation and any agency or instrumentality of the U.S. Government
succeeding to its functions.
---------
* Confidential
"DESIGNATOR CODE" means the airline designations originally allotted
and administered pursuant to Agreements CAB 24606 and 26056.
"DIRECT LOANS": as defined in the Funding Agreement.
"DOLLARS", "UNITED STATES DOLLARS" or "$": means the lawful currency of
the United States.
"ELIGIBLE ACCOUNT": means an account established by and with an
Eligible Institution acting at the request of the Security Trustee, which
institution agrees, for all purposes of the UCC including Article 8 thereof,
that (a) such account shall be a "securities account" (as defined in Section
8-501 of the UCC), (b) all property (other than cash) credited to such account
shall be treated as a "financial asset" (as defined in Section 8-102(9) of the
UCC), (c) the Security Trustee shall be the "entitlement holder" (as defined in
Section 8-102(7) of the UCC) in respect of such account, (d) it will comply with
all entitlement orders issued by the Security Trustee to the exclusion of the
Borrower, and (e) the "securities intermediary jurisdiction" (under Section
8-110(e) of the UCC) shall be the State of New York.
"ELIGIBLE INSTITUTION": means the corporate trust department of (a)
JPMorgan Chase Bank, acting solely in its capacity as a "securities
intermediary" (as defined in Section 8-102(14) of the UCC), or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from ▇▇▇▇▇'▇ and
Standard & Poor's of at least A-3 or its equivalent.
"ENGINE": means (a) the two ▇▇▇▇▇▇▇ AE3007A1P-series engines listed by
manufacturer's serial numbers and subjected to the Lien of the Security
Agreement pursuant to the Security Agreement Supplement originally executed and
delivered under the Security Agreement, whether or not from time to time
installed on the Airframe or installed on any other airframe or on any other
aircraft; and (b) any Replacement Engine that may from time to time be
substituted for an Engine pursuant to Section 3.3 or Section 3.4 of the Security
Agreement; together, in each case, with any and all Parts so long as the same
shall be incorporated or installed in or attached thereto or so long as the same
shall be subject to the Lien of the Security Agreement in accordance with the
terms of Section 3.3 thereof after removal from any such engine. At such time as
a Replacement Engine shall be so substituted and the Engine for which
substitution is made shall be released from the Lien of the Security Agreement,
such replaced Engine shall cease to be an Engine under the Security Agreement.
"ENGINE MANUFACTURER": means Rolls-Royce Company, formerly known as
▇▇▇▇▇▇▇ Engine Company, Inc., a Delaware corporation.
"ENGINE WARRANTY ASSIGNMENT AGREEMENT AND CONSENT" OR "ENGINE WARRANTY
AGREEMENT": means the Engine Warranty Assignment Agreement and Consent, dated as
of December 27, 2001, among Solitair, Borrower and the Engine Manufacturer.
"EQUIPMENT": means the Aircraft, the Airframe, any Engine and/or any
Part.
"ERISA": means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT": has the meaning set forth in Section 8.1 of the
Loan Agreement.
"EVENT OF LOSS": means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect to
such property, for any reason whatsoever.
(a) the destruction of such property, damage to such property
beyond economic repair or rendition of such property permanently unfit for
normal use by Borrower;
(b) the actual or constructive total loss of such property or
any damage to such property, or requisition of title or use of such property,
which results in an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss;
(c) any theft, hijacking or disappearance of such property for
a period of 90 consecutive days or more;
(d) any seizure, condemnation, confiscation, taking or
requisition (including loss of title) of such property by any Government Entity
or purported Government Entity (other than a requisition of use by the U.S.
