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EXHIBIT 10.4
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AMENDED AND RESTATED
ADMINISTRATIVE AGENCY AGREEMENT
among
AerFi Administrative Services Limited
AerFi Group plc,
as Guarantor
AerCo Limited
AerFi Group plc,
as Servicer
and
The Entities Listed on Appendix A Hereto
Dated as of July 17, 2000
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EXECUTION COPY
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions............................................... 1
ARTICLE 2
APPOINTMENT; ADMINISTRATIVE SERVICES
SECTION 2.01. Appointment............................................... 9
SECTION 2.02. Limitations............................................... 9
SECTION 2.03. Administrative Services................................... 11
SECTION 2.04. Accounting and Draft Accounts............................. 19
SECTION 2.05. Additional Administrative Services........................ 21
SECTION 2.06. Additional Aircraft....................................... 22
SECTION 2.07. New Subsidiaries.......................................... 22
SECTION 2.08. AerCo Group Responsibility................................ 22
ARTICLE 3
STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY
SECTION 3.01. Standard of Performance................................... 23
SECTION 3.02. Liability and Indemnity................................... 23
SECTION 3.03. Conflicts of Interest..................................... 24
ARTICLE 4
ADMINISTRATIVE AGENT UNDERTAKINGS
SECTION 4.01. Administrative Agent Undertakings......................... 25
ARTICLE 5
UNDERTAKINGS OF AERCO GROUP
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SECTION 5.01. Cooperation............................................... 28
SECTION 5.02. Information............................................... 28
SECTION 5.03. Scope of Services......................................... 28
SECTION 5.04. Ratification.............................................. 29
SECTION 5.05. Covenants................................................. 29
SECTION 5.06. Ratification by Subsidiaries.............................. 31
ARTICLE 6
APPROVALS
SECTION 6.01. Approvals................................................. 31
ARTICLE 7
EFFECTIVENESS
SECTION 7.01. Effectiveness............................................. 31
ARTICLE 8
ADMINISTRATIVE FEES, EXPENSES AND SUBORDINATION
SECTION 8.01. Administrative Fees....................................... 32
SECTION 8.02. Expenses.................................................. 33
SECTION 8.03. Taxes..................................................... 33
SECTION 8.04. Payment of Expenses....................................... 34
SECTION 8.05. Subordination of Fees and Expenses........................ 34
ARTICLE 9
TERM, REMOVAL OF OR TERMINATION BY THE ADMINISTRATIVE AGENT
SECTION 9.01. Term...................................................... 34
SECTION 9.02. Cross-termination......................................... 34
SECTION 9.03. Right to Terminate........................................ 34
SECTION 9.04. Consequences of Termination............................... 37
SECTION 9.05. Survival.................................................. 37
ARTICLE 10
ASSIGNMENT AND DELEGATION
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SECTION 10.01. Assignment and Delegation................................. 38
ARTICLE 11
GUARANTEE
SECTION 11.01. Guarantee................................................. 38
SECTION 11.02. Absolute Obligations...................................... 39
SECTION 11.03. Guarantor's Representations............................... 39
SECTION 11.04. Successors and Assigns; Amendments........................ 40
SECTION 11.05. Limitations............................................... 40
SECTION 11.06. Payments; Costs of Enforcement............................ 41
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices................................................... 41
SECTION 12.02. Governing Law............................................. 42
SECTION 12.03. Jurisdiction.............................................. 43
SECTION 12.04. Agent for Service of Process.............................. 43
SECTION 12.05. WAIVER OF JURY TRIAL...................................... 43
SECTION 12.06. Counterparts; Third Party Beneficiaries................... 43
SECTION 12.07. Entire Agreement.......................................... 44
SECTION 12.08. Power of Attorney......................................... 44
SECTION 12.09. Restrictions on Disclosure................................ 44
SECTION 12.10. Rights of Setoff.......................................... 45
SECTION 12.11. No Partnership............................................ 45
SECTION 12.12. Implied Terms Excluded.................................... 46
SECTION 12.13. Table of Contents; Headings............................... 46
SECTION 12.14. No Retroactive Application................................ 46
SECTION 12.15. Limited Recourse.......................................... 46
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Appendix A Subsidiaries
Appendix B Form of Accession Agreement
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AMENDED AND RESTATED ADMINISTRATIVE AGENCY AGREEMENT dated as of July
17, 2000 (the "AGREEMENT"), among AerFi Administrative Services Limited, a
company incorporated under the laws of Ireland and formerly known as GPA
Administrative Services Limited (the "ADMINISTRATIVE AGENT"), AerFi Group plc, a
company incorporated under the laws of Ireland and formerly known as GPA Group
plc (the "GUARANTOR" or "AerFi GROUP"), AerCo Limited, a company incorporated
under the laws of Jersey, Channel Islands ("AerCo"), AerFi Group plc, as
Servicer (the "SERVICER"), and the entities listed on Appendix A hereto and any
other Subsidiary of AerCo which accedes to this Agreement pursuant to an
Accession Agreement (together, the "SUBSIDIARIES"). This Agreement amends and
restates in its entirety the administrative agency agreement dated as of July
15, 1998 (the "ORIGINAL AGREEMENT"), entered into among certain of the parties
hereto.
For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree that the Original Agreement be and the same is hereby amended and restated
to read in its entirety as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings. Unless otherwise defined herein, all capitalized terms
used but not defined herein have the meanings assigned to such terms in the
Indenture.
"ACCESSION AGREEMENT" means an accession agreement substantially in
the form of Appendix B hereto.
"ADDITIONAL FEE" has the meaning assigned to such term in Section
8.01(a) hereof.
"ADDITIONAL NOTES" has the meaning assigned to such term in the
Offering Memorandum.
"ADMINISTRATIVE AGENT" has the meaning assigned to such term in the
preamble hereto.
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"ADMINISTRATIVE FEE" has the meaning assigned to such term in Section
8.01(a) hereof.
"ADMINISTRATIVE SERVICES" has the meaning assigned to such term in
Section 2.01(a) hereof.
"AerCo" has the meaning assigned to such term in the preamble hereto.
"AerCo GROUP" has the meaning assigned to such term in Section 2.01(a)
hereof.
"AerFi GROUP" has the meaning assigned to such term in the preamble
hereto.
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified. The parties hereto acknowledge that each of AerCo
and its Subsidiaries, on the one part, and AerFi Group plc and its subsidiaries,
on the other part, are not Affiliates of each other.
"AFTER-TAX BASIS" means on a basis such that any payment received,
deemed to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all U.S. Federal, state, local and Irish or
other foreign Taxes, penalties, fines, interest, additions to Tax and other
charges resulting from the receipt (actual or constructive) or accrual of such
payments imposed by or under any U.S. Federal, state, local or Irish or other
foreign law or Governmental Authority (after taking into account any current
deduction to which such Person shall be entitled with respect to the amount that
gave rise to the underlying payment) be equal to the payment received, deemed to
have been received or receivable.
"AGREEMENT" has the meaning assigned to such term in the preamble
hereto.
"AIRCRAFT ASSET" has the meaning assigned to such term in the Servicing
Agreement.
"ANNUAL APPRAISED VALUE" means the average Base Value of an Aircraft at
the time acquired by a member of AerCo Group as determined annually by three
independent appraisers, which initially shall be Aircraft Information Services,
Inc., BK Associates, Inc. and Airclaims Limited, or, thereafter, be such other
independent appraisers as may be selected by the Administrative Agent and
approved by the Board of Directors of AerCo.
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"ASSET EXPENSES BUDGET" has the meaning assigned to such term in
Section 7.04(a) of the Servicing Agreement.
"BOARD OF DIRECTORS" means the board of directors of AerCo.
"BUSINESS OBJECTIVES" means maximizing the present value of the cash
flows derived from the leases relating to the Aircraft over time, subject to the
constraints imposed by the Indenture and Servicing Agreement, and seeking to
achieve a balanced and diversified portfolio (including, without limitation,
with respect to lessees, geography and lease term lengths), in all cases taking
into account the then-existing and anticipated market conditions affecting the
operating leases of used aircraft and the commercial aviation industry
generally.
"CASH MANAGEMENT AGREEMENT" means the Amended and Restated Cash
Management Agreement dated as of July 17, 2000, among the Cash Manager, the
Guarantor, AerCo, the Servicer, Bankers Trust Company, solely in its capacity as
indenture trustee and security trustee and the entities listed on Appendix A
thereto and any other Subsidiary of AerCo which accedes thereto, as amended from
time to time.
"CASH MANAGER" means AerFi Cash Manager II Limited, a limited company
organized under the laws of Ireland and formerly known as GPA Cash Manager II
Limited.
"CONCENTRATION THRESHOLDS" has the meaning assigned to such term in
Section 2.02(a) of Schedule 2.02(a) of the Servicing Agreement.
"CONFLICTS STANDARD" has the meaning assigned to such term in Section
3.02(b) of the Servicing Agreement.
"CONSOLIDATED QUARTERLY DRAFT ACCOUNTS" has the meaning assigned to
such term in Section 2.04(b)(ii) hereof.
"CONSOLIDATING QUARTERLY DRAFT ACCOUNTS" has the meaning assigned to
such term in Section 2.04(b)(iii) hereof.
"CONTROL" of a Person (including, with its correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise) of such Person.
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"DOLLARS" or "$" means the lawful money of the United States of
America.
"DRAFT ACCOUNTS" has the meaning assigned to such term in Section
2.04(b)(iii) hereof.
"EU" means the European Union.
"FEE PERIOD" has the meaning assigned to such term in Section 8.01(a)
hereof.
"FIXED FEE" has the meaning assigned to such term in Section 8.01
hereto.
"GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any officer or
representative thereof), national, federal, state, local or international, of
competent jurisdiction including, without limitation, the EU.
"GUARANTEED OBLIGATIONS" has the meaning assigned to such term in
Section 11.01(a) hereof.
"GUARANTEED PARTIES" has the meaning assigned to such term in Section
11.01(a) hereof.
"GUARANTOR" has the meaning assigned to such term in the preamble
hereto.
"INDENTURE" means the Indenture dated as of July 15, 1998, between
AerCo and the Trustee, as amended or supplemented from time to time.
"INFLATION FACTOR" means with respect to any calendar year the result
(expressed as a decimal) of the following calculation:
IF = (X-1) x 0.75
where:
"IF" means the Inflation Factor;
"X" means the average of (a) the quotient (expressed as a
decimal) of (i) the U.S. CPI published in respect of the most recently ended
calendar year (the "New Year") divided by (ii) the U.S. CPI published in respect
of the calendar year immediately preceding the New Year and (b) the quotient
(expressed as a decimal) of (i) the Irish CPI
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published in respect of the New Year divided by (ii) the Irish CPI published in
respect of the immediately preceding calendar year. For the avoidance of doubt,
if X is less than 1, the Inflation Factor shall be a negative number.
"INITIAL PERIODS" has the meaning assigned to such term in Section
7.04(b) of the Servicing Agreement.
"IRISH CPI" means the Consumer Price Index (all items) published
quarterly by the Central Statistics Office of Ireland (current base date
November 1989 = 100) or by any other Irish governmental department or other
Person to which the publication thereof may have been transferred. If the base
date for Irish CPI is at any time revised then Irish CPI shall be calculated for
the purposes hereof as so revised.
"LEDGERS" has the meaning assigned to such term in Section 2.04(b)(i)
hereof.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor which is not a Person within
AerCo Group under any conditional sale agreement, capital lease or title
retention agreement relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such
securities.
