EX-4.3 8 a2219001zex-4_3.htm EX-4.3

Exhibit 4.3

 

Execution Form

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY AERCAP HOLDINGS N.V.  THIS REDACTED VERSION OMITS CONFIDENTIAL INFORMATION, DENOTED BY ASTERISKS [***].  A REFERENCE COPY, INCLUDING THE TEXT OMITTED FROM THIS REDACTED VERSION, HAS BEEN DELIVERED TO THE SECURITIES AND EXCHANGE COMMISSION.

 

DATED            May 2013

 

AERCAP HOLDINGS N.V.

 

LATAM AIRLINES GROUP S.A.

 


 

FRAMEWORK DEED

 

Relating to the purchase and leaseback of ten (10) used Airbus A330-200 aircraft, nine (9) new Airbus A350-900 aircraft, four (4) new Boeing 787-9 aircraft and two (2) new Boeing 787-8 aircraft

 


 

 

Freshfields Bruckhaus Deringer LLP

65 Fleet Street

London EC4Y 1HS

 



 

CONTENTS

 

CLAUSE

 

 

PAGE

 

 

 

 

1.

Definitions and Interpretation

 

1

 

 

 

 

2.

Purpose; Base Documents; Conditions Precedent; Agreement

 

6

 

 

 

 

3.

Definitive Documents — Arrangements for Execution and Key Terms and Conditions

 

8

 

 

 

 

4.

Cancellation Rights Following Delay in Delivery / Total Loss

 

11

 

 

 

 

5.

Other Original Purchase Agreement Related Matters

 

12

 

 

 

 

6.

Guarantees

 

15

 

 

 

 

7.

Obligations of the Parties and Related Matters

 

15

 

 

 

 

8.

Representations and Warranties

 

17

 

 

 

 

9.

Payment Related Matters

 

18

 

 

 

 

10.

Assignments

 

18

 

 

 

 

11.

Other Matters

 

18

 

 

 

 

12.

Governing Law and Disputes; Process Agent

 

21

 

 

Schedule 1 Aircraft details and Scheduled Delivery Quarters

 

 

 

Schedule 2 A330 Aircraft

 

 

 

Schedule 3 Escalation Formula and Sample Calculations

 

 

 

Schedule 4 Relevant Events

 

 

 

Schedule 5 Relevant Additional clauses for Purchase Agreement Assignment

 

 

 

Schedule 6 Form of Purchase Agreement

 

 

 

Schedule 7 Form of Lease (A350-900 Aircraft)

 

 

 

Schedule 8 Form of Lease (787-8 Aircraft and 787-9 Aircraft)

 

 

 

Schedule 9 Additional Provisions for Lease (A350-900 Aircraft)

 

 

 

Schedule 10 Additional Provisions for Lease (787-8 Aircraft and 787-9 Aircraft)

 

 

 

Schedule 11 Form of Lessor Guarantee

 

 

I



 

THIS DEED is made by way of deed and is entered into on                                             2013

 

BETWEEN:

 

(1)                                 AERCAP HOLDINGS N.V., a public company with limited liability (naamloze vennootshap met beperkte aansprakelijkheid) incorporated under the laws of The Netherlands whose registered office is at AerCap House, Stationsplein 965, 1117 CE Schiphol, The Netherlands (AerCap); and

 

(2)                                 LATAM AIRLINES GROUP S.A., a sociedad anónima incorporated under the laws of Chile, whose registered office is at Av. Presidente Riesco 5711, 20th Floor, Las Condes, Santiago, Chile (LATAM).

 

IT IS AGREED AND THIS DEED WITNESSES as follows.

 

1.                                      DEFINITIONS AND INTERPRETATION

 

In this Deed the following terms have the meanings set out:

 

787-8 Specification has the meaning given to it in clause 3.6(h)(ii).

 

787-9 Specification has the meaning given to it in clause 3.6(h)(ii).

 

A330 Aircraft means each Aircraft listed in Schedule 2.

 

A330 Aircraft Documentation means, with respect to each A330 Aircraft, the documentation referred to in clause 3.7.

 

A330 Purchase Agreement means each of the purchase agreements entered into or to be entered into with respect to an A330 Aircraft, between Lan Cargo Overseas, as seller and a Lessor.

 

A350 Specification has the meaning given to it in clause 3.6(h)(i).

 

Acceptable Guarantor means AerCap Holdings N.V., or such other guarantor notified by Lessor to LATAM provided that such other Guarantor is a Qualifying Person.

 

Actual Delay has the meaning given to it in clause 4.1(c).

 

AerCap Cancellation Right means, with respect to an Aircraft (other than an A330 Aircraft), the right of AerCap to cancel its obligation under this Deed to purchase or procure the purchase of, such Aircraft as set out in clause 4.1(c) or 4.2.

 

Aircraft Specifications means the A350 Specification, the 787-8 Specification and the 787-9 Specification as applicable.

 

Anticipated Delay has the meaning given to it in clause 4.1(c).

 

Affiliate means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified, and includes any trust of which the beneficiary or Owner Participant (if applicable) is the Lessor or Owner Participant (if applicable) or an Affiliate of the Lessor or Owner Participant (if applicable).

 

1



 

Airbus means Airbus S.A.S. or its successor in title.

 

Aircraft means each of the Airframes to be delivered, sold, assigned, as applicable, and leased in accordance with the relevant Lease and this Deed, with the Engines that will be installed on such Airframes at Delivery and all Parts and Aircraft Documents.