Government) for a period exceeding 90 consecutive days; or
(e) as a result of any law, rule, regulation, order or other
action by the Aviation Authority or by any Government Entity of the government
of registry of the Aircraft, or by any Government Entity otherwise having
jurisdiction over the operation or use of the Aircraft, the use of such property
in the normal course of Borrower's business of passenger air transportation is
prohibited for a period of 90 consecutive days, unless Borrower, prior to the
expiration of such 90 day period, shall have undertaken and shall be diligently
carrying forward such steps as may be necessary or desirable to permit the
normal use of such property by Borrower, but in any event if such use shall have
been prohibited for a period of 365 days, provided that no Event of Loss shall
be deemed to have occurred if such prohibition has been applicable to Borrower's
(or a Permitted Lessee's) entire U.S. fleet of such property and Borrower (or a
Permitted Lessee), prior to the expiration of such 365-day period, shall have
conformed at least one unit of such property in its fleet to the requirements of
any such law, rule, regulation, order or other action and commenced regular
commercial use of the same in such jurisdiction and shall be diligently carrying
forward in a manner which does not discriminate against such property in so
conforming such property, steps which are necessary or desirable to permit the
normal use of such property by Borrower, but in any event if such use shall have
been prohibited for a period of three years.
"FAA": means the U.S. Federal Aviation Administration and any agency or
instrumentality of the U.S. Government succeeding to its functions.
"FAA APPLICATION FOR AIRCRAFT REGISTRATION": means an application for
registration of the Aircraft in the name of the Borrower on AC Form 8050-1 or
such other form approved by the FAA.
"FAA ▇▇▇▇ OF SALE": means the ▇▇▇▇ of sale for the Aircraft on AC Form
8050-2 or such other form approved by the FAA executed by the Manufacturer in
favor of the Borrower.
"FAA REGULATIONS" means the Federal Aviation Regulations issued or
promulgated pursuant to the Federal Aviation Code from time to time.
"FEDERAL AVIATION CODE": means the sections of Title 49 of the United
States Code relating to aviation, as amended from time to time, or any similar
legislation of the United States enacted in substitution or replacement
therefor.
"FINAME": as defined in the recitals to the Loan Agreement.
"FLY-AWAY-FACTORY CONDITION": with respect to any Aircraft, that such
Aircraft is or was accepted by Borrower from the Manufacturer on the Delivery
Date as new and in compliance with the Purchase Agreement, subject to
unsatisfied delivery discrepancies that Manufacturer agrees or agreed to remedy.
"FUNDING AGREEMENT": means the Funding Agreement, dated as of December
27, 2001, between the Lender and Chautauqua.
"GAAP": means generally accepted accounting principles as set forth in
the statements of financial accounting standards issued by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants, as such principles may at any time or from time to time be varied
by any applicable financial accounting rules or regulations issued by the SEC
and, with respect to any Person, shall mean such principles applied on a basis
consistent with prior periods except as may be disclosed in such Person's
financial statements.
"GOVERNMENT ENTITY": means (a) any national, federal, state, provincial
or similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"INDEMNITEE": has the meaning set forth in Section 9.16(i) of the Loan
Agreement.
"Indemnified Taxes": means Taxes with respect to the Loan A other than:
1. Taxes imposed on the Lender in excess of Taxes that would
have been imposed if such Lender had not engaged in any business in or had any
presence or contact in the jurisdiction imposing such Taxes other than any
business, presence or contact as a result of the operation, presence,
registration or location of the Aircraft in such jurisdiction or as a result of
the transactions contemplated by the Operative Agreements;
2. Taxes imposed on the Lender that arise out of or are caused
by the gross negligence or willful misconduct of such Lender (unless such gross
negligence or willful misconduct is imputed to such Lender by reason of the acts
or omissions of the Borrower);
3. Taxes that would not have been imposed but for any failure
of the Lender to (x) file proper and timely reports or returns or to pay any
Taxes when due (except to the extent
caused by a breach by Borrower of its obligations pursuant to Section 2.6 of the
Loan Agreement), [*], comply with any certification, information, documentation,
reporting or other similar requirements, concerning the nationality, residence,
identity or connection with jurisdiction imposing such Taxes, if such compliance
is required to obtain or establish relief or exemption from or reduction in such
Taxes and such Lender was eligible to comply with such requirement (but only if
and to the extent that such Lender is entitled under applicable Law to furnish
such forms and is eligible to claim such reduction or exemption and only to the
extent that such forms may be filed by such Lender without adverse consequences
to the Lender or any of its Affiliates, or risk thereof, as reasonably
determined by such Lender in good faith), or (z) with respect to a Brazilian
Lender, failure to comply with such Lender's obligations in Section 2.6(d) of
the Loan Agreement;
4. [*]Taxes imposed by any Government Entity in a jurisdiction
within which such Lender is incorporated or has its principal place of business
(but excluding any such Taxes resulting from the presence, activities or conduct
of the Borrower (or any Affiliate of the Borrower) in such jurisdiction); or
5. [*]
"INSPECTING PARTIES": has the meaning specified in Section 3.8 of the
Security Agreement.