"LOSSES" means any and all liabilities (including liabilities arising
out of the doctrine of strict liability), obligations, losses, damages,
penalties, Taxes, actions, suits, judgments, costs, fees, expenses (including
reasonable legal fees, expenses and related charges and costs of investigation)
and disbursements, of whatsoever kind and nature; provided that the term
"Losses" shall not include any indemnified party's management time or overhead
expenses.
"MAINTENANCE RESERVES" means the aggregate of
(i) any cash amount payable under a Lease and expressed as (a) a
maintenance reserve, (b) constituting a fund for application
towards the cost of maintenance, overhauls or repairs or (c)
supplemental rent payable by reference to the level of
utilization of such aircraft or of any engine, part or
complement thereof; and
(ii) any letters of credit, guarantees or other credit support
provided either as security for the cost of maintenance,
overhauls or repairs, or as security for the general
obligations of the Lessee under the Lease, but in an amount
calculated by reference to the level of utilization of such
aircraft or of any engine, part or complement thereof,
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in respect of all of the Leases.
"MATERIAL ADVERSE EFFECT" with respect to any Person means an event,
condition, matter, change or effect that impacts or, insofar as reasonably can
be foreseen, in the future is likely to impact, in a material adverse manner,
the condition (financial or otherwise), properties, assets, liabilities,
earnings, capitalization, shareholders' equity, licenses or franchises,
businesses, operation or prospects of such Person or the ability of such Person
to consummate the transactions contemplated by the Indenture or to perform fully
any of its obligations under any of the Related Documents.
"NOTES OFFERING" has the meaning assigned to such term in Section 8.01
hereof.
"OFFERING MEMORANDUM" means the Offering Memorandum dated July 12, 2000
with respect to debt securities of AerCo.
"OPERATING BUDGET" has the meaning assigned to such term in Section
7.04(a)(i) of the Servicing Agreement.
"ONE YEAR PERIOD" has the meaning assigned to such term in Section
2.04(a) hereof.
"PERIOD" has the meaning assigned to such term in Section 2.04(a)
hereof.
"QUARTER" means each fiscal quarter of AerCo or any of its
Subsidiaries, as applicable.
"RATINGS" means the ratings assigned to the Notes by the Rating
Agencies.
"REIMBURSABLE EXPENSES" has the meaning assigned to such term in
Section 8.02(b) of this Agreement.
"RELATED DOCUMENTS" has the meaning assigned to such term in the
Indenture.
"RELEVANT JURISDICTION" means, in the case of AerCo, Jersey, Channel
Islands; and, in the case of a Subsidiary of AerCo, the jurisdiction in which it
is incorporated, or if the context requires, tax resident.
"RENTAL FEE" has the meaning assigned to such term in Section 8.01 of
this Agreement.
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"REPRESENTATIVES" with respect to any Person means the officers,
directors, employees, advisors and agents of such Person.
"SCHEDULE 2.02(A) OF THE SERVICING AGREEMENT" has the meaning assigned
to such term in Section 2.03(m) hereof.
"SECURITY TRUSTEE" means Bankers Trust Company, a New York banking
corporation, not in its individual capacity, but solely as security trustee
under the Security Trust Agreement dated as of July 15, 1998, among AerCo, the
Security Trustee and the other entities specified therein, as amended or
supplemented from time to time.
"SERVICE PROVIDERS" has the meaning assigned to such term in Section
2.02(d) hereof.
"SERVICER" has the meaning assigned to such term in the preamble
hereto.
"SERVICES" has the meaning assigned to such term in Section 2.02(a) of
the Servicing Agreement.
"SERVICING AGREEMENT" means the Servicing Agreement dated as of July
17, 2000, among the Servicer, AerCo, the Cash Manager, the Administrative Agent
and the entities listed on Appendix A thereto and any other Subsidiary of AerCo
which accedes thereto, as amended from time to time.
"SPECIAL BOARD RESOLUTION" has the meaning given to it in the Articles
of Association of AerCo; provided that references to a Special Board Resolution
shall be construed as references to an ordinary resolution of the Board of
Directors any time at which the Servicer and/or its Affiliates do not hold a
majority of the Class E Notes.
"STANDARD OF CARE" has the meaning assigned to such term in Section
3.01 of the Servicing Agreement.
"STANDARD OF PERFORMANCE" has the meaning assigned to such term in
Section 3.01 hereof.
"STIPULATED INTEREST RATE" means, for any period, a rate per annum
equal to LIBOR in effect during such period plus 2% per annum.
"SUBSIDIARIES" has the meaning assigned to such term in the preamble
hereto.
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"THREE YEAR PERIOD" has the meaning assigned to such term in Section
2.04(a) hereof.
"TRANSACTION COSTS" means all out-of-pocket expenses incident to any
Notes Offering (specifically excluding, except to the extent otherwise expressly
included herein, any direct or indirect commissions, discounts, fees or other
remuneration allowed or paid to any underwriters in connection with any such
Notes Offering), including the cost of printing any offering documents
(including the Offering Memorandum) and any expenses (including fees and
disbursements of counsel) incurred by any underwriters in connection with
qualification of the Notes for sale under the laws of such jurisdictions as the
underwriters designate and the printing of memoranda relating thereto, for any
fees charged by investment rating agencies for the rating of the Notes, for any
filing fees of the National Association of Securities Dealers, Inc. relating to
the Notes and for expenses incurred in distributing any Prospectuses.
"TRUSTEE" means Bankers Trust Company, a New York banking corporation,
not in its individual capacity, but solely as trustee under the Indenture.
"U.S. CPI" means with respect to any calendar year or any period during
any calendar year the "Consumer Price Index for All Urban Consumers (CPI-U) U.S.
City Average for All Items" published by the Bureau of Labor Statistics for the
United States Department of Labor (1982-1984=100). If the U.S. CPI shall be
converted to a different standard reference base or otherwise revised after the
date hereof, U.S. CPI shall thereafter be calculated with use of such new or
revised statistical measure published by the Bureau of Labor Statistics or, if
not so published, as may be published by any other reputable publisher of such
price index selected by Servicing Company.
"U.K. GAAP" has the meaning assigned to such term in Section 2.04(b)(i)
hereto.
"YEAR" means each 12 month fiscal year (or such shorter fiscal period
as agreed upon in the future) ended June 30 or as modified in the future.
ARTICLE 2
APPOINTMENT; ADMINISTRATIVE SERVICES
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SECTION 2.01. Appointment. (a) AerCo hereby appoints the Administrative
Agent as the provider of the administrative and related services set forth in
Sections 2.03 through 2.07 hereof (the "ADMINISTRATIVE SERVICES") to AerCo and
each Subsidiary of AerCo (collectively, "AERCO GROUP") on the terms and subject
to the conditions set forth in this Agreement.
(b) The Administrative Agent hereby accepts such appointment and agrees
to perform the Administrative Services on the terms and subject to the
conditions set forth in this Agreement.
(c) The Administrative Services do not include any service or matter
which is the responsibility of the Servicer under the Servicing Agreement, the
Cash Manager under the Cash Management Agreement, the Company Secretary under
the Secretarial Services Agreement or the company secretaries of AerCo Group's
Subsidiaries.
(d) The Administrative Services do not include any service or matter
that falls under the categories of "investment business services" or "investment
advice" under the Investment Intermediaries Act, 1995 or any other applicable
provision of Irish law that would require such services to be performed by an
entity that has obtained prior authorization from the Central Bank of Ireland.
SECTION 2.02. Limitations. (a) The Administrative Agent agrees (with
respect to the Administrative Services agreed by it to be carried out hereunder)
to comply with the terms of the articles of incorporation, by-laws, trust
agreements or similar constituting documents of each Person within AerCo Group
and all agreements to which any Person within AerCo Group is a party (including
all Related Documents), provided that copies of such documents and agreements
have been delivered to the Administrative Agent and, without prejudice to the
foregoing, not to enter into, on behalf of any Person within AerCo Group, any
commitments, loans or obligations or charge, mortgage, pledge, encumber or
otherwise restrict or dispose of the property or assets or expend any funds of
any Person within AerCo Group save (i) as expressly permitted by the terms of
this Agreement or (ii) upon the express direction of, as applicable, any of the
boards of directors of AerCo or any of its Subsidiaries.
(b) Each Person within AerCo Group hereby appoints AerCo to act as its
representative and, having been duly authorized to do so by each of its
Subsidiaries, as the representative of each of its Subsidiaries with respect to
any matter in respect of which any Person within AerCo Group, or AerCo Group as
a whole, is required or permitted to take any action pursuant to the terms of
this Agreement. Accordingly, in
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connection with the performance of the Administrative Services, the
Administrative Agent shall in all cases be entitled to rely on the instructions
(or other actions) of AerCo as representative of each Person within AerCo Group.
The Administrative Agent further agrees to make reasonable efforts so as not to
take any action inconsistent with the Servicing Agreement.
(c) In connection with the performance of the Administrative Services,
the Administrative Agent shall (i) have no responsibility for the failure of any
other Person (other than any Person acting as a delegate of the Administrative
Agent under this Agreement pursuant to Section 10.01 hereof) providing services
directly to AerCo Group to perform its obligations to AerCo Group, (ii) in all
cases be entitled to rely upon the instructions of AerCo Group or any of its
Representatives and upon notices, reports or other communications made by any
Person providing services to AerCo Group (other than any Affiliate of the
Administrative Agent) and shall not be responsible for the accuracy or
completeness of any such notices, reports or other communications except to the
extent that the Administrative Agent has actual notice of any matter to the
contrary and (iii) not be obligated to act in any manner which is reasonably
likely to (A) violate any Applicable Law, (B) lead to an investigation by any
Governmental Authority or (C) expose the Administrative Agent to any liabilities
for which, in the Administrative Agent's good faith opinion, adequate bond or
indemnity has not been provided.
(d) Subject to the limitations set forth in Section 2.02(a) hereof, in
connection with the performance of the Administrative Services, the
Administrative Agent is expressly authorized by AerCo and each other Person
within AerCo Group (i) to engage in and conclude commercial negotiations with
the Persons providing services to AerCo Group, including, without limitation,
where the context permits, the Servicer, the Cash Manager, the Reference Agent,
the Company Secretary and other Persons performing similar services or advising
AerCo Group in each case other than an Affiliate of the Administrative Agent
(the "SERVICE PROVIDERS") and with their Representatives, and (ii) after such
consultation, if any, as the Administrative Agent deems necessary under the
circumstances, to act on such Person's behalf with regard to any and all matters
requiring any action on the part of the Administrative Agent under the Servicing
Agreement. AerCo Group agrees that it will give the Administrative Agent and the
Servicer 60 days' prior written notice of any limitation or modification of the
authority set forth in this Section 2.02(d).
(e) The Administrative Agent may rely on the advice of any law firm,
accounting firm, risk management adviser, tax adviser, insurance adviser,
aircraft
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appraiser or other professional adviser appointed by any Person within AerCo
Group and any Person appointed in good faith by the Administrative Agent and
shall not be liable for any claim by any Person within AerCo Group to the extent
that it was acting in good faith upon the advice of any such persons.
(f) Notwithstanding the appointment of, and the delegation of
authority and responsibility to, the Administrative Agent hereunder, AerCo and
each other Person within AerCo Group shall continue to have and exercise through
its board of directors real and effective central control and management of all
matters related to its ongoing business, operations, assets and liabilities,
subject to matters that are expressly the responsibility of the Administrative
Agent in accordance with the terms of this Agreement, and each of AerCo and each
other Person within AerCo Group shall at all times conduct its separate ongoing
business in such a manner as the same shall at all times be readily identifiable
from the separate business of the Administrative Agent, and none of the Persons
within AerCo Group is merely lending its name to decisions taken by others.