 

Aircraft Documents means (i) all Manuals and Technical Records; (ii) all log books, Aircraft records, and other documents provided to Lessee at Delivery of the Aircraft and (iii) all documents listed in a schedule to the relevant Delivery Acceptance Certificate.

 

Airframe means the A330 Aircraft, the nine (9) new Airbus model A350-900 aircraft (each, a A350-900 Aircraft), the four (4) new Boeing model 787-9 aircraft (each, a 787-9 Aircraft) and the two (2) new Boeing model 787-8 aircraft (each, a 787-8 Aircraft).

 

Applicable Reference Adjustment means [***].

 

Applicable Swap Rate means the prevailing twelve (12) year US Dollar SWAP rate as stated on Bloomberg screen service page IRSB18 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those current provided on such page of such service), expressed as a percentage rounded to two (2) decimal places at 11:00 AM New York City time two (2) Business Days prior to the Delivery Date of the relevant Aircraft.

 

Base Documents has the meaning given to it in clause 2.3.

 

Basic Rent for an Aircraft means the amount set out in clause 3.6(g).

 

BFE means the buyer furnished equipment supplied or purchased by or on behalf of LATAM in respect of the Aircraft (other than the A330 Aircraft) for installation by the Manufacturer pursuant to the Original Purchase Agreement on or before the Delivery Date.

 

Boeing means The Boeing Company or its successor in title.

 

Business Day means any day other than a Saturday or a Sunday on which commercial banks are open for business in New York, New York, United States of America, Amsterdam, the Netherlands, Dublin, Ireland, Sao Paolo, Brazil and in Santiago, Chile.

 

Cancellation Right means the AerCap Cancellation Right or the LATAM Cancellation Right, as applicable.

 

Cancelled Aircraft means a Delayed Aircraft in relation to which the provisions of clause 4 apply or a Total Loss Aircraft, as applicable.

 

Compensation Amount means, [***].

 

Definitive Documents has the meaning given to it in clause 3.1.

 

Delay means any delay in the delivery of an Aircraft (other than an A330 Aircraft) by the Manufacturer under the Original Purchase Agreement, whether actual or anticipated, beyond the last day of the originally Scheduled Delivery Quarter applicable to such Aircraft.

 

Delayed Aircraft means any Aircraft the subject of a Delay.

 

2



 

Delivery means (a) with respect to each Aircraft (other than an A330 Aircraft), the delivery of such Aircraft by the Manufacturer under the Original Purchase Agreement and (b) with respect to an A330 Aircraft the delivery of such A330 Aircraft under the relevant A330 Purchase Agreement; its transfer of title to the relevant Lessor and the commencement of the leasing of such Aircraft to LATAM under the related Lease.

 

Delivery Date means, with respect to an Aircraft, the date on which Delivery takes place.

 

Dispute has the meaning given to it in clause 12.2(a).

 

Dollars, United States Dollars, U.S. Dollar, USD, US$ and $ means the lawful currency of the United States of America.

 

Engines means:

 

(a)                                 with respect to an A350-900 Aircraft each Rolls-Royce Trent XWB83 engine;

 

(b)                                 with respect to a 787-9 Aircraft each Rolls-Royce Trent 1000-C1 engine;

 

(c)                                  with respect to a 787-8 Aircraft each Rolls-Royce Trent 1000-C1 engine; and

 

(d)                                 with respect to an A330 Aircraft each engine that is applicable to such Aircraft as specified in column 2 of Schedule 2,

 

including, in each case, all Parts installed on any such Engines.

 

Event of Default has the meaning given to it under the relevant Lease.

 

Features has the meaning defined in clause 5.2.

 

Guaranteed Liabilities means any and all monies, liabilities and obligations (whether actual or contingent, whether now existing or hereafter arising, whether or not for the payment of money, and including any obligation or liability to pay damages and including any interest which would have accrued on the amounts in question) which are now or which may at any time and from time to time hereafter be due, owing, payable, or incurred, or expressed to be due, owing, payable or incurred from or by:

 

(a)                                 Lan Cargo Overseas;

 

(b)                                 TAM; and/or

 

(c)                                  any Affiliate of LATAM,

 

to AerCap or any AerCap Affiliate or any Lessor or any Purchaser under or in connection with any Purchase Agreements, Purchase Agreement Assignments, Airframe Warranties Agreements, Engine Warranties Agreements and any bills of sale or other documentation entered into in connection with the sale and purchase of any Aircraft as contemplated by this Deed, and references to Guaranteed Liabilities includes references to any part thereof.

 

Lan Cargo Overseas means Lan Cargo Overseas Limited a company incorporated under the laws of the Bahamas whose registered office is at Dehands House, 2nd Terrace West, Centreville, Nassau, The Bahamas.

 

3



 

LATAM Cancellation Right means, with respect to an Aircraft (other than an A330 Aircraft), the right of LATAM to cancel its obligation under this Deed to sell or procure the sale of, such Aircraft as set out in clause 4.1(c).

 

Lease means, with respect to each Aircraft, the lease agreement for such Aircraft between LATAM (as lessee) and a Lessor (as lessor) on the terms and conditions specified in clause 3, and, with respect to any Aircraft, references in this Deed to the Lease shall be construed so as to refer to the Lease for such Aircraft.

 

Lease Rent means the Basic Rent adjusted by the provisions of clause 3.6(g).

 

Lease Term means the applicable scheduled lease term as specified in clause 3.6(f).

 

Lessee means LATAM.

 

Lessor means AerCap or an Affiliate of AerCap or a Qualifying Person, or a trustee acting on behalf of any such person, as AerCap may determine, and, with respect to an Aircraft, references to Lessor in this Deed shall be construed so as to refer to the Lessor applicable to such Aircraft.

