EXHIBIT 10.2
EXECUTION COPY
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Dated as of 27 August 1996
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YA96A LIMITED
as Borrower
THE BANKS AND OTHER
FINANCIAL INSTITUTIONS named herein
as Lenders
ABN AMRO BANK N.V., CHICAGO BRANCH
as Facility Agent
WILMINGTON TRUST COMPANY
(not in its individual capacity,
but solely as security trustee)
as Security Trustee
and
EXPORT-IMPORT BANK OF THE UNITED STATES
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GUARANTEED LOAN AGREEMENT
TERM LOAN FACILITY
of up to US$103,000,000
relating to two (2) Boeing 767-300 Airframes
with Rolls-Royce RB211-524H-36 Engines
EXIM Guarantee No. AP070425
People's Republic of China
(China Yunnan Airlines)
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▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CONTENTS
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NUMBER CLAUSE HEADING PAGE
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1. INTERPRETATION........................................................ 2
2. THE FACILITY.......................................................... 15
3. CONDITIONS PRECEDENT.................................................. 18
4. CONVERSION TO FIXED RATE.............................................. 19
5. INTEREST.............................................................. 23
6. REPAYMENT, PREPAYMENT AND CANCELLATION................................ 23
7. CHANGE OF LAW OR CIRCUMSTANCES........................................ 27
8. TAXES AND OTHER DEDUCTIONS............................................ 29
9. FEES, EXPENSES AND OTHER INDEMNITIES.................................. 31
10. PAYMENTS AND EVIDENCE OF DEBT......................................... 32
11. REPRESENTATIONS AND WARRANTIES........................................ 34
12. UNDERTAKINGS.......................................................... 38
13. EVENTS OF DEFAULT..................................................... 41
14. DEFAULT INTEREST...................................................... 44
15. SET-OFF AND PRO-RATA SHARING.......................................... 45
16. THE FACILITY AGENT AND THE SECURITY TRUSTEE........................... 46
17. AMENDMENT............................................................. 51
18. WAIVER AND SEVERABILITY............................................... 52
19. MISCELLANEOUS......................................................... 52
20. ASSIGNMENT, TRANSFER AND LENDING OFFICES............................... 52
21. NOTICES................................................................ 54
22. GOVERNING LAW AND JURISDICTION......................................... 56
23. COUNTERPARTS........................................................... 57
SCHEDULE 1.................................................................. 59
APPENDIX 1.................................................................. 1-1
APPENDIX 2.................................................................. 2-1
PART I................................................................. 2-1
PART II................................................................ 2-2
PART III............................................................... 2-4
APPENDIX 3.................................................................. 3-1
APPENDIX 4.................................................................. 4-1
APPENDIX 5.................................................................. 5-1
APPENDIX 6.................................................................. 6-1
THIS GUARANTEED LOAN AGREEMENT (this "Agreement" or this "Guaranteed Loan
Agreement") is made as of the 27th day of August 1996
BY AND AMONG:
(1) YA96A LIMITED, a company incorporated under the laws of the Cayman
Islands and having its registered office at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies
as borrower (the "Borrower");
(2) THE BANKS AND OTHER FINANCIAL INSTITUTIONS listed in Schedule 1 as
Lenders (each, a "Lender" and collectively, the "Lenders");
(3) ABN AMRO BANK N.V., CHICAGO BRANCH, as facility agent for the Lenders
(the "Facility Agent");
(4) WILMINGTON TRUST COMPANY not in its individual capacity, except as
expressly stated herein, but solely as security trustee (the "Security
Trustee");
and
(5) EXPORT-IMPORT BANK OF THE UNITED STATES ("EXIM").
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to establish a credit
facility in Dollars in its favor in an amount equal to the Aggregate Commitment
so that the Borrower may hereunder finance, or refinance indebtedness incurred
to finance, up to (a) 85% of the purchase price paid or payable by the Borrower
in respect of the purchase in the United States and the export to the People's
Republic of China of two (2) Boeing 767-300 airframes which items are of U.S.
manufacture and have been approved by EXIM as eligible for financing under this
Agreement (the two (2) Boeing 767-300 airframes being hereinafter referred to as
the "Items"), (b) 100% of the Exposure Fee payable by the Borrower to EXIM in
respect of the Items and the Approved Services and (c) 85% of the cost of the
Approved Services payable by the Borrower in respect of the Items;
WHEREAS, the Borrower has requested the ECGD Lenders to establish a
credit facility in Dollars in its favor to finance the purchase by the Borrower
of, or to refinance indebtedness incurred by the Borrower to purchase, four (4)
Rolls Royce RB211-524H-36 engines which are to be installed (two in respect of
each airframe) on the Boeing 767-300 airframes referred to above, it being
understood that no reference herein to parties hereto which may also be ECGD
Lenders shall be deemed to refer to such parties in their capacity as ECGD
Lenders or to any rights they may have in respect of the ECGD Loan;
WHEREAS, the Borrower has made or is prepared to make cash payments
aggregating not less than 15% of the aggregate purchase price of the Items and
the Approved Services which payments will be financed by way of a loan from the
Commercial Lenders on the terms and subject to the conditions set out in the
Commercial Loan Agreement, it being
understood that no reference herein to parties hereto which may also be lenders
under the Commercial Loan Agreement shall be deemed to refer to such parties in
their capacity as lenders under the Commercial Loan Agreement or to any rights
they may have thereunder;
WHEREAS, the Borrower has agreed to lease each Aircraft to China Yunnan
Airlines, a legal entity organized and existing under the laws and decrees of
the People's Republic of China, pursuant to the terms of a Lease with respect to
such Aircraft;
WHEREAS, on the terms and conditions hereinafter set forth, the Lenders
are prepared to establish the Facility in favor of the Borrower for the purpose
of providing the Borrower with the financing requested by the Borrower to enable
it to purchase, or to refinance indebtedness incurred to purchase, the Items;
WHEREAS, EXIM is prepared to issue, for the benefit of the Lenders, its
guarantee of repayment in respect of the principal amount of each Disbursement
made pursuant to this Guaranteed Loan Agreement together with interest thereon,
in accordance with the terms and conditions stated in the EXIM Guarantee;
WHEREAS, upon the terms and conditions set forth herein, the Facility
Agent is prepared to act as agent for the Lenders and shall perform those
functions and duties assigned to it hereunder;
WHEREAS, upon the terms and conditions set forth in the Proceeds
Agreement (as hereinafter defined), the Security Trustee is prepared to act as
security trustee for purposes of holding security granted pursuant to the
Security Documents;
WHEREAS, upon the agreement of the Lenders, the Borrower and EXIM the
Floating Rate Notes issued hereunder may be converted to Fixed Rate Notes; and
WHEREAS, the establishment of the Facility will facilitate exports and
imports and the exchange of commodities between the United States and the
People's Republic of China.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. INTERPRETATION
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1.01 Definitions. In this Agreement, unless the context requires otherwise:
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"Aggregate Commitment" means, on any date, an amount equal to the
aggregate of the Commitments of all Lenders as determined on such day;
2
"Aircraft" means either or both, as the context may require, of the
Airframes, in each case with installed engines purchased by the Borrower
pursuant to the Aircraft Purchase Agreement (as assigned to the Borrower,
in respect of such Aircraft, pursuant to the relevant Purchase Agreement
Assignment);
"Aircraft Purchase Agreement" means the purchase agreement No. 1844 dated
as of 3rd December 1994 between The Boeing Company, as seller, and China
Aviation Supplies Corporation, as buyer, as such agreement relates to the
Aircraft;
"Airframe" or "Airframes" means either or both, as the context may
require, of the two (2) Boeing 767-300 airframes bearing manufacturer's
serial numbers 28148 and 28149 (excluding the Engines or any engines from
time to time installed thereon);
"Applicable Margin" means with respect to each Disbursement while bearing
interest at the Floating Rate, 0.08% (eight basis points);
"Applicable Rate" means, with respect to any Interest Period for each
Disbursement, the rate per annum equal to:
(i) if such Interest Period ends on or prior to the Conversion Date,
if any, the Floating Rate for such Interest Period; and
(ii) if such Interest Period begins on or after the Conversion Date,
the Fixed Rate;
"Approved Services" shall have the meaning ascribed to such term in the
Reimbursement and Indemnity Agreement;
"Available Commitment" means, with respect to each Lender, on any day, an
amount which equals the Commitment of such Lender as determined on such
day less (i) such Lender's Pro-Rata Share of the outstanding principal
amount of the Loan on such day and (ii) any repayments or prepayments of
the principal amount of the Loan on or prior to such day;
"Availability Period" means the period commencing on the date of this
Agreement and ending on the earlier of (i) October 31, 1996 (or such
later date as may be agreed by the Borrower, the Facility Agent, the
Lenders, EXIM and the Lessee), (ii) the date on which the Available
Commitment of each Lender is reduced to zero in accordance with the terms
hereof, (iii) the date on which the Disbursement is made in respect of
the last Aircraft to be financed hereunder, and (iv) the date on which
the Borrower notifies the Facility Agent that the Availability Period is
terminated;
"Banking Day" means (i) a day which is not a Saturday or Sunday and (ii)
a day on which banks are open for the transaction of business of the
nature required by
3
this Agreement and the Operative Documents (A) prior to or on the
Conversion Date, in Hong Kong, Shanghai, London and New York City and,
for the purposes of Clause 13.01(a), Beijing and (B) after the Conversion
Date, in New York City and Hong Kong (for all purposes other than in
determining a Payment Date) and, for the purposes of Clause 13.01(a),
Beijing;
"Bare Trust Agreement" means the bare trust agreement executed and
delivered, or as the context may require, to be executed and delivered by
the Lessor Parent, as trustee, and the Lessee, as beneficiary, as amended
or supplemented from time to time;
"Boeing Warranties Agreement" means, in respect of each Aircraft, the
agreement to be entered into in respect of such Aircraft by the Lessee,
China Aviation Supplies Corporation, the Borrower and the Security
Trustee and (by way of the execution of the consent and agreement
thereto) The Boeing Company;
"Borrowing Date" means, with respect to a Disbursement, the date, which
date shall be a Banking Day, designated by the Borrower in a Notice of
Drawing as the date on which such Disbursement shall be made subject to
fulfillment or waiver of the terms and conditions of this Agreement;
"Bridge Financing Documents" means, in respect of the Aircraft bearing
manufacturer's serial number 28148, the respective financing and security
documents entered into between the Borrower, the Lessee, ABN AMRO Bank
N.V. (as facility agent and as security agent) and the Lenders as defined
therein, as applicable, in connection with the acquisition of such
Aircraft by the Borrower and the leasing of such Aircraft by the Borrower
to the Lessee;
"Commercial Facility Agent" means ABN AMRO Bank N.V., Shanghai Branch, as
facility agent under the Commercial Loan Agreement.
"Commercial Lenders" has the meaning ascribed to the term "Lenders" in
the Commercial Loan Agreement;
"Commercial Loan" has the meaning ascribed to the term "Loan" in the
Commercial Loan Agreement;
"Commercial Loan Agreement" means the commercial loan agreement (tranche
C) of even date herewith by and among the Borrower, the banks and
financial institutions named therein as lenders, and the Commercial
Facility Agent;
"Commitment" means, in relation to each Lender, the principal amount set
forth opposite that Lender's name in Schedule 1, as the same may be
reduced in accordance with the terms hereof;
4
"Conversion" means the conversion of interest payable in respect of the
Loan to the Fixed Rate from the Floating Rate as contemplated in the
Notice of Conversion;
"Conversion Date" means, prior to Conversion, the date set forth in the
Notice of Conversion as the Conversion Date, which date shall be a
Banking Day occurring on or prior to March 12, 1997 (or such later date
as the Borrower, EXIM, the Underwriter and the Facility Agent may agree)
and, on or after the Conversion, the date of such Conversion provided
that if the Conversion has not occurred on or prior to March 12, 1997 (or
such later date as the Borrower, EXIM, the Underwriter and the Facility
Agent may agree) Conversion Date shall have no meaning;
"Co-ordination Agreement" means the co-ordination agreement entered into,
or as the context may require, to be entered into between EXIM, ECGD, the
Facility Agent, the Lenders, the Commercial Lenders, the ECGD Lenders,
the Commercial Facility Agent, the ECGD Lender and the Security Trustee;
"Default" means any event which with the giving of notice or lapse of
time or both would constitute an Event of Default;
"Determination Date" means the earlier of (i) the date on which the
Underwriter and the Borrower determine not to effect the Securitization
of the Loan and provide notice thereof to the Facility Agent and EXIM and
(ii) if the Conversion has not occurred on or prior to March 12, 1997 (or
such later date as the Borrower, EXIM, the Underwriter and the Facility
Agents may agree) March 12, 1997 (or such later date);
"Disbursement" shall have the meaning ascribed to such term in Clause
2.01 hereof;
"Dollars" and "US$" mean the lawful currency for the time being of the
United States of America;
"ECGD" means the Export Credits Guarantee Department of the United
Kingdom;
"ECGD Facility Agent" means ABN AMRO BANK, N.V., London Branch, in its
capacity as facility agent under the ECGD Loan Agreement for and on
behalf of the ECGD Lenders;
"ECGD Lenders" has the meaning ascribed to the term "Lenders" in the ECGD
Loan Agreement;
"ECGD Loan" means the principal amount for the time being outstanding
under the ECGD Loan Agreement;
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"ECGD Loan Agreement" means the loan agreement entered into or, as the
context may require, to be entered into between the Borrower, the ECGD
Facility Agent, the financial institutions named therein as lenders and
ECGD;
"Event of Default" means any event specified as such in Clause 13;
"EXIM Eligible Amount" means, with respect to each Airframe, the amount
of the purchase price of such Airframe and related fees and expenses
which have been approved by EXIM to be eligible for EXIM support and
which amount shall not exceed the sum of (i) 85% of the EXIM-approved
cost for the Airframe, (ii) 100% of the Exposure Fee payable by the
Borrower to EXIM pursuant to the terms of the Reimbursement and Indemnity
Agreement, and (iii) 85% of the cost of Approved Services payable by the
Borrower in respect of such Airframe;
"EXIM Guarantee" means, the Guarantee Agreement dated as of the first
Borrowing Date hereunder between the Facility Agent, the Lenders and
EXIM;
"Exposure Fee" shall have the meaning ascribed to such term in the
Reimbursement and Indemnity Agreement;
"Facility" means the loan facility to be made available to the Borrower
under Clause 2 of this Agreement;
"Facility Agent" means (i) on or prior to the Conversion Date, ABN AMRO
BANK, N.V., Chicago Branch of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, in its capacity as facility agent for the Lenders hereunder or
any successor thereto in accordance with the terms of this Agreement and
(ii) thereafter, the Trustee;
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the average
rate quoted to the Facility Agent on such day for the purchase by the
Facility Agent of federal funds;
"Final Maturity Date" means August 15, 2008 or, if such date is not a
Banking Day, the first preceding Banking Day;
"Financed Aircraft" means, with respect to a Disbursement, the Aircraft
for which the proceeds of such Disbursement will be used, in substantial
part, in connection with the acquisition of, or the refinancing of
indebtedness incurred to acquire, such Aircraft;
"Fixed Rate" means the fixed rate of interest determined in accordance
with the pricing procedure described in Appendix 7 and specified in the
Notice of Conversion (or, after the submission of the Notice of
Conversion but prior to the Conversion Date, such other subsequent
written agreement specifying the Fixed Rate to which the Borrower, the
Facility Agent, EXIM and the Trustee are party)
6
as applicable to the Loan (and evidenced by the Fixed Rate Notes) for
each Interest Period commencing on and after the Conversion Date;
"Fixed Rate Note" or "Fixed Rate Notes" means either or both, as the
context may require, of the promissory notes issued by the Borrower on
the Conversion Date which collectively evidence the Loan at such time as
interest thereon accrues at the Fixed Rate and which are substantially in
the form of Part 2 of Appendix 3 hereto;
"Fixed Rate Payment Date" means (i) each Semi-annual Date occurring after
the Conversion Date and (ii) the Final Maturity Date, provided, if any
Fixed Rate Payment Date would otherwise be a day that is not a Banking
Day, such Fixed Rate Payment Date shall be the first preceding Banking
Day. For purposes of this definition, "Semi-annual Date" shall mean each
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February 15 and August 15 of each year commencing February 15, 1997;
"Floating Rate" means, with respect to an Interest Period while the Loan
bears interest at the Floating Rate, the aggregate rate per annum equal
to LIBOR plus the Applicable Margin on the date of determination,
----
provided however if such Interest Period has a duration of one (1) day or
one (1) week pursuant to Clause 2.04 or 4.05, the Floating Rate for each
day during such period shall be the Federal Funds Rate plus the
Applicable Margin;
"Floating Rate Note" or "Floating Rate Notes" means either or both, as
the context may require, of the promissory notes issued by the Borrower
which collectively evidence the Loan at such time as interest thereon
accrues at the Floating Rate and which are substantially in the form of
the Part 1 of Appendix 3 hereto;
"Floating Rate Payment Date" means (i) each Semi-annual Date occurring
during the term of this Agreement and (ii) the Final Maturity Date,
provided, (x) if any Floating Rate Payment Date would otherwise be a day
that is not a Banking Day, such Floating Rate Payment Date shall be the
first preceding Banking Day and (y) if the Conversion shall have
occurred, the Conversion Date shall be the final Floating Rate Payment
Date. For purposes of this definition "Semi-annual Date" shall mean each
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February 15 and August 15 of each year commencing February 15, 1997;
"Guaranteed Amount" shall have the meaning ascribed to such term in the
EXIM Guarantee;
"Guaranteed Interest Rate" shall have the meaning ascribed to such term
in the EXIM Guarantee;
"ICBC" means The Industrial & Commercial Bank of China, acting through
its head-office at ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇'▇
▇▇▇▇▇▇▇▇ of China;
7
"ICBC/EXIM Guarantee" means that certain contract of guaranty dated as of
the date thereof between ICBC and EXIM relating to EXIM Credit Number
AP070425 and the Aircraft, as the same may be modified, amended or
supplemented from time to time in accordance with the provisions thereof;
"Insurance Proceeds" means any and all amounts payable in consequence of
a claim under any of the Insurances in respect of a Total Loss;
"Insurances" means, in respect of an Aircraft, any and all contracts or
policies of insurance required to be maintained and effected in respect
of such Aircraft under the relevant Lease;
"Interest Period" means:
(i) with respect to each Disbursement while bearing interest at the
Floating Rate, the period commencing on and including the date on
which the proceeds of such Disbursement are made available to the
Borrower to, but excluding the day which is one (1) day, one (1)
week, or one (1), three (3) or six (6) months from such date, in
any case, as determined in accordance with Clause 2.04; and
thereafter each successive period commencing on and including the
last day of the next preceding Interest Period to, but excluding,
the day which is one (1) day, one (1) week, or one (1), three (3)
or six (6) months from such date, in any case, as determined in
accordance with Clause 2.04 provided that, subject to the proviso
hereto, any Interest Period in respect of any such Disbursement
beginning after the Determination Date shall have a duration of
six (6) months; and
(ii) with respect to each Disbursement while bearing interest at the
Fixed Rate, the period commencing on, and including, the
Conversion Date to, but excluding, the first Fixed Rate Payment
Date thereafter; and thereafter each successive period commencing
on and including the last day of the next preceding Interest
Period to, but excluding, the next succeeding Fixed Rate Payment
Date;
provided however that notwithstanding anything in this Agreement to the
contrary, (x) an Interest Period that would otherwise extend beyond a
Payment Date shall end on such Payment Date, (y) the final Interest
Period shall end on the Final Maturity Date and (z) if the last day of an
Interest Period would otherwise be a day that is not a Banking Day, such
last day shall be the next succeeding Banking Day unless, in the case of
an Interest Period of 1, 3 or 6 months when a Disbursement bears interest
at the Floating Rate, such next succeeding Banking Day falls in the next
calendar month in which case the last day of the relevant Interest Period
shall be the next preceding Banking Day;
8
"Lease" means, with respect to each Aircraft, the aircraft lease
agreement in such form as may reasonably be acceptable to EXIM and the
Facility Agent entered into or, as the context may require, to be entered
into between (1) the Borrower and (2) the Lessee under which the
Borrower, as lessor, agrees to lease such Aircraft to the Lessee, as
lessee, and "Leases" shall mean, collectively, all of such Leases;
"Lending Office" means, in relation to a Lender, the office identified
below its name in Schedule 1 or such other office which becomes its
lending office in accordance with the terms hereof;
"Lessee" means China Yunnan Airlines, a legal entity organized under
applicable laws and decrees of the People's Republic of China having its
principal office at ▇▇ ▇▇▇ Ba Airport, Kunming, Yunnan, People's Republic
of China;
"Lessor Parent" means Trident Trust Company (Cayman) Limited, a company
incorporated and organized under applicable law of Cayman Islands whose
registered office is at P.O. Box 847, ▇▇▇▇▇▇ Town, Grand Cayman, Cayman
Islands, British West Indies;
"LIBOR" means, with respect to any Interest Period for which the same is
to be calculated, the rate per annum (expressed as a decimal) for
deposits in U.S. Dollars for a period equal or comparable to such
Interest Period which appears on the Telerate Page 3750 (or such other
page as may replace such Telerate Page 3750 for the purpose of displaying
London interbank offered rates for U.S. Dollar deposits), at
approximately 11:00 A.M. London time on the day which is two (2) Banking
Days (or such shorter period as may be agreed by the Facility Agent and
the Borrower) prior to the first day of such Interest Period provided,
that if for any such Interest Period or comparable period no such rate
appears on the Telerate Page 3750 (or replacement page), LIBOR in respect
of such Interest Period shall be the rate per annum quoted by the
Reference Bank at approximately 11:00 A.M. London time (or as soon
thereafter as practicable) on the day which is two (2) Banking Days (or
such shorter period as may be agreed by the Facility Agent and the
Borrower) prior to the first day of such Interest Period for the offering
by the Reference Bank to leading banks in the London interbank market of
U.S. Dollar deposits having a term comparable to such Interest Period and
in an amount comparable to the amount for which LIBOR is to be
calculated;
"Liquidity Agreement" means, in connection with the Securitization, if
any, the irrevocable revolving liquidity agreement entered into by the
Liquidity Provider, as such agreement may be amended, modified or
supplemented from time to time hereafter with the consent of EXIM and in
accordance with the terms thereof;
"Liquidity Provider" means, ABN AMRO BANK N.V., Seattle Branch, or any
successor thereunder under the Liquidity Agreement;
"Loan" or "Loans" has the meaning ascribed to such term in Clause 2.01
hereof;
9
"Losses" means any losses, costs, charges, expenses, interest, fees
(including, without limitation, reasonable legal fees), payments,
demands, liabilities, claims, actions, proceedings, penalties, damages,
adverse judgements, orders or other sanctions, but excludes Taxes;
"Majority Lenders" means, on any day, (a) if the Loan is not outstanding
on such day, a group of Lenders whose Commitments on such day amount or
aggregate to more than sixty seven per cent (67%) of the Aggregate
Commitment on such day; and (b) if the Loan is outstanding on such day, a
group of Lenders to which an aggregate of more than sixty seven per cent
(67%) of the Loan then outstanding is (or, immediately prior to its
repayment, was then) owed;
"Make-Whole Amount" means, with respect to a Fixed Rate Note the
principal of which is being prepaid pursuant to Clause 6.04 hereof, an
amount (if greater than zero) equal to (a) the discounted cash flow of
the remaining installments of principal and interest payable in respect
of such Fixed Rate Note as determined on the date of the payment required
or permitted to be made by the Borrower in respect thereof minus (b) the
outstanding principal of such Fixed Rate Note on the date of such payment
in each case without giving effect to the prepayment. In determining the
discounted cash flow, the discount rate to be applied shall be the U.S.