SECTION 2.03. Administrative Services. The Administrative Agent hereby
agrees to perform and provide the following services for each Person within
AerCo Group and their respective governing bodies:
(a) administrative services:
(i) except in such instances in which such preparation and
distribution is required to be done by another party by Applicable Law,
preparation and distribution, at such time as shall be agreed with the
Administrative Agent, of draft board of directors' or trustees' meeting
agendas and any other papers required in connection with such meetings;
(ii) maintaining, or monitoring the maintenance of, the books,
records, registers and associated filings of each Person within AerCo
Group, other than those required to be maintained by the Company
Secretary;
(iii) providing any administrative assistance reasonably
necessary to assist any Person within AerCo Group in carrying out its
obligations, including providing timely notice of decisions to be
made, or actions to be taken, under any of the Related Documents;
provided, that if such obligations of AerCo Group under any of the
Related Documents are only required upon receipt of notice to AerCo
Group or the Administrative Agent, then the
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Administrative Agent shall provide such administrative assistance only
to the extent it has received such notice or is otherwise aware of
such obligations (it being understood that the Administrative Agent
shall not be deemed to be otherwise aware of such obligations solely
because notice has been provided to a Person within AerCo Group or to
AerFi Group or any Affiliate of AerFi Group other than the
Administrative Agent);
(iv) providing information and other assistance to enable AerCo
Group to: (a) develop its interest rate management policy and
developing financial models, cash flow projections and forecasts, by
proposing such policies, models, projections and forecasts to the
relevant board of directors for approval, and, after such approval,
implementing them to the extent required by AerCo Group, and (b) make
its aircraft lease, sale and capital investment decisions, to the
extent such information and assistance is not contemplated to be
provided by the Servicer pursuant to the Servicing Agreement;
(v) procuring, when the Administrative Agent considers in good
faith that it is appropriate or necessary to do so, and coordinating
the advice of, legal counsel, accounting, tax and other professional
advisers at the expense of the relevant Person within AerCo Group, to
assist such Person in carrying out its obligations, and supervising, in
accordance with instructions from such Person, such legal counsel and
other advisers;
(vi) as frequently as is necessary for AerCo Group to comply
with its obligations under the Related Documents and as required in
connection with the acquisition of Additional Aircraft, arranging for
the Appraisals to be made and providing the Appraisals to the relevant
Service Providers;
(vii) providing the Cash Manager with information with respect
to the Annual Appraised Value of the Aircraft and any changes thereto;
and
(viii) providing assistance to the Servicer with respect to
matters for which such assistance is contemplated by the Servicing
Agreement or is reasonably necessary in order for the Servicer to
perform its duties in accordance with the Servicing Agreement;
(b) to monitor the performance of the Service Providers (provided
that, for the avoidance of doubt, this clause shall not preclude AerCo from
being entitled, by
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Special Board Resolution, to appoint other Persons to perform such monitoring
function) and to report on such performance to the board of directors of AerCo
on a quarterly basis, including:
(i) with respect to the Servicer:
(A) monitoring and reviewing the information and other
reports provided by the Servicer pursuant to the Servicing
Agreement, including with respect to the status of Lease
payments, Lessee receivables, Maintenance Reserves, security
deposits, adjustments of rentals and claims against
Maintenance Reserves in accordance with Lease terms (to the
extent provided to the Administrative Agent);
(B) assisting in evaluating the Servicer's performance
relative to the Standard of Care and the Conflicts Standard;
(C) assisting in establishing standards for evaluating
the Servicer's performance relative to the terms of the
Servicing Agreement generally, assisting in evaluating such
performance against such standards and recommending action
with respect thereto;
(D) reviewing and providing advice with respect to
recommendations made by the Servicer for approval by any
Person within AerCo Group;
(E) monitoring the compliance of the Servicer with its
obligations under the Servicing Agreement; and
(F) authorization of payment by the Cash Manager of
invoices approved by the Servicer in accordance with Section
6.03 of Schedule 2.02(a) of the Servicing Agreement;
(ii) with respect to the other Service Providers:
(A) to the extent not provided for in the relevant
agreement, assisting in establishing standards for performance
evaluation and compliance with the terms of such agreement;
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(B) assisting in evaluating the performance and
compliance of each Service Provider against its obligations
under the relevant agreement or such standards as are
established pursuant to subsection 2.03(b)(ii)(A) above;
(C) monitoring and reviewing the information and
reports provided by the Cash Manager to the Administrative
Agent and the relevant Person within AerCo Group and
reviewing and providing advice with respect to such reports;
and
(D) implementing any other request by Persons within
AerCo Group to evaluate the performance of the Service
Providers under the relevant agreements with such Persons
within AerCo Group, which shall be at the expense of such
Persons, to the extent services are required that are
materially greater in scope than those being provided pursuant
to the express terms of this Agreement;
(c) to the extent that (i) the following services are not provided by
the other Service Providers, and (ii) the relevant information is provided to
the Administrative Agent by Persons within AerCo Group or the Service Providers,
to act as liaison with the Rating Agencies with respect to the rating impact of
any decisions on behalf of AerCo Group, including:
(i) advising the Rating Agencies from time to time of any
material changes in the Portfolio, coordinating with AerCo Group and
the Service Providers and providing the Rating Agencies with such
statistical and other information as they may from time to time
request and in connection with the acquisition of Additional Aircraft
(such information to be provided at AerCo Group's expense to the
extent that providing such information requires services that are
materially greater in scope than those being provided pursuant to the
express terms of this Agreement);
(ii) providing the Rating Agencies with the outstanding
principal balances of each class or subclass of Notes and loan-to-
value ratios (i.e., ratio of debt to Annual Appraised Value of AerCo
Group's assets); and
(iii) coordinating among AerCo Group, the Servicer and the
Appraisers to ensure that the Appraisals are received as required;
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(d) to provide assistance to AerCo Group in procuring lessee consents,
novations and other documentation and in taking all other actions necessary in
connection with the reissue or amendment of letters of credit under which the
current beneficiary is the Guarantor or an Affiliate of the Guarantor such that
the new beneficiary becomes a Person within AerCo Group;
(e) to provide assistance to AerCo Group in connection with (i) the
reissue or amendment of letters of credit under which the current beneficiary is
the Guarantor or an Affiliate of the Guarantor such that the new beneficiary
becomes a Person within AerCo Group, (ii) the re-lease and/or sale of the
Aircraft, (iii) the acquisition of Additional Aircraft and issuance of
Additional Notes, (iv) the issuance of Refinancing Notes and (v) any other
financing transactions relating to AerCo Group after the Closing Date,
including:
(i) coordinating with the Service Providers, legal and other
professional advisers to monitor the protection of AerCo Group's
interests and rights and coordinating the execution of documentation
required at closings;
(ii) providing qualified personnel to attend and provide
administrative support (including the preparation of any certificates
required pursuant to the Servicing Agreement) at the closings in
connection with sales or re-leases of the Aircraft, if required (it
being understood that the Administrative Agent will not be obligated
to provide legal counsel or legal or technical services to AerCo
Group);
(iii) coordinating with AerCo Group and the Service Providers and
assisting in the management of the closing process so that closings
will occur on a timely basis;
(iv) providing all necessary administrative support to complete
any documentation and other related matters (including assistance in
completing registration statements, offering memoranda and other
offering or disclosure documents in connection with financings or
refinancings); and
(v) appointing counsel and other appropriate professional
advisers to represent AerCo Group in connection with any such
closings;
(f) to coordinate with the Cash Manager, including:
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(i) reviewing the impact on AerCo Group's operation and financial
condition and on the Notes of any proposal for the re-lease or sale of
an Aircraft or the acquisition of Additional Aircraft;
(ii) establishing any sales objectives in connection with
expected cash flow needs;
(iii) analyzing the effect of the budgets developed pursuant to
Section 2.04(a) below on the expected cash flows of AerCo Group with
respect to the payment of the Notes; and
(iv) providing written notice to the Cash Manager identifying in
reasonable detail Expenses, Lease obligations or other liabilities of
Persons within AerCo Group for which interim withdrawals may be made
pursuant to Sections 3.04 and 3.05 of the Indenture;
(g) with respect to the implementation, following Board of Directors
approval, of AerCo Group's interest rate management strategy (including hedging
strategy), (i) to obtain information and reports from, and, where it or the
Board of Directors deems such opinions appropriate, the opinion of, third party
advisers for the purpose of making decisions as to hedging strategy and swap
counterparties and to advise the Board of Directors of such opinions; (ii) to
provide assistance with respect to any closings on behalf of AerCo Group in
connection with any such hedging activities; (iii) to calculate the amount of
any broken funding costs under any swap agreements; (iv) at least every three
months following the Closing Date, to assist Persons within AerCo Group in
seeking to enter into additional swap agreements or to sell at market value or
unwind part or all of any initial or future swap agreements entered into by such
Persons, in order to rebalance the fixed and floating mix of interest
obligations and the fixed and floating mix of Rental Payments and (v) from time
to time following the Closing Date, to assist Persons within AerCo Group to sell
at market value or unwind part or all of any initial or future options on
interest rate swaps purchased by such Persons;
(h) based on information produced or provided to it, to prepare, file
and/or distribute, with the assistance of outside counsel and auditors, if
appropriate, all reports to be prepared, filed and/or distributed by AerCo Group
or its governing bodies, subject to Board of Directors' approval in the case of
reports on Form 20-F and 6-K under the Exchange Act, including:
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(i) filings AerCo Group is required to make in various
jurisdictions and preparing such filings or monitoring counsel and
advisers in connection with the preparation and filing of such
materials;
(ii) compliance by AerCo Group with the periodic reporting
requirements of the Exchange Act, in particular, working with
necessary professional advisers to AerCo Group and the Service
Providers, as appropriate, to prepare on behalf of AerCo Group and to
arrange for the filing and distribution of an annual report on
Form 20-F in respect of AerCo Group and any required reports on
Form 6-K in respect of AerCo Group;
(iii) reports required or recommended to be distributed to
investors (including press releases), and managing investor relations
on behalf of AerCo Group, and preparing or arranging for the
preparation and distribution of such reports at AerCo Group's expense;
and
(iv) reports required to be filed with any Governmental
Authorities, and preparing on behalf of AerCo Group or arranging for
the preparation of and arranging for the filing of any reports
required to be filed with any other entity in order for AerCo Group
not to be in violation of Applicable Law or any applicable covenants;
(i) with respect to amendments,
(i) to report on the substance of any proposed amendments to any
Related Documents other than the Leases;
(ii) to the extent requested by AerCo Group or by the parties to
Related Documents and subject to approval by the appropriate board of
directors, to coordinate with AerCo Group's legal counsel, the other
parties thereto and their counsel the preparation and execution of any
amendments to the Related Documents (other than amendments relating to
the Aircraft or the Leases), and to provide assistance in the
implementation of such amendments; and
(iii) to the extent reasonably requested by the Servicer, to
coordinate and provide assistance on behalf of AerCo Group with the
Servicer and seek to obtain appropriate approvals to take any action
which may be required to amend the terms of the Leases;
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(j) to the extent reasonably requested by the Servicer, to coordinate
and provide assistance on behalf of AerCo Group with the Servicer and outside
counsel in a Lessee default or repossession situation;
(k) to authorize payment of certain bills and expenses (i) payable to
legal and professional advisers authorized to be engaged or consulted pursuant
to this Agreement or (ii) approved by the board of directors of AerCo or any of
its Subsidiaries, and remit approved invoices to the Cash Manager for payment
processing;
(l) to provide to the Servicer periodically (but not more than once
each week) a statement of AerCo Group's interest rate hedging policies;
(m) providing assistance to AerCo with respect to matters for which
action by AerCo is required under the Servicing Agreement and the Indenture,
including such assistance that may be necessary for AerCo to:
(i) comply with Sections 6.06, 7.04 and 7.05 of the Servicing
Agreement;
(ii) provide such instructions to the Servicer as the Servicer
may be entitled to receive under the Servicing Agreement, in
interpreting the Indenture, the Concentration Thresholds and Annex 2
to Schedule 2.02(a) of the Servicing Agreement ("SCHEDULE 2.02(A) OF
THE SERVICING AGREEMENT");
(iii) direct the Servicer to amend the minimum hull and liability
insurance coverage amounts set forth in Annex 1 to Schedule 2.02(a) of
the Servicing Agreement;
(iv) direct the Servicer that settlement offers received by the
Servicer with respect to claims for damage or loss in excess of
$2,000,000 with respect to an Aircraft Asset are acceptable;
(v) request periodic reports from the Servicer regarding
insurance matters;
(vi) grant approvals when such approvals are required by
Section 7.05(a) hereof and Schedule 2.02(a) of the Servicing Agreement;
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(vii) provide the Servicer with such information as the Servicer
may reasonably request in connection with the Concentration Thresholds;
(viii) recommend to the Servicer fixed rates of interest to be
considered by the Servicer in connection with negotiation by the
Servicer of proposed leases and advise the Servicer whether AerCo
intends to enter into any swap agreements with respect to such
proposed leases and as to the additional costs associated with such
swap agreements;
(ix) take the action contemplated by Section 3.02(d) of
Schedule 2.02(a) of the Servicing Agreement;
(x) direct the Servicer to arrange for the sale of an Aircraft
Asset and certify to the Servicer that such sale complies with the
terms of the Indenture;
(xi) direct the Servicer to arrange for the acquisition of
Additional Aircraft;
(xii) direct the Servicer to cooperate with any additional
refinancings, note offerings, corporate restructurings and any
additional issuances of debt securities to fund such acquisitions;
(xiii) make any discretionary decisions, judgments or
assumptions necessary in connection with the preparation of any
projections, and provide the Servicer with any written policies and
guidelines that the Servicer shall require in connection with such
preparation; and
(xiv) request valuations of Aircraft Assets in accordance with
Section 5.01 of Schedule 2.02(a) of the Servicing Agreement;
it is expressly acknowledged that the Administrative Agent has no
authority to issue any instructions, directions, requests, approvals,
recommendations or decisions and that its function in respect of such matters is
to provide information, advice and assistance to AerCo, which shall be entitled
to take independent advice if so determined by Special Board Resolution;
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(n) to inform the Board of Directors of AerCo as soon as is reasonably
practicable if the Administrative Agent believes that (i) net revenues generated
by the Leases will be insufficient to satisfy the payment obligations of AerCo
Group and (ii) an Event of Default will result from such insufficiency, and to
advise the Board of Directors as to any appropriate action to be taken (subject
to the provisions of the Related Documents) with respect to such insufficiency
and to cause the actions directed by the Board of Directors to be implemented so
as to avoid an Event of Default, if it is possible to do so; and
(o) to advise the Board of Directors of AerCo as to the appropriate
levels of the Liquidity Reserve Amount.