 

Lessor Guarantee has the meaning given to it in clause 6.1.

 

Losses has the meaning specified in the form of Leases attached to this Deed.

 

Manufacturer means:

 

(a)                                 in relation to the A330 Aircraft and A350-900 Aircraft, Airbus; and

 

(b)                                 in relation to the 787-8 Aircraft and 787-9 Aircraft, Boeing,

 

and references in this Deed to the Manufacturer shall be construed so as to refer to whichever of Airbus or Boeing is applicable.

 

Manufacturer Consent means, with respect to any Aircraft (other than the A330 Aircraft), the consent and agreement of the Manufacturer to the assignment of certain rights under the relevant Original Purchase Agreement (in particular the right to take title to such Aircraft) to the applicable Lessor, in such form as is market practice at the relevant time.

 

Operative Documents has the meaning set out in each Lease.

 

Original Purchase Agreement means:

 

(a)                                 in relation to an A350-900 Aircraft, the purchase agreement relating to the acquisition by TAM of the Aircraft from the Manufacturer dated 20 December 2005 as amended and restated from time to time;

 

(b)                                in relation to a 787-8 Aircraft or 787-9 Aircraft, the purchase agreement relating to the acquisition by LATAM of the Aircraft from the Manufacturer dated 29 October 2007 and bearing reference number 3256,

 

and references in this Deed to the Original Purchase Agreement shall be construed so as to refer to whichever agreement is applicable.

 

4



 

Owner Participant means such entity as AerCap shall advise Lessee in writing as being the owner participant under any owner trust agreement entered into with a Lessor with respect to an Aircraft.

 

Parts means, whether or not installed in or attached to the Airframe or any Engine any component, furnishing or equipment (other than a complete Engine) installed on or attached to or furnished with the Airframe or any Engine on the Delivery Date or thereafter. Parts includes BFE and Features.

 

[***]

 

Purchase Agreement means:

 

(a)                                 in relation to an A350-900 Aircraft, a 787-8 Aircraft or a 787-9 Aircraft, the purchase agreement between the applicable Purchaser (as purchaser of the Aircraft) and the applicable Seller (as seller) substantially in the form of Schedule 6; and

 

(b)                                 in relation to an A330 Aircraft, the A330 Purchase Agreement,

 

and, with respect to any Aircraft, references in this Deed to the Purchase Agreement shall be construed so as to refer to the Purchase Agreement for such Aircraft.

 

Purchase Agreement Assignment means, if applicable in relation to an Aircraft (other than an A330 Aircraft), the assignment of certain rights under the relevant Original Purchase Agreement (in particular the right to take title to such Aircraft) entered into between the relevant Seller (as assignor) and the relevant Lessor (as assignee) and consented to by the Manufacturer by way of the Manufacturer Consent (unless the Manufacturer is also a party to the Purchase Agreement Assignment and provides its consent by entering into such document).

 

Purchase Price for an Aircraft (other than an A330 Aircraft) means the amount set out in clause 3.6(a) for such aircraft type as adjusted in accordance with the provisions of clause 3.6(a).

 

Purchaser means AerCap or an Affiliate of AerCap or a Qualifying Person or a Person guaranteed by a Qualifying Person.

 

Qualifying Person means a Person (i) with a net worth of [***].

 

Reference Rate means [***].

 

Relevant Event means any event as specified in Schedule 4.

 

Relevant Extracts has the meaning given to it in clause 5.8.

 

Scheduled Delivery Date for an Aircraft (other than the A330 Aircraft) is the date notified by the Manufacturer as the date on which such Aircraft is scheduled to be ready for delivery and acceptance under the Original Purchase Agreement.

 

Scheduled Delivery Quarter means the quarter during which each Aircraft (other than the A330 Aircraft) is currently scheduled to be delivered under the Original Purchase Agreement as set out in column 2 of Schedule 1.

 

5



 

Seller means LATAM or an Affiliate of LATAM and, in respect of the A330 Aircraft, Lan Cargo Overseas.

 

Specification means for an aircraft type (other than in respect of an A330 Aircraft), the specification identification number as set out in clause 3.6(h).

 

Specification Change Notice has the meaning given to it in clause 5.1.

 

[***]

 

[***]

 

TAM means TAM Linhas Aéreas S.A.

 

Total Loss means:

 

(a)                                 in relation to any A330 Aircraft, any of the following:

 

(i)             the actual or constructive total loss of the Aircraft (including any damage to the Aircraft or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or

 

(ii)          the Aircraft being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or

 

(iii)       the requisition of title or other compulsory acquisition of title for any reason of the Aircraft by any Government Entity or other Person, whether de jure or de facto; or

 

(iv)      the hi-jacking, theft, disappearance, confiscation, detention, or hire of the Aircraft, which deprives any person permitted by this Deed to have possession and/or use of the Aircraft of its possession and/or use for more than sixty (60) days (and one hundred eighty 180 days in the case of seizure or requisition for use).  If, within 30-days following the Total Loss Date in relation to such hi-jacking, theft, disappearance, confiscation, detention, seizure or requisition for use or hire of the Aircraft, is restored to the possession of TAM, then the scheduled Delivery should continue; and

 

(b)                                 in relation to any Aircraft (other than as A330 Aircraft), the loss, destruction or, in the reasonable opinion of the relevant Manufacturer, the damage of such Aircraft beyond repair.

 

Total Loss Aircraft means any Aircraft the subject of a Total Loss.

 

Capitalized terms used but not otherwise defined herein shall have the meaning set forth for such terms in the form Leases attached to this Deed.