Treasury Rate for maturities similar to the weighted average term on the
installments of such Fixed Rate Note to be paid. For purposes of this
definition, "U.S. Treasury Rate" shall mean that rate which, for the day
which is five (5) Banking Days prior to the date of prepayment of a Fixed
Rate Note, is specified in the Federal Reserve Statistical Release, H.15
(519) Selected Interest Rates for the category entitled "Treasury Bills,
Secondary Market" or, if not included in such category, the category
entitled "Treasury Constant Maturities" having maturities as close as
practicable to the then weighted average life to final maturity of the
Fixed Rate Note or Fixed Rate Notes the principal of which is being
prepaid;
"Mortgage" means, in respect of each Aircraft, the deed of mortgage
relating to, inter alia, the mortgage of such Aircraft entered into, or
as the context may require, to be entered into between the Borrower and
the Security Trustee;
"New York Banking Day" means any day (other than a Saturday or Sunday) on
which commercial banks in New York, New York are open for the conduct of
a commercial lending business;
"Note" means, on any day, any Fixed Rate Note or Floating Rate Note
outstanding on such day and "Notes" means collectively all of the Fixed
Rate Notes or Floating Rate Notes, as applicable, outstanding on such
day;
"Notice of Conversion" shall have the meaning set forth in Clause 4.01;
"Notice of Drawing" means a notice in the form, or substantially in the
form, set out in Appendix 1;
10
"Operative Documents" means this Agreement, each Note, each Lease, the
Reimbursement and Indemnity Agreement and the Security Documents;
"Payment Date" means prior to or on the Conversion Date, each Floating
Rate Payment Date and, thereafter, each Fixed Rate Payment Date;
"Pro-Rata Share" has the meaning ascribed to such term in Clause 2.01
hereof;
"Proceeds Agreement" means the proceeds agreement entered into or, as the
context may require, to be entered into between the Borrower, the Lessee,
EXIM, ECGD, the Facility Agent, the Lenders, the ECGD Facility Agent, the
ECGD Lenders the Commercial Facility Agent, the Commercial Lenders and
the Security Trustee;
"Purchase Agreement Assignment" means with respect to each Aircraft, the
purchase agreement assignment by and among China Aviation Supplies
Corporation, as assignor, the Borrower, as assignee, and the Lessee, as
lessee, pursuant to which the Borrower has acquired certain rights under
the Aircraft Purchase Agreement in respect of such Aircraft;
"Reference Bank" means ABN AMRO BANK, N.V., Chicago branch, or such other
financial institution, acceptable to EXIM, as may be selected from time
to time by the Facility Agent;
"Reimbursement and Indemnity Agreement" means the Reimbursement and
Indemnity Agreement dated as of the date of the initial Disbursement
hereunder among EXIM, the Borrower and the Lessee;
"Relevant Fraction" means, as of any date of determination and in respect
of an Aircraft, that portion of the principal amount of the Loan
outstanding on such date determined by the Facility Agent, the Borrower
and EXIM to be attributable to the EXIM-approved cost of the Aircraft
included in the outstanding principal amount of the Disbursement made in
respect of such Aircraft and, without duplication, a pro-rata portion of
the aggregate Exposure Fee and aggregate Approved Services included in
the outstanding principal amount of all Disbursements made hereunder on
or prior to such date;
"Rolls Royce Warranties Agreement" means the agreement to be entered into
in respect of the Aircraft by the Lessee, China Aviation Supplies
Corporation, the Borrower, the Security Trustee and Rolls Royce
Commercial Aero Engines Limited, as agent for and on behalf of the Engine
Manufacturer;
"Secured Property" means the property and/or assets subject to the
Security Interests created pursuant to the Security Documents;
11
"Securitization" means a securitization of the Fixed Rate Notes pursuant
to which the same may be assigned to the Trustee;
"Securitization Documents" means any trust indenture, certificate,
underwriting agreement or other instrument, document or agreement
relating to the Securitization including, without limitation, the
Underwriting Agreement, the Liquidity Agreement and the Trust Agreement.
"Security Assignment" means the deed of security assignment relating to,
inter alia, the assignment of the Lease, ICBC Guarantees and Insurances
entered into among the Borrower, the Lessee and the Security Trustee;
"Security Documents" means each Mortgage, the Share Mortgage, each
Security Assignment, the Proceeds Agreement, the Boeing Warranties
Agreement, the Rolls-Royce Warranties Agreement and the Co-ordination
Agreement;
"Security Interest" means (a) any lien, mortgage, charge, deed of trust,
encumbrance, pledge, hypothecation, attachment, license, assignment by
way of security or security interest, in each case of any kind and
howsoever arising (including, without limitation, pursuant to applicable
law), (b) any other preferential arrangement resulting in a secured
transaction or having the same economic or legal effect as any of the
foregoing, (c) any agreement to give any of the foregoing, or (d) any
arrangement to prefer one creditor over another creditor;
"Taxes" means any and all present and future gross or net income,
receipts, franchise, business, transfer, capital, property, excise or
stamp taxes, levies, withholdings, assessments, imposts, duties, fees or
charges of whatever nature, including, without limitation, any
documentation, registration, landing, sales, use, value added or similar
tax imposed by any government agency or taxing authority of any
jurisdiction or any political subdivision thereof together with any
penalties, fines or interest thereon, and "Taxation" shall be construed
accordingly;
"Transfer Agreement" means the transfer agreement executed or to be
executed by the Lenders, the Borrower and the Trustee substantially in
the form of Appendix 4 hereto, in connection with a transfer to the
Trustee of the Loan in connection with a Securitization;
"Trust" means the trust to be established in connection with the
Securitization by the Trustee pursuant to the Trust Agreement;
"Trust Agreement" means the Declaration of Trust to be entered by the
Trustee establishing the Trust;
"Trustee" means LaSalle National Bank or such other financial institution
reasonably acceptable to the Borrower and EXIM which acts as the trustee
of the
12
Trust under the Trust Agreement and any successor thereto in accordance
with the terms of the Trust Agreement;
"Underwriter" means ABN AMRO BANK N.V. or any of its affiliates;
"Underwriting Agreement" means the underwriting agreement to be entered
into in respect of the Trust;
"U.S. Trade" means U.S. Trade Funding Corporation, a Delaware
corporation.
1.02 Construction. In this Agreement, unless otherwise defined herein or
------------
unless the context requires otherwise, terms and expressions defined in a
Lease have the same meanings when used in this Agreement, a reference to
the singular shall include the plural and vice versa and any reference
to:
an "authorization" includes any approvals, consents, licenses, permits,
franchises, permissions, registrations, resolutions, directions,
declarations and exemptions;
"indebtedness" includes any obligation of any person for the payment or
repayment of money, whether present or future, actual or contingent
including, but not limited to, any such obligation:
(a) under or in respect of any acceptance, ▇▇▇▇, bond, debenture, note
or similar instrument;
(b) under or in respect of any guarantee, indemnity, counter-security
or other assurance against financial loss;
(c) in respect of the purchase, hire or lease (financial or otherwise)
of any asset or service; or
(d) in respect of any indebtedness of any other person whether or not
secured by or benefiting from a Security Interest on any property
or asset of such person;
"law" and/or "regulation" includes any constitutional provisions,
treaties, conventions, statutes, acts, laws, decrees, ordinances,
subsidiary and subordinate legislation, orders, rules and regulations
having the force of law and rules of civil and common law and equity;
an "order" includes any judgment, injunction, decree, determination or
award of any court, arbitration or administrative tribunal;
a "person" includes any individual, company, body corporate or
unincorporate or other juridical person, partnership, association, firm,
joint venture or trust or any
13
federation, state or subdivision thereof or any government or agency of
any thereof;
"applicable law" includes, without limitation (i) applicable laws,
statutes, decrees, acts, codes, legislation, treaties and similar
instruments and, in respect of any of the foregoing, any instrument
passed in substitution therefor or for the purposes of consolidation
thereof with any other instrument or instruments, (ii) final judgments,
orders, determinations or awards of any court from which there is no
right of appeal or if there is a right of appeal such appeal is not
prosecuted within the allowable time, and (iii) rules, regulations,
permits, authorizations, approvals, certificates and consents of,
registrations and filings with and exemptions by any person;
"government agency" includes any federal government or government of a
state or subdivision thereof and any ministry, department, authority,
official, commission, bureau or other agency of any such government or
subdivision; and
"hereof", "herein" and "hereunder" and other words of similar import mean
this Agreement as a whole and not any particular part hereof.
1.03 Successors, Transferees and Assigns. The expressions "Borrower",
-----------------------------------
"Lenders", "Facility Agent", "Lessee", "Security Trustee", "Lessor
Parent", "Trustee", "ECGD Lenders", "ECGD Facility Agent", "Commercial
Lenders", "ECGD", "ICBC", "Commercial Facility Agent" and "EXIM" shall
where the context permits include their respective successors,
transferees and permitted assigns and any persons deriving title under
them. All references herein to "EXIM" shall be construed, where the
context permits, so as to include a reference to EXIM as an assignee or
transferee of the Lenders as a result of any assignment or transfer by
the Lenders to EXIM pursuant to the EXIM Guarantee.
1.04 Miscellaneous. In this Agreement, unless the context requires otherwise,
-------------
references to statutory provisions shall be construed as references to
those provisions as replaced, amended, modified or re-enacted from time
to time; words importing the singular include the plural and vice versa
and words importing a gender include every gender; references to this
Agreement or any Operative Document shall be construed as references to
such document as the same may be amended, modified, varied, novated or
supplemented from time to time; unless otherwise stated, references to
Clauses, Schedules and Appendices are to clauses of and schedules and
appendices to this Agreement. Unless the context otherwise requires all
references to this Agreement and/or the "Loan Agreement" in any other
Operative Document shall be construed so as to include the Notes. Clause
headings are inserted for reference only and shall be ignored in
construing this Agreement.
14
2. THE FACILITY
------------
2.01 Disbursements. Subject to the terms and conditions set forth in this
-------------
Guaranteed Loan Agreement, each Lender hereby severally and not jointly
agrees, from time to time during the Availability Period, to make one or
more disbursements (all such disbursements made on a single Borrowing
Date in respect of an Aircraft being a "Disbursement" and, as of any
date, the then aggregate outstanding principal amount of all
Disbursements made on or prior to such date, as evidenced, prior to the
Conversion Date, by the Floating Rate Notes, and thereafter, by the Fixed
Rate Notes, being herein referred to as the "Loan"), in Dollars, to the
Borrower on each Borrowing Date in an amount in respect of each
Disbursement which equals the same proportion of such Disbursement as its
Commitment on such Borrowing Date bears to the Aggregate Commitments on
such Borrowing Date (such Lender's "Pro-Rata Share") provided, however,
-------- -------
that (i) a Lender's Pro-Rata Share of the principal amount of a
Disbursement shall not exceed the Available Commitment of the Lender,
(ii) the aggregate principal amount of a Disbursement shall not exceed
the EXIM Eligible Amount in respect of the relevant Financed Aircraft
except that the aggregate principal amount of a Disbursement may also
include up to 85% of the aggregate cost of Approved Services payable by
the Borrower in respect of another Aircraft and not included in another
Disbursement or otherwise previously financed hereunder and (iii) after
giving effect to such Disbursement, the aggregate principal amount of the
Loan shall not exceed the Aggregate Commitment.
2.02 Several Commitments. Each Disbursement under this Guaranteed Loan
-------------------
Agreement shall be made by the Lenders simultaneously and proportionately
to their respective Pro-Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Disbursement hereunder and that the Commitment of
any Lender shall not be increased or decreased without the prior written
consent of such Lender as a result of the failure by any other Lender to
perform its obligation to make a Loan. The failure of any Lender to make
available to the Facility Agent its Pro-Rata Share of any Disbursement
shall not relieve any other Lender of its obligation hereunder to make
available to the Facility Agent such other Lender's Pro-Rata Share of
such Disbursement on the date such funds are to be made available
pursuant to the terms of this Guaranteed Loan Agreement.
2.03 Purpose. The proceeds of the Facility shall be used towards financing
-------
the acquisition of, or refinancing indebtedness, if any, incurred to
acquire, the Aircraft and the payment of certain fees and expenses
relating thereto or in such other manner as the Facility Agent and EXIM
may approve, but failure of the Borrower to comply with this Clause 2.03
shall not prejudice the rights of the Facility Agent and/or Lenders or
EXIM under this Agreement or any other Operative Documents. None of the
Facility Agent, EXIM or any Lender shall have any responsibility to see
to the application of the proceeds by the Borrower.
15
2.04 Availability. Subject to the conditions set forth in Clauses 3.01 and
------------
3.02 hereof, the Borrower may request one or more Disbursements on any
Banking Day during the Availability Period by delivering to the Facility
Agent and EXIM a Notice of Drawing no later than 12:00 noon (New York
City time) at least three (3) Banking Days (or such shorter period to
which the Facility Agent and EXIM may agree) in advance of the proposed
Borrowing Date. The Notice of Drawing shall specify (a) the Borrowing
Date (which shall be a Banking Day) in respect of the Disbursement or
Disbursements, as relevant, (b) subject to Clause 2.01, the amount of the
proposed Disbursement or Disbursements, as relevant and (c) if such
Disbursement initially will bear interest at the Floating Rate, the
duration of the initial Interest Period in respect of such Disbursement
which duration shall be a period of one (1) day, one (1) week or one (1),
three (3) or six (6) months in any case as may be agreed by the Facility
Agent and the Borrower, provided, however, if the Facility Agent and the
Borrower cannot agree on the duration of an Interest Period, the duration
shall be one (1) month. At least three (3) Banking Days (or such shorter
period to which the Facility Agent may agree) prior to the end of each
Interest Period, the Borrower shall notify the Lender of the duration
which it has selected for the next succeeding Interest Period. Subject
to the provisions of the definition of "Interest Period," such duration
shall be one (1) day, one (1) week or one (1), three (3) or six (6)
months as may be agreed between the Facility Agent and the Borrower,
provided, however, if the Facility Agent and the Borrower cannot agree on
the duration of an Interest Period, the duration shall be one (1) month.
In the event that the Borrower fails to select the duration of an
Interest Period in accordance with the provisions of this Clause 2.03,
the Borrower shall be deemed to have selected an Interest Period with a
duration of one (1) month unless the existing Interest Period has a
duration of one (1) week or one (1) day in which case the Borrower shall
be deemed to have selected an Interest Period with a duration of one (1)
day.
2.05 Notification. The Facility Agent shall promptly notify the Lenders of
------------
the Notice of Drawing whereupon each Lender shall, subject to the
provisions of this Agreement, make available to the Borrower on the
relevant Borrowing Date its Pro-Rata Share of the Disbursement
ascertained in accordance with Clause 2.01, in the manner specified in
Clause 10.01.
2.06 Notice of Drawing Irrevocable. The Notice of Drawing once given shall be
-----------------------------
irrevocable and the Borrower shall be bound to borrow the Disbursement in
accordance therewith, except as otherwise provided in this Agreement.
Subject to any agreement to the contrary, if for any reason (other than a
default by the Facility Agent or any Lender) a Disbursement is not made
on the Borrowing Date specified in the relevant Notice of Drawing, the
Borrower shall on demand pay to the Facility Agent for the account of
each Lender such amount (if any) as such Lender may certify to be
necessary to compensate it for any Losses (but not to include loss of the
Applicable Margin) in liquidating, placing or redeploying funds arranged
for the purpose of the Disbursement or otherwise as a consequence of the
Disbursement not having been made on the Borrowing Date specified in the
16
relevant Notice of Drawing provided however that if (A) the Borrower has
notified the Facility Agent that a Disbursement cannot be made on the
Borrowing Date specified in the relevant Notice of Drawing because the
conditions precedent in Clause 3 cannot be satisfied as a result of the
failure of the Manufacturer to obtain an FAA Certificate of Airworthiness
for the relevant Aircraft or due to such Aircraft failing to be
technically acceptable to the Borrower (in the exercise of its reasonable
discretion); and (B) the Facility Agent and the Borrower reasonably
expect that such certificate will be obtained or that such Aircraft will
be technically acceptable to the Borrower within seven (7) Banking Days,
then, notwithstanding any instructions to the contrary in the Notice of
Borrowing, the proceeds of such Disbursement shall be disbursed to an
account with the Facility Agent in the name of the Borrower. If such
conditions precedent are subsequently satisfied and the EXIM Guarantee
obtained within seven (7) Banking Days of the originally scheduled
Borrowing Date, on such date, the funds held in the Borrower's account
shall be disbursed in accordance with the instructions of the Borrower
and the Disbursement shall be deemed to have been made on the originally
scheduled Borrowing Date. If such conditions precedent cannot be
satisfied or the EXIM Guarantee cannot be obtained within such seven (7)
Banking Days period, then on the next Banking Day the Facility Agent
shall apply all funds in the Borrower's account to prepay the relevant
Disbursement, together with interest accrued thereon, and any losses,
certified by each Lender, incurred as a result of such prepayment. To
the extent such proceeds are not sufficient to pay such amounts in full,
the Borrower shall, on demand, pay the Facility Agent for the account of
the Lenders the amount of such deficiency. In either case, the Borrower
will be credited, at the time of disbursement or application with
interest on the amount held in the Borrower's account, at the available
overnight interest rate, for the period from and including the date of
deposit to but excluding the date of disbursement or application.