SECTION 2.04. Accounting and Draft Accounts. (a) Budgeting Process.
The Administrative Agent shall, in accordance with the procedures, policies and
guidelines described below and on the basis of information generated by the
Administrative Agent and information provided by the Service Providers and
AerCo Group:
(i) in respect of the Initial Periods, each one Year period (a
"ONE YEAR PERIOD") and each three Year Period (a "THREE YEAR PERIOD"
and, together with a One Year Period, and an Initial Period, each a
"PERIOD") during the term of the Servicing Agreement, and on behalf of
AerCo Group, prepare and deliver to the Servicer, not later than 60
days immediately preceding the commencement of each Year (other than
with respect to the fiscal year commencing July 1, 1998), a proposed
Operating Budget and Asset Expenses Budget for such Period together
with reasonably detailed information regarding the assumptions
underlying such proposed Operating Budget and Asset Expenses Budget,
such proposed Operating Budget and Asset Expenses Budget to be based,
in part, on the information provided by the Servicer pursuant to
Section 7.04(f) of the Servicing Agreement;
(ii) on behalf of AerCo Group, review and discuss with the
Servicer the proposed Operating Budget and the Asset Expenses Budget
prepared pursuant to Section 7.04 of the Servicing Agreement;
(iii) submit the revised proposed Operating Budget and Asset
Expenses Budget for each Period, no later than 30 days immediately
preceding the commencement of each Year, to AerCo for its
consideration and approval (other than with respect to the fiscal year
commencing July 1, 1998); and
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(iv) in the event that the proposed Operating Budget and Asset
Expenses Budget are not approved, review and revise, in consultation
with the Servicer, the Operating Budget and Asset Expenses Budget to
the extent possible to address the concerns of AerCo, it being
understood that final approval of the Operating Budget and Asset
Expenses Budget is the responsibility of AerCo.
(b) Management Accounts and Financial Statements. The Administrative
Agent shall, in accordance with the procedures, policies and guidelines
described below and on the basis of information generated by the Administrative
Agent and information provided by the Service Providers and AerCo Group:
(i) establish an accounting system and maintain the accounting
ledgers of and for each Person within AerCo Group and their
Subsidiaries in accordance with accounting principles generally
accepted in the United Kingdom, ("U.K. GAAP"), unless otherwise
required by Applicable Law and specified by the relevant board of
directors of Persons within AerCo Group (collectively, the "LEDGERS");
(ii) prepare and deliver (within 40 days after the end of the
relevant Quarter or, if the end of such Quarter coincides with the end
of a Year, within 75 days after the end of such Year), with respect to
AerCo Group, on a consolidated basis, a draft balance sheet and draft
statement of changes in shareholders' equity or residual trust interest
as of the end of each Quarter and Year, as applicable, and draft
statements of income and cash flows for each Quarter and Year, as
applicable (the "CONSOLIDATED QUARTERLY DRAFT ACCOUNTS");
(iii) to the extent required by Applicable Law, prepare and
deliver (within 40 days after the end of the relevant Quarter or, if
the end of such Quarter coincides with the end of a Year, within
90 days after the end of such Year), with respect to AerCo Group and
such Persons within AerCo Group as specified by the relevant board of
directors of Persons within AerCo Group in a written schedule provided
To the Administrative Agent (which schedule may be updated by such
board of directors to the Administrative Agent delivered at least
30 days prior to the commencement of the relevant Quarter), on a
consolidating company-by-company basis, a draft balance sheet and
statement of changes in shareholders' equity or residual trust
interest as of the end of each Quarter and Year, as applicable, with
respect to such Person and draft
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statements of income and cash flows for such Quarter and Year, as
applicable (the "CONSOLIDATING QUARTERLY DRAFT ACCOUNTS" and, together
with the Consolidated Quarterly Draft Accounts the "DRAFT ACCOUNTS").
The Board of Directors of AerCo shall specify the applicable legal
requirements mandating the preparation of such Consolidating Quarterly
Draft Accounts in the written schedule provided to the Administrative
Agent pursuant to this Section;
(iv) arrange for, coordinate with and assist AerCo Group's
auditors in preparing annual audits;
(v) prepare or arrange for the preparation of and arrange for
the filing of AerCo Group's tax returns in conjunction with AerCo
Group's tax advisers after submission to the Board of Directors to the
extent required by the Board of Directors or Applicable Law; and
(vi) compare the expected cash flows of AerCo Group, as provided
by the Cash Manager, and the budgets to actual results.
(c) The Administrative Agent shall be entitled to request instructions
from the Board of Directors of AerCo as to general guidelines or principles to
be followed in preparing Draft Accounts and as to amending or supplementing any
such guidelines or principles. The entry in the Ledgers of any item in
accordance with the specific instructions of AerCo Group shall always be
permitted, and the Administrative Agent shall make such entries upon
instruction.
SECTION 2.05. Additional Administrative Services. The Administrative
Agent will provide additional Administrative Services, including (a) providing
assistance in arranging one or more refinancings of all or a portion of the
Notes, and (b) undertaking efforts to avoid any adverse change in the tax status
of any Person within AerCo Group. In addition, subject to Section 8.01(b)
hereof, upon a request by AerCo Group, the Administrative Agent will take such
other actions as may be appropriate to facilitate AerCo Group's business
operations and assist the relevant boards of directors or trustees in carrying
out their obligations; provided, however, that the Administrative Agent will not
be obligated or permitted to take any action that might reasonably be expected
to result in the business of AerCo Group ceasing to be separate and readily
identifiable from, and independent of, the Administrative Agent, the Guarantor
and any of their Affiliates.
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SECTION 2.06. Additional Aircraft. In the event that AerCo Group shall
acquire any Additional Aircraft and notwithstanding that AerCo Group may retain
different service providers for such Additional Aircraft, the Administrative
Agent hereby agrees to provide the same Administrative Services with respect to
all such Additional Aircraft.
SECTION 2.07. New Subsidiaries. The Administrative Agent shall be
responsible for coordinating with outside legal counsel, auditors, tax advisers
and other professional advisers with respect to all corporate and administrative
matters relating to the formation, operation, corporate affairs and related
matters with respect to all Subsidiaries which are or may become members of
AerCo Group, including identifying such outside advisers, a potential company
secretary and candidates for director to the extent necessary, and shall be
permitted to incur expenses in respect of such Subsidiaries without AerCo
Group's consent up to such aggregate amount as shall be authorized from time to
time. To the extent that the Administrative Agent shall deem it necessary or
desirable in order for AerCo Group to carry on its business, the Administrative
Agent shall have the authority to assist in the formation of new Subsidiaries of
AerCo Group and to appoint any director or company secretary to any such
Subsidiary without the consent of AerCo Group. The Administrative Agent and its
personnel may act as company secretary for any Subsidiary.
SECTION 2.08. AerCo Group Responsibility. (a) The obligations of the
Administrative Agent hereunder are limited to those matters that are expressly
the responsibility of the Administrative Agent in accordance with the terms of
this Agreement. Notwithstanding the appointment of the Administrative Agent to
perform the Administrative Services, AerCo Group shall remain responsible for
all matters and decisions related to its business, operations, assets and
liabilities.
(b) Without derogating from the authority and responsibility of the
Administrative Agent with respect to the performance of certain of the
Administrative Services as set forth in this Agreement, it is hereby expressly
agreed and acknowledged that the Administrative Agent is not authorized or
empowered to make or enter into any agreement, contract or other legally binding
arrangement, in respect of or relating to the business or affairs of AerCo
Group, or pledge the credit of, incur any indebtedness on behalf of or expend
any funds of any Person within AerCo Group other than as expressly permitted in
accordance with the terms of this Agreement, all such authority and power being
reserved to the appropriate Persons within AerCo Group.
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ARTICLE 3
STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY
SECTION 3.01. Standard of Performance. The Administrative Agent will
devote the same amount of time and attention to and will be required to exercise
the same level of skill, care and diligence in the performance of the
Administrative Services as it would if it were administering such services on
its own behalf (the "STANDARD OF PERFORMANCE").