 

2.                                      PURPOSE; BASE DOCUMENTS; CONDITIONS PRECEDENT; AGREEMENT

 

2.1                               This Deed constitutes the agreement reached among AerCap and LATAM in respect of the purchase by AerCap or by a Purchaser procured by AerCap and the leaseback to LATAM of the Aircraft.

 

2.2                               The purpose of this Deed is to set forth:

 

6



 

(a)                                 the terms of the agreement of AerCap to provide a purchase and leaseback for the Aircraft, including the terms of LATAM’s agreement to sell, or procure the sale of, each Aircraft to the applicable Lessor and concurrently to lease such Aircraft from the applicable Lessor, and AerCap’s agreement to cause the applicable Lessor to purchase such Aircraft from the applicable Seller (or Manufacturer, pursuant to a Purchase Agreement Assignment in the case of an Aircraft other than an A330 Aircraft), and concurrently to lease such Aircraft to, LATAM, on the applicable Delivery Date for such Aircraft;

 

(b)                                 the method for determining the key economic provisions, notably the purchase price payable for the Aircraft and the scheduled rental payable under the related Lease; and

 

(c)                                  certain other terms that are to be applicable to the purchase and leaseback transaction relating to each Aircraft.

 

Base Documents

 

2.3                               Attached to this Deed as Schedules are the forms of the following documents (together with some specific pre-agreed amendments) which have been fully negotiated by AerCap and LATAM, with respect to the purchase and leaseback of the Aircraft (collectively, the Base Documents):

 

(a)                                 Schedule 6 — Purchase Agreement - to be used for the purchase of the A350-900 Aircraft, 787-8 Aircraft and 787-9 Aircraft subject to the terms of clause 3.4;

 

(b)                                 Schedule 7 — Lease Agreement (A350-900 Aircraft variant) — subject, if requested by AerCap at its discretion that they be inserted, to the amendments specified in Schedule 9;

 

(c)                                  Schedule 8 — Lease Agreement (787-8 Aircraft and 787-9 Aircraft variant) — subject, if requested by AerCap at its discretion that they be inserted, to the amendments specified in Schedule 10;

 

(d)                                 [***];

 

(e)                                  [***];

 

(f)                                   Schedule 11 — form of Lessor Guarantee.

 

Conditions Precedent

 

2.4                               As a condition precedent to the effectiveness of this Deed, each party has provided the following documentation to the other party:

 

(a)                                 evidence that it has duly authorised the entry into and performance of the transactions contemplated by of this Deed and evidence of the authority of the person signing this Deed on its behalf, all such documentation to be reasonably satisfactory to the party receiving it; and

 

(b)                                a legal opinion as to this Deed, in form and substance acceptable to the other party, acting reasonably, from external legal counsel in its jurisdiction of incorporation that the parties have separately agreed will provide such opinion.

 

7



 

By signature to this Deed, each party confirms its receipt and satisfaction of the foregoing conditions.

 

Agreement to purchase, sell and lease

 

2.5                               Subject to the terms and conditions of this Deed and, with respect to each Aircraft, the Definitive Documents and/or the A330 Aircraft Documentation (where applicable) and/or any other documentation entered into by the Seller with the Purchaser relating to such Aircraft:

 

(a)                                 AerCap agrees to buy or procure the purchase of each Aircraft from the Seller;

 

(b)                                 LATAM agrees to sell or procure the sale of each Aircraft to the Purchaser; and

 

(c)                                  Aercap agrees that it will procure that the Purchaser leases the Aircraft to LATAM pursuant to the Lease and LATAM agrees to take the Aircraft on lease from the Purchaser, such leasing to commence simultaneously with the purchase and sale of the Aircraft.

 

3.                                      DEFINITIVE DOCUMENTS — ARRANGEMENTS FOR EXECUTION AND KEY TERMS AND CONDITIONS

 

Definitive Documents — Execution Process

 

3.1                               The definitive documentation for the purchase and leaseback of each Aircraft, other than the A330 Aircraft as to which clause 3.7 shall apply, (with respect to each Aircraft, the Definitive Documents) will be in the form of the Base Documents (except as AerCap and LATAM may otherwise agree in writing) and will reflect the specific purchase and leaseback terms for such Aircraft determined pursuant to this Deed.

 

3.2                               AerCap, acting reasonably, may, request the amendment of the form of the Lease Agreement for any Aircraft, subject to LATAM’s consent, acting reasonably:

 

(a)                                 on the advice of its legal counsel to reflect any changes in law in Chile or Brazil after the date of this Deed or, if different, the proposed State of Registration of the Aircraft;

 

(b)                                 to reflect the requirements of AerCap’s financiers who will provide financing for the Aircraft provided that such amendments reflect market standards for operating lease transactions for the relevant Aircraft or similar Aircraft at the time of the request and further provided such changes will not lead to increased costs for LATAM; and/or

 

(c)                                  to make changes of an administrative nature, for example to reflect updated definitions, names and addresses of parties, account details and the like,

 

provided always that any such changes do not increase any material obligations or reduce any material rights of LATAM under the related Lease Agreement.

 

AerCap will reimburse LATAM in respect of any reasonable out of pocket expenses (including legal fees) incurred by LATAM in connection with documenting any such amendments.