2.07 Cancellation. Any part of any Commitment which is not drawn at the
------------
expiry of the Availability Period shall automatically be cancelled.
2.08 Notes.
-----
(A) Simultaneously upon each Disbursement being made hereunder, the
Borrower shall execute and deliver a Floating Rate Note (if such
Disbursement occurs prior to the Conversion Date) or a Fixed Rate
Note (if such Disbursement occurs on the Conversion Date) to the
Facility Agent evidencing the principal amount of such
Disbursement, in the form or substantially in the form set out in
Part 1 of Appendix 3 or Part 2 of Appendix 3, respectively, and
indicating the Aircraft to which such Note relates, provided that
the schedule to such Note shall be in a form agreed by the
Borrower, the Lessee, the Facility Agent and EXIM.
(B) Each repayment and permitted prepayment by the Borrower made on
account of principal of any Note shall be recorded (i) prior to
the
17
Conversion Date, by the Facility Agent and the relevant Lender on
their respective books and by the Facility Agent on the schedule
attached to such Note, and (ii) on and after the Conversion Date,
by the Trustee on its books and on the schedule attached to such
Note. Failure by the Facility Agent or the Trustee, as the case
may be, to make correctly such notation shall not affect the
obligations of the Borrower hereunder or under the Notes. Upon
payment in full by the Borrower of all amounts owing under, or in
respect of, any Note, such Note will be cancelled by the Facility
Agent and returned to the Borrower through EXIM.
(C) If any Note is mutilated, lost, stolen or destroyed, the Borrower
shall issue a new Note of the same type, date, maturity and
denomination as the Note so mutilated, lost, stolen or destroyed,
provided, in the case of a mutilated Note such mutilated Note
shall be delivered to the Borrower through EXIM and in the case of
a lost, stolen or destroyed Note, there shall first be furnished
to the Borrower and EXIM an instrument of indemnity and evidence
of such loss, theft or destruction in each case reasonably
satisfactory to the Borrower and EXIM.
3. CONDITIONS PRECEDENT
--------------------
3.01 Conditions to Initial Disbursement. Except as otherwise provided herein,
----------------------------------
the obligation of each Lender to advance its Pro-Rata Share of each
Disbursement requested by the Borrower on the initial Borrowing Date to
occur hereunder shall be subject to the receipt, on or prior to such
Borrowing Date, by the Facility Agent and EXIM of the documents set out
in Part I of Appendix 2 hereto.
3.02 Conditions to all Disbursements. Except as otherwise provided herein,
-------------------------------
the obligation of each Lender to advance its Pro-Rata Share of any
Disbursement shall be subject to the satisfaction, or waiver by EXIM and
the Facility Agent, of each of the following conditions precedent:
(i) the Facility Agent and EXIM shall have received a duly executed
Notice of Drawing in accordance with the provisions of Section
2.04;
(ii) each of the Facility Agent and EXIM shall have satisfied itself
that all conditions precedent to the leasing of the Aircraft
related to such Disbursement under the terms of the Lease
applicable thereto have been, or will on the relevant Borrowing
Date be, fulfilled, satisfied or waived to its satisfaction and
each of the Facility Agent and EXIM shall have received such
original or certified copies of each of the documents delivered to
the Borrower by the Lessee or to the Lessee by the Borrower
pursuant to Clause 4 of such Lease;
18
(iii) the Borrower shall deliver to the Facility Agent and EXIM the
documents specified in Part II of Appendix 2, on or before the
relevant Borrowing Date;
(iv) all of the representations and warranties of the Borrower
contained in or repeated pursuant to Clause 11 (other than
representations and warranties, if any, which expressly speak only
as of a different day) shall be true and correct in all material
respects on and as of the relevant Borrowing Date as though made
on and as of such date both before and after taking into account
the Disbursement to be made;
(v) no Default or Event of Default shall have occurred and be
continuing or would result from the making of the Disbursement;
and
(vi) all of the Operative Documents in respect of the Aircraft related
to such Disbursement shall be in full force and effect on the
relevant Borrowing Date.
The submission of a Notice of Drawing shall be deemed to be a
representation by the Borrower that all of the conditions set forth in
sub-clauses (iv), (v) and (vi) above have been satisfied in respect of
the related Disbursement.
3.03 Facility Agent's and EXIM's Approval. All the documents and evidence
------------------------------------
referred to in Clauses 3.01 and 3.02 shall be in form and substance
satisfactory to the Facility Agent and EXIM. Copies required to be
certified shall be certified in a manner satisfactory to the Facility
Agent and EXIM by a director or responsible officer of the Borrower, the
Lessee or other relevant parties concerned.
4. CONVERSION TO FIXED RATE
------------------------
4.01 Provided that no Default or Event of Default has occurred and is
continuing and subject to the conditions precedent set forth in Section
4(b) of the EXIM Guarantee and in Part III of Appendix 2 hereto having
been fulfilled or waived on or prior to the Conversion Date, (i) upon
receiving instructions from the Underwriter, the Borrower may, and if the
Borrower shall have approved the Fixed Rate in accordance with the
pricing procedure set forth in Appendix 6 or (ii) if the Conversion shall
not have then occurred, on March 5, 1997 (or such later date as the
Borrower and the Facility Agent may agree), the Borrower shall by notice
delivered to EXIM and the Facility Agent at least five (5) New York
Banking Days (or such shorter period as may be agreed by EXIM, the Lender
and the Borrower) prior to the Conversion Date, specify that on the
Conversion Date interest on the Loan shall be converted, in whole and not
in part, from the Floating Rate to the Fixed Rate, provided, however, if
the Conversion Date is not the last day of an Interest Period or if the
Conversion does not occur on such date as a result of the relevant
conditions herein not being satisfied or waived (except for those
conditions
19
set forth in Section 4(b) of the EXIM Guarantee which have not been
fulfilled by the Lenders), the Borrower shall pay to the Lenders all
amounts required to be paid in respect of the Loan pursuant to Clause
6.07(b) hereof. Notwithstanding the foregoing and anything herein or in
any other Operative Document to the contrary, the Fixed Rate shall under
no circumstances become applicable to the Loan (nor shall the Conversion
occur) unless the conditions to the Conversion set forth herein have been
satisfied (or waived in writing by EXIM, in the case of any condition set
forth in Section 4(b) of the EXIM Guarantee, and by EXIM and the Facility
Agent, in the case of Part III of Appendix 2). Absent the satisfaction
(or waiver in accordance with the terms hereof) of such conditions, the
Loan shall continue to bear interest at the Applicable Rate referred to
in clause (i) of the definition thereof. Subject as herein provided, any
such notice shall be substantially in the form of Appendix 5 hereto
(hereinafter a "Notice of Conversion"), shall be irrevocable and binding
--------------------
on each of the parties hereto, and shall specify the Fixed Rate. A
Notice of Conversion shall be deemed effective upon its signature by the
Borrower and the Underwriter and its receipt by EXIM and the Facility
Agent. Upon receipt of a Notice of Conversion, the Facility Agent
promptly shall notify the Lenders of the Conversion Date.
4.02 If a Notice of Conversion has been delivered by the Borrower as
contemplated by Clause 4.01 then:
(i) each of the Lenders shall and hereby agrees and undertakes that
not later than 9:00 a.m. New York time on the Conversion Date it
shall deliver to the Trustee a duly executed Transfer Agreement
whereby, upon (a) the due execution thereof by the Trustee, the
Facility Agent and the Borrower, and (b) satisfaction (or waiver)
of all conditions precedent specified therein, such Lender shall,
with effect from the Conversion Date, assign and transfer to the
Trustee all of its rights, obligations and benefits hereunder and
to and under the Floating Rate Notes with respect to its ratable
share of the Disbursements and thereupon be released from all of
its obligations hereunder and thereunder;
(ii) the Borrower shall and hereby agrees and undertakes that it shall
(a) immediately upon receipt of the same, execute the Transfer
Agreement, and (b) not later than 10:00 a.m. New York time on the
Conversion Date deliver to the Trustee in Washington, D.C. (or
such other location as may be agreed between the Borrower, EXIM
and the Trustee) a Fixed Rate Note for each Aircraft in a
principal amount equal to the Relevant Fraction for such Aircraft
on the date of issuance of such Note, provided, however, that the
aggregate principal amount of all Fixed Rate Notes so delivered on
the Conversion Date shall equal the aggregate principal amount of
the Loan outstanding on the Conversion Date (after giving effect
to any principal payments in respect of the Loan made on the
Conversion Date in accordance with the provisions hereof). Each
such Note (i) subject to the terms hereof, with effect from the
20
Conversion Date shall bear interest at the Fixed Rate, (ii) shall
be made payable to the order of the Trustee at the account and
address specified by the Trustee, (iii) shall be dated the date of
its issuance hereunder, (iv) shall be repayable as to principal in
accordance with the provisions of Clause 6.01, and (v) shall
indicate the Aircraft to which the Note relates;
(iii) EXIM, upon (a) return of the Floating Rate Notes with the EXIM
guarantee legend thereon or attached thereto, (b) receipt of the
Transfer Agreement duly executed by the Trustee, the Lenders, the
Facility Agent and the Borrower evidencing the Trustee's
acceptance of the duties and obligations of the Facility Agent and
the Lenders under the EXIM Guarantee, and (c) satisfaction of all
relevant conditions precedent to the Conversion as specified in
the EXIM Guarantee and on Part III of Appendix 2, shall and hereby
agrees and undertakes that it shall on the Conversion Date endorse
each Fixed Rate Note with EXIM's guarantee legend and return each
Floating Rate Note to the Borrower for cancellation (after
cancelling EXIM's guarantee legend thereon); and
(iv) the Facility Agent shall and hereby agrees and undertakes that it
shall (a) immediately upon receipt of the Transfer Agreement
executed by each of the Lenders and the Borrower, execute the
Transfer Agreement and deliver the Transfer Agreement to the
Trustee for execution by the Trustee and (b) return to EXIM the
Floating Rate Notes with the EXIM guarantee legend thereon or
attached thereto.
4.03 Notwithstanding anything herein to the contrary, it is hereby agreed
that, if on the Conversion Date the conditions set forth in Section 4 of
the Transfer Agreement have been duly satisfied and provided EXIM shall
have endorsed its guarantee legend on the Fixed Rate Notes, then, on and
with effect from the Conversion Date (i) the Trustee shall succeed to all
the rights, benefits and obligations expressed to be assigned and
transferred to it pursuant to such Transfer Agreement, (ii) neither the
Facility Agent nor the Lenders shall have any further rights or benefits
hereunder with respect to the Loan or under such Notes and shall be
released from all of their respective obligations hereunder and (iii) all
references herein to the Facility Agent shall be deemed to be references
to the Trustee.
4.04 Subject to Clauses 4.01 and 4.02 hereof, if a Notice of Conversion is
issued but for any reason the Trustee fails by 3:00 p.m. New York time
(or, such later time on which the Trustee and the Facility Agent may
mutually agree) on the Conversion Date to pay the full amount payable by
it to the Lenders pursuant to the Transfer Agreement, the Facility Agent
shall advise the Borrower and EXIM and such Conversion shall not take
effect on such Conversion Date but shall be postponed until the next
Banking Day (such date or any subsequent day to which such Conversion is
postponed pursuant to this Clause 4.04, a "Postponed Conversion Date")
-------------------------
and the provisions of Clause 4.01 and 4.02 shall apply thereto as though
the Postponed Conversion Date were the Conversion Date. If the
21
Trustee fails to pay the full amount payable by it to the Lenders as
aforesaid by 3:00 p.m. New York time (or such later time as the Trustee
and the Facility Agent may mutually agree) on any Postponed Conversion
Date, the Facility Agent shall advise the Borrower and EXIM thereof and
such Conversion shall be further postponed until the next Banking Day
(provided that such Conversion may not be postponed more than five times)
and the provisions of Clauses 4.01 and 4.02 shall apply thereto as though
the Postponed Conversion Date were the Conversion Date. If after five
Postponed Dates (or such other number of Postponed Conversion Dates as
the Borrower, EXIM and the Facility Agent may agree) such Conversion has
not occurred, such Conversion shall not take effect and the provisions of
Clause 4.06 shall apply as from the last Postponed Conversion Date.
4.05 With respect to the Conversion Date and any Postponed Conversion Date, if
the provisions of Clause 4.04 apply, then each period between such
Conversion Date and each day to which such Conversion is postponed shall
be deemed to be an Interest Period and the rate of interest applicable to
the Loan during such Interest Period shall be the sum of the Federal
Funds Rate applicable to such Interest Period and the Applicable Margin.
4.06 With respect to the Conversion, if after five Postponed Conversion Dates
(or such other number of Postponed Conversion Dates as the Borrower, EXIM
and the Facility Agent may agree), the Conversion shall not have
occurred, then:
(i) the duration of the Interest Period starting on the last such
Postponed Conversion Date shall end on the next Floating Rate
Payment Date;
(ii) the Floating Rate during such Interest Period shall be the rate
per annum which is the sum of the Applicable Margin and the rate
per annum determined by the Facility Agent to be the rate (rounded
upwards, if not already such a multiple, to the nearest whole
multiple of one-sixteenth of one percent (1/16%)) on the last day
of such Interest Period to be equal to that which expresses as a
percentage rate per annum the cost to the Lenders of funding from
whatever sources each may select during such Interest Period; and
(iii) the Interest Periods with respect to the Loan commencing on and
after such Floating Rate Payment Date and the rate of interest
applicable thereto shall be established in accordance with Clause
5.02 hereof.
4.07 Upon any Conversion taking effect, interest shall accrue, and be payable,
on the Loan at the Fixed Rate in accordance with Clause 5.02 hereof.
4.08 Each of the Facility Agent, the Lenders, EXIM and the Security Trustee
hereby agree to execute such documents and to take such actions as the
Borrower or the Underwriter may reasonably request in order to effect the
Conversion. Without limiting the foregoing or any other provision of
this Agreement, the Facility Agent
22
and each Lender undertakes and agrees with the Borrower that on or prior
to the Conversion Date (i) the Facility Agent and the Lenders will not
agree to any amendment to the EXIM Guarantee without first obtaining the
consent of the Borrower, which consent shall not be unreasonably withheld
or delayed, (ii) the Facility Agent and the Lenders will perform their
respective obligations under the EXIM Guarantee, and (iii) the Facility
Agent will deliver, or cause to be delivered, to EXIM, in connection with
the Conversion and as a condition thereto, the Floating Rate Notes marked
"cancelled".
5. INTEREST
--------
5.01 Interest. The Borrower shall pay interest in respect of the Loan at the
--------
Applicable Rate for each day from, and including, the Borrowing Date to,
but excluding, the date on which the Loan is repaid in full in accordance
with the provisions of this Clause.
5.02 Rate and Calculation. When evidenced by a Floating Rate Note, the Loan
--------------------
shall bear interest at the then applicable Floating Rate. When evidenced
by a Fixed Rate Note, the Loan shall bear interest at the Fixed Rate.
Interest shall accrue from day to day during each Interest Period,
including the first day of such Interest Period but excluding the last,
and (i) on or prior to the Conversion or if the Determination Date has
occurred, shall be paid, in arrears, on the last day of each Interest
Period (or, in the case of an Interest Period with a duration of less
than one (1) month, such later date as the Facility Agent may agree) and
(ii) after the Conversion, shall be paid in arrears on each Payment Date.
The Floating Rate shall be calculated on the basis of a year of 360 days
and actual days elapsed. The Fixed Rate shall be calculated on the basis
of a 360-day year consisting of twelve (12) months of thirty (30) days
each. Default interest shall accrue from day to day and shall be
calculated on the basis of a year of 360 days and the actual number of
days elapsed and shall otherwise be payable in accordance with Clause 14.
6. REPAYMENT, PREPAYMENT AND CANCELLATION
--------------------------------------
6.01 Repayment. Subject to the provisions of this Agreement, the Borrower
---------
shall repay the principal amount of each Note in installments on each
Payment Date in the amounts set out therein provided, however, the
principal payable on the Final Maturity Date for the Loan shall in all
cases be in an amount equal to the entire principal amount of the Loan
outstanding on such date, and such principal installment shall be paid
together with all accrued and unpaid interest and all other amounts then
owing hereunder in respect thereof. The parties hereto acknowledge and
agree that, to the extent applicable, payment by the Liquidity Provider
of any amount under the Liquidity Agreement shall in no event constitute
(or be deemed to constitute) payment of any amounts under this Agreement
(or cure (or be
23
deemed to cure) any Event of Default which results from any failure to
pay any amount under this Agreement).
6.02A Prepayments. (a) The Borrower may prepay all or part of the Floating
-----------
Rate Notes relating to any Aircraft on the last day of any applicable
Interest Period, provided that:
(i) the Borrower shall have given to the Lender and EXIM not
less than thirty (30) days' prior written notice specifying
the amount and date of prepayment; and
(ii) the amount of any partial prepayment shall be at least five
million Dollars (US$5,000,000) in aggregate among such
Notes;
(b) the Borrower shall be required to prepay all or part of the
Floating Rate Notes relating to any Aircraft, if on any date
pursuant to clause 4.8 and clause 4.10 of the ECGD Loan Agreement,
the Borrower:
(i) prepays the whole of the ECGD Loan, then on such date the
Borrower shall be obliged to prepay the entire outstanding
principal amount of the Floating Rate Notes applicable to
the Aircraft; or
(ii) prepays part of the ECGD Loan, then on such date the
Borrower shall be obliged to prepay the same proportion of
the outstanding principal amount of the Floating Rate Notes
applicable to the Aircraft as the principal amount of the
relevant ECGD Loan which is prepaid bore to the principal
amount of the relevant ECGD Loan immediately prior to such
prepayment;
(c) if the Borrower gives any notice to prepay the whole or part of
the ECGD Loan pursuant to clause 4.8 or clause 4.10 of the ECGD
Loan Agreement, the Borrower shall simultaneously with the giving
thereof provide a copy to the Lender and EXIM provided that any
failure or delay by the Borrower in providing such copy to the
Lender or EXIM shall not prejudice the Borrower's obligations
under Clause 6.02A(b)(i) and (ii);
(d) all accrued interest on the Floating Rate Note(s) to be prepaid
and all other sums then due and payable under this Agreement and
any other Operative Document relating to the relevant Aircraft
shall have been paid to the Lender and EXIM;
24
(e) promptly following any prepayment contemplated by this Clause
6.02A the Lender and the Lessee shall prepare a substitute payment
schedule (in respect of the payments of principal and interest
payable by the Borrower hereunder after such prepayment has been
made), which substitute payment schedule shall be subject to the
prior approval of EXIM, and substitute Schedule 5 and Part 1 of
Schedule 6 to the relevant Lease (in respect of payments of A Rent
and A Termination Sum to be made by the Lessee under the relevant
Lease after such prepayment has been made) which substitute
schedules shall in the absence of manifest error be substituted
for the then existing payment schedule and Schedule 5 and Part 1
of Schedule 6 to the relevant Lease and be binding on all parties
hereto and on the Lessee. If any payment schedule is substituted
for the then existing payment schedule then such substitute
payment schedule shall become the payment schedule for all
purposes of this Agreement and this Agreement shall be construed
accordingly.
6.02B Limited Prepayment Rights After Conversion Date. The Borrower shall not
-----------------------------------------------
be entitled to prepay all or any part of a Fixed Rate Note except
pursuant to Clause 6.03 or Clause 6.04.