SECTION 3.02. Liability and Indemnity. (a) The Administrative Agent
shall not be liable for any Losses or Taxes to or of or payable by AerCo Group
at any time from any cause whatsoever or any Losses or Taxes directly or
indirectly arising out of or in connection with or related to the performance by
the Administrative Agent of this Agreement unless such Losses or Taxes are the
result of the Administrative Agent's own wilful misconduct or gross negligence
or that of any of its directors, officers, agents or employees, as the case may
be.
(b) Notwithstanding anything to the contrary set forth in any other
agreement to which any Person within AerCo Group is a party, AerCo and each
other Person within AerCo Group do hereby assume liability for and do hereby
agree to indemnify and hold harmless on an After-Tax Basis the Administrative
Agent, its directors, officers, employees and agents and each of them from any
and all Losses or Taxes that may be imposed on, incurred by or asserted against
any of them arising out of, in connection with or related to the Administrative
Agent's performance under this Agreement (including any Losses or Taxes incurred
by the Administrative Agent as a result of indemnifying any Person to whom it
shall have delegated its obligations hereunder in accordance with Section 10.01
hereof, but only to the extent the Administrative Agent would have been
indemnified had it performed such obligations), except as a result of the gross
negligence or wilful misconduct of the Administrative Agent or any of its
directors, officers, employees or agents. This indemnity shall not apply to:
(i) Taxes imposed on net income by the revenue authorities of
Ireland in respect of any payment by AerCo Group to the Administrative
Agent due to the performance of the Administrative Services; and
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(ii) Taxes imposed on net income of the Administrative Agent by
any Government Authority other than Irish Authorities to the extent
such Taxes would not have been imposed in the absence of any
connection of the Administrative Agent with such jurisdiction imposing
such Taxes other than any connection that results from the performance
by the Administrative Agent of its obligations under this Agreement.
This indemnity shall expressly inure to the benefit of any director,
officer, agent or employee of the Administrative Agent now existing or in the
future and to the benefit of any successor of the Administrative Agent and shall
survive the expiration of this Agreement.
(c) The Administrative Agent agrees to indemnify and hold harmless on
an After-Tax Basis each Person within AerCo Group, its directors or trustees and
its agents for any Losses whatsoever which they or any of them may incur or be
subject to in consequence of the performance of the Administrative Services or
any breach of the terms of this Agreement by the Administrative Agent, but only
to the extent such Losses arise due to the gross negligence, wilful misconduct
or fraud of the Administrative Agent or any of its directors, officers or
employees, as the case may be; provided, however, that this indemnity shall not
apply and the Administrative Agent shall have no liability in respect of Losses
to the extent that they arise from (i) the wilful misconduct, recklessness or
gross negligence of any Person within AerCo Group, its directors, trustees or
agents, (ii) any breach by the Administrative Agent of its obligations under
this Agreement to the extent such breach is a result of a Service Provider's
failure to perform its obligations to AerCo Group or a failure by AerCo Group to
comply with its obligations under this Agreement, (iii) any action that AerCo
Group requires the Administrative Agent to take pursuant to a direction but only
to the extent that the Administrative Agent takes such action in accordance with
such direction and in accordance with the provisions hereof or (iv) a refusal by
AerCo Group to take action upon a recommendation made in good faith by the
Administrative Agent in accordance with the terms hereof.
SECTION 3.03. Conflicts of Interest. (i) Each of AerCo and the
Subsidiaries acknowledges and agrees that (a) in addition to providing the
Administrative Services under this Agreement, the Administrative Agent may
provide similar services for itself and for other third parties; (b) an
Affiliate of the Administrative Agent has been appointed to act as Cash Manager
and another Affiliate of the Administrative Agent has been appointed to act as
Servicer; (c) in the course of conducting such activities, the Administrative
Agent will from time to time have conflicts of interest in
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performing its duties on behalf of AerCo Group, itself and any other entities in
respect of which it provides such similar services; and (d) AerCo Group has
approved the transactions contemplated by this Agreement and desires that such
transactions be consummated and in giving such approval has expressly recognized
that such conflicts of interest may arise and that when such conflicts of
interest arise, the Administrative Agent shall promptly report the same to AerCo
Group and shall act in a manner that (i) treats AerCo Group equally with such
other entities, (ii) does not violate the Standard of Performance set forth in
Section 3.01 hereof or any of the covenants of the Administrative Agent set
forth in Article 4 hereof and (iii) would not be reasonably likely to have a
Material Adverse Effect on AerCo Group.
(ii) The Directors of AerCo, by a Special Board Resolution, shall be
entitled to seek independent advice and to appoint an independent representative
in connection with the provision of the administrative and related services by
the Administrative Agent hereunder, including in connection with any conflict of
interest or any potential conflict of interest.
ARTICLE 4
ADMINISTRATIVE AGENT UNDERTAKINGS
SECTION 4.01. Administrative Agent Undertakings. The Administrative
Agent hereby covenants with AerCo Group that it will conduct its business such
that it is a separate and readily identifiable business from, and independent
of, AerCo Group and further covenants as follows (it being understood that these
covenants shall not prevent any Person within AerCo Group from publishing
financial statements that are consolidated with those of AerFi Group, if to do
so is required by Applicable Law or accounting principles from time to time in
effect, and that the Affiliates of the Administrative Agent and certain Persons
within AerCo Group may file a consolidated tax return for United States federal,
state and local income tax purposes):
(a) if the Administrative Agent receives any money whatsoever, which
money belongs to AerCo Group or is to be paid to AerCo Group or into any account
pursuant to any Related Document or otherwise, it will hold such money in trust
for AerCo Group, and shall keep such money separate from all other money
belonging to the Administrative Agent and shall as promptly as practicable
thereafter pay the same into
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the relevant account in accordance with the terms thereof without exercising any
right of setoff;
(b) it will comply with any proper directions, orders and instructions
which AerCo Group may from time to time give to it in accordance with the
provisions of this Agreement;
(c) it will not knowingly fail to comply with any legal requirements
in the performance of the Administrative Services;
(d) unless to do so would be in accordance with the Indenture, it will
not take any steps for the purpose of procuring the appointment of any
administrative receiver or the making of an administrative order or for
instituting any bankruptcy, reorganization, arrangement, insolvency, winding up,
liquidation, composition or any like proceedings under the laws of any
jurisdiction in respect of any Person within AerCo Group or in respect of any of
their liabilities, including, without limitation, as a result of any claim or
interest of the Administrative Agent or any of its Affiliates;
(e) it will promptly take or arrange (through the appointment of
counsel or accountants, as appropriate, and by coordinating with the Company
Secretary) for the taking of all steps as may be reasonable to ensure that the
Company Secretary prepares and files the application of AerCo to renew its
annual exemption from Jersey taxation, including coordinating and arranging for
the filing of all necessary papers with the appropriate Jersey fiscal and other
authorities;
(f) it will cooperate with AerCo Group and its agents and directors,
including by providing such information as may reasonably be requested, to
permit AerCo Group or its authorized agents to monitor the Administrative
Agent's compliance with its obligations under this Agreement;
(g) during the term of this Agreement, it will observe all corporate
formalities necessary to remain a legal entity separate and distinct from, and
independent of each Person within AerCo Group;
(h) during the term of this Agreement, it will maintain its assets and
liabilities separate and distinct from each Person within AerCo;
(i) during the term of this Agreement, it will maintain records,
books, accounts and minutes separate from those of each Person within AerCo
Group;
(j) during the term of this Agreement, it will pay its obligations in
the ordinary course of its business as a legal entity separate from each Person
within AerCo Group;
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(k) during the term of this Agreement, it will keep its funds separate
and distinct from the funds of each Person within AerCo Group, and it will
receive, deposit, withdraw and disburse such funds separately from the funds of
such Person;
(l) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of any Person within AerCo Group;
(m) during the term of this Agreement, it will not pay or become
liable for any debt of any Person within AerCo Group, other than to make
payments in the form of indemnity as required by the express terms of this
Agreement;
(n) during the term of this Agreement, it will not hold out that it is
a division of any Person within AerCo Group, or that any such Person is a
division of it;
(o) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of any Person within AerCo Group in order
that such third party will be induced to contract with it;
(p) during the term of this Agreement, it will not enter into any
agreements between it and any Person within AerCo Group that are more favorable
to either party than agreements that the parties would have been able to enter
into at such time on an arm's-length basis with a non-affiliated third party,
other than any agreements in effect on the date hereof (it being understood that
the parties hereto do not intend by this covenant to ratify any self-dealing
transactions);
(q) during the term of this Agreement, it will devote at least one of
its employees to working full time on behalf of AerCo Group; and
(r) during the term of this Agreement, it will (i) forward promptly to
the Servicer a copy of any material communication received from any Person in
relation to any Lease or Aircraft; (ii) grant such access to the Servicer to its
books of account, documents and other records and to its employees as may be
reasonably necessary for the Servicer to perform its obligations in respect of
any Lease or Aircraft under the Servicing Agreement, provided, however, that the
Servicer shall not have access to the
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minutes of the Administrative Agent's board of directors meetings and other
confidential business information; and (iii) execute and deliver such documents
and do such acts and things as the Servicer may reasonably request in order to
effect the purposes of the Servicing Agreement.
ARTICLE 5
UNDERTAKINGS OF AERCO GROUP
SECTION 5.01. Cooperation. AerCo and the other Persons within AerCo
Group, shall use commercially reasonable efforts to cause any Service Provider
to, at all times cooperate with the Administrative Agent to enable the
Administrative Agent to provide the Administrative Services, including providing
the Administrative Agent with all powers of attorney as may be reasonably
necessary or appropriate for the Administrative Agent to perform the
Administrative Services in accordance with this Agreement.
SECTION 5.02. Information. AerCo or its agents will provide the
Administrative Agent with the following information in respect of itself and all
other Persons within AerCo Group:
(a) copies of all Related Documents, including the articles of
incorporation, by-laws, trust agreements (or equivalent documents) of each such
Person, and copies of all books and records maintained on behalf of such
Persons;
(b) details of all bank accounts and bank mandates maintained by any
Person within AerCo Group;
(c) names of and contact information with respect to the board of
directors, board of trustees, company secretaries and registered offices of any
Person within AerCo Group;
(d) such other information as is necessary to the Administrative
Agent's performance of the Administrative Services; and
(e) a copy of any information provided to AerCo Group pursuant to the
Servicing Agreement;
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provided, that such information as is referred to in this Section 5.02
(with the exception of paragraph (e)) shall be provided to the Administrative
Agent upon execution of this Agreement and, in respect of any amendment or
changes to the information provided to the Administrative Agent upon execution
of this Agreement, promptly following the effectiveness of such amendments or
changes.
SECTION 5.03. Scope of Services. (a) In the event that any Person
within AerCo Group shall enter into any agreement, amendment or other
modification of any Leases or shall take any other action that has the effect
of increasing in any material respect the scope, nature or level of the
Administrative Services to be provided under this Agreement without the
Administrative Agent's express prior written consent, AerCo Group shall so
notify the Administrative Agent and the Administrative Agent shall not be
obligated to perform the affected Administrative Service to the extent of such
increase unless and until the Administrative Agent and AerCo Group shall agree
on the terms of such increased Administrative Service (it being understood that
(i) the Administrative Agent shall have no liability to any Person within AerCo
Group directly or indirectly arising out of, in connection with or related to
the Administrative Agent's failure to perform such increased Administrative
Service prior to any such agreement and (ii) AerCo Group shall not be permitted
to engage another Person to perform the affected Administrative Service without
the prior written consent of the Administrative Agent unless the Administrative
Agent has indicated it is unable or unwilling to act in respect of the affected
Administrative Service).