 

3.3                               AerCap will distribute execution versions of the Definitive Documents with respect to each Aircraft (other than an A330 Aircraft) at least thirty (30) days before the Scheduled

 

8


 

Delivery Date for such Aircraft. Upon distribution of such documents LATAM will execute, and AerCap will cause the relevant Purchaser and Lessor to execute, the Definitive Documents with respect to each Aircraft to which it is to be a party, and the parties will thereupon exchange fully executed copies of the Definitive Documents, in each case at least fifteen (15) days before the Scheduled Delivery Date for such Aircraft.  For the avoidance of doubt, if all Definitive Documents with respect to an Aircraft are not executed and delivered by all parties to each such document, then none of the Definitive Documents for such Aircraft shall be binding or otherwise enforceable against any of the parties thereto.

 

Purchase Agreement Assignment

 

3.4          If LATAM wishes that title to any Aircraft (other than an A330 Aircraft as to which clause 3.7 shall apply) is transferred directly to the relevant Lessor by the Manufacturer then LATAM will notify AerCap of the same at least forty five (45) days prior to the first Aircraft of that type and with respect to any further Aircraft of that type at least thirty (30) days prior to the Scheduled Delivery Date, such notice to be accompanied by a draft of the Purchase Agreement Assignment relating to such title transfer. The parties will work together in good faith with a view to agreeing upon the execution form of such Purchase Agreement Assignment and any related Manufacturer Consent such that the same is agreed at least twenty (20) days prior to the Scheduled Delivery Date. Absent such agreement, LATAM and the relevant Lessor will enter into a Purchase Agreement for such Aircraft using the Base Document form. The parties agree that the form of Purchase Agreement Assignment, once agreed as contemplated by this clause, will actually be signed by the relevant parties thereto on the Delivery Date for the applicable Aircraft subject always to the terms and conditions of this Deed and to AerCap and the relevant Purchaser being satisfied that LATAM will take the Aircraft on lease in accordance with the provisions of the related Lease simultaneously with the Purchaser taking title to the Aircraft by way of the Purchase Agreement Assignment.

 

3.5          In the event that an Aircraft is purchased pursuant to a Purchase Agreement Assignment, the parties agree that the additional clauses set out in Schedule 5 to this Deed will be deemed to apply to the purchase and delivery of any Aircraft the subject of a Purchase Agreement Assignment.

 

Key Terms and Conditions

 

3.6          The key terms and conditions for the purchase and leaseback of each of the Aircraft, other than the A330 Aircraft as to which clause 3.7 shall apply, are as follows:

 

(a)                                 Purchase Price: [***];

 

(b)                                 Seller: at LATAM’s option, either:

 

(i)             for the A350-900 Aircraft, TAM pursuant to the Purchase Agreement or Airbus (by way of a Purchase Agreement Assignment); or

 

(ii)          for the 787-8 Aircraft and 787-9 Aircraft, LATAM pursuant to the Purchase Agreement or Boeing (by way of a Purchase Agreement Assignment);

 

(c)                                  Purchaser/Lessor: at AerCap’s option:

 

(i)             AerCap; or

 

9



 

(ii)          an AerCap Affiliate (or an entity acting as trustee on behalf of such Affiliate) guaranteed by an Acceptable Guarantor pursuant to a guarantee in the form of the Guarantee; or

 

(iii)       a Qualifying Person (or a Person guaranteed by an Acceptable Guarantor), provided always that, notwithstanding that the Aircraft is to be purchased by and leased to LATAM by a Qualifying Person (or a Person guaranteed by an Acceptable Guarantor), AerCap will be primarily liable to ensure that such Person purchases the Aircraft on the Delivery Date subject to and in accordance with the requirements of this Deed and the Operative Documents;

 

(d)                                 Lessee: LATAM;

 

(e)                                  Delivery Date: the date of delivery of such Aircraft by the Manufacturer under the Original Purchase Agreement, estimated to be a date in the Scheduled Delivery Quarter as set out in Schedule 1, noting the potential for a delay in delivery in accordance with the terms of the related Original Purchase Agreement, which is subject to the delayed delivery arrangements agreed by the parties in clause 4;

 

(f)                                   Lease Term: for each Aircraft, [***] from the actual Delivery Date for such Aircraft;

 

(g)                                  Lease Rent: [***];

 

(h)                                 Aircraft specification:

 

(i)             A350-900 Aircraft: LATAM confirms to AerCap that the current specification of the A350-900 aircraft is the standard specification as set out in the Airbus Aircraft Description Document number [***], as amended by an applicable Specification Change Notices (the A350 Specification);

 

(ii)          Boeing Aircraft: LATAM confirms to AerCap that the current specification for the 787-8 Aircraft and the 787-9 Aircraft is as follows: the standard specification referred to by the Boeing Detail Specification number [***] (the 787-8 Specification and the 787-9 Specification as applicable);

 

(iii)       LATAM agrees that it will not discriminate between the Aircraft (excluding the A330 Aircraft) to be subject to the purchase and leaseback transaction as contemplated by this Deed and the other aircraft that are subject to the Original Purchase Agreement and that are to be delivered within a similar timeframe as the Aircraft, such that the final specification of the Aircraft will be substantially the same as such other aircraft.

 

LATAM agrees to consider in good faith, without obligation to consent, any requests by AerCap to include additional specifications which will assist in the remarketing of the Aircraft, such additions to be incorporated at AerCap’s cost and such cost will not lead to any adjustment in the rent payable by Lessee under the related Lease; and

 

(i)                                     Other Terms and Conditions: as set out in the agreed form Lease that is applicable to such Aircraft type.

 

A330 Aircraft Documentation

 

3.7          On or prior to the date of this Deed, the parties have agreed the following relating to each A330 Aircraft:

 

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(a)                                 the form of A330 Purchase Agreement;

 

(b)                                 the form of Lease;

 

(c)                                  the specifications of each A330 Aircraft; and

 

(d)                                 the purchase price, Lease rent, Lease rent factor, and Lease term for each A330 Aircraft (as set out in Schedule 2).