"IRS": means the United States Internal Revenue Service or any agency
or instrumentality of the U.S. Government succeeding to its functions.
"LAW": means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"LEASE": means any lease of the Aircraft, including any subsequent
Permitted Lease.
"LEASE ASSIGNMENT": means an assignment of a Permitted Lease
substantially in the form of Exhibit B to the Security Agreement.
"LENDER": has the meaning set forth in the introductory paragraph of
the Loan Agreement.
"LENDER LIENS" means any Lien attributable to the Lender with respect
to the Aircraft, any interest therein, or any other portion of the Collateral,
arising as a result of (I) claims against the Lender not related to its interest
in the Aircraft or the administration of the Loan under the Loan Agreement, (II)
acts of the Lender not permitted by, or failure of the Lender to take any action
required by, the Operative Agreements, (iii) Taxes against such Person or any of
its Affiliates not required to be indemnified by Borrower under the Loan
Agreement, or (iv) claims against such Person arising out of any transfer by
such Person of its interest in the Loan, any Note and its interests in the
Operative Agreements.
"LEVERAGED LEASING LOAN": has the meaning specified in the Funding
Agreement.
[*]
---------
* Confidential
"LIEN": means any mortgage, pledge, lien, charge, claim, encumbrance,
lease or security interest affecting title to or any interest in property.
"LOAN": Loan A and Loan B, collectively.
"LOAN A": means that portion of the Loan evidenced by Note A.
"LOAN A MATURITY DATE": means the [*] anniversary of the Borrowing
Date.
"LOAN AGREEMENT": means the Loan Agreement (CH-285SK) dated as of
December 27, 2001 between the Borrower and the Lender.
"LOAN B": means that portion of the Loan evidenced by Note B.
[*]
"LOSS PAYMENT DATE": has the meaning set forth in Section 3.4(b)(i) of
the Security Agreement.
"MAINTENANCE PROGRAM": has the meaning set forth in Section 3.3(g) of
the Security Agreement.
"MANDATORY MODIFICATION": has the meaning set forth in section 3.3(j)
of the Security Agreement.
"MANUFACTURER": means Embraer - Empresa Brasileira de Aeronautica S.A.,
and its successors and permitted assigns.
"MANUFACTURER INVOICE": means the invoice of the Manufacturer setting
forth the purchase price of the Aircraft (which shall be the Net Aircraft Cost).
"MATERIAL ADVERSE CHANGE": has the meaning set forth in the Funding
Agreement.
"MATERIAL CHANGE": means, with respect to any Person, any event,
condition or circumstance that materially and adversely affects such Person's
business or consolidated financial condition, or its ability to observe or
perform its obligations, liabilities and agreements under, or affect the
validity or enforceability of the Operative Agreements.
"NET AIRCRAFT COST": means, for the Aircraft, the Relevant Net Aircraft
Cost (as defined in the Funding Agreement) for the Aircraft.
"NOTE A": means the promissory note substantially in the form of Annex
B-1 to the Loan Agreement, dated the Borrowing Date and executed by the
Borrower.