6.03 Casualty. If a Total Loss occurs in relation to any Aircraft (the "Lost
--------
Aircraft"), unless the Borrower shall have previously obtained EXIM's
written consent to the purchase by the Borrower of a Qualified
Replacement Aircraft (as hereinafter defined) and said aircraft shall
become subject to the terms of the related Lease, then on the Total Loss
Prepayment Date (as hereinafter defined) the Borrower shall prepay (i) if
the Total Loss Payment Date occurs prior to the Conversion Date, the then
outstanding principal amount of the Floating Rate Note or Floating Rate
Notes issued in respect of such Lost Aircraft, and (ii) if the Total Loss
Payment Date occurs on or after the Conversion Date, the then outstanding
principal amount of the Fixed Rate Note or Fixed Rate Notes issued in
respect of such Lost Aircraft (the amount to be prepaid in accordance
with (i) or (ii) above, being the "Lost Aircraft Amount"), together, in
either case, with accrued interest thereon to but excluding the date of
payment and all other sums due and payable under this Agreement and the
other Operative Documents relating to such Lost Aircraft Amount or the
Lost Aircraft to the Facility Agent, in the case of (i) above, or to EXIM
(or a paying agent designated by EXIM) (the "Total Loss Payment Agent")),
in the case of (ii) above. Such amount shall fall due and be payable by
the Borrower (regardless of whether any Insurance Proceeds in respect of
such Total Loss are actually paid or received by any Person) on the date
(the "Total Loss Prepayment Date"), which is the earlier of (i) the date
on which the Insurance Proceeds in respect of such Lost Aircraft are
received, (ii) the date on which Lessee is required, pursuant to Clause
16.03 of the relevant Lease, to make payment for a Total Loss with
respect to the Lost Aircraft and (iii) such earlier date as the Loan
becomes payable pursuant to Clause 13.02.
25
For the purposes of this Clause 6.03, a "Qualified Replacement Aircraft"
shall mean an aircraft that (i) is either (a) a new aircraft of U.S.
manufacture, or (b) a used aircraft of U.S. manufacture that has not
previously been exported from the United States and, in either case, is
eligible for EXIM financing, (ii) complies with the terms of Clause 12 of
the Lease, (iii) is not subject to any Security Interest and (iv) is duly
subjected to the Security Interest of the Mortgage related thereto.
6.04 Voluntary Termination of Lease. If, at any time, the Lessee shall become
------------------------------
entitled to terminate a Lease pursuant to Clause 3.02 (voluntary
termination prior to or on the Conversion Date) or Clause 3.03 (voluntary
termination after the Conversion Date) thereof with respect to the
related Aircraft (for the purposes of this Clause 6.04, the "Terminated
Aircraft"), then on the date on which the Lessee is required to pay the
Termination Sum and any other amount in respect thereof, the Borrower
shall prepay (a) if the termination occurs prior to the Conversion Date,
the then outstanding principal amount of the Floating Rate Note or
Floating Rate Notes issued in respect of the Terminated Aircraft, and (b)
if the termination occurs on or after the Conversion Date, the then
outstanding principal amount of the Fixed Rate Note or Fixed Rate Notes
issued in respect of such Terminated Aircraft, together, in either case,
with (i) accrued interest thereon, (ii) all other sums due and payable
under this Agreement and any other Operative Document relating to such
Terminated Aircraft and (iii) in the case of a prepayment resulting from
a termination pursuant to Clause 3.03 of a Lease after the Conversion
Date, the relevant Make-Whole Amount. After the Conversion Date, any
payment under this Clause 6.04 shall be made to EXIM (or a paying agent
designated by EXIM).
6.05 Assignment of Prepaid Fixed Rate Notes to EXIM. Upon the occurrence of a
----------------------------------------------
prepayment of a Fixed Rate Note described in Clauses 6.03 or 6.04, each
Lender shall assign to EXIM pursuant to the EXIM Guarantee the applicable
Fixed Rate Note and the related rights hereunder.
6.06 Provisions Applicable to Prepayments. Any notice of prepayment given by
------------------------------------
the Borrower under any provision of this Agreement shall be irrevocable
and the Borrower shall be bound to make a prepayment in accordance
therewith. The Borrower may not prepay the Loan or any part thereof
except in accordance with the express terms of this Agreement. Amounts
prepaid may not be reborrowed under this Agreement.
6.07 Other Amounts. If the principal amount of a Floating Rate Note or any
-------------
part thereof is prepaid or repaid under any provision of this Agreement,
the Borrower shall pay to the Facility Agent for the account of each
Lender concerned:
(a) at the time of prepayment, such Lender's proportion of interest in
respect of such Floating Rate Note accrued to but excluding the
date of prepayment and all other sums due and payable by the
Borrower under this Agreement and the other Operative Documents to
which it is a party for the account of such Lender; and
26
(b) if the date of such repayment or prepayment is not a Payment Date
or is not the last day of an Interest Period or is not made on
any date specified in a notice of prepayment given by the
Borrower or if the Borrower does not make a principal payment on
the relevant Payment Date, in any case, such amount as such
Lender may certify to be necessary to compensate it for any
Losses incurred as a consequence of such repayment, prepayment or
failure to pay including, without limitation, any Losses incurred
in connection with liquidating, placing or redeploying deposits
or funds (but excluding any loss of Applicable Margin) obtained
to fund such Lender's participation in the Floating Rate Note.
7. CHANGE OF LAW OR CIRCUMSTANCES
------------------------------
7.01 Unlawfulness (Lender). If after the date hereof and prior to the end of
---------------------
the Availability Period, any change in or introduction of any law,
regulation or regulatory requirement or any request of any central bank,
monetary, regulatory or other authority with which a Lender is bound to
comply or any order of any court renders it unlawful for any Lender to
give effect to or maintain its Available Commitment hereunder, such
Lender shall, through the Facility Agent, deliver to the Borrower a
notice (i) stating that a change or introduction or request referred to
above has occurred and (ii) specifying in reasonable detail the nature of
such change, introduction or request giving rise to the illegality. Upon
delivery of such notice, such Lender's Available Commitment shall be
reduced to zero provided always that, if requested by the Borrower, the
Lenders, the Facility Agent and the Borrower shall negotiate in good
faith with each other in accordance with Clause 7.03 with a view to
restructuring the transactions contemplated by this Agreement on an
alternative basis acceptable to the Lenders, the Facility Agent, EXIM and
the Borrower which would avoid the relevant circumstances referred to
above.
7.02 Increased Cost. If a Lender or the Facility Agent determines that after
--------------
the date hereof and prior to the Conversion Date any change in any
applicable law or regulation or any change in the interpretation or
application thereof or compliance by such Lender or the Facility Agent
with any applicable direction, request or requirement with which a Lender
is bound to comply (whether or not having the force of law) of any
central bank or competent governmental or other authority does or will
subject the Lender or the Facility Agent to any increase in the cost to
the Lender or the Facility Agent of agreeing to make or making, funding
or maintaining its Available Commitment or any Disbursement bearing
interest at the Floating Rate, such Lender shall promptly after first
becoming aware thereof through the Facility Agent so notify the Borrower,
and the Borrower shall from time to time upon demand pay to the Facility
Agent for the account of such Lender or the Facility Agent, as the case
may be, such additional amounts as shall be required to compensate the
Lender or the Facility Agent for such increased costs. Notwithstanding
anything to the contrary in this Agreement, no demand hereunder in
respect of any increased cost shall be made, and the Borrower shall not
be
27
obligated to pay any amount in respect of an increased cost, after the
45th day following the earliest to occur of (i) the discovery of such
increased cost, (ii) the Conversion Date and (iii) the payment in full of
such Lender's Pro-Rata Share of the Loan and all interest accrued
thereon. So long as no Event of Default has occurred and is continuing,
the Borrower and the Facility Agent in consultation with such Lender
shall discuss in good faith in accordance with Clause 7.03 whether any
alternative arrangement may be made (at the Borrower's expense) to avoid,
mitigate or limit the extent of such increased cost including, without
limitation, the affected Lender or the Facility Agent transferring its
rights and obligations hereunder, although the Lender will not be
obligated to do so. So long as the circumstances giving rise to such
increased cost continue, and the Conversion Date shall not have occurred
prior to the date of prepayment hereinafter referred to, the Borrower
may, after giving the Facility Agent not less than three (3) Banking
Days' prior written notice, prepay all (but not less than all) of such
Lender's Pro-Rata Share of the Loan together with accrued but unpaid
interest thereon to the date of prepayment and any other amounts,
including amounts for which the Borrower is liable pursuant to this
Clause 7.02 or Clause 15.01, then due and payable by the Borrower to such
Lender under any of the Operative Documents to which it is a party, and
upon the giving of such notice such Lender's Commitment shall be
cancelled. Notwithstanding the foregoing, in no event shall the Borrower
be obligated to reimburse any Lender or the Facility Agent for any
increased cost arising after the Conversion Date.
7.03 Consultation. So long as no Event of Default has occurred and is
------------
continuing, if, in respect of the Facility Agent, any Lender or the
Borrower, as the case may be, circumstances arise which would or would
upon the giving of notice result in:
(a) an increase in the amount of any payment to be made to it or for
its account pursuant to Clause 8.01;
(b) a claim for indemnification under Clause 8.01; or
(c) the cancellation of such Lender's Commitment pursuant to Clause
7.01 or Clause 7.02 or claim for repayment pursuant to Clause
7.02,
then without prejudice to the provisions of Clauses 7.01, 7.02, or 8.01
or any of the obligations of the Borrower, the Facility Agent or the
affected Lender under this Agreement or the rights of the Facility Agent
or the Lenders under this Agreement, the Facility Agent or such Lender
shall, promptly upon its Lending Office becoming aware of the same, or
the Borrower shall promptly upon becoming aware of the same, notify the
Facility Agent, whereupon the Facility Agent shall promptly notify the
Borrower, as the case may require, and the Lessee thereof and, in
consultation with the Facility Agent and the Borrower, the Lenders, the
Facility Agent and the Borrower shall, for a period of up to sixty (60)
days after the date on which the Borrower and the Lessee were notified as
aforesaid, negotiate with each other and the Lessee in good faith with a
view to restructuring
28
arrangements (at the Borrower's expense) so that payments can be made
hereunder or obligations maintained and performed in such manner, place,
currency and other circumstances as shall be lawful or as shall not give
rise to such increased payment, claim for such indemnity or occurrence
and so as to achieve substantially the same result as would have been
achieved had such claim, increased payment, reduction in Commitments and
claim for repayment or occurrence not occurred and in any event shall
consider requesting and permitting, but shall be under no obligation to
procure, any affected Lender to transfer its rights and obligations
hereunder.
7.04 Application. Any repayment or prepayment of any part of the Loan by the
-----------
Borrower pursuant to Clauses 7.02 or 8.02 shall reduce rateably the
remaining installments of principal of the Loan and the Schedules to the
Notes shall be adjusted appropriately in the manner set forth in Section
6.02A(e).
8. TAXES AND OTHER DEDUCTIONS
--------------------------
8.01 Taxes. All sums payable by the Borrower under this Agreement shall be
-----
paid in full without set-off or counterclaim or any restriction or
condition and free and clear of any Tax or other deductions or
withholdings of any nature now or hereafter imposed and the Borrower
shall, upon the demand of the Facility Agent or EXIM, indemnify EXIM, the
Facility Agent and the Lenders against any Taxes (other than Taxes on the
overall net income of the Lenders or the Facility Agent, as the case may
be, in the jurisdiction of its principal office or Lending Office, such
Taxes being "Excluded Taxes") which may be imposed, levied, collected,
assessed or otherwise claimed on, from or against the Lenders or EXIM or
the Facility Agent in respect of any sum paid or payable by or on behalf
of the Borrower under this Agreement and against all costs, losses,
expenses and liabilities which may be incurred or suffered by the Lenders
or EXIM or the Facility Agent as a result of any levy, collection,
assessment, imposition or claim contemplated by this Clause 8.01. If the
Borrower is required to make any deduction or withholding (on account of
Tax or otherwise) from any payment for the account of any Lender, the
Facility Agent or EXIM, the Borrower shall, together with such payment,
pay such additional amount as will ensure that such Lender, EXIM or the
Facility Agent receives (free and clear of any Tax or other deductions or
withholdings) the full amount which it would have received if no such
deduction or withholding had been required. The Borrower shall promptly
forward to the Facility Agent or EXIM, as appropriate, copies of official
receipts or other evidence showing that the full amount of any such
deduction or withholding has been paid over to the relevant Taxation or
other authority. If any Lender or the Facility Agent shall receive any
amount in respect of an Excluded Tax, such person hereby agrees promptly
to refund such amount to the Borrower.
8.02 Mitigation. Should the circumstances described in Clause 8.01 arise or
----------
have arisen, so long as no Event of Default has occurred and is
continuing, the Facility
29
Agent, EXIM (if EXIM shall be so affected) and the Borrower shall discuss
in accordance with Clause 7.03 arrangements satisfactory to each of the
Facility Agent, the relevant Lender, EXIM (if EXIM shall be so affected)
and the Borrower which would mitigate or limit the amount and extent of
any such withholdings or deductions. Should the parties fail to make
satisfactory arrangements to mitigate or limit the amount and extent of
any such deductions or withholdings as aforesaid, the Borrower shall have
the option at any time after such discussion period but prior to the
Conversion Date to give notice to the Facility Agent to prepay such
Lender's Pro-Rata Share the Loan whereupon the outstanding principal
amount of the Loan together with all accrued but unpaid interest thereon
calculated to the date of prepayment and any other amounts (including,
without limitation, amounts due from the Borrower under this Clause 8.02
and Clause 15.01) payable by the Borrower hereunder and under any of the
Operative Documents shall become due and payable on the date specified in
the Borrower's notice of prepayment.
8.03 Transfers. Without regard to any assignment to EXIM pursuant to the EXIM
---------
Guarantee (it being agreed that the provisions of this Clause 8.03 and
Clause 8.04 shall not apply to EXIM as a result of such an assignment),
if a Lender lends through any office or offices other than the office
specified in Schedule 1 or assigns or disposes of all or any part of its
rights or benefits or transfers all or any part of its obligations under
this Agreement and, solely as of the effective date and as a consequence
of such change of office, assignment, disposal or transfer any additional
costs would, but for this Clause 8.03 or Clause 20.04, be payable by the
Borrower under any of Clause 7.02 or Clause 8.01, then the obligations of
the Borrower under Clause 7.02 or Clause 8.01 to the Lender lending
through its other office shall not, unless the Borrower and the Lessee
have consented otherwise (it being understood that the Borrower's
execution and delivery of a Fixed Rate Note shall constitute such a
consent) or unless a transfer is made pursuant to Clause 8.02, exceed
what its obligations would have been (calculated rateably in the case of
a partial assignment or transfer) had no such change of office,
assignment or disposal or transfer taken place.
8.04 Tax Credits. If:
-----------
(i) the Facility Agent or any Lender in its sole opinion determines
that it has obtained the benefit of, or without being in any way
obliged so to do utilizes, any credit against tax or actually
receives any repayment of tax, which credit or repayment is
referable to any additional amount paid by the Borrower to or for
the account of the Facility Agent or such Lender, as appropriate,
pursuant to the provisions of Clause 8.01; and
(ii) the Facility Agent or such Lender in its sole opinion determines
that the aggregate of the net amount of the credit or repayment
and the net amount received by the Facility Agent or such Lender,
as appropriate, (in each case after deducting any applicable tax)
exceeds the amount
30
which would have been received by the Facility Agent or such
Lender, as appropriate, if no such deduction or withholding had
been made or been required to be made,
then the Facility Agent or such Lender, as appropriate, shall, to the
extent that it can do so without prejudice to the retention of the amount
of such credit or repayment and provided that no Event of Default shall
have occurred and be continuing and that the Facility Agent or such
Lender, as appropriate, shall not thereby be in a less favorable position
than it would have been in if the Borrower had not been compelled to pay
any such additional amount pursuant to the provisions of Clause 8.01, pay
to the Borrower such amount as the Facility Agent or such Lender, as
appropriate, shall in its sole assessment have determined to be
attributable to the relevant deduction, withholding or payment. Nothing
herein contained shall interfere with the right of the Facility Agent or
such Lender, as appropriate, to arrange its tax affairs in whatever
manner it thinks fit and, in particular, neither the Facility Agent nor
any Lender shall be under any obligation to claim credit, relief,
remission or repayment from or against its corporate profits or similar
tax liability in respect of the amount of such deduction, withholding or
payment in priority to any other claims, reliefs, credits or deductions
available to it. Nothing herein shall be construed to give the Borrower
any right of access to, or inspection of, the books or tax returns of the
Facility Agent or any Lender.
9. FEES, EXPENSES AND OTHER INDEMNITIES
------------------------------------
9.01 Fees and Expenses. The Borrower shall pay the Facility Agent, for itself
-----------------
and on behalf of the Lenders, such fees and expenses (including legal
expenses) applicable to the Loan at the times and in the amounts as may
be agreed in writing between the Facility Agent and the Borrower.
9.02 Enforcement Costs. The Borrower shall from time to time forthwith on
-----------------
demand pay to or reimburse each of EXIM, the Facility Agent, the Lenders
and the Security Trustee for all Losses (including legal and other fees
on a full indemnity basis and all other out-of-pocket expenses) incurred
by it in exercising or seeking to exercise any of its rights or powers
under this Agreement or any other Operative Document or in suing for or
seeking to recover any sums due under this Agreement or any Operative
Document following the occurrence of any Default or Event of Default or
otherwise preserving or enforcing its rights under this Agreement or any
Security Document following the occurrence of any Default or Event of
Default or in defending any claims brought against it in respect of this
Agreement or in releasing or re-assigning any Security Document or in
connection with any actual or proposed modification, amendment or waiver
of any Operative Document requested by the Borrower or the Lessee.
9.03 Taxes. The Borrower shall pay all Taxes which may be payable in the
-----
People's Republic of China, the States of Delaware or New York (U.S.A.),
England or the
31
Cayman Islands in respect of this Agreement or any other Operative
Document and shall indemnify each of EXIM, the Facility Agent, the
Lenders and the Security Trustee for, from and against all Losses which
may result from any default in paying such Taxes.
9.04 Operational Indemnities. The Borrower agrees to indemnify each of the
-----------------------
Security Trustee (in its individual capacity and as trustee), the
Facility Agent, the Lenders and EXIM (each an "Indemnified Person") and
each of their respective officers, directors, employees, servants and
agents on the same terms as the Lessee undertakes to indemnify the
Borrower in Clause 8.03, 8.08, 9.03, 9.04 and 15.03(g) of the Lease and
subject to the provisions of Clauses 8.04 and 8.05 of the Lease except
that all references therein regarding any such indemnity to "Lessee"
shall be to "Borrower" and all references therein regarding any such
indemnity to "Lessor" shall be to each "Indemnified Person", provided,
however, that any Operational Taxes (as such term is defined in the
Lease) which the Borrower may be required to indemnify any Indemnified
Person (other than EXIM) for under this Agreement shall exclude any
Income Taxes (as such term is defined in the Lease) imposed by any taxing
authority of (i) the jurisdiction in which the Indemnified Person is
organized, (ii) the jurisdiction in which the lending office, if any, of
the Indemnified Person is located or (iii) any other jurisdiction through
which the Indemnified Person acts for purposes of this Agreement (each an
"Indemnitee Jurisdiction") and shall also exclude any other Taxes except
to the extent such Taxes arise as a result of or in connection with this
Agreement or the transactions contemplated hereby.
9.05 Certain Taxes. The Borrower shall pay or procure the payment of and hold
-------------
harmless each of the Indemnified Persons for, from and against all Taxes
(other than (excluding as to EXIM) net income taxes) which are legally
payable in respect of the Secured Property and/or any part thereof and
shall forthwith pay and discharge or procure the payment and discharge
of, all debts, damages, liabilities which may give rise to any Security
Interest on or claim against the Secured Property.
10. PAYMENTS AND EVIDENCE OF DEBT
-----------------------------
10.01 Loan. Amounts to be advanced by the Lenders to the Borrower under this
----
Agreement shall be made available to the Facility Agent not later than
11:00 a.m. (New York time) on the relevant Borrowing Date by remittance
in Dollars to the account of the Facility Agent with ABN AMRO BANK N.V.,
New York, New York, ABA No. ▇▇▇▇▇▇▇▇▇, Account No. 6510010111-42 (or such
other account or bank as the Facility Agent may have specified in writing
for that purpose). On the relevant Drawdown Date, the Facility Agent
shall make available to the Borrower the amounts received by it by
payment to such account or accounts as the Borrower shall have previously
agreed with the Facility Agent as specified in the relevant Notice of
Drawing or another writing. The Borrower shall be deemed
32
to have borrowed the relevant amount when such payment is made by the
Facility Agent.