 

3.8          Subject to the terms and conditions of each Purchase Agreement and each Lease, the parties confirm their intention that the completion of the purchase and leaseback of the A330 Aircraft will take place during the month of June, 2013 and each party agrees to cooperate together to ensure that such completions take place in line with a schedule of closings that they have separately settled upon.

 

3.9          [***].

 

4.             CANCELLATION RIGHTS FOLLOWING DELAY IN DELIVERY / TOTAL LOSS

 

[***]

 

4.1          [***]:

 

Total Loss of an Aircraft prior to Delivery

 

4.2          If, before Delivery, an Aircraft suffers a Total Loss, LATAM shall, as soon as reasonably practicable after it has become aware of such Total Loss, notify AerCap in writing thereof.  Following notification of a Total Loss, subject to clause 4.3, AerCap has the right, by giving notice in writing to LATAM, to cancel its obligation under this Deed to purchase or procure the purchase of the Total Loss Aircraft and lease it to LATAM (and each applicable Purchaser and Lessor, if Definitive Documents have been executed and delivered, shall have a corresponding right under such documents).  If AerCap exercises such Cancellation Right then, [***] LATAM will pay to AerCap the Compensation Amount for the Total Loss Aircraft within six (6) months of the exercise of the Cancellation Right.

 

[***]

 

4.3          [***].

 

4.4          [***].

 

4.5          [***].

 

4.6          [***].

 

4.7          [***].

 

4.8          All references to “Aircraft” in this clause 4 shall be construed so as not to include any A330 Aircraft, it being agreed that this clause 4 does not apply to the A330 Aircraft.

 

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5.             OTHER ORIGINAL PURCHASE AGREEMENT RELATED MATTERS

 

Specification Change Notices, Features and BFE

 

5.1          The parties acknowledge that the A350 Specification is not yet fully defined.  In this regard, LATAM agrees with AerCap that LATAM will finalise, or procure that TAM finalises, the list of Specification Change Notices (SCNs) and BFE to be installed on each A350-900 Aircraft with the Manufacturer in accordance with the Manufacturer’s usual processes as contemplated by the Original Purchase Agreement. LATAM will give AerCap prior written notice of proposed SCNs and BFE to be incorporated on each A350-900 Aircraft and confirm to AerCap such SCNs and BFE once contracted with Airbus or the relevant BFE vendor.

 

5.2          The parties acknowledge the amendments to the 787-8 Specification and the 787-9 Specification are not yet fully defined.  In this regard, LATAM agrees with AerCap that LATAM will finalise the list of features (Features) and BFEs to be installed on each 787-8 Aircraft and 787-9 Aircraft with the Manufacturer in accordance with the Manufacturer’s usual processes as contemplated by the Original Purchase Agreement. LATAM will give AerCap prior written notice of proposed Features and BFEs to be incorporated on each 787-8 Aircraft and the 787-9 Aircraft and confirm to AerCap such Features and BFE once contracted with Boeing or the relevant BFE vendor.

 

5.3          In relation to any such amendment to the Specification by way of SCN and/or BFE, LATAM agrees that it will not discriminate between the Aircraft to be subject to the purchase and leaseback transaction as contemplated by this Deed and the other aircraft that are subject to the Original Purchase Agreement to be delivered during a similar timeframe as the Aircraft, and that the final Specification of the Aircraft as amended by any Specification Change Notices and/or BFE shall be substantially the same as such other aircraft. LATAM further agrees to consider in good faith without obligation to consent a request from AerCap following its review of SCN, Features or BFE list, for the installation, at AerCap’s cost (and on the basis that such costs shall not be rentalised), of incremental SCNs, Features or BFEs which would improve the remarketability of the Aircraft following the Lease with LATAM.

 

Development Changes and Certification Changes

 

5.4          From time to time each Aircraft Specifications may be revised by the relevant Manufacturer (Development and Certification Changes).  LATAM shall as soon as reasonably practicable, provide AerCap a written copy of such Development and Certification Changes.

 

Manufacturer Notices

 

5.5          LATAM shall, as soon as reasonably practicable, inform AerCap of the contents of any notices and other communications received by LATAM from the relevant Manufacturer concerning the following with respect to each Aircraft:

 

(a)                                the proposed month of Delivery;

 

(b)                                 the manufacturer’s serial number;

 

(c)                                  the Scheduled Delivery Date of each Aircraft;

 

(d)                                 any change to or amendment of the Specification of any Aircraft;

 

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(e)                                  the arrangements for the delivery of the Aircraft;

 

(f)                                   any actual or anticipated delay in delivery of any Aircraft;

 

(g)                                  any default by LATAM or TAM or any Affiliate under any Original Purchase Agreement where the relevant Manufacturer has reserved its rights in relation to such default or notifies LATAM of the termination, in whole or in part, of any Original Purchase Agreement as a consequence of such default.

 

Delivery Inspections and delivery condition deviations

 

5.6    (a)    Subject to compliance by AerCap with any requirements of the relevant Manufacturer, LATAM will use reasonable endeavours to procure that AerCap is entitled, if it wishes to do so, to participate in the inspection of the Aircraft conducted under the provisions of the related Original Purchase Agreement and to attend the delivery and acceptance process for each Aircraft so that AerCap can verify that the Aircraft meets the Aircraft Specification as amended by SCNs, Features and BFE, the requirements of the Original Purchase Agreement, this Deed and the other Operative Documents, as to specification and condition.