"NOTE B": means the promissory note substantially in the form of Annex
B-2 to the Loan Agreement, dated the Borrowing Date and executed by the
Borrower.
"NOTES": means the Note A and Note B.
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"OBSOLETE PARTS": has the meaning set forth in section 3.3(j) of the
Security Agreement.
"OFFICER'S CERTIFICATE": means, in respect of any Person, a certificate
signed by the Chairman, the President, any Vice President (including those with
varying ranks such as Executive, Senior, Assistant or Staff Vice President), any
Director, the Treasurer or the Secretary of such Person.
"OPERATIVE AGREEMENTS": means the Bills of Sale, Loan Agreement, the
Notes, the Security Agreement, each Security Agreement Supplement, any amendment
to the Security Agreement, any Permitted Lease, any Lease Assignment, the
Purchase Agreement Assignment, the Engine Warranty Assignment Agreement and
Consent, the Aircraft Warranty Agreement, the Security Deposit Agreement, the
Security Account Control Agreement, and any other agreement or instrument
specifically identified therein with the consent of the Borrower as a "Operative
Agreements" for purposes hereof.
"OPTIONAL MODIFICATION": has the meaning set forth in section 3.3(j) of
the Security Agreement.
"ORIGINATION FEE": has the meaning set forth in Section 2.1 of the Loan
Agreement.
"PARTS": means all appliances, parts, components, avionics, landing
gear, instruments, appurtenances, accessories, furnishings, seats and other
equipment of whatever nature (other than (a) Engines or engines, and (b) any
Removable Parts leased by Borrower from a third party or subject to a security
interest granted to a third party), that may from time to time be installed or
incorporated in or attached or appurtenant to the Airframe or any Engine.
"Payment Date": means each [*]and [*] of each year prior to the Loan A
Maturity Date, commencing with the first such date to occur after the Borrowing
Date of the Loan, and the Loan A Maturity Date.
"PAYMENT DEFAULT": means the failure of the Borrower to pay any amount
of principal of or interest on the Loan when due.
"PERMITTED AIR CARRIER": means (i) any Permitted Foreign Air Carrier,
(ii) any other Person approved in writing by Lender and Security Trustee or
(iii) any U.S. Air Carrier.
"PERMITTED COUNTRY" means any country listed on Annex D to the Security
Agreement.
"PERMITTED FOREIGN AIR CARRIER": means any air carrier with its
principal executive offices in any Permitted Country and which is authorized to
conduct commercial airline operations and to operate jet aircraft similar to the
Aircraft under the applicable Laws of such Permitted Country.
"PERMITTED INVESTMENTS": means the following securities (which shall
mature within 90 days of the date of purchase thereof): (a) direct obligations
of the U.S. Government; (b) obligations fully guaranteed by the U.S. Government;
and (c) certificates of deposit issued by, or bankers' acceptances of, or time
deposits or a deposit account with, Security Trustee or any bank, trust company
or national banking association incorporated or doing business under
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* Confidential
the laws of the United States or any state thereof having a combined capital and
surplus and retained earnings of at least $500,000,000 and having a rate of "C"
or better from the Thomson BankWatch Service.
"PERMITTED LEASE": means a lease or a sublease permitted under Section
3.2 of the Security Agreement (Direct Loans).
"PERMITTED LESSEE": means the lessee or sublessee under a Permitted
Lease.
"PERMITTED LIENS": has the meaning set forth in Section 3.1 of the
Security Agreement (Direct Loans).
"PERSON OR "PERSON": means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity of whatever nature.
"PLAN": means any employee benefit plan within the meaning of Section
3(3) of ERISA or any plan within the meaning of Section 4975(e)(1) of the Code.
"PURCHASE AGREEMENT": the EMB-145 Purchase Agreement Number GCT-025/98
dated as of November 12, 1998 between the Manufacturer and Solitair Corp., to
the extent assigned pursuant to the Purchase Agreement Assignment.