10.02 Payments by Borrower. All payments by the Borrower under this Agreement
--------------------
shall be made in Dollars in immediately available funds (or in such other
funds as may then be customary for the settlement in Dollars of
transactions of this nature). All payments by the Borrower under this
Agreement on or prior to the Conversion shall be made no later than 11:00
a.m. (New York time) on the relevant due date to the account of the
Facility Agent with ABN AMRO Bank N.V., New York, New York, ABA No.
▇▇▇▇▇▇▇▇▇, Account No. 6510010111-42 (or such other account or bank as
the Facility Agent may have specified in writing for this purpose by not
less than five (5) Banking Days' notice). All payments by the Borrower
under this Agreement after the Conversion Date shall be made no later
than 11:00 a.m. (New York time) on the relevant due date to the account
of the Facility Agent with LaSalle National Bank, Chicago, Illinois,
Trust Acct. No. 677286809 (or such other account or bank as the Facility
Agent may have specified in writing for this purpose by not less than
five (5) Banking Days' notice). The Facility Agent shall give notice in
writing to the Borrower, EXIM and the Lessee if any payment due from the
Borrower hereunder is not received by the Facility Agent on the due date
for payment thereof, provided that any failure of the Facility Agent to
give, or delay by the Facility Agent in giving, such notice shall not
prejudice the rights of the Facility Agent, the Security Trustee or EXIM
under the Operative Documents. Notwithstanding the foregoing, any amount
payable to EXIM shall be paid in accordance with Article III, paragraph E
of the Reimbursement and Indemnity Agreement.
10.03 Allocation of Receipts. Subject to the provisions of Clause 2 of the
----------------------
Proceeds Agreement, if any amount received from the Borrower is less than
the full amount due, such amount shall be allocated towards principal,
interest and/or other sums owing hereunder in the following order:
(a) First, in or towards payment of all interest (but not default
interest or interest due on amounts payable hereunder other than
principal) payable in respect of the Notes hereunder which is
accrued, due and unpaid, pro rata to the Notes on the basis of the
then outstanding principal amounts of such Notes;
(b) Secondly, in or towards payment of all amounts of principal
payable in respect of the Notes hereunder which is due and unpaid,
pro rata to the Notes on the basis of the then outstanding
principal amounts of such Notes;
(c) Thirdly, on a pro rata basis, in or towards payment of all amounts
of default interest, or interest due on amounts other than
principal, payable hereunder which is accrued, due and unpaid; and
33
(d) Fourthly, on a pro rata basis, in or towards payment of all other
amounts payable hereunder which are due and unpaid, including,
without limitation, any and all Losses payable under Clause 9.04.
10.04 Non-Receipt of Funds by the Facility Agent. Unless the Facility Agent
------------------------------------------
shall have been notified by a Lender or the Borrower (the "Payor") prior
to the date on which the Payor is scheduled to make payment to the
Facility Agent of (in the case of a Lender) the amount required to be
paid pursuant to Clause 10.01 on such date or (in the case of the
Borrower) an amount for the account of one or more of the Lenders
hereunder (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Facility Agent, the Facility
Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such date and,
if the Payor has not in fact made the Required Payment to the Facility
Agent, the recipient(s) of such payment shall, on demand, repay to the
Facility Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date
such amount was so made available by the Facility Agent until the date
the Facility Agent recovers such amount at a rate per annum certified by
the Facility Agent to be equal to the cost (expressed as a rate per
annum) to the Facility Agent (as reasonably determined by the Facility
Agent) of funding such amount of the Required Payment so made available
and, if such recipient(s) shall fail promptly to make such payment, the
Facility Agent shall be entitled to recover such amount, on demand, from
the Payor, together with interest as aforesaid.
10.05 Banking Days. If any payment (other than principal or interest accruing
------------
in respect thereof pursuant to Clause 5.01) due under this Agreement
would otherwise be due on a day which is not a Banking Day the due date
for payment shall be the next succeeding Banking Day and the amount, if
any, of interest thereon shall be adjusted accordingly.
10.06 Certificate Conclusive and Binding. Where any provision of this
----------------------------------
Agreement provides that a Lender, EXIM, the Facility Agent or the
Security Trustee may certify or determine an amount or rate payable by
the Borrower, a certificate by such Lender, EXIM, the Facility Agent or
the Security Trustee as to such amount or rate and specifying in
reasonable detail the basis of computation of the relevant amount, shall
be conclusive and binding on the Borrower in the absence of manifest
error.
11. REPRESENTATIONS AND WARRANTIES
------------------------------
11.01 The Borrower represents and warrants to each of the Lenders, the Facility
Agent and EXIM that:
34
(a) the Borrower is validly existing as a legal entity under the laws
of the Cayman Islands and has the power to carry on its business
as it is now being conducted and to own its property and other
assets;
(b) the Borrower has the power to execute and deliver, and to perform
its obligations under, this Agreement and the other Operative
Documents to which the Borrower is or will become a party and all
necessary action has been taken to authorize the execution,
delivery and performance of this Agreement and the other Operative
Documents to which the Borrower is or will become a party;
(c) this Agreement and the Operative Documents to which it is or will
become a party constitute or, as the case may be, will constitute
legal, valid and binding obligations of the Borrower in each case
enforceable against the Borrower in accordance with its respective
terms subject to the qualifications that:
(i) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization and other similar laws of
general application relating to or affecting the rights of
creditors generally;
(ii) enforcement may be limited by general principles of equity;
(iii) claims may become barred under statutes of limitation or
may be or become subject to defenses of set-off or
counterclaim; and
(iv) in the event of any proceedings being brought in the Cayman
Islands' courts in respect of a monetary obligation
expressed to be payable in a currency other than Cayman
Islands' dollars, a Cayman Islands' court would give
judgment expressed as an order to pay such currency or its
Cayman Islands' dollar equivalent at the time of payment or
enforcement of the judgment. With respect to winding up
proceedings, Cayman Islands' law may require that all
claims or debts are converted either into Cayman Islands'
dollars or the Borrower's functional currency of account at
the exchange rate ruling at the date of commencement of the
winding up; currency indemnity provisions not having been
tested in the courts of the Cayman Islands;
(d) the execution and delivery of, and the performance of its
obligations under, this Agreement and the Operative Documents to
which it is or will become a party do not and will not (i)
contravene any existing applicable law, enactment, rule or
regulation or any judgment, decree,
35
authorization, license or permit to which the Borrower or any of
its properties is subject, (ii) upon discharge of the Bridge
Financing Documents, conflict with, or result in any breach of any
of the terms of, or constitute a default under, any agreement or
other instrument or document to which the Borrower is a party or
is subject or by which its assets are bound, (iii) contravene or
conflict with any provision of the Borrower's Memorandum of
Association, or (iv) result in the creation or imposition of, or
oblige the Borrower to create, any Security Interest on or over
any of its undertakings, properties, assets, rights or revenues
(other than pursuant to the Operative Documents);
(e) every consent, authorization, license or approval of or
registration with or declaration to a governmental or public body
or authority or court required in the Cayman Islands or in New
York by the Borrower to authorize or in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of this Agreement and
the Operative Documents to which it is or will become a party or
the performance by the Borrower of any of its obligations under
this Agreement and the Operative Documents to which it is or will
become a party has been duly obtained or made and is in full force
and effect;
(f) under the laws of its jurisdiction of incorporation in force at
the date hereof, the Borrower's obligations under this Agreement
and the Notes are (or will be when issued for value) direct,
general and unconditional obligations of the Borrower and rank (or
will rank when issued for value) at least pari passu in priority
---- -----
of payment with all its other unsecured and unsubordinated
indebtedness for borrowed money with the exception of indebtedness
mandatorily preferred by law and not by contract;
(g) under the laws of its jurisdiction of incorporation in force at
the date hereof, all payments to be made by the Borrower under
this Agreement and the Operative Documents to which it is or will
become a party may be made by the Borrower free and clear of, and
without deduction for, any Taxes and no deductions or withholdings
are required to be made therefrom;
(h) under the laws of its jurisdiction of incorporation in force at
the date hereof, it is not necessary to ensure the legality,
validity, priority, enforceability against the Borrower,
admissibility in evidence, effectiveness of this Agreement against
the Borrower or the Operative Documents to which the Borrower is
or will become a party or the creation or preservation of any
Security Interest created in favor of the Lenders, EXIM or the
Security Trustee in the other Operative Documents that this
Agreement, such Operative Documents or any other
36
instrument or document be filed, recorded, registered or enrolled
in any court, public office or registry or elsewhere in the Cayman
Islands or that any stamp, documentary, registration or similar
Tax be paid in the Cayman Islands on or in relation to this
Agreement or such Operative Documents, provided however, that (A)
entries must be made by the Borrower in the Register of Mortgages
and Charges maintained at its registered office in the Cayman
Islands in respect of the Security Interests created under any of
the Operative Documents to which the Borrower is a party (notably
in the Mortgage and the Security Assignment) in order to comply
with Section 53 of the Companies Law (Revised) of the Cayman
Islands, (B) failure to enter such details would not affect the
legality, validity, enforceability or admissibility in evidence of
such documents, but might affect the priority of the security
granted thereby, and (C) stamp duty will be payable if any of the
Operative Documents are executed in, brought to or produced before
a court of, the Cayman Islands, although such duty will be
nominal;
(i) this Agreement is, and the other Operative Documents to which the
Borrower is, or will become, a party when executed will be, in
proper form for their enforcement in the courts of the Cayman
Islands;
(j) no litigation, arbitration or administrative proceeding is taking
place or pending or, to the best of the Borrower's knowledge,
threatened against, or against any of the assets of, the Borrower
which is likely to have a material and adverse effect on the
ability of the Borrower to perform its obligations hereunder;
(k) subject always to the qualifications under Cayman Islands law set
forth in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ referred to in Part II of
Appendix 2 hereto, the choices by the Borrower of English law to
govern each Lease, each Mortgage, each Security Assignment, the
Share Mortgage, the Co-ordination Agreement, the Proceeds
Agreement and the Rolls Royce Warranties Agreement and of the laws
of the State of New York to govern this Agreement and the
Reimbursement and Indemnity Agreement and the submission by the
Borrower to the non-exclusive jurisdiction of the English Courts
and of the courts of New York State are valid and binding under
the laws of the Cayman Islands;
(l) the Borrower has conducted, and from and after the date hereof
will conduct, no business other than in connection with the
transactions contemplated by the Bridge Financing Documents and
the Operative Documents to which it is or will become a party and
the Borrower has no indebtedness other than indebtedness incurred
pursuant to the Bridge Financing Documents or the Operative
Documents and as required for the maintenance of its corporate
records and existence;
37
(m) the Borrower does not have a place of business outside the Cayman
Islands;
(n) the Lessor Parent is the legal owner of record and the Lessee is
the beneficial owner of all of the issued and outstanding shares
in the capital of the Borrower and the same is free and clear of
all Security Interests (other than Security Interests created
pursuant to the Bare Trust Agreement and the Share Mortgage);
(o) the Bare Trust Agreement is in full force and effect;
(p) no Event of Default has occurred and is continuing;
(q) the Borrower's only business is that of leasing the Aircraft and
the entering into of arrangements relating to the financing or
refinancing of the acquisition of ownership thereof and any other
business incidental thereto and it has not undertaken any other
business prior to the date hereof other than in conjunction with
the Bridge Financing Documents or otherwise as disclosed to the
Facility Agent and EXIM prior to the date hereof; and
(r) in any proceedings taken in its jurisdiction of incorporation in
relation to this Agreement, the Notes or any other Operative
Document to which it is or will become a party, the Borrower will
not be entitled to claim for itself or any of its assets immunity
from suit, execution, attachment or other legal process.
11.02 It is hereby agreed that all the representations and warranties made by
the Borrower in this Clause 11 shall survive the execution and delivery
of this Agreement.
12. UNDERTAKINGS
------------
12.01 Affirmative undertakings. The Borrower undertakes and agrees throughout
------------------------
the continuance of this Agreement and so long as any sum remains owing
hereunder that the Borrower will, unless EXIM and, prior to the
Conversion Date, the Majority Lenders otherwise agree in writing:
(a) promptly after becoming aware of the same, inform the Facility
Agent, the Security Trustee and EXIM of the occurrence of any
Default or Event of Default (and provide the Facility Agent, the
Security Trustee and EXIM with full details of the same and of the
actions, if any, which the Borrower has taken or proposes to take
to remedy the Default or Event of Default in question) and, upon
receipt of a written request to that effect from EXIM, the
Facility Agent or the Security Trustee
38
(provided that reasonable grounds exist for the submission of such
request), confirm to EXIM, the Facility Agent or the Security
Trustee, as relevant, that except as previously notified or as
notified in such confirmation, no Default or Event of Default has
occurred and is continuing;
(b) without prejudice to Clauses 3 and 11, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with all consents, authorizations, licenses or
approvals required in or by applicable laws and regulations to
enable it to enter into and perform its obligations under this
Agreement and the other Operative Documents to which the Borrower
is, or will be, a party and to ensure the validity, enforceability
or admissibility in evidence of, this Agreement and the other
Operative Documents to which it is, or will be, a party;
(c) use the Loan exclusively for the purposes specified in Clause
2.03;
(d) promptly file or cause to be filed all tax returns required to be
filed in all applicable jurisdictions and pay or cause to be paid
all Taxes shown to be due and payable on such returns or any
assessments made against it or its properties and assets prior to
the date from which penalties attach for failure to pay the same
(other than those being contested in good faith and in respect of
which such payment may be lawfully withheld and adequate reserves
have been set aside);
(e) execute, acknowledge, deliver, file and register all such
additional agreements, instruments, certificates, documents and
assurances and perform such other acts or things as the Facility
Agent, the Security Trustee or EXIM shall reasonably request to
effectuate the purposes of this Agreement and each of the other
Operative Documents to which the Borrower is, or will be, a party
or the transactions contemplated hereby or thereby; and
(f) promptly after receipt by the Borrower, deliver to EXIM, the
Security Trustee and the Facility Agent a copy of any notice,
document or instrument which EXIM, the Security Trustee or the
Facility Agent is not otherwise entitled to receive under this
Agreement or any other Operative Document and which is received by
the Borrower from any other party pursuant to or in connection
with this Agreement or any other Operative Document to which it
is, or will be, a party.
12.02 Negative Undertakings. The Borrower undertakes and agrees throughout the
---------------------
continuation of this Agreement and so long as any sum remains owing
hereunder that the Borrower will not, unless EXIM and, prior to the
Conversion Date, the Majority Lenders otherwise agree in writing:
39
(a) create any Security Interest on or over any of its present or
future assets or revenues, including, in particular, but without
limitation, any Aircraft other than any Permitted Lien; or
(b) sell, transfer, assign, lease or otherwise dispose of any revenues
or all or substantially all of its assets, including any Aircraft,
except as expressly contemplated by this Agreement or the other
Operative Documents; or
(c) conduct any business or maintain any bank account (unless the same
is pledged to the Security Trustee for the benefit of EXIM and the
Lenders) other than in connection with the transactions
contemplated by the Operative Documents to which it is a party and
will incur no indebtedness or liability other than under, or as
expressly contemplated by, the Operative Documents and as required
for the maintenance of its corporate records and existence or the
administration of its affairs; or
(d) to the extent the Borrower may lawfully so agree (i) commence any
case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect
to it or its debts, (ii) seek appointment of a receiver, trustee,
custodian or other similar official for it or for all or any
substantial part of its assets, or make a general assignment for
the benefit of its creditors, or (iii) take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth above; or
(e) consolidate with or merge into any other person or, to the extent
Borrower may lawfully so agree, declare and pay dividends or make
distributions in respect of its capital stock except as expressly
permitted by the Operative Documents.
12.03 Lease Undertakings. The Borrower undertakes and agrees, throughout the
------------------
continuation of this Agreement and for so long as any sum remains owing
hereunder, that it will, unless EXIM and, prior to the Conversion Date,
the Majority Lenders otherwise agree in writing, comply with all of its
undertakings and perform all of its obligations under each Lease.