 

(b)                                 Where, with respect to an Aircraft, the delivery acceptance and inspections procedure has been conducted by the Manufacturer under the Original Purchase Agreement and:

 

(i)             such Aircraft does not meet the Specification; and/or

 

(ii)          LATAM, acting in a manner that is consistent with best practices of leading commercial airlines accepting delivery of aircraft new from the Manufacturer, determines that it is not willing to accept delivery of such Aircraft under the Original Purchase Agreement due to other technical deficiencies in the condition of such Aircraft,

 

then the parties shall consult together, in good faith, with respect to such deviation from Specification and/or other technical deficiencies, such consultation to continue for at least fifteen (15) Business Days or such longer period as the parties may agree. LATAM will use reasonable efforts to arrange for the Manufacturer to be involved in such consultations. If following such consultations the parties have not agreed upon a remedy with respect to the Specification deviation or other deficiency that is acceptable to each of them, in their sole discretion (or in the case of a deficiency referred to in clause 5.6(b)(ii), acceptable to LATAM, in its sole discretion) then:

 

(X)                               in the case of clause 5.6(b)(i), either party may terminate this Deed with respect to such Aircraft; and

 

(Y)                               in the case of clause 5.6(b)(ii), only LATAM may terminate this Deed with respect to such Aircraft.

 

In such event, the party wishing to terminate this Deed with respect to such Aircraft will promptly notify the other party of its decision to do so and sub-clause (c) below will then apply.

 

(c)                                  With respect to any Aircraft for which a termination notice is issued in accordance with clause 5.6(b) , the provisions of clause 4 shall apply as if such Aircraft were a “Delayed Aircraft” and a Cancellation Right had been exercised in relation to such Aircraft.

 

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Amendments to Original Purchase Agreement

 

5.7          LATAM will not amend or agree to any amendment of, or waive performance under or agree to any such waiver, any Original Purchase Agreement (or under any Engine general terms agreement) if the same relate to any of the following matters:

 

(a)                                 the formula for calculating purchase price escalation;

 

(b)                                 the warranties relating to the Aircraft and/or any Engines;

 

(c)                                  the delivery and acceptance process and the obligations of the Manufacturer in relation to the delivery of the Aircraft in compliance with the Specification and otherwise in accordance with the requirements of the Original Purchase Agreement.

 

Relevant Extracts

 

5.8          Subject to the consent of the relevant Manufacturer, LATAM has provided to AerCap on or before the date of this Deed:

 

(a)                                 the following extracts from the Original Purchase Agreements:

 

(i)             Aircraft specifications;

 

(ii)          price escalation formulae;

 

(iii)       all provisions that relate to: delivery, title transfer, acceptance; specification change; scheduled delivery quarters and matters to do with delay — excusable and non-excusable; termination; warranties and service life policies; and

 

(b)                                 the assignable engine warranties and service life policies

 

(together the Relevant Extracts).

 

5.9          LATAM undertakes to provide to AerCap all relevant extracts of documentation relating to BFE as AerCap may reasonably request, subject always to obtaining the relevant manufacturer’s consent, if required.

 

5.10        LATAM hereby represents and warrants to AerCap that the Relevant Extracts are true, complete and accurate copies of the original documentation as to the matters referred to therein and LATAM has not omitted to provide AerCap with any documentation or agreements that have the effect of amending any of the provisions that have been disclosed .

 

5.11        LATAM will use reasonable efforts to ensure that AerCap is allowed access to all online information as available on AirbusWorld (including AIRNAV, CDIS and drawings), MyBoeingFleet (MBF) as well as equivalents of Engine manufacturers relating to each Aircraft from the relevant Delivery Date of such Aircraft (or earlier if available). If such access is not permitted by the Manufacturer or Engine manufacturer then LATAM will, on request and subject to the consent of the relevant Manufacturer, or Engine Manufacturer, to the extent required, provide AerCap with copies of any documentation that it would otherwise have had access on the online system.

 

5.12        All references to “Aircraft” in this clause 5 shall be construed so as not to include any A330 Aircraft, it being agreed that this clause 5 does not apply to the A330 Aircraft.

 

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6.             GUARANTEES

 

Lessor Guarantee

 

6.1          AerCap undertakes that in relation to each Lease, AerCap or an Acceptable Guarantor will provide to LATAM a guarantee substantially in the form of Schedule 11 (each a Lessor Guarantee).

 

6.2          AerCap will notify LATAM of the identity of any Acceptable Guarantor which it wishes to propose for each relevant Lease no later than fifteen (15) Business Days before entry into the relevant Lease.

 

LATAM Guarantee

 

6.3          By entry into this Deed, LATAM irrevocably and unconditionally guarantees to AerCap on demand the due and punctual performance of the Guaranteed Liabilities. LATAM also agrees to indemnify AerCap and the relevant Lessor on demand in relation to any Losses suffered or incurred by AerCap or the relevant Lessor as a result of any representation or warranty given by TAM, LAN Cargo Overseas, any Affiliates of LATAM or any seller under and pursuant to any Purchase Agreement or any bill of sale or other title transfer document relating to any Aircraft being inaccurate, untrue or incorrect. Any release, discharge or settlement between LATAM and AerCap shall be conditional upon no security, disposition or payment to AerCap being void, set aside or ordered to be refunded and if such condition shall not be fulfilled AerCap shall be entitled to enforce the guarantee under this clause subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.