"PURCHASE AGREEMENT ASSIGNMENT": means the Purchase Agreement
Assignment dated as of the applicable Delivery Date, between Solitair and the
Borrower.
"REGISTER": has the meaning specified in Section 9.5(d)(v) of the Loan
Agreement.
"RELATED LOANS B": means the loans identified as "Loan B" made under
the Related Operative Agreements.
"RELATED OPERATIVE AGREEMENTS": means all "OPERATIVE AGREEMENTS" as
defined in each loan agreement for Direct Loans (other than the Loan Agreement)
entered into pursuant to the Funding Agreement.
"RELATED NOTES A": means notes issued under the Related Operative
Agreements evidencing the "Loan A" as defined therein.
"REMOVABLE PART": has the meaning set forth in Section 3.3(j) of the
Security Agreement.
"REPLACEMENT AIRCRAFT": means the Aircraft of which a Replacement
Airframe is part.
"REPLACEMENT AIRFRAME": means an airframe that shall have been
subjected to the Lien of the Security agreement pursuant to Section 3.4 thereof.
"REPLACEMENT ENGINE": means an engine which shall have been subjected
to the Lien of the Security Agreement pursuant to Section 3.3 or Section 3.4
thereof.
"REQUIREMENT OF LAW": means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Government Entity, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"SEC": means the Securities and Exchange Commission of the United
States, or any Government Entity succeeding to the functions of such Securities
and Exchange Commission.
"SECTION 1110": means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor section of the federal bankruptcy Law in effect from time to time.
"SECTION 1110 AGREEMENT": means a written agreement of the debtor to
perform referred to in Section 1110(a)(2)(A) of the Bankruptcy Code that,
without further review or modification, qualifies under Section 1110 to keep the
automatic stay provided by Section 362 of the Bankruptcy Code in effect with
respect to the Aircraft.
"SECTION 1110 AIR CARRIER": means a Person holding an air carrier
operating certificate issued pursuant to chapter 447 of Title 49 of the United
States Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo.
"SECTION 1110 PERIOD": means the continuous period of (i) 60 days
specified in Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer
period, if any, agreed to under Section 1110(b) of the Bankruptcy Code), plus
(ii) an additional period, if any, commencing with the trustee or
debtor-in-possession in such proceeding entering into with court approval a
Section 1110 Agreement within such 60 days (or longer period as agreed) and
continuing until such time as such trustee or debtor-in-possession ceases to
fully perform its obligations thereunder with the result that the period during
which the Security Trustee is prohibited from repossessing the Aircraft under
the Security Agreement comes to an end; PROVIDED that, at all times on and after
such 60 day period, all cures specified in Section 1110(a)(2)(B) have been
timely and fully made and performed.
"SECURED OBLIGATIONS": has the meaning set forth in Section 2.1 of the
Security Agreement.
"SECURITIES ACCOUNT CONTROL AGREEMENT": means the Securities Account
Control Agreement (CH-285SK) dated as of December 27, 2001 among the Borrower,
FINAME and JPMorgan Chase Bank.
"SECURITY DEPOSIT AGREEMENT": means the Security Deposit Agreement
(CH-285SK) dated as of December 27, 2001 among the Borrower, FINAME and JPMorgan
Chase Bank.
"SECURITIZATION": has the meaning specified in Section 9.5(b)(2) of the
Loan Agreement.
"SECURITY AGREEMENT": means the Security Agreement (CH-285SK) dated as
of the date of the Loan Agreement, substantially in the form of Exhibit C-2 to
the Funding Agreement, between the Borrower and the Security Trustee, including
all annexes, schedules, exhibits, appendices, amendments and supplements
thereto.
"SECURITY AGREEMENT SUPPLEMENT": means (A) the Security Agreement
Supplement No. 1 (CH-285SK) substantially in the form of Exhibit A-1 to the
Security Agreement, dated the Borrowing Date, which shall describe with
particularity the Airframe and the Engines and which creates a security interest
in the Airframe and Engines and (B) any other supplement to the Security
Agreement from time to time executed and delivered.