(b) In the event that AerCo Group shall acquire Additional Aircraft,
AerCo Group shall so notify the Administrative Agent and the Administrative
Agent shall be obligated to provide the Administrative Services with respect to
such Additional Aircraft in accordance with Section 2.06 hereof.
SECTION 5.04. Ratification. AerCo and the other AerCo Group Members
hereby ratify and confirm and agree to ratify and confirm (and shall furnish
written evidence thereof upon request of the Administrative Agent) any act or
omission by the Administrative Agent in accordance with this Agreement in the
exercise of any of the powers or authorities conferred upon the Administrative
Agent under the terms of this Agreement, it being expressly understood and
agreed that none of the foregoing shall have any obligation to ratify and
confirm, and expressly does not ratify and confirm, any act or omission of the
Administrative Agent in violation of this Agreement, the Standard of Performance
or for which the Administrative Agent is obligated to indemnify any AerCo Group
Member or any Subsidiary under Article 3 hereof.
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SECTION 5.05. Covenants. Each of AerCo and the other Persons within
AerCo Group covenants with the Administrative Agent that it will conduct its
business such that it is a separate and readily identifiable business from, and
independent of, the Administrative Agent, the Guarantor and any of its
Affiliates (it being understood that these covenants shall not prevent any
Person within AerCo Group from publishing financial statements that are
consolidated with those of AerFi Group, if to do so is required by Applicable
Law or accounting principles from time to time in effect);
(a) during the term of this Agreement, it will observe, and will
cause its Subsidiaries to observe, all corporate formalities necessary to
remain legal entities separate and distinct from, and independent of, the
Administrative Agent, the Guarantor and any of its Subsidiaries;
(b) during the term of this Agreement, it will maintain, and will
cause its Subsidiaries to maintain, each of their respective assets and
liabilities separate and distinct from those of the Administrative Agent;
(c) during the term of this Agreement, it will maintain, and will
cause its Subsidiaries to maintain, records, books, accounts, and minutes
separate from those of the Administrative Agent;
(d) during the term of this Agreement, it will pay, and will cause its
respective Subsidiaries to pay, each of their respective obligations in the
ordinary course of business as legal entities separate from the Administrative
Agent;
(e) during the term of this Agreement, it will keep, and will cause
its Subsidiaries to keep, each of their respective funds separate and distinct
from any funds of the Administrative Agent, and will receive, deposit, withdraw
and disburse such funds separately from any funds of the Administrative Agent;
(f) during the term of this Agreement, it will conduct, and will cause
its respective Subsidiaries to conduct, each of their respective businesses in
their own name, and not in the name of the Administrative Agent;
(g) during the term of this Agreement, it will not agree, and will
cause its Subsidiaries not to agree, to pay or become liable for any debt of the
Administrative Agent, other than to make payments in the form of indemnity as
required by the express terms of this Agreement;
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(h) during the term of this Agreement, it will not hold out, and will
cause its Subsidiaries not to hold out, that any of them is a division of the
Administrative Agent, or that the Administrative Agent is a division of any of
them;
(i) during the term of this Agreement, it will not induce, and will
cause its Subsidiaries not to induce, any third party to rely on the
creditworthiness of the Administrative Agent in order that such third party will
be induced to contract with it;
(j) during the term of this Agreement, it will not enter into, and
will cause its Subsidiaries not to enter into, any transaction between any of
them and the Administrative Agent that are more favorable to either party than
transactions that the parties would have been able to enter into at such time on
an arm's-length basis with a non-affiliated third party, other than any
agreements in effect on the date hereof (it being understood that the parties
hereto do not intend by this covenant to ratify any self-dealing transactions);
and
(k) during the term of this Agreement, it will observe, and it will
cause its Subsidiaries to observe, all material corporate or other procedures
required under Applicable Law and under each of their respective constitutive
documents.
SECTION 5.06. Ratification by Subsidiaries. AerCo hereby undertakes to
procure that, if so requested by the Administrative Agent, any subsidiary of
AerCo formed or acquired after the date hereof, shall execute an agreement with
the Administrative Agent adopting and confirming, as regards such Subsidiary,
the terms of this Agreement, and agreeing to ratify anything done by the
Administrative Agent in connection herewith.
ARTICLE 6
APPROVALS
SECTION 6.01. Approvals. The Administrative Agent recognizes that
certain instructions hereunder and under the other Related Documents to be given
by AerCo Group may also require the approval of an AerCo Group Subsidiary. In
such circumstances, the Administrative Agent will seek approval from the
relevant AerCo Group Subsidiary and shall report on such approval to AerCo
Group; provided,
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however, that nothing herein shall in any way diminish any authority which may
be granted to AerCo to act as representative of each Person within the AerCo
Group.
ARTICLE 7
EFFECTIVENESS
SECTION 7.01. Effectiveness. The effectiveness of this Agreement and
all obligations of the parties hereunder with respect to each Aircraft Asset
shall be conditional upon:
(i) the occurrence of the Delivery Date of such Aircraft Asset;
(ii) with respect to AerCo, the Servicer, the Administrative
Agent, the Guarantor and the entities listed on Appendix A to this
Agreement, the execution hereof by those parties; and
(iii) with respect to any entity which executes and delivers an
Accession Agreement, the execution thereof in acknowledgment and
agreement by AerCo, the Servicer, the Administrative Agent and the
Guarantor. The original parties hereto and each entity which becomes a
party hereto by executing and delivering such an Accession Agreement
agree that such Accession Agreement shall be effective without the need
for each other party hereto to execute such Accession Agreement in
acknowledgment and agreement.
ARTICLE 8
ADMINISTRATIVE FEES, EXPENSES AND SUBORDINATION
SECTION 8.01. Administrative Fees. (a) In consideration of the
Administrative Agent's performance of the Administrative Services, AerCo Group
agrees to pay to the Administrative Agent the following fees: (i) a fee (an
"ADMINISTRATIVE FEE") of 2.0% of the rental payments made by the Lessees under
the Leases received in respect of each Fee Period from AerCo in respect of its
services to AerCo (the "RENTAL FEE") subject to an annual minimum of $200,000
(the "FIXED FEE"); and
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(ii) a fee for participation in and cooperation with refinancings and
other public or private securities offerings ("NOTES OFFERINGS") of 0.025% of
the Net Proceeds of any such offering (the "ADDITIONAL FEE"). "NET PROCEEDS"
means the cash proceeds received by any person selling Notes (other than
underwriters) within AerCo Group or any other person in connection with any
Notes Offering, less Transaction Costs incurred by any person within AerCo Group
or any such other person in connection with any such Notes Offering (other than
the fees payable pursuant to this Section 8.01).
The Administrative Fee shall be payable in arrears for each period
commencing on the Closing Date (or, thereafter, the most recent Calculation
Date) and ending on the next succeeding Calculation Date during the term of this
Agreement (each such period, a "FEE PERIOD"), such payment to be made no later
than the Payment Date immediately following the end of each such Fee Period.
(b) The above fees have been calculated on the basis of estimated time
and resources having regard to the expectations of AerCo Group and the
Administrative Agent concerning the services required from the Administrative
Agent. To the extent the performance of the Administrative Services requires an
investment of time, resources or services that is materially greater or less
than anticipated, the Administrative Agent and AerCo Group shall negotiate in
good faith to arrive at an adjustment to the Administrative Fees that
appropriately reflects the work performed by the Administrative Agent.
(c) The Fixed Fee shall be automatically adjusted as of each March 31
during the term of this Agreement commencing March 31, 1999, for inflation by
multiplying such fees in effect on such March 31 by the sum of 1.00 plus (if
positive) or minus (if negative) the Inflation Factor with respect to the
immediately preceding calendar year.
SECTION 8.02. Expenses. (a) The Administrative Agent shall be
responsible for all telephone, facsimile and communications costs and expenses
directly relating to or associated with the Administrative Agent's performance
of its duties as set forth in this Agreement up to an annual amount of $200,000.
(b) Subject to the provisions of Section 8.02(a) and Section 8.05
hereof, AerCo Group shall be responsible for the following expenses incurred by
the Administrative Agent in the performance of its obligations ("REIMBURSABLE
EXPENSES"):
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(i) reasonable out of pocket expenses, including travel,
accommodation and subsistence and approved expenditures in respect of
insurance coverage for the Administrative Agent;
(ii) annual telephone, fax and communication costs and expenses
necessarily and directly incurred in connection with the performance
of the Administrative Services in excess of $200,000;
(iii) expenses expressly authorized by (i) the board of
directors of any Person within AerCo Group or (ii) any Person to whom
such authority has been delegated, other than the Administrative Agent
or its Affiliates; and
(iv) expenses expressly authorized pursuant to other provisions
of this Agreement.
SECTION 8.03. Taxes. The fees specified in Section 8.01 hereof are net
of any value added tax required to be accounted for by the Administrative Agent.
Where the Administrative Agent is required to account for value added tax in
respect of any amounts payable by or on behalf of AerCo Group to the
Administrative Agent, AerCo Group shall cause to be paid to the Administrative
Agent such additional amounts as are necessary to discharge such value added tax
upon production of a valid value added tax invoice. AerCo Group and the
Administrative Agent shall cooperate in good faith to file an application for
relief from value added taxes on VAT Form 60A as soon as practicable after the
date of this Agreement.
SECTION 8.04. Payment of Expenses. No later than each Calculation Date,
the Administrative Agent shall deliver a notice to the Cash Manager and AerCo
Group, setting forth the amounts of expenses paid by the Administrative Agent
pursuant to Section 8.02 hereof through and including such Calculation Date (it
being understood that if there are no such expenses the Administrative Agent
will be under no obligation to provide such notice). Subject to Section 8.05
hereof, on the next Payment Date following such Calculation Date, AerCo Group
agrees to pay to the Administrative Agent all such amounts.
SECTION 8.05. Subordination of Fees and Expenses. The Administrative
Agent agrees that the fees payable to it under Section 8.01 hereof and the
Reimbursable Expenses shall be paid to it in accordance with the Indenture, and
that all such fees and Reimbursable Expenses shall be subordinated in right of
payment to
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all other payments set forth in the Indenture as ranking higher in priority of
payment thereto.
ARTICLE 9
TERM, REMOVAL OF OR TERMINATION BY THE ADMINISTRATIVE AGENT
SECTION 9.01. Term. This Agreement shall have a term commencing on the
Closing Date and expiring on the date of payment in full of all amounts
outstanding to be paid on the Notes (including the Class D Notes and the Class E
Notes) and any other securities issued by AerCo relating to Additional Aircraft
owned by AerCo Group.
SECTION 9.02. Cross-termination. This Agreement shall terminate in
the event of a termination of either the Servicing Agreement or the Cash
Management Agreement.
SECTION 9.03. Right to Terminate. (a) At any time during the term of
this Agreement, AerCo Group by a Special Board Resolution shall be entitled to
terminate this Agreement on 120 days' written notice if:
(i) the Administrative Agent shall materially breach any of its
obligations under this Agreement and, after written notice from AerCo
the Administrative Agent has failed to cure such breach within 30 days;
or
(ii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking relief in respect of the Administrative Agent, or
of a substantial part of the property or assets of the Administrative
Agent, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other U.S. Federal or state or foreign
bankruptcy, insolvency, receivership or similar law, and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered or the Administrative Agent, shall go into liquidation, suffer
a receiver or mortgagee to take possession of all or substantially all
of its assets or have an examiner appointed over it or if a petition
or proceeding is presented for any of the foregoing and not discharged
within 60 days; or
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(iii) the Administrative Agent shall (A) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or
any other U.S. Federal or state or foreign bankruptcy, insolvency,
receivership or similar law, (B) consent to the institution of, or
fail to contest the filing of, any petition described in clause (ii)
above, (C) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, or (D) make a
general assignment for the benefit of its creditors.