40
13. EVENTS OF DEFAULT
-----------------
13.01 Events of Default. Each of the following events shall be an Event of
-----------------
Default:
(a) the Borrower fails to pay any sum payable by it under this
Agreement within seven (7) Banking Days of the date on which such
sum is due, provided, that where any such payment of any such sum
shall have been made by the Borrower but the same has not been
received by, or on behalf of, the Facility Agent, the Security
Trustee, the Lenders or EXIM, as appropriate, by reason of a
technical failure (outside the Borrower's control) in the banking
system, it shall not be an Event of Default under this paragraph
(a) if such failure shall have been remedied within seven (7)
Banking Days (which period may run concurrently with the seven (7)
Banking Days' grace period specified above) of receipt by the
Borrower of written notification from the Facility Agent pursuant
to Clause 10.02 hereof or the Security Trustee or EXIM, as
appropriate, that payment of any such sum has not been received by
the appropriate person and provided further that it shall be
deemed an Event of Default hereunder if any sum payable by
Borrower under this Agreement shall not have been paid within
fifteen (15) days of the date such sum is due; or
(b) the Borrower commits any breach of or omits to observe any of its
covenants, agreements or obligations under this Agreement (other
than as referred to in Clause 13.01(a)) or under any of the other
Operative Documents to which it is or will become a party and the
Borrower does not remedy the same within forty-five (45) days of
receipt by the Borrower of written notice from the Facility Agent,
the Security Trustee or EXIM requiring the same to be remedied; or
(c) any representation or warranty made or deemed to be made by the
Borrower in or pursuant to this Agreement or any of the Operative
Documents is or proves to have been untrue or incorrect in any
material respect when made or deemed to be made or would have been
untrue or incorrect if repeated at any time when any moneys are
owing under this Agreement or any other Operative Documents with
reference to the facts and circumstances existing at such time and
in any such case the rights of the Facility Agent, EXIM, the
Security Trustee or the Lenders are materially prejudiced as a
result thereof and such representation or warranty remains
material and incorrect for a period of forty-five (45) days after
receipt by the Borrower of written notice from the Facility Agent,
EXIM or the Security Trustee of the existence of such situation;
or
(d) any consent, authorization, license or approval of or filing or
registration with or declaration to any governmental or public
body or authority or
41
court required to authorize, or required in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of this Agreement or
any of the Operative Documents or the performance by the parties
hereto or thereto of any of their obligations under this Agreement
or any of the Operative Documents is modified in a manner
unacceptable to the Lenders, EXIM or the Security Trustee or is
revoked or terminated or expires and is not renewed or otherwise
ceases to be in full force and effect; or
(e) an encumbrancer takes possession of or a receiver or similar
officer is appointed for the whole or any material part of the
undertakings, properties, assets, rights or reserves of the
Borrower or of ICBC or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against the
Borrower or ICBC, or any material part of their respective
undertakings, properties, assets, rights or revenues and is not
discharged within sixty (60) days; or
(f) the Borrower or ICBC shall (i) admit in writing its inability to
pay its debts generally as they become due, (ii) file a voluntary
petition in bankruptcy or a voluntary petition or an answer
seeking reorganization in a proceeding under any bankruptcy laws
(as now or hereafter in effect) or an answer admitting the
material allegations of a petition filed against the Borrower or
ICBC, as the case may be, or the Borrower or ICBC, as the case may
be, shall by voluntary petition, answer or consent, seek relief
under the provisions of any other now existing or future
bankruptcy or other similar law providing for the reorganization
or winding-up of corporations, or providing for an agreement,
composition, extension or adjustment with its creditors, (iii)
make a general assignment for the benefit of creditors, (iv)
consent to the appointment of a receiver, administrator,
administrative receiver, trustee or liquidator or itself or of a
substantial part of its property or (v) cease or threaten to cease
to carry on its business; or
(g) a proceeding or a case shall be commenced, without the application
or consent of the Borrower or ICBC, as the case may be, in any
court of competent jurisdiction, which shall not be struck out
within sixty (60) days of commencement and which seeks (i) the
liquidation, reorganization, dissolution, winding-up, or
composition or readjustment of debts of the Borrower or ICBC, as
the case may be, (ii) the appointment of a trustee, receiver,
administrator, administrative receiver, custodian, liquidator or
the like of the Borrower or ICBC, as the case may be, or of all or
any substantial part of the properties of the Borrower or ICBC, as
the case may be, or (iii) similar relief in respect of the
Borrower under any law providing for the relief of debtors, or an
order for relief against the Borrower or ICBC, as the case may be,
shall be entered in an involuntary case under such bankruptcy law;
or
42
(h) a Termination Event under any Lease shall have occurred and be
continuing (any applicable grace or cure period having expired and
any notice required to have been given having been given) provided
that if the Termination Event refers to an opinion, consideration
or determination of, or notice to be given by, the Borrower then
regardless of the opinion, consideration, determination or notice
of the Borrower such event shall be deemed to have occurred if
EXIM is of the relevant opinion or consideration or so determines
or has given the relevant notice; or
(i) a default under the Commercial Loan has occurred and is continuing
and as a result thereof the principal amount of the indebtedness
outstanding thereunder shall have become due and payable prior to
such time as such principal amount otherwise would have been due
and payable; or
(j) a default under the ECGD Loan has occurred and is continuing and
as a result thereof the principal amount of the indebtedness
outstanding thereunder shall have become due and payable prior to
such time as such principal amount otherwise would have been due
and payable; or
(k) the Lessee shall fail to pay when due after lapse of any
applicable grace period relating thereto any amount due and
payable under any agreement or document to which the Lessee and
EXIM are party which relates to any financing to or for the
benefit of Lessee which shall have the benefit of an EXIM
Guarantee or other credit support provided by EXIM; or
(l) this Agreement or any Security Document shall become invalid or
unenforceable against the Borrower or the Reimbursement and
Indemnity Agreement shall become invalid or unenforceable against
the Borrower or the Lessee; or
(m) ICBC commits any breach of or omits to observe any of its
undertakings, covenants, agreements or obligations under the
ICBC/EXIM Guarantee and ICBC does not remedy the same within
thirty (30) days of receipt by ICBC of written notice from EXIM
requiring the same to be remedied; or
(n) any representation or warranty made, repeated or deemed to be made
by ICBC in or pursuant to the ICBC/EXIM Guarantee proves to have
been untrue or incorrect in any material respect when made or
deemed to be made or repeated or would have been untrue or
incorrect in any material respect if repeated at any time when any
moneys are owing under this Agreement with reference to the facts
and circumstances existing at such time; and in any such case the
rights of EXIM are, in its opinion, materially prejudiced as a
result thereof and such representation or warranty remains
incorrect or untrue in any material respect for a period
43
of thirty (30) days after written notice from EXIM to ICBC of such
situation; or
(o) any consent, authorization, license or approval of or registration
with or declaration to any governmental agency or courts required
by ICBC to authorize, or required by ICBC in connection with, the
execution, delivery, legality, validity, priority, enforceability,
admissibility in evidence or effectiveness of the ICBC/EXIM
Guarantee is modified in a manner unacceptable to EXIM or is not
granted or is revoked or terminated or expires and is not renewed
or otherwise ceases to be in full force and effect; and, in any
such case, the rights of EXIM are, in its opinion, materially
prejudiced as a result thereof; or
(p) the ICBC/EXIM Guarantee shall not be or shall cease to remain in
full force and effect or ICBC shall deny any of its payment
obligations under the ICBC/EXIM Guarantee or shall consent in
writing that any of its obligations thereunder are invalid or
unenforceable; or
(q) any other event occurs or any other circumstance arises (other
than an Event of Loss) which, in the reasonable judgment of EXIM,
is likely materially and adversely to affect the ability of ICBC,
the Lessee or the Borrower to perform its respective obligations
under the ICBC/EXIM Guarantee (in the case of ICBC), the Lease or
the Reimbursement and Indemnity Agreement (in the case of the
Lessee) or the Guaranteed Loan Agreement or the Reimbursement and
Indemnity Agreement (in the case of the Borrower).
13.02 Declarations. If an Event of Default has occurred and is continuing EXIM
------------
may by written notice to the Borrower:
(a) declare the Loan, accrued interest and all other sums payable
hereunder to be, whereupon they shall become, immediately due and
payable without further demand, notice or other legal formality of
any kind, all of which are hereby expressly waived by the
Borrower; and
(b) declare that the Facility is cancelled forthwith, whereupon the
same shall be so cancelled and each Lender's Commitment shall be
reduced to zero.
14. DEFAULT INTEREST
----------------
If the Borrower fails to pay any amount payable under this Agreement when
due, the Borrower shall pay interest on such amount (including overdue
interest, to the extent permitted by applicable law) from and including
the date on which such amount was due to the date of actual payment of
such amount (as well after as before judgment) at the rate per annum
determined by the Facility Agent to be the
44
higher of (x) the aggregate of (i) one percent (1%) and (ii) the rate of
interest then in effect just prior to default, (y) the aggregate of (i)
one percent (1%) plus (ii) the Applicable Margin plus (iii) the Federal
Funds Rate and (z) if such overdue amount is of principal or interest on
a Fixed Rate Note, any other interest rate set forth in the Liquidity
Agreement applicable to the repayment of advances made by the Liquidity
Provider, as the Liquidity Agreement may be modified or amended after the
date hereof in accordance with the requirements of the Transfer Agreement
provided that for purposes of this subclause (z) any amendment or
modification to such interest rate which does not comply with such
requirements shall not be effective. Interest payable under this Clause
14 shall be computed on the basis set forth in Clause 5.02 hereof and
shall be payable on demand. Notwithstanding the foregoing, default
interest payable to EXIM by the Borrower, including, without limitation,
any amount which may be payable to EXIM by virtue of the assignment to
EXIM of the Lenders' rights under this Agreement and the Notes pursuant
to the EXIM Guarantee shall be paid in accordance with Article III,
paragraph B of the Reimbursement and Indemnity Agreement.
15. SET-OFF AND PRO-RATA SHARING
----------------------------
15.01 Currency Indemnity. Dollars shall be the currency of account and of
------------------
payment in respect of all amounts payable under this Agreement. If an
amount is received in another currency, pursuant to a judgment or order
or in the liquidation of the Borrower or otherwise, the Borrower's
obligations under this Agreement shall be discharged only to the extent
that the Facility Agent on behalf of the Lenders, EXIM or the Security
Trustee (as the case may be) may purchase Dollars with such other
currency in accordance with normal banking procedures upon receipt of
such amount. If the amount in Dollars which may be so purchased, after
deducting any costs of exchange and any other related costs, (using the
exchange rate available on the date of receipt, or if no exchange can be
effected on such day, the exchange rate on the next day such exchange can
be effected) is less than the relevant sum payable under this Agreement,
the Borrower shall indemnify the Facility Agent on behalf of the Lenders,
EXIM or the Security Trustee (as the case may be) against such shortfall.
This indemnity shall be an obligation of the Borrower independent of and
in addition to its other obligations under this Agreement and shall take
effect notwithstanding any time or other concession granted to the
Borrower or any judgment or order being obtained or the filing of any
claim in the liquidation, dissolution or bankruptcy (or analogous
process) of the Borrower.
15.02 Set-Off. If an Event of Default has occurred but subject to the terms of
-------
the Proceeds Agreement, each Lender and the Facility Agent shall (without
prejudice to any general or banker's lien, right of set-off or any other
right to which it may be entitled) have the right, without notice to the
Borrower or any other person, to set off and apply any credit balance on
any account (whether subject to notice or not and whether matured or not
and in whatever currency) of the Borrower with
45
such Lender or the Facility Agent (as the case may be) and any other
indebtedness owing by such Lender or the Facility Agent (as the case may
be) to the Borrower, against the liabilities of the Borrower under this
Agreement, and each Lender and the Facility Agent is authorized to
purchase with the monies standing to the credit of any such account such
other currencies as may be necessary for this purpose.
15.03 Pro-Rata Sharing. If at any time any Lender receives any amount from the
----------------
Borrower or otherwise in respect of amounts due from the Borrower
hereunder (other than through the Facility Agent pursuant to Clause
10.02) whether by way of voluntary or involuntary payment, set-off or
otherwise, it will promptly pay to the Facility Agent the amount so
received for distribution to the Lenders pro rata in accordance with
their respective participations in such amount. The Facility Agent shall
treat such amount as if it were a payment by the Borrower directly to the
Facility Agent on account of amounts due from the Borrower hereunder so
that, as between the Borrower and the Lender who originally received the
amount, the amount shall not be treated as having been paid and such
Lender shall retain all its rights against the Borrower or otherwise with
respect to such amount (except to the extent of any sum received by it
from such distribution by the Facility Agent). Notwithstanding the
foregoing provisions of this Clause 15.03 but subject to the provisions
of the Proceeds Agreement, (i) no Lender shall be required to share any
amount which it has received as a result of any legal proceedings
commenced against the Borrower to recover sums owing to it under this
Agreement with any other Lender which has a legal right to but does not
join in such legal proceedings after having been given reasonable
opportunity so to do or which does not commence a separate action to
enforce its rights against the Borrower and (ii) if any Lender is
required to repay to the Borrower any part of an amount originally
received by it from the Borrower (which amount such Lender has shared
with the other Lenders in accordance with this Clause 15.03), the other
Lenders shall promptly pay to the Facility Agent, for onward payment to
such Lender, their pro rata portion of the amount which such Lender shall
be required to repay to the Borrower, and the Facility Agent shall pay to
such Lender the amounts actually received from the other Lenders.
16. THE FACILITY AGENT AND THE SECURITY TRUSTEE
-------------------------------------------
16.01 Appointment of the Facility Agent. Each Lender hereby irrevocably
---------------------------------
appoints the Facility Agent to act as its agent for the purposes set out
in this Agreement and irrevocably authorizes the Facility Agent to take
such action on its behalf and to exercise and enforce such rights, powers
and discretions as are expressly or by implication delegated to the
Facility Agent by the terms hereof and such rights, powers and
discretions as are reasonably incidental thereto.
16.02 Scope of Duties of the Facility Agent. In respect of its duties and
-------------------------------------
functions hereunder the Facility Agent shall be considered to be acting
solely as an agent of the Lenders in an administrative capacity only and
shall not be deemed an agent or
46
trustee of the Borrower for any purpose. The Facility Agent shall not
have any duties or obligations except those provided for in this
Agreement.
16.03 Specific Duties and Obligations of the Facility Agent. Prior to the
-----------------------------------------------------
Conversion Date, the Facility Agent shall:
(a) promptly account to each Lender for its due proportion of all
payments received by the Facility Agent from, or on behalf of, the
Borrower or otherwise in connection with the Loan in accordance
with the provisions of this Agreement;
(b) promptly inform each Lender of:
(i) the contents of any document for distribution to the
Lenders which the Facility Agent receives in respect of the
Facility; and
(ii) any Event of Default of which the personnel of the Facility
Agent having functional responsibility for the
administration of the Loan has actual notice;
(c) subject to the limitations set out in this Agreement, take or
refrain from taking any action in accordance with any lawful and
proper instructions given to it by the Majority Lenders and any
such action taken or refrained from being taken shall be binding
on all the Lenders;
(d) consult with the Lenders to the extent practicable before
effecting any amendment or waiver under Clause 17 or Clause 18;
and
(e) take all such actions (including, without limitation, submission
of any claim or demand on EXIM) in a timely manner and otherwise
in accordance with the terms of the EXIM Guarantee.
Subject to the provisions of the Security Documents in respect of any
Event of Default and except as otherwise expressly provided herein, the
Facility Agent shall not take any actions, make any determinations or
issue any declarations or approvals hereunder without the approval of the
Majority Lenders (or, all of the Lenders in the case of Clause 3).
16.04 Rights and Powers of the Facility Agent. Prior to the Conversion Date,
---------------------------------------
the Facility Agent may:
(a) perform any of its duties and functions hereunder through its
directors, officers, employees or agents;
47
(b) engage and pay for the advice or services of lawyers, accountants
or other experts or professional advisers as the Facility Agent
may consider necessary or desirable and rely and act upon such
advice;
(c) assume that any representation or warranty made or deemed to be
made by any person in or in connection with any of the Operative
Documents is true and correct unless the personnel of the Facility
Agent having functional responsibility for the administration of
the Loan have actual notice to the contrary;
(d) assume that any right, power, authority or discretion vested
herein upon the Majority Lenders, the Lenders or any other person
or group of persons has not been exercised unless the personnel of
the Facility Agent having functional responsibility for the
administration of the Loan have actual notice to the contrary;
(e) refrain from exercising any right, power or discretion vested in
it as agent hereunder unless and until instructed by the Majority
Lenders as to whether or not such right, power or discretion is to
be exercised and, if it is to be exercised, as to the manner in
which it should be exercised provided, however, that, in the
absence of such instructions, the Facility Agent may (but shall
not be required to) exercise any right, power or discretion as it
may deem necessary or appropriate;
(f) refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal suit, action or proceedings
arising out of or in connection with this Agreement until it shall
have received such security as it may require (whether by way of
payment in advance or otherwise) for any and all costs, claims,
expenses (including legal fees) and liabilities which it will or
may expend or incur in complying with such instructions;
(g) assume that no Default or Event of Default has occurred and that
no party is in breach of its obligations under this Agreement or
any Security Document unless the personnel of the Facility Agent
having functional responsibility for administration of the Loan
have actual notice to the contrary;
(h) rely upon any communication or document believed by it to be
genuine and the Facility Agent shall not be liable for acting on
or in relation to any such communication or document;
(i) assume that the Lending Office of each Lender is that identified
in Schedule 1 attached hereto (or, in the case of a Transferee, at
the end of the Transfer Certificate to which it is a party as
Transferee) until it has received from such Lender a notice
designating some other office of such
48
Lender to replace its Lending Office and act upon any such notice
until the same is superseded by a further such notice:
(j) rely as to any matters of fact which might reasonably be expected
to be within the knowledge of the Borrower upon a certificate
signed by or on behalf of the Borrower.
16.05 No Liability of the Facility Agent to Lenders. Neither the Facility
---------------------------------------------
Agent nor its respective directors, officers, any employees or agents
shall, have any liability or obligation to any Lender:
(a) as a result of any failure or delay by the Borrower or any other
party in performing its respective obligations under this
Agreement, the Bare Trust Agreement or any other Operative
Document;
(b) for the authorization, execution, legality, validity,
enforceability, effectiveness, genuineness or sufficiency of this
Agreement, any other Operative Document or any other document
relevant to this transaction, or for the accuracy of any
representation, warranty or statement made in or in connection
with this Agreement or any other Operative Document, or for the
accuracy or completeness of any information supplied by any person
whether or not such information was or is circulated by the
Facility Agent;
(c) to take any steps to ascertain whether a Default or an Event of
Default has occurred or whether the Borrower or any other party is
otherwise in breach of any of its respective obligations under
this Agreement or any other Operative Document;
(d) to provide any credit or other information concerning the
financial or other condition of the Borrower or the Lessee other
than as expressly provided for herein;
(e) to account for any sum received by the Facility Agent (other than
for the account of the Lenders) by way of fees or reimbursement of
expenses in connection with this Agreement or for any benefit
received by it arising out of any present or future banking or
other relationship with the Borrower or any other party to any
Operative Document;
(f) for anything done or not done by it or any of them under or in
connection with this Agreement or the Operative Documents except
in the case of its or their own gross negligence, fraud or wilful
misconduct.
16.06 Banking Relationships with Lessee. The Facility Agent and the Lenders
---------------------------------
may (without liability to account for any profit) accept deposits from,
lend money to
49
and generally engage in any kind of banking or other business with the
Borrower or the Lessee.
16.07 No Liability of Facility Agent to Borrower. The Facility Agent shall
------------------------------------------
have no liability or obligation to the Borrower as a result of any
failure or delay by any Lender, the Facility Agent (except to the extent
attributable to it gross negligence, fraud or wilful misconduct) or any
other party in performing its respective obligations under this Agreement
or any other Operative Document.
16.08 Liability and Indemnity of Facility Agent. Neither the Facility Agent
-----------------------------------------
nor any of its directors, officers, employees or agents shall be liable
for any action taken or omitted to be taken in connection with this
Agreement unless resulting directly from its or their gross negligence,
fraud or wilful misconduct. Each Lender shall indemnify the Facility
Agent (to the extent not reimbursed by the Borrower) in proportion to
such Lender's respective participations in the Loan or, if there is no
outstanding Loan, in proportion to their respective Commitments from and
against all claims, actions, liabilities, damages, penalties, losses,
costs and expenses (including legal fees, but excluding any agency or
other like fees, due to the Facility Agent) which the Facility Agent may
incur in any way relating to or arising out of this Agreement or any
Security Document or any action taken or omitted by the Facility Agent
(in compliance with the terms of this Agreement) in seeking to protect or
enforce the rights of the Lenders and the Facility Agent or otherwise in
connection with the Facility, except to the extent that any of the
foregoing results directly from the Facility Agent's gross negligence,
fraud or wilful misconduct.
16.09 Acknowledgment by Lenders. Each Lender acknowledges to and agrees with
-------------------------
the Facility Agent that:
(a) it has itself been and will continue to be solely responsible for
making its own analysis of and investigations into the status,
creditworthiness, prospects, business, operations, assets and
condition of the Borrower, EXIM and any other person referred to
herein and for making its own decisions as to the entering into or
the taking or not taking of any action in connection with this
transaction;
(b) it has not relied upon any representation or statement made by the
Facility Agent as an inducement to it entering into this
Agreement.
16.10 Resignation and Removal of Facility Agent. Prior to the Conversion Date,
-----------------------------------------
the Facility Agent may resign its appointment at any time by giving not
less than thirty (30) days' prior written notice to EXIM, the Lenders and
the Borrower. The Lenders shall have the right to appoint a successor
Facility Agent, but if they do not do so within the thirty (30) day
notice period the retiring Facility Agent may do so on their behalf. The
Majority Lenders may at any time by giving not less than seven (7) days'
prior written notice to the Lenders, the Borrower, EXIM and
50
the Facility Agent remove the Facility Agent as agent and appoint a
successor Facility Agent. The Facility Agent's resignation or removal
shall not take effect until a successor Facility Agent has been
appointed. Upon such appointment the successor Facility Agent shall
succeed to and become vested with all the rights, powers, discretions and
duties of the retiring Facility Agent and the retiring Facility Agent
shall be discharged from any further duties and obligations hereunder.
16.11 Facility Agent as Lender. The Facility Agent shall have the same rights
------------------------
and powers with respect to its participation in the Loan as any other
Lender and may exercise such rights and powers as if it were not acting
as agent under this Agreement.
16.12 Representations of Security Trustee. For the benefit of the Lenders, the
-----------------------------------
Facility Agent, the Borrower and EXIM, the Security Trustee hereby
represents and warrants to each of the Lenders, the Facility Agent, the
Borrower and EXIM, mutatis mutandis in its individual capacity, each of
the representations and warranties of the Security Trustee contained in
Clause 6.19 of the Proceeds Agreement, as if such representations and
warranties were set out in full herein.
16.13 Covenants of Security Trustee. For the benefit of the Lenders, the
-----------------------------
Facility Agent, the Borrower and EXIM, the Security Trustee hereby
covenants and agrees that it will perform its obligations under Clause 6
of the Proceeds Agreement, to the same extent as if such obligations were
set forth herein, mutatis mutandis.
17. AMENDMENT
---------
Any amendment, supplement, modification or waiver of any provision of
this Agreement or of any Note and any waiver of any default under this
Agreement shall only be effective if made in writing and signed by or on
behalf of the Borrower, the Facility Agent, EXIM and, prior to the
Conversion Date, the Majority Lenders provided, however, that prior to
the Conversion Date (i) no such amendment, supplement, modification or
waiver shall (a) increase the Commitment of a Lender, (b) reduce the
amount or extend the maturity of a Note or any installment thereof, (c)
reduce the rate or extend the time of payment of interest thereon, or (d)
amend the definition of "Majority Lenders" or the provisions of this
Clause 17, in each case, without the consent of all Lenders, and (ii) no
such amendment, supplement modification or waiver shall reduce any fee
payable hereunder to the Facility Agent or any Lender without the consent
of the Lender affected thereby.