"SECURITY TRUSTEE": has the meaning set forth in the introductory
paragraph of the Security Agreement.
"SECURITY TRUSTEE LIENS": means any Lien attributable to the Security
Trustee with respect to the Aircraft, any interest therein, or any other portion
of the Collateral, arising as a result of (I) claims against the Security
Trustee in its individual capacity not related to its interest in the Aircraft
or the administration of the Collateral pursuant to the Security Agreement, (II)
acts of the Security Trustee not permitted by, or failure of the Security
Trustee to take any action required by, the Operative Agreements, (III) Taxes
against the Security Trustee or any of its Affiliates not required to be
indemnified by Borrower under the Loan Agreement, or (iv) claims against the
Security Trustee arising out of the transfer by the Security Trustee of all or
any portion of its interest in the Collateral, other than a transfer permitted
by the terms of the Operative Agreements or pursuant to the exercise of remedies
set forth in Section 5 of the Security Agreement.
"SOLITAIR": Solitair Corp., a Delaware corporation and an affiliate of
the Borrower.
"SPV": has the meaning specified in Section 9.5(b)(2) of the Loan
Agreement.
"SPV SECURITIES": has the meaning specified in Section 9.5(b)(2) of the
Loan Agreement.
"SUBSIDIARY": means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"SUBSTANTIAL PART": for any Loan A or Leveraged Leasing Loan, 90% or
more of the then remaining cash flow scheduled to be paid under such Loan A or
Leveraged Leasing Loan.
"TAX" and "TAXES": means all governmental or quasi-governmental fees
(including, without limitation, license, filing and registration fees) and all
taxes (including, without limitation, franchise, excise, stamp, value added,
income, gross receipts, sales, use, property, personal and real, tangible and
intangible taxes and mandatory contributions), withholdings, assessments,
levies, imposts, duties or charges, of any nature whatsoever, together with any
penalties, fines, additions to tax or interest thereon or other additions
thereto imposed, withheld, levied or assessed by any country, taxing authority
or governmental subdivision thereof or therein or by any international
authority, including any taxes imposed on any Person as a result of such Person
being required to collect and pay over withholding taxes.
"Tax Treaty Countries": means [*]
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* Confidential
"THRESHOLD AMOUNT": means [*]
"UNITED STATES" and "U.S.": each means the United States of America.
"U.S. AIR CARRIER": means any United States air carrier that is a
Citizen of the United States holding an air carrier operating certificate issued
pursuant to chapter 447 of title 49 of the United States Code for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo, and
as to which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the FAA Regulations, or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefore or in the absence thereof.
"U.S. GOVERNMENT": means the federal government of the United States,
or any instrumentality or agency thereof the obligations of which are guaranteed
by the full faith and credit of the United States.
"U.S. TAX LAW": includes the Code, any regulations promulgated or
proposed thereunder [*].
"U.S. WITHHOLDING TAX": any Tax imposed by way of deduction or
withholding by the United States federal government, including the federal
income tax imposed under Sections 881(a) and 1442 of the Code, on payments to a
person who is not a U.S. Person within the meaning of Section 7701(a)(30) of the
Code.
"WET LEASE" means any arrangement whereby Borrower or a Permitted
Lessee agrees to furnish the Aircraft, Airframe or any Engine to a third party
pursuant to which the Aircraft, Airframe or Engine shall at all times be in the
operational control of Borrower or a Permitted Lessee, provided that Borrower's
obligations under the Operative Agreements shall continue in full force and
effect notwithstanding any such arrangement.
"WARRANTY ▇▇▇▇ OF SALE": means the full warranty ▇▇▇▇ of sale covering
the Aircraft (together with the FAA ▇▇▇▇ of Sale collectively called "Bills of
Sale"), executed by Manufacturer in favor of the Borrower, and specifically
referring to each Engine, as well as to the Airframe, constituting a part of the
Aircraft.
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* Confidential