(b) At any time during the term of this Agreement the Administrative
Agent shall be entitled to terminate this Agreement on 60 days' written notice
if:
(i) any AerCo Group entity shall fail to pay in full when due
(A) any Administrative Fee within 30 days or any Reimbursable Expenses
in an aggregate amount in excess of $750,000 within 30 days, in either
case, after the effectiveness of written notice from the
Administrative Agent of such failure or (B) any other amount payable
to the Administrative Agent hereunder, within 60 days after written
notice from the Administrative Agent of such failure;
(ii) any Person within AerCo Group shall fail to perform or
observe or shall violate in any material respect any material term,
covenant, condition or agreement to be performed or observed by it in
respect of this Agreement for 30 days after AerCo Group shall have
received notice of such failure (other than with respect to payment
obligations referred to in clause (b)(i) of this Section 9.03);
(iii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking relief in respect of AerCo or any other Person
within AerCo Group, or of a substantial part of the property or assets
of any of AerCo or any other Person within AerCo Group under Title 11
of the United States Code, as now constituted or hereafter amended, or
any other U.S. Federal or state or foreign bankruptcy, insolvency,
receivership or similar law, and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered or AerCo or any other
Person within AerCo Group shall go into liquidation, suffer a receiver
or mortgagee to take possession of all or substantially all of its
assets or have an examiner
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appointed over it or if a petition or proceeding is presented for any
of the foregoing and not discharged within 60 days; or
(iv) AerCo or any other Person within AerCo Group shall
(A) voluntarily commence any proceeding or file any petition seeking
relief under any U.S. Federal or state or foreign bankruptcy,
insolvency, receivership or similar law, (B) consent to the
institution of, or fail to contest the filing of, any petition
described in clause 9.03(b)(iii) above, (C) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding or (D) make a general assignment for the benefit of its
creditors.
(c) Notwithstanding anything to the contrary in this Article 9, no
termination of this Agreement pursuant to Section 9.02 hereof, no termination of
this Agreement by AerCo Group pursuant to Section 9.03(a) hereof and no
termination of this Agreement by the Administrative Agent pursuant to Section
9.03(b) hereof shall become effective prior to the date of appointment by AerCo
Group of a successor Administrative Agent and the acceptance of such appointment
by such successor Administrative Agent; provided, however, that in the event
that a successor Administrative Agent shall not have been appointed within 90
days after the date upon which this Agreement would otherwise have terminated,
the Administrative Agent may petition any court of competent jurisdiction for
the appointment of a successor Administrative Agent. Upon action by either party
pursuant to the provisions of this Section 9.03(c), the Administrative Agent
shall be entitled to the payment of any compensation owed to it hereunder and to
the reimbursement of all Reimbursable Expenses incurred in connection with all
services rendered by it hereunder, as provided in Article 8 hereof, and for so
long as the Administrative Agent is continuing to perform any of the
Administrative Services for any Person within AerCo Group, the Administrative
Agent shall be entitled to continue to be paid all amounts due to it hereunder,
net of any amounts that shall have been finally adjudicated by a court of
competent jurisdiction to be owed by the Administrative Agent to AerCo Group or
not to be due to the Administrative Agent, until a successor Administrative
Agent shall have been appointed and shall have accepted such appointment in
accordance with the provisions of Section 9.04(c) hereof.
(d) The parties hereto agree not to amend this Agreement to reduce the
scope of the Administrative Services to be provided by the Administrative Agent
hereunder unless a third party reasonably acceptable to the parties hereto and
to the Servicer becomes a party to this Agreement and agrees to provide such
Administrative Services in the place of the Administrative Agent.
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SECTION 9.04. Consequences of Termination. (a) Notices. (i) Following
the termination of this Agreement pursuant to Section 9.02 hereof or by AerCo
Group or by the Administrative Agent pursuant to Section 9.03 hereof, the
Administrative Agent will promptly forward to AerCo Group any notices received
by it during the year immediately after termination.
(ii) AerCo Group will notify promptly any relevant third party,
including each Rating Agency, the Trustee, and the Servicer, of the
termination of this Agreement by AerCo Group or by the Administrative
Agent and will request that any such notices and accounting reports and
communications thereafter be made or given directly to the entity
engaged to serve as Administrative Agent, and to AerCo Group.
(b) Accrued Rights. A termination of this Agreement by AerCo Group or
by the Administrative Agent hereunder shall not affect the respective rights and
liabilities of any party accrued prior to such termination in respect of any
prior breaches hereof or otherwise.
(c) Replacement. If this Agreement is terminated under Section 9.02
hereof or by the Administrative Agent or AerCo Group under Section 9.03 hereof,
the Administrative Agent will cooperate with any person appointed to perform the
Administrative Services, including providing such person with all information
and documents reasonably requested.
SECTION 9.05. Survival. Notwithstanding any termination or the
expiration of this Agreement, the obligations of AerCo Group and the
Administrative Agent under Section 3.02 hereof shall survive such termination or
expiration, as the case may be.
ARTICLE 10
ASSIGNMENT AND DELEGATION
SECTION 10.01. Assignment and Delegation. (a) No party to this
Agreement shall assign or delegate or otherwise subcontract this Agreement or
all or any part of its rights or obligations hereunder to any Person without the
prior written consent of the other parties, such consent not to be unreasonably
withheld.
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(b) Without limiting the foregoing, any Person who shall become a
successor by assignment or otherwise of any party hereto shall be required as a
condition to the effectiveness of any such assignment or other arrangement to
become a party to this Agreement.
ARTICLE 11
GUARANTEE
SECTION 11.01. Guarantee. (a) The Guarantor absolutely, irrevocably and
unconditionally guarantees for the benefit of AerCo Group and the Servicer (the
"GUARANTEED PARTIES"), as primary obligor and not merely as a surety, the
following (which are collectively referred to as the "GUARANTEED OBLIGATIONS"):
the full and punctual payment by the Administrative Agent when due of any and
all amounts that are or may become due and payable by the Administrative Agent
to the Guaranteed Parties under the Administrative Agency Agreement and the
timely performance of all other obligations owed by the Administrative Agent to
the Guaranteed Parties hereunder. The Guarantor hereby further agrees that if
the Administrative Agent shall fail to pay or perform any Guaranteed Obligation
when the same shall become due and payable or is required to be performed, the
Guarantor will pay or perform, as the case may be, such Guaranteed Obligation
promptly upon receipt of notice stating that such Guaranteed Obligation was not
paid when due or performed when required, as the case may be. To the extent that
the Guarantor performs under this Guarantee, the rights of the Guarantor will be
subrogated to the rights of the Administrative Agent under the Administrative
Agency Agreement. The obligations of the Guarantor under this Guarantee are
expressly subject to any defenses that the Administrative Agent may have against
the Guaranteed Parties under the terms of the Administrative Agency Agreement,
including any and all claims, defenses, rights and set-offs available to the
Administrative Agent, except any thereof arising out of, based on or otherwise
described in clause (i) or (ii) of Section 11.02(b) hereof. The performance
obligation of the Guarantor under this Guarantee will be deemed satisfied when
and to the extent that the Administrative Agent performs its obligations under
the Administrative Agency Agreement. The foregoing guarantee of the Guarantor is
given solely to the Guaranteed Parties and, except as expressly permitted by
Section 11.05 hereof, the Guarantor undertakes no liability or responsibility
hereby to any Person other than the Guaranteed Parties.
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(b) The Guarantor hereby waives (i) notice of acceptance hereof and
(ii) presentment to, demand of payment from or protest to the Administrative
Agent of any of the Guaranteed Obligations. This Guarantee shall be a continuing
guarantee of payment and performance and not of collection only, and shall
remain operative and in full force and effect until the earlier of such time as
(i) the Guaranteed Obligations shall have been paid and performed in full, (ii)
the Administrative Agency Agreement shall have been terminated in accordance
with its terms or (iii) the Administrative Agency Agreement shall have been
assigned pursuant to its terms by the Administrative Agent to a third party
which is not affiliated with the Guarantor; provided, however, that the
obligations of the Guarantor under this Guarantee shall not terminate with
respect to those provisions that expressly survive the termination of the
Administrative Agency Agreement, as set forth in Section 9.05 hereof, until the
obligations of the Administrative Agent hereunder shall have been performed in
full.
(c) If any Guaranteed Obligation paid by any Person is at any time
repaid by the recipient thereof in compliance with any court order pertaining to
any bankruptcy or insolvency proceedings relating to the Administrative Agent,
the amount so repaid shall not be deemed to have been paid and shall be deemed
to be outstanding, and the obligation of the Guarantor hereunder to pay such
Guaranteed Obligation shall remain in full force and effect.
SECTION 11.02. Absolute Obligations. The obligations of the Guarantor
hereunder shall be absolute and unconditional and shall not be affected by any
circumstances other than (a) any claims, defenses, rights and set-offs available
to the Administrative Agent under the Administrative Agency Agreement or
otherwise (except those set forth in clauses (i) and (ii) of Section 11.02(b))
and (b) performance by the Administrative Agent of its obligations under the
Administrative Agency Agreement, including (i) any lack of genuineness,
authorization, validity, legality or enforceability of the bankruptcy,
reorganization or similar proceeding by or against the Administrative Agent or
any other Person or the appointment of a receiver or examiner with respect
thereto or (ii) any amendment, waiver or other modification of the
Administrative Agency Agreement that shall have been entered into with the
consent of the Administrative Agent.
SECTION 11.03. Guarantor's Representations. The Guarantor represents
and warrants as of the date hereof to the Guaranteed Parties that:
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(a) the Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of Ireland, and has full power, authority
and legal right to execute and deliver, and to perform its obligations under,
this Guarantee;
(b) the Guarantor has taken all necessary corporate and legal action
to authorize the guarantee hereunder on the terms and conditions of this
Guarantee and to authorize its execution, delivery and performance;
(c) this Guarantee has been duly executed and delivered by a duly
authorized officer or representative of the Guarantor, and constitutes the
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms;
(d) the execution, delivery and performance of this Guarantee will not
constitute a default under or violate any provision of any law or regulation, or
any judgment or order of any court, arbitrator or governmental authority, in
each case applicable to the Guarantor, or the certificate of incorporation or
by-laws of the Guarantor, or any agreement to which the Guarantor is a party;
and
(e) no consent of any other Person, and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority, bureau or
agency is required in connection with the execution delivery, performance,
validity or enforceability with respect to the Guarantor of this Guarantee.
SECTION 11.04. Successors and Assigns; Amendments. (a) This Guarantee
shall be binding upon and inure to the benefit of the Guarantor and the
Guaranteed Parties and their respective permitted successors and assigns. The
Guarantor may not assign its rights or obligations under this Guarantee to any
Person. The Guaranteed Parties may assign their rights under this Guarantee only
to such person as it shall assign its rights under this Agreement and only on
the terms set forth in Section 10.01 hereof.
(b) This Guarantee may not be amended in any material respect without
first obtaining the written permission of the Guaranteed Parties and the
Guarantor.
SECTION 11.05. Limitations. Except as expressly provided in Section
11.06 hereof and without limiting the provisions of Section 11.02 hereof, the
Guarantor shall have no greater obligations or liabilities under this Guarantee
than does the
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Administrative Agent under this Agreement. Without limiting the foregoing, the
Guarantor shall be entitled to the benefits of Section 3.02 of this Agreement
and the Guarantor, so long as it shall have any obligation under this Guarantee,
shall be entitled to the benefit of all indemnities to which the Administrative
Agent is entitled under this Agreement as if the Guarantor were named as a
party thereto and shall be bound by the provisions thereof to the same extent.