51
18. WAIVER AND SEVERABILITY
-----------------------
Time is of the essence of this Agreement but no failure or delay by the
Facility Agent, EXIM, the Security Trustee or any Lender in exercising
any right, power or remedy hereunder shall impair such right, power or
remedy or operate as a waiver thereof, nor shall any single or partial
exercise of the same preclude any further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and
remedies herein provided are cumulative and do not exclude any other
rights, powers and remedies provided by law. If at any time any
provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, the
legality, validity and enforceability of such provision under the law of
any other jurisdiction, and of the remaining provisions of this
Agreement, shall not be affected or impaired thereby.
19. MISCELLANEOUS
-------------
19.01 Entire Agreement. This Agreement and the documents referred to herein
----------------
constitute the entire obligation of the Lenders and the Facility Agent
and supersede any previous expressions of intent or understandings in
respect of this transaction.
19.02 Publicity. Except as necessary to effect a Securitization and except as
---------
required by applicable law (or, with respect to EXIM, its internal
policies), no announcement or other publicity in connection with this
Agreement or relating in any way to the Loan shall be made or arranged
except with the prior written consent of the Facility Agent and the
Borrower.
20. ASSIGNMENT, TRANSFER AND LENDING OFFICES
----------------------------------------
20.01 Successors and Assigns. Except as otherwise provided herein, this
----------------------
Agreement shall be binding on and inure to the benefit of the Borrower,
the Facility Agent, the Lenders, the Security Trustee and EXIM and their
respective successors and permitted assigns and transferees, except that
the Borrower may not assign all or part of its rights or obligations
hereunder or under any of the other Operative Documents without the
express prior written consent of the Facility Agent, acting (prior to the
Conversion Date) with the approval of all the Lenders and EXIM.
20.02 Lending Office and Assignment. Prior to the Conversion, any Lender may
-----------------------------
(subject to giving prior written notice to the Facility Agent and the
Borrower but without the need for any consent of the Facility Agent or
the Borrower) change its Lending Office. Other than in connection with
the Securitization or any transfer to EXIM, no Lender may assign or
transfer or grant or sell any participating interest in the whole or any
part of its rights or obligations under this Agreement without the prior
written consent of EXIM and, prior to the Conversion, the Borrower.
52
20.03 Facility Agent and Lenders. If any Lender assigns (which assignment
--------------------------
shall be subject to Section 9 of the EXIM Guarantee) all or any of its
rights and benefits hereunder in accordance with Clause 20.02 (other than
an assignment to EXIM), then, unless and until the assignee has agreed
with the Facility Agent and the other Lenders that it shall be under the
same obligations towards each of them as it would have been under if it
had been a party hereto as a Lender, the Facility Agent and the other
Lenders shall not be obliged to recognize such assignee as having the
rights against each of them which it would have had if it had been such a
party hereto.
20.04 Liability. Other than in the case of a transfer to EXIM pursuant to the
---------
EXIM Guarantee (in which case the provisions of this Clause 20.04 shall
not apply) the Borrower shall not become subject to any greater
obligation or liability under Clause 7.02 or 8.01 or any provision of
Clause 9 hereof (A) towards an assignee of a Lender than would have been
owed to such Lender with respect to the rights assigned or transferred to
such assignee or (B) towards a Lender which changes its Lending Office
than would have been owed to such Lender had it not changed its Lending
Office, unless:
(i) such assignment or transfer or change of Lending Office was made
with the approval of the Lessee to mitigate or avoid the
requirement for payment of increased costs to make any withholding
or deductions pursuant to Clause 8.01 hereof or to avoid any
unlawfulness pursuant to Clause 7.01; or
(ii) such greater obligation or liability results from a change of law,
regulation, regulatory requirement or official directive, ruling,
request or guideline having the force of law (or, if not having
the force of law, the observance of which is in accordance with
the reasonable practice of banks or other similar financial
institutions in the jurisdiction concerned) or in the
interpretation or application thereof by any person charged with
the administration or interpretation thereof which occurred after
the date of the relevant assignment, transfer or change of Lending
Office (which date shall be, in the case of an assignment or
transfer of a Note to the Trustee in relation to a Securitization,
if any, the Conversion Date) and was not reasonably foreseeable on
such date.
21. NOTICES
-------
21.01 Delivery. Each notice, demand or other communication to be given or
--------
made under this Agreement shall be in writing and delivered or sent to
the relevant party at its address or telex number or fax number set out
below (or such other address or telex number or fax number as the
addressee has by five (5) days' prior written notice specified to the
other parties):
53
To the Borrower: YA96A Limited
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇ House
South Church Street
Grand Cayman
Cayman Islands
British West Indies
Telex Number: CP (0293) 4212
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: The Secretary
With copies to: China Yunnan Airlines
▇▇ ▇▇▇ Ba Airport
Kunming, Yunnan
People's Republic of China
Fax Number: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
Attention: The President
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
To the Facility Agent: ABN AMRO Bank N.V., Chicago Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
U.S.A.
Telex Number: 6732700
Answerback: ABNAMRO CGO
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President
Structured Trade Finance
54
To the Wilmington Trust Company
Security Trustee: ▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇.▇.
Telex Number: 835437
Answerback: WILMTR
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
Administration
To EXIM: Export-Import Bank of the United States
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇.▇.▇.
Telex Number: 89461
Answerback: EXIM UT
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President
- Aircraft Finance Division
Subject: EXIM ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of China
(China Yunnan Airlines)
With a copy to: Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz
▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
and to the Lenders at their respective Lending Offices.
21.02 Deemed Delivery. Any notice, demand or other communication so addressed
---------------
to the relevant party shall be deemed to have been delivered (a) if given
or made by letter, when actually delivered to the relevant address; (b)
if given or made by telex, when dispatched with confirmed answerback and
(c) if given or made by fax, when receipt is confirmed by the intended
recipient to the transmitting party provided that notwithstanding the
foregoing no notice to EXIM shall be effective until received by the
appropriate officer referred to in Clause 21.01 above.
55
21.03 Facility Agent. All communications between the Lenders and the Borrower
--------------
in relation to this Agreement shall be made through the Facility Agent.
21.04 Language. Each notice, demand or other communication hereunder shall be
--------
either in English or accompanied by a certified translation thereof into
the English language.
22. GOVERNING LAW AND JURISDICTION
------------------------------
22.01 Law. This Agreement shall be governed by, and construed in accordance
---
with, the laws of the State of New York, without reference to the
principles of conflicts of law.
22.02 Jurisdiction. Any suit, legal action or proceeding against the Borrower
------------
or its assets with respect to this Agreement or any other Operative
Document or on any judgment entered by any court in respect thereof
(hereinafter referred to as "Proceedings"), may be brought in any New
York State court sitting in New York City and in the United States
District Court for the Southern District of New York. The Borrower
hereby irrevocably submits to and accepts the non-exclusive jurisdiction
of such courts for the purpose of any Proceedings. The Borrower hereby
agrees that the service upon it of all writs, processes and summonses in
any such Proceedings shall be sufficiently served if delivered to
Corporation Service Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America or to any other person in New York duly
authorized by the Borrower to receive the same, and any such address or
person so designated in such jurisdiction shall be for the purposes of
this Clause 22 a "Process Agent". If any Process Agent appointed
pursuant to this Clause 22 shall cease or desire to cease or shall not be
capable or qualified to act, the Borrower shall promptly upon becoming
aware of the same irrevocably designate and appoint another address
and/or person acceptable to the Facility Agent and EXIM. Failing any
such designation by the Borrower within seven (7) days after written
demand therefor, the Facility Agent and EXIM shall be entitled at the
cost of the Borrower to designate and appoint another such address and/or
person on behalf of the Borrower and the Borrower hereby appoints the
Facility Agent and EXIM its duly authorized attorney for such purpose.
The Borrower agrees that service on any such person in New York shall be
deemed due service for the purpose of Proceedings in such courts without
prejudice to any other mode of service and agrees that the failure of the
person authorized in New York to give any notice of any such service to
it shall not impair or affect the validity of such service or of any
judgment rendered in any Proceeding based thereon.
22.03 Waiver of Objection to Venue. The Borrower hereby irrevocably waives, to
----------------------------
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any Proceedings brought in any
New York State court or United States District Court located in New York
City.
56
22.04 No Limit to Proceedings in Other Jurisdictions. The foregoing
----------------------------------------------
shall not limit the right of the Facility Agent, the Security Trustee or
EXIM to bring any Proceedings against the Borrower in any other
appropriate jurisdiction, and to initiate Proceedings and serve legal
process in any manner authorized by the laws of such jurisdiction upon
the Borrower, nor shall the bringing of Proceedings in one or more
jurisdictions preclude the bringing of Proceedings in any other
jurisdiction, whether concurrently or not. The Borrower agrees that final
judgment against it in any Proceedings shall be conclusive and may be
enforced in New York or any other jurisdiction within or outside the
United States by suit on the judgment, as provided by law.
22.05 Waiver of Sovereign Immunity. The Borrower agrees that in any
----------------------------
Proceedings no immunity from such Proceedings (which shall include,
without limitation, suit, attachment prior to judgment, other attachment,
the obtaining of judgment, execution or other enforcement) shall be
claimed (whether on the basis of sovereign immunity or otherwise) by or
on behalf of the Borrower or with respect to its assets, and irrevocably
waives any such right of immunity which it or its assets now have or may
hereafter acquire or which may be attributed to it or its assets and
consents generally in respect of any such Proceedings to the giving of
any relief or the issue of any process in connection with such
Proceedings including, without limitation, the making, enforcement or
execution against any property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in such
Proceedings.
23. COUNTERPARTS
------------
This Agreement may be executed in counterparts and by different parties
on separate counterparts which may be in the form of facsimile
transmitted copies and which when taken together shall be deemed to
constitute one agreement. This Agreement shall be effective between
parties which have executed this Agreement, upon such execution,
notwithstanding that other parties may execute this Agreement at a later
date.
57
IN WITNESS WHEREOF this Guaranteed Loan Agreement has been executed by the duly
authorized representatives of the parties hereto as of the day and year first
above written and by EXIM on the date of the first Disbursement hereunder and is
intended to be effective (with respect to all parties hereto other than EXIM) as
of the day and year first above written and (with respect to EXIM) as of the
date of the first Disbursement hereunder.
THE BORROWER THE FACILITY AGENT
------------ ------------------
YA96A Limited, as Borrower ABN AMRO Bank, N.V., Chicago
Branch, as Facility Agent
By: ABN AMRO NORTH AMERICA,
INC., its agent
By: By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Its: Vice President
-------------------------------
Title:
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Date: Its: Assistant Vice President
-------------------------------
Date:______________________________
EXIM THE SECURITY TRUSTEE
---- --------------------
The Export-Import Bank of Wilmington Trust Company
The United States (not in its individual capacity,
except as expressly provided
By: herein, but only in its capacity
as security trustee)
Title:
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Date:
Title: Vice President
-----------------------------
Date:
THE LENDER
----------
ABN AMRO Bank N.V., Chicago Branch, as Lender
By: ABN AMRO NORTH AMERICA,
INC., its agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Its: Vice President
-------------------------------
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Its: Assistant Vice President
-------------------------------
Date:______________________________
SCHEDULE 1
THE LENDERS
-----------
Name and Lending Office Commitment
----------------------- ----------
ABN AMRO Bank N.V., Chicago Branch US$103,000,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
U.S.A.
Telex Number: 6732700
Answerback: ABNAMRO CGO
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President
Structured Trade Finance
59
APPENDIX 1
FORM OF NOTICE OF DRAWING
-------------------------
From: YA96A LIMITED
To: ABN AMRO Bank N.V., Chicago Branch, as Facility Agent
Export-Import Bank of the United States
_________________ 1996
Dear Sirs,
LOAN FACILITY OF UP TO US$103,000,000
GUARANTEED LOAN AGREEMENT DATED AS OF 27 AUGUST 1996
----------------------------------------------------
We refer to the above Guaranteed Loan Agreement, and hereby give notice that we
request a Disbursement under the Facility on _________________________________
1996 in the amount of US$______________________ in respect of the financing of
two Boeing 767-300 aircraft bearing manufacturer's serial numbers 28148 and
28149.
The proceeds of the Disbursement are to be used exclusively for the purposes
specified in Clause 2.03 of the Guaranteed Loan Agreement, and shall be
disbursed pursuant to payment instructions as agreed between the Borrower and
the Lender.
The initial Interest Period shall have a duration of ________________.
We confirm that:
(a) the representations and warranties set out in Clause 11 of the Guaranteed
Loan Agreement, repeated with reference to the facts and circumstances
subsisting at the date of this notice, remain true and correct; and
(b) no Default has occurred which remains unwaived or unremedied.
Terms defined in the Guaranteed Loan Agreement have the same meanings when used
in this notice.
For and on behalf of
YA96A LIMITED
_____________________
We agree to the above.
_____________________
For and on behalf of
Yunnan Airlines
- 1-1 -
APPENDIX 2
LIST OF DOCUMENTS AND EVIDENCE
------------------------------
PART I
------
1. A certified true copy of each of the following documents: (i) the
Borrower's Certificate of Incorporation, Memorandum and Articles of
Association; (ii) a list of directors and officers of the Borrower
together with their specimen signatures; (iii) the Register of Members of
the Borrower; and (iv) the Power of Attorney and the resolutions of the
Board of Directors of the Borrower approving the transactions
contemplated by this Agreement and the Operative Documents to which it is
a party and authorizing a person or persons to execute the same together
with any other notices or documents required in connection herewith or
therewith, under hand or by affixing and witnessing the common seal.
2. A certified true copy of the certificate as to the authority of the
Lessee, issued by the President of the Lessee, duly authorizing the lease
by the Lessee of the Aircraft under the Lease related thereto and the
execution, delivery and performance by the Lessee of its obligations
under such Lease and each other document required to be executed and
delivered by the Lessee in accordance with the provisions thereof and
naming the person or persons authorized to execute and deliver all such
documents and including the specimen signatures of such person or
persons.
3. An executed copy of the EXIM Guarantee.
4. A certified extract of the Aircraft Purchase Agreement.
5. An executed copy of the Share Mortgage and all documents contemplated
thereby.
6. An executed copy of the Bare Trust Agreement.
7. An executed copy of the Proceeds Agreement and an executed copy of the
Co-ordination Agreement.
8. Evidence that the process agent appointed pursuant to Clause 22.02 has
accepted its appointment.
9. The opinion of Potter, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Security
Trustee.
10. Evidence satisfactory to the Facility Agent and EXIM that all of the
conditions precedent under the Commercial Loan Agreement and the ECGD
Loan Agreement to the Commercial Lenders' and the ECGD Lenders'
obligations to make the Commercial Loan and the ECGD Loan, respectively,
to the Borrower shall have been satisfied or waived.
- 2-1 -
PART II
-------
A. With respect to each Aircraft to be financed on a Borrowing Date
----------------------------------------------------------------
1. A certified copy of an insurance certificate from the People's Insurance
Company of China in or substantially in the form of Schedule 10 of the
Lease evidencing the insurance required to be maintained pursuant to
Clause 15 and Schedule 4 of the Lease.
2. An executed copy of the related Purchase Agreement Assignment.
3. An executed copy of the related Security Documents.
4. An executed copy of the related Lease.
5. An undertaking from the General Administration of Civil Aviation of China
to issue a certificate of registration within thirty (30) days of the
Borrowing Date noting the interests of the Lessee as operator of the
Aircraft and the Borrower as lessor and owner and the Security Trustee as
mortgagee.
6. A notice of assignment of insurances in the form set forth in Schedule 2
to the Security Assignment executed by the Borrower and the Lessee.
7. The following legal opinions each addressed to EXIM, the Security
Trustee and the Facility Agent:
(i) an opinion of Zheng, Liu, Yuan & Zhou Law Office, Chinese counsel
to the Lessee,
(ii) an opinion of ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Cayman Islands counsel to the
Borrower; and
(iii) an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, English counsel to the Borrower.
8. Certified true copies of the Bills of Sale relating to the transfer of
title to such Aircraft to the Borrower.
9. Evidence satisfactory to the Facility Agent and EXIM that all of the
conditions precedent under the related Lease to the Lessee's obligation
to lease the Aircraft shall have been satisfied or waived.
- 2-2 -
10. Evidence that the security constituted by the Bridge Financing Documents,
if any, has been discharged or will be discharged contemporaneously with
the relevant Disbursement hereunder.
B. With respect to each Disbursement
---------------------------------
1. An executed Note with the EXIM guarantee endorsed thereon.
- 2-3 -
PART III
--------
Conditions to Conversion
------------------------
1. Executed copy of the Securitization Documents duly executed and delivered
by each of the parties thereto in form and substance acceptable to the
Facility Agent, EXIM and the Trustee and their respective legal counsel.
2. Evidence of payment by Borrower of amounts required to be paid on the
Conversion Date.
3. Executed copy of the Fixed Rate Notes with the EXIM guarantee legend,
endorsed by EXIM.
4. Such other documents, legal opinions and certificates as may be required
pursuant to the Securitization Documents including, without limitation,
an opinion of the General Counsel of EXIM addressed to the Trustee, in
form and substance acceptable to the Trustee.
5. The certificates to be issued under the Trust shall have been rated "AAA"
by Standard & Poor's Rating Group.
6. The registration statement relating to the certificates to be issued
under the Trust shall have become effective and remain effective as to
such issuance.
7. The Trust shall have been duly created and validly existing.
- 2-4 -
APPENDIX 3
PART 1
------
FORM OF FLOATING RATE INSTALLMENT NOTE
--------------------------------------
YA96A LIMITED
PROMISSORY NOTE DUE _______________
IN RESPECT OF ONE ▇▇▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ [ ]
IN THE AGGREGATE PRINCIPAL AMOUNT OF
US$[______________________]
FOR VALUE RECEIVED, YA96A LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies (the
"Borrower"), hereby irrevocably and unconditionally promises to pay to ABN AMRO
Bank N.V., as Facility Agent for the Lenders, the principal sum of
[US$___________________], in twenty-four (24) equal (or as nearly equal as
practicable) consecutive principal installments, each such principal installment
to be due and payable on the date and in the amount set forth in Annex A hereto,
together with interest on the unpaid principal amount hereof from time to time
outstanding at the rate determined in accordance with Clause 5.02 of the
Guaranteed Loan Agreement (defined below), from and including the date hereof
until such principal amount is paid in full; provided, however, that the final
-------- -------
principal payment hereon shall in any and all events equal the then outstanding
principal balance hereof. Interest shall accrue from day to day, and shall be
calculated on the basis of a 360-day year and actual days elapsed. Accrued
interest hereon shall be payable on the last day of each Interest Period (or, in
the case of an Interest Period with a duration of less than one month, such
later date as the Facility Agent may agree) and on the date this Note is paid in
full.
This promissory note is one of the Floating Rate Notes referred to in the
Guaranteed Loan Agreement dated as of 27 August 1996 (the "Guaranteed Loan
Agreement") made by and among the Borrower, the banks and other financial
institutions named therein as Lenders, ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent, Wilmington Trust Company, as Security Trustee, and Export-Import
Bank of the United States, the provisions of which are incorporated herein by
reference. All terms and expressions defined in the Guaranteed Loan Agreement
(whether defined therein or incorporated by reference to another document) shall
have the same meanings when used in this Note.
Principal and interest due hereunder or under the Guaranteed Loan
Agreement shall be payable in Dollars in immediately available funds for receipt
on or prior to 11:00 a.m. New York time on the due date thereof as specified in
Clause 10 of the Guaranteed Loan Agreement. The holder hereof, by its
acceptance of this Note, agrees that each payment of principal and interest
received by it hereunder shall be applied in the order specified in Clause 10.03
of the Guaranteed Loan Agreement.
- 3-1 -
In the event that any amount of the principal hereof or accrued interest
on this Note is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay to the Lender, on demand
interest on such unpaid amount (to the extent permitted by applicable law) for
the period from the date such amount was due until such amount shall have been
paid in full at an interest rate per annum determined in accordance with Section
14 of the Guaranteed Loan Agreement.