SECTION 11.06. Payments; Costs of Enforcement. (a) All payments to be
made by the Guarantor hereunder shall be made in United States Dollars and in
such funds and in such manner as the Administrative Agent is required to make
such payments under this Agreement, and all such payments shall be free and
clear of and without deduction or withholding for or on account of any and all
Taxes.
(b) The Guarantor agrees to reimburse the Guaranteed Parties for any
reasonable cost or expense (including the reasonable fees and disbursements of
counsel for the Guaranteed Parties) which may be reasonably incurred by or
behalf of the Guaranteed Parties in connection with the failure of the Guarantor
to perform any of its obligations hereunder and any enforcement proceedings
resulting therefrom.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices. Subject to paragraph (d) below, all notices,
consents, directions, approvals, instructions, requests and other communications
required or permitted by such agreement to be given to any Person shall be in
writing, and any such notice shall become effective five Business Days after
being deposited in the mail, certified or registered, return receipt requested,
with appropriate postage prepaid for first class mail, or if delivered by hand
or courier service or in the form of a facsimile, when received (and, in the
case of a facsimile, receipt of such facsimile is confirmed to the sender), and
shall be directed to the address or facsimile number of such Person set forth
below (with a copy to the Administrative Agent):
If to the Administrative Agent, to:
AerFi Administrative Services Limited
c/o AerFi Group plc
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇
▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇▇-▇▇-▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇▇▇▇
If to the Guarantor, to:
AerFi Group plc
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇▇-▇▇-▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇▇▇▇
If to AerCo or its Subsidiaries, to:
AerCo Limited
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
Attention: Mourant & Co. Secretaries Limited,
Company Secretary
Telephone: ▇▇-▇▇▇▇-▇▇▇-▇▇▇
Facsimile: 44-1534-609-333
If to the Servicer, to:
AerFi Group plc
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇▇-▇▇-▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇▇▇▇
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is conclusively presumed to have been duly given,
whether or not the addressee receives it.
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From time to time any party to such agreement may designate a new
address or number for purposes of notice thereunder by notice to each of the
other parties thereto.
SECTION 12.02. Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York.
SECTION 12.03. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 12.01 or 12.04 hereof
shall be deemed effective service of process on such party.
SECTION 12.04. Agent for Service of Process. Each of AerCo and its
Subsidiaries hereby appoint Corporation Service Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇, ▇.▇.▇. as its nonexclusive agent for service of
process in the United States in connection with this Agreement. The parties may
use any legally available means of service of process. Each of AerCo and its
Subsidiaries will promptly notify the other persons listed in Section 12.01
hereof of any change in the address of the respective agents; provided, however,
that each of AerCo and its Subsidiaries will at all times maintain an agent
located within New York State for service of process in connection with this
Agreement, the identity of any successor agent to be reasonably satisfactory to
the Administrative Agent.
SECTION 12.05. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
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BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.06. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto where upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 12.07. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
SECTION 12.08. Power of Attorney. Each of AerCo and the Subsidiaries
shall appoint the Administrative Agent and its successors, and its permitted
designees and assigns, as their true and lawful attorney-in-fact. All services
to be performed and actions to be taken by the Administrative Agent pursuant to
this Agreement shall be performed to and on behalf of each of AerCo and the
Subsidiaries. The Administrative Agent shall be entitled to seek and obtain from
each of AerCo and the Subsidiaries a power of attorney in respect of the
execution of any specific action as the Administrative Agent deems appropriate.
SECTION 12.09. Restrictions on Disclosure. The Administrative Agent
agrees that it shall not, prior to the termination or expiration of this
Agreement or within the three years after such termination or expiration,
disclose to any Person any confidential or proprietary information, whether of a
technical, financial, commercial or other nature, received directly or
indirectly from AerCo Group regarding AerCo Group or its business or the
Aircraft, except as authorized in writing by AerCo Group or otherwise permitted
by this Agreement, and except:
(a) to Representatives of the Administrative Agent and any of its
Affiliates in furtherance of the purposes of this Agreement, provided that any
such Representatives shall have agreed to be bound by the restrictions on
disclosure set forth in this Section 12.09;
(b) to the extent (i) required by Applicable Law or by judicial or
administrative process, including pursuant to any subpoena, civil investigative
demand
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or similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Administrative Agent or an affiliate thereof is a
party, or (ii) reasonably necessary in order to enable the Administrative Agent
to perform the Administrative Agent Services, but in the case of clause (i)
above, in the event of proposed disclosure, the Administrative Agent shall seek
the assistance of AerCo Group to protect information in which AerCo Group has
an interest to the maximum extent achievable;
(c) to the extent such information is required to be included in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated by the Indenture
approved in advance by AerCo;
(d) to the extent that the information:
(i) was generally available in the public domain;
(ii) was lawfully obtained from a source under no obligation of
confidentiality, directly or indirectly, to any Person within AerCo
Group;
(iii) was disclosed to the general public with the approval of
any Person within AerCo Group; or
(iv) was developed independently by the Administrative Agent or
any Affiliates of the Administrative Agent; and
(e) to the extent the Administrative Agent reasonably deems necessary
to protect and enforce its rights and remedies under this Agreement; provided,
however, that in such an event the Administrative Agent shall act in a manner
reasonably designed to prevent disclosure of such confidential information; and
provided further, that prior to disclosure of such information the
Administrative Agent shall inform AerCo of such disclosure.
SECTION 12.10. Rights of Setoff. To the extent permitted by Applicable
Law, the Administrative Agent hereby waives any right it may have under
Applicable Law to exercise any rights of setoff it has under Applicable Law with
respect to any assets it holds owned by, or money or monies it owns to, any
Person within AerCo Group pursuant to and in accordance with the terms and
conditions of this Agreement; provided, however, that this Section 12.10 shall
not affect any rights of setoff or other
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rights that the Administrative Agent has or may have under the express terms
and conditions of this Agreement.
SECTION 12.11. No Partnership. (a) It is expressly recognized and
acknowledged that this Agreement is not intended to create a partnership, joint
venture or other similar arrangement between any AerCo Group member or members
on the one part and the Administrative Agent on the other part. It is also
expressly understood that any actions taken on behalf of any AerCo Group member
by the Administrative Agent shall be taken as agent for AerCo Group, either
naming the relevant AerCo Group entity, or naming the Administrative Agent as
agent for an undisclosed principal. No AerCo Group member shall hold itself out
as a partner of the Administrative Agent, and the Administrative Agent will not
hold itself out as a partner of any AerCo Group member.
(b) The Administrative Agent shall not have any fiduciary duty or
other implied obligations or duties to any AerCo Group member, any Lessee or any
other Person arising out of this Agreement.
SECTION 12.12. Implied Terms Excluded. For the avoidance of doubt,
the provisions of Section 39 of the Sale of Goods and Supply of Services Act,
1980 of Ireland are hereby expressly excluded.
SECTION 12.13. Table of Contents; Headings. The table of contents and
headings of the various articles, sections and other subdivisions of this
Agreement are for convenience and reference only and shall not modify, define or
limit any of the terms or provisions of this Agreement.
SECTION 12.14. No Retroactive Application. This Agreement amends and
restates the Original Agreement with no intention of retroactive application.
The Original Agreement has been restated for the convenience of the parties and
such amendment and restatement is not intended to waive or modify the
obligations of any party which accrued or were to have been performed on or
prior to the effective date hereof or to deprive any party of its rights and
remedies in respect thereof.
SECTION 12.15. Limited Recourse. (a) In the event that the assets of
AerCo are insufficient, after payment of all other claims, if any, ranking in
priority to the claims of the Administrative Agent hereunder, to pay in full
such claims of the Administrative Agent, then the Administrative Agent shall
have no further claim against AerCo in respect of any such unpaid amounts.
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(b) No recourse under any obligation, covenant or agreement of any
party contained in this Agreement shall be had against any shareholder, officer
or director of the relevant party as such, by the enforcement of any assessment
or by any proceeding, by virtue of any statue or otherwise; it being expressly
agreed and understood that this Agreement is a corporate obligation of the
relevant party and no personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of the relevant party as such, or
any of them under or by reason of any of the obligations, covenants or
agreements of such relevant party contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such party of
any of such obligations, covenants or agreements, either at law or by statute or
constitution, of every such shareholder, officer, agent or director is hereby
expressly waived by the other parties as a condition of and consideration for
the execution of this Agreement.
(c) The Administrative Agent hereby agrees that it shall not, until
the expiry of one year and one day after the payment of all sums outstanding and
owing under the latest maturing Note then rated, take any corporate action or
other steps or legal proceedings for the winding-up, dissolution or
re-organization or for the appointment of a receiver, administrator,
administrative receiver, trustee, liquidator, sequestrator or similar officer
of AerCo or of any or all of AerCo's revenues and assets.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the date
first written above.
AERFI ADMINISTRATIVE SERVICES LIMITED,
as Administrative Agent
By: ___________________________________
Name:
Title:
AERFI GROUP PLC,
as Guarantor
By: ___________________________________
Name:
Title:
AERCO LIMITED
By: ___________________________________
Name:
Title:
AERFI GROUP PLC,
as Servicer
By: ___________________________________
Name:
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Title:
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AERCO IRELAND LIMITED
By: ___________________________________
Name:
Title:
AERCO IRELAND II LIMITED
By: ___________________________________
Name:
Title:
AERFI BELGIUM N.V.
By: ___________________________________
Name:
Title:
AERCOUSA INC.
By: ___________________________________
Name:
Title:
AIRCRAFT LEASE PORTFOLIO
SECURITIZATION 94-1 LIMITED
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By: ___________________________________
Name:
Title:
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ALPS ▇▇-▇ (▇▇▇▇▇▇▇) N.V.
By: ___________________________________
Name:
Title:
PERGOLA LIMITED
By: ___________________________________
Name:
Title:
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APPENDIX A
SUBSIDIARIES
AerCo Ireland Limited
AerCo Ireland II Limited
AerCoUSA Inc.
AerFi Belgium N.V.
Aircraft Lease Portfolio Securitization 94-1 Limited
ALPS ▇▇-▇ (▇▇▇▇▇▇▇) N.V.
Pergola Limited
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
FORM OF ACCESSION AGREEMENT
[DATE]
We refer to the Amended and Restated Administrative Agency Agreement
dated as of July 17, 2000, among AerFi Administrative Services Limited, AerFi
Group plc, as Guarantor, AerCo Limited, AerFi Group plc, as Servicer, the
entities listed on Appendix A thereto and all other Subsidiaries which have
heretofore signed an Accession Agreement in substantially the form of this
Accession Agreement (the "ADMINISTRATIVE AGENCY AGREEMENT").
We agree, as of the date of this Accession Agreement, to be considered
a party to the Administrative Agency Agreement for all purposes, as if an
original signatory to the Administrative Agency Agreement, and to be bound by
the terms of the Administrative Agency Agreement.
This Accession Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, this Accession Agreement has been duly executed on
the date first written above.
[ ]
By:__________________________
Name:
Title:
B-1
62
ACCEPTED AND ACKNOWLEDGED:
AERFI ADMINISTRATIVE SERVICES LIMITED,
as Administrative Agent
By: __________________________
Name:
Title:
AERFI GROUP PLC,
as Guarantor
By: __________________________
Name:
Title:
AERCO LIMITED
By: __________________________
Name:
Title:
AERFI GROUP PLC,
as Servicer
By: __________________________
Name:
Title:
B-2