Notwithstanding the preceding paragraph hereof, beginning on the date on
which EXIM shall have made a claim payment to the Lender under the EXIM
Guarantee, in the event any amount of principal of or accrued interest on this
Note owing to EXIM is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay, without duplication of
default interest otherwise payable under the Guaranteed Loan Agreement, to EXIM
on demand interest on such unpaid amount (to the extent permitted by applicable
law) for the period from the date such amount was due until such amount shall
have been paid in full at an interest rate per annum equal to the per annum rate
of interest fixed for new EXIM borrowings (in U.S. Dollars) occurring at any
time within the six (6) month period preceding the date of such default plus
1.75% (as determined by EXIM), which rate once so determined for an amount in
default shall remain in effect until such default is cured.
This Note is subject to prepayment only as permitted by the terms of the
Guaranteed Loan Agreement. Following any such prepayment Annex A hereto shall
be deemed to be amended to conform to the substitute Schedule 2 to the
Guaranteed Loan Agreement as agreed between the Borrower, EXIM and the Lender
pursuant to Clause 6.02A or 7.04 of the Guaranteed Loan Agreement, and
thereafter all payments of principal and interest thereon to be made hereunder
shall be made in accordance with Annex A, as so amended.
The Borrower hereby waives any demand, diligence, presentation, protest
and notice of any kind and warrants to the holder hereof that all action and
approval required for execution and delivery hereof as a legal, valid and
binding obligation of the Borrower, enforceable in accordance with the terms
hereof, has been duly obtained and is in full force and effect.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed, as
of the date hereof.
YA96A LIMITED
By __________________________________________
Title:
- 3-2 -
GUARANTEE
---------
This note is guaranteed by the Export-Import Bank of the United States ("EXIM")
as provided in the Guarantee Agreement dated as of ____________, 1996, between
ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and EXIM, and said
guarantee is expressly made subject to all of said provisions therein as if all
of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF THE
UNITED STATES
By:__________________________________________
Name:________________________________________
Title:_______________________________________
EXIM ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of China (China Yunnan Airlines)
- 3-3 -
APPENDIX 3
PART 2
------
FORM OF FIXED RATE INSTALLMENT NOTE [Issuance Date]
-----------------------------------
IN RESPECT OF
ONE BOEING 767-300 AIRCRAFT, MSN [ ]
YA96A LIMITED
PROMISSORY NOTE DUE _______________
IN THE AGGREGATE PRINCIPAL AMOUNT OF
US$[_________________]
FOR VALUE RECEIVED, YA96A LIMITED, a company incorporated under the laws of the
Cayman Islands and having its registered office at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies (the
"Borrower"), hereby irrevocably and unconditionally promises to pay to the order
of LaSalle National Bank, as trustee, the principal sum of
[US$_________________], together with interest on the unpaid principal amount
hereof from time to time outstanding at the [Fixed Rate] from and including the
date hereof until such principal amount is paid in full; provided, however, that
-------- -------
the final principal payment hereon shall in any and all events equal the then
outstanding principal balance hereof. Such principal and interest shall be due
and payable on the dates set forth in Annex A hereto in [ ]/1/ equal
(or as nearly equal as practicable) consecutive installments of combined
principal and interest in the amounts set forth in Annex A hereto. Interest
shall accrue from day to day, and shall be calculated on the basis of a 360-day
year of twelve 30-day months. Accrued interest hereon shall be payable on each
Fixed Rate Payment Date and on the date this Note is paid in full.
This promissory note is one of the Fixed Rate Notes referred to in the
Guaranteed Loan Agreement dated as of 27 August 1996 (the "Guaranteed Loan
Agreement") made by and among the Borrower, the banks and other financial
institutions named therein as Lenders, ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent, Wilmington Trust Company, as Security Trustee, and Export-Import
Bank of the United States, the provisions of which are incorporated herein by
reference. All terms and expressions defined in the Guaranteed
_________________________
/1/ Insert number equal to (1) twenty-four (24) minus (2) the sum of (A)
the number of Floating Rate Payment Dates occurring prior to the
Conversion and (B) if the Conversion Date is a Floating Rate Payment
Date, one (1).
- 3-4 -
Loan Agreement (whether defined therein or incorporated by reference to another
document) shall have the same meanings when used in this Note.
Principal and interest due hereunder or under the Guaranteed Loan
Agreement shall be payable in Dollars in immediately available funds for receipt
on or prior to 11:00 a.m. New York time on the due date thereof as specified in
Clause 10 of the Guaranteed Loan Agreement. The holder hereof, by its
acceptance of this Note, agrees that each payment of principal and interest
received by it hereunder shall be applied in the order specified in Clause 10.03
of the Guaranteed Loan Agreement.
In the event that any amount of the principal hereof or accrued interest
on this Note is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay to the Lender, on demand
interest on such unpaid amount (to the extent permitted by applicable law) for
the period from the date such amount was due until such amount shall have been
paid in full at an interest rate per annum determined in accordance with Section
14 of the Guaranteed Loan Agreement.
Notwithstanding the preceding paragraph hereof, beginning on the date on
which EXIM shall have made a claim payment to the Lender under the EXIM
Guarantee, in the event any amount of principal of or accrued interest on this
Note owing to EXIM is not paid in full when due (whether at stated maturity, by
acceleration or otherwise), the Borrower shall pay, without duplication of
default interest otherwise payable under the Guaranteed Loan Agreement, to EXIM
on demand interest on such unpaid amount (to the extent permitted by applicable
law) for the period from the date such amount was due until such amount shall
have been paid in full at an interest rate per annum equal to the per annum rate
of interest fixed for new EXIM borrowings (in U.S. Dollars) occurring at any
time within the six (6) month period preceding the date of such default plus
1.75% (as determined by EXIM), which rate once so determined for an amount in
default shall remain in effect until such default is cured.
This Note is subject to prepayment only as permitted by the terms of the
Guaranteed Loan Agreement.
The Borrower hereby waives any demand, diligence, presentation, protest
and notice of any kind and warrants to the holder hereof that all action and
approval required for execution and delivery hereof as a legal, valid and
binding obligation of the Borrower, enforceable in accordance with the terms
hereof, has been duly obtained and is in full force and effect.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
- 3-5 -
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed, as
of the date hereof.
YA96A LIMITED
By___________________________________________
Title:
GUARANTEE
---------
This note is guaranteed by the Export-Import Bank of the United States ("EXIM")
as provided in the Guarantee Agreement dated as of [____________, 1996], between
ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and EXIM, and said
guarantee is expressly made subject to all of said provisions therein as if all
of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF THE
UNITED STATES
By:__________________________________________
Name:________________________________________
Title:_______________________________________
EXIM ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of China (China Yunnan Airlines)
- 3-6 -
APPENDIX 4
FORM OF TRANSFER AGREEMENT
--------------------------
THIS TRANSFER AGREEMENT is made and entered into as of the ____ day of
____________, 1996 among (1) YA96A Limited (the "Borrower"); (2) ABN AMRO Bank
N.V., Chicago branch, as facility agent, (the "Facility Agent") and (3)
______________________ as lender (the "Lender"), [(4) U.S. Trade Funding
Corporation], and (5) LaSalle National Bank, (the "Assignee"), as trustee of the
[__________Trust __________] formed pursuant to the Trust Agreement.
RECITALS
WHEREAS, on the date hereof, the Lender has an outstanding loan to the
Borrower in the principal amount of $[_______] (such loan, to the extent
outstanding on the Effective Date, being referred to as the "Loan"), subject to
the terms of the Loan Agreement (as hereinafter defined);
WHEREAS, the Lender and the Facility Agent propose to sell, assign and
transfer to the Assignee, and the Assignee proposes to accept and assume from
the Lender and the Facility Agent all of the rights, benefits and obligations of
the Lender and the Facility Agent under the Loan Agreement, the Floating Rate
Notes and the Eximbank Guarantee then outstanding in respect thereof including
all rights, benefits and obligations under the Security Documents, all on the
terms and subject to the conditions of this Transfer Agreement (such rights,
benefits and obligations being herein referred to as the "Assigned Property");
WHEREAS, this Transfer Agreement is being entered into pursuant to Clause 4
of the Loan Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions.
-----------
1.1 "Loan Agreement" means the Guaranteed Loan Agreement dated as of 27
--------------
August, 1996 (as amended, supplemented and otherwise modified and in effect from
time to time) and made between YA96A Limited, as Borrower, ABN AMRO Bank N.V.,
Chicago branch, as facility agent, the financial institutions party thereto,
Export-Import Bank of the United States and Wilmington Trust Company, as
Security Trustee;
-4-1-
1.2 Defined terms used and not defined herein shall have the respective
meanings given to such terms in the Loan Agreement.
SECTION 2. Assignment.
----------
2.1 On the terms set forth herein and subject to the satisfaction of the
conditions to effectiveness set forth in Section 4 hereof and the EXIM
Guarantee, effective as of [the Conversion Date to be included] (the "Effective
Date"): (a) the Lender and the Facility Agent hereby sell, assign and transfer
to the Assignee all of the right, title and interest of the Lender and the
Facility Agent in and to the Assigned Property arising from and after the
Effective Date, and (b) the Assignee hereby accepts such sale, assignment and
transfer and hereby assumes all of the obligations of the Lender and the
Facility Agent from and after the Effective Date under the Loan Agreement in
respect of such Floating Rate Notes outstanding thereunder and the Eximbank
Guarantee.
2.2 Each of the parties hereto hereby confirm that in consideration of
such sale, transfer and assignment and with effect from the Effective Date, the
Lender and the Facility Agent are hereby released from all obligations under the
Loan Agreement (but only to the extent assigned hereby), under the Floating Rate
Notes and under the EXIM Guarantee.
2.3 Such sale, assignment and transfer shall be without recourse,
representation or warranty except as expressly provided herein.
2.4 The Assignee hereby expressly assumes, effective as of the Effective
Date, for the benefit of the Borrower and EXIM, all of the Facility Agent's and
the Lender's obligations under the EXIM Guarantee.
2.5 The Assignee further agrees for the benefit of the Borrower and EXIM
(i) to perform its obligations under the Trust Agreement to the same extent as
if the terms thereof (which are hereby incorporated by reference) were set out
herein in full, (ii) not to amend, modify or waive any provision of the
Liquidity Agreement without the prior written consent of EXIM and (iii) not to
amend or modify the interest rate set forth in the Liquidity Agreement without
the prior written consent of the Borrower and EXIM, provided that any amendment,
modification or waiver of the Liquidity Agreement which does not comply with the
provisions of this Clause 2.5 shall be null and void for all purposes of the
Operative Documents and the EXIM Guarantee
SECTION 3. Payments.
--------
3.1 As consideration for the sale, assignment and transfer contemplated by
Section 2 hereof, the Assignee shall by not later than 1:00 p.m. New York time
on the Effective Date, pay to the Lender an amount equal to $_________________.
3.2 The Lender and the Assignee agree that any principal, interest and
other payments with respect to the Assigned Property (i) accrued prior to but
excluding the
-4-2-
Effective Date or owed pursuant to Clause 5.02 of the Loan Agreement shall be
payable to, and for the account of, such Lender, and (ii) accruing from and
after the Effective Date shall be payable to, and for the account of, the
Assignee. Each party further agrees that it will hold for the other party any
principal, interest or other amounts that it may receive to which the other
party shall be entitled pursuant to the preceding sentence and pay, in like
money and funds, any such amounts that it may receive to the other party
promptly upon receipt.
3.3 All payments hereunder shall be made in Dollars and in immediately
available funds, without setoff, deduction or counterclaim to the Lender by
payment to its account no. [_____] with ____________________).
SECTION 4. Conditions to Effectiveness.
---------------------------
The effectiveness of the sale, assignment and transfer contemplated
hereby is subject to the satisfaction of each of the following conditions:
4.1 the due execution and delivery of this Transfer Agreement by the
Lender, the Assignee, the Facility Agent, [U.S. Trade Funding Corporation] and
the Borrower;
4.2 the receipt by the Lender of the payment required to be made by the
Assignee under Section 3.1 hereof;
4.3 receipt by the Facility Agent (for the account of the Persons entitled
thereto) of all sums due and payable by the Borrower under the Loan Agreement
and/or the Floating Rate Notes on or before the Effective Date;
4.4 receipt by the Assignee of the Fixed Rate Notes referred to in Clause
4.02 of the Loan Agreement; and
4.5 receipt by the Assignee of the EXIM guarantee legend on the Fixed Rate
Notes issued by the Borrower in favor of the Assignee.
SECTION 5. Representations and Warranties of the Lender, the Facility
----------------------------------------------------------
Agent and the Assignee.
----------------------
Each of the Lender and the Facility Agent represents and warrants to the
Assignee, the Borrower and EXIM and the Assignee represents (in respect of
subclauses (a) and (b)) to EXIM, the Facility Agent and the Lender that (a) it
has full power and authority, and has taken all action necessary to execute and
deliver this Transfer Agreement and any and all other documents required to be
executed or delivered by it in connection with this Transfer Agreement and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Transfer Agreement, and no governmental authorization or other
authorizations are required to be obtained by it in connection therewith, (b)
immediately prior to the Conversion contemplated hereby, it owns all right,
title and interest in and to the Floating Rate Notes and, pursuant to this
Transfer Agreement, has transferred all such right,
-4-3-
title and interest free and clear of all Liens, and (c) this Transfer Agreement
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms.
SECTION 6. Further Assurances.
------------------
The Lender, the Facility Agent and the Assignee hereby agree to execute and
deliver such other instruments, and take such other actions, as either party may
reasonably request in connection with the transactions contemplated by this
Transfer Agreement.
SECTION 7. Governing Law; Jurisdiction; Service of Process; Venue; Waiver
--------------------------------------------------------------
of Jury Trial; Etc.
-------------------
This Transfer Agreement shall be governed by and construed in accordance
with the law of the State of New York. Any legal action or proceeding arising
out of or relating to this transfer agreement or the transactions contemplated
hereby, and any action or proceeding to execute or otherwise enforce any
judgment obtained in connection therewith, may be instituted in the Supreme
Court of the State of New York, County of New York or in the U.S. District Court
for the Southern District of New York, and by execution and delivery of this
transfer agreement each of the parties hereby irrevocably and unconditionally
submits generally (but non-exclusively) to the jurisdiction of each such court.
Each of the parties hereby irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to such party at its address specified in Section 9 hereof or to such
other Person as may be appointed pursuant to Clause 22 of the Loan Agreement.
Each of the parties hereby agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. The Assignee
irrevocably waives, to the fullest extent permitted by law, any objection which
the Assignee may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Each of the
parties hereby irrevocably waives, to the fullest extent permitted by law, any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
SECTION 8. Notices.
-------
All communications between the parties hereto (including, without
limitation, any modifications of, or any waivers or consents under, this
Transfer Agreement) and notices in connection with this Transfer Agreement shall
be in writing, hand-delivered or sent by ordinary mail, telex or facsimile
transmitter, addressed as follows: (a) if to the Assignee at its address set
forth beneath its signature hereto, and (b) if to the Borrower, the Facility
Agent or EXIM, at its address set forth beneath its signature to the Loan
Agreement or, in the case of a Lender, at its Lending Office. All such
communications and notices shall be effective upon receipt.
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SECTION 9. Binding Effect; Amendments.
--------------------------
This Transfer Agreement shall be binding upon and inure to the benefit of
the parties hereby and their respective successors and assigns. No party hereto
(other than the Assignee) may assign or transfer any of its rights or
obligations under this Transfer Agreement without the prior consent of the other
parties hereto, and any purported assignment, absent such consent, shall be
void. No provisions of this Transfer Agreement may be amended, waived or
otherwise modified except by an instrument in writing signed by each party
hereto.
SECTION 10. Interpretation.
--------------
The headings of the various sections hereof are for convenience of
reference only and shall not affect the meaning or construction of any provision
hereof.
SECTION 11. Counterparts.
------------
This Transfer Agreement may be executed in any number of counterparts, each
of which shall be identical and all of which, when taken together, will
constitute one and the same instrument, and each party may execute this Transfer
Agreement by signing any such counterpart.
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IN WITNESS WHEREOF each of the parties hereto has caused this Transfer
Agreement to be duly executed and delivered as of the day and year first before
written.
____________________________________
as Lender
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
LASALLE NATIONAL BANK
By: ________________________________
Name:
Title:
U.S. TRADE FUNDING CORPORATION
By: ________________________________
Name:
Title:
Address:
Telephone No.:
Telex No.:
Facsimile No.:
Attention:
YA96A LIMITED
By: ________________________________
Name:
Title:
ABN AMRO BANK N.V., Chicago Branch
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By: __________________________________
Name:
Title
By: ___________________________________
Name:
Title:
Acknowledged and Agreed:
EXPORT-IMPORT BANK
OF THE UNITED STATES
By: ________________________________
Name:
Title:
APPENDIX 5
FORM OF NOTICE OF CONVERSION
----------------------------
To: ABN AMRO Bank N.V., Chicago Branch
as Facility Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
U.S.A.
Attention: ______________________
______________________
and
The Export-Import Bank of the United States
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Dated: _____________, 1996
Re: Guaranteed Loan Agreement dated as of 27 August 1996
----------------------------------------------------
Ladies and Gentlemen:
1. We refer to the Guaranteed Loan Agreement (as from time to time amended,
varied, novated or supplemented, the "Loan Agreement") entered into among
YA96A Limited as Borrower, the financial institutions party thereto as
Lenders, Wilmington Trust Company, as Security Trustee, ABN AMRO Bank N.V.,
Chicago branch, as Facility Agent, the financial institutions party thereto
as Lenders and Export-Import Bank of the United States. Terms defined as
the Loan Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Loan Agreement and on [date
of proposed Conversion] (the "Conversion Date"), we wish to convert
interest payable on the Loan to the Fixed Rate from the Floating Rate upon
the terms and subject to the conditions contained therein.
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3. The Fixed Rate applicable to the Loan from and after the date of Conversion
shall be _____ % per annum.
We have caused this Notice of Conversion to be executed by our authorized
representative as of the date hereof.
Yours faithfully
_________________________________
for and on behalf of
YA96A Limited
APPENDIX 6
FIXED RATE PRICING PROCEDURE
For purposes of conversion to the Fixed Rate pursuant to Clause 4 of the
Guaranteed Loan Agreement, the Facility Agent shall, no later than 5.00 p.m.,
Chicago time, on the Chicago business day prior to the date, which date shall be
a Chicago business day, on which the Underwriter proposes to set the Fixed Rate
(the "Rate Set Date"), deliver to the Borrower and the Lessee a notice, for
acceptance or rejection by the Borrower, which sets forth the rate (the
"Proposed Maximum Fixed Rate") and reasonable detail of the calculation thereof,
which the Fixed Rate will not exceed if the Underwriter and the Borrower were to
set the Fixed Rate on the Rate Set Date. The Borrower shall, prior to 8.00
a.m., Chicago time, on the Rate Set Date notify the Facility Agent by telecopy
of its acceptance or rejection of the Proposed Maximum Fixed Rate. If the
Borrower does not so notify the Facility Agent, the Borrower shall be deemed to
have rejected the Proposed Maximum Fixed Rate.
Notwithstanding any acceptance of the Proposed Maximum Fixed Rate by the
Borrower in accordance with the prior paragraph, the Borrower may telephone the
Facility Agent no later than 8.00 a.m., Chicago time, on the Rate Set Date to
determine whether the Facility Agent wishes to confirm the Proposed Maximum
Fixed Rate or to quote a newer and lower rate to be the maximum Fixed Rate (the
"New Maximum Rate"). During such telephone conversation, which the Borrower
authorizes to be tape-recorded, the Borrower shall have the right to reject the
Proposed Maximum Fixed Rate, to accept the New Maximum Rate or to reject both
rates.
If the Borrower shall have accepted the Proposed Maximum Fixed Rate or the
New Maximum Rate, the Underwriter shall, while using its best efforts to
minimize the rate, set the Fixed Rate on the Rate Set Date. Provided that the
Fixed Rate so set by the Underwriter equals or is less than the rate accepted by
the Borrower in accordance with these procedures, such rate shall be the Fixed
Rate for all purposes of Clause 4 of the Guaranteed Loan Agreement.