 

6.4          The guarantee under clause 6.3 shall:

 

(a)                                 secure the Guaranteed Liabilities from time to time owing to AerCap and shall be a continuing security, notwithstanding any intermediate payment, partial settlement, delay in payment or other matter whatsoever;

 

(b)                                 be in addition to any present or future rights or remedies available to AerCap in respect of the Guaranteed Liabilities; and

 

(c)                                  not be in any way prejudiced or affected by the existence of any such rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by AerCap dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.

 

6.5          The liability of LATAM shall not be affected nor shall the guarantee under clause 6.3 be discharged or reduced by reason of any act or omission which, but for this clause 6.5, would discharge or reduce its liability under the guarantee under clause 6.3.

 

7.             OBLIGATIONS OF THE PARTIES AND RELATED MATTERS

 

7.1          AerCap agrees to cause each Lessor to satisfy or to cause to be satisfied the conditions precedent set forth in Section 6.3 of the Lease and clause 4.1 of each Purchase Agreement in each case to which such Lessor is a party.

 

7.2          LATAM agrees to satisfy or to cause to be satisfied the conditions precedent set forth in Sections 6.1 and 6.2 of each Lease and clause 4.4 of each Purchase Agreement.

 

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7.3          If:

 

(a)                                 an Event of Default occurs and is continuing under any Lease in respect of a delivered Aircraft; or

 

(b)                                 a Relevant Event occurs and is continuing; or

 

(c)                                  LATAM fails to return to AerCap fully executed copies of the Definitive Documents with respect to any Aircraft (other than an A330 Aircraft) at least ten (10) days before the Scheduled Delivery Date; or

 

(d)                                 if the Definitive Documents for an Aircraft (other than an A330 Aircraft) are entered into but title to such Aircraft is not transferred to the Lessor and the leasing of such Aircraft to LATAM is not commenced within ten (10) Business Days of the date notified by the Manufacturer to be the Scheduled Delivery Date for such Aircraft, for any reason other than as specified in clause 4, clause 5.6 or clause 7.4 below; or

 

(e)                                  LATAM breaches any of its other material obligations or representations and warranties under this Deed and such breach, if capable of remedy, is not remedied to the reasonable satisfaction of AerCap, with thirty (30) days of notice from AerCap requiring the same to be remedied; or

 

(f)                                   the Original Purchase Agreement is terminated or cancelled with respect to all of the Aircraft (other than where such termination relates to a Delay or cancellation which is provided for in clause 4),

 

then all obligations of AerCap to cause any Lessor to purchase and take title to some or all Aircraft (that have not yet been purchased and leased as contemplated by this Deed) and concurrently to lease such Aircraft to LATAM, and the related obligations of AerCap and any Lessor under this Deed and any of the Operative Documents with respect to such Aircraft as selected by AerCap in its absolute discretion, shall terminate and be of no further force or effect:

 

(i)                  upon notice of such termination by AerCap to LATAM; and

 

(ii)               automatically, without notice or other action, upon the occurrence of any of the Relevant Events specified in paragraphs 3 or 4 of Schedule 4.

 

7.4          If:

 

(a)                                 AerCap fails to purchase or arrange for the purchase of any Aircraft in circumstances where:

 

(i)                  LATAM has fulfilled all of its material obligations under this Deed and each other Operative Document relating to such Aircraft;

 

(ii)               all of the conditions precedent to the delivery, purchase and lease of such Aircraft (other than those that can only be, and are, provided simultaneously with the Delivery) that are required to be provided for Lessor’s or AerCap’s benefit have been supplied or otherwise fulfilled;

 

(iii)            such Aircraft is in the condition required by the Original Purchase Agreement, this Deed and the related Lease and AerCap has had the opportunity to inspect such Aircraft or to participate in the inspection of such

 

16



 

Aircraft to verify that it meets such condition in accordance with the terms of this Deed; or

 

(iv)           none of the events or circumstances specified in clause 7.3 have occurred and are continuing,

 

and such failure continues for thirty (30) days from notice by LATAM to AerCap requiring such failure to be remedied; or

 

(b)                                 any Relevant Event of the type referred to in paragraphs 3 or 4 of Schedule 4 occurs and is continuing with respect to AerCap,

 

then all obligations of LATAM to procure the sale of some or all of the Aircraft (that have not yet been purchased and leased as contemplated by this Deed) and concurrently to lease such Aircraft, and the related obligations of LATAM under this Deed and any of the Operative Documents with respect to such Aircraft as selected by LATAM in its absolute discretion, shall terminate and be of no further force or effect upon notice of such termination by LATAM to AerCap.

 

7.5          Notwithstanding any termination pursuant to this clause 7:

 

(a)                                 each of AerCap and LATAM shall retain any and all rights, remedies and claims that it may have against the other party for breach of its obligations under this Deed and under any Operative Document; and

 

(b)                                 [***].

 

7.6          If any Aircraft is ready for Delivery under the Original Purchase Agreement and an event or circumstance referred to in clause 7.3 has occurred and is continuing such that AerCap is entitled to terminate this Deed with respect to such Aircraft then AerCap will notify LATAM of its decision as to whether or not it wishes to proceed with the purchase and leaseback of such Aircraft subject to and in accordance with this Deed. AerCap agrees to give such notice as soon as reasonably practicable and in any event no later than ten (10) Business Days after the Scheduled Delivery Date for such Aircraft. AerCap will not be obliged to give such notice if it is restricted from doing so under any applicable laws.

 

8.             REPRESENTATIONS AND WARRANTIES

 

Each party to this Deed represents and warrants to the others, as of the date of execution and delivery of this Deed, that:

 

(a)                                 this Deed has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium, examinership or other similar laws affecting the rights of creditors generally and by general principles of equity; and

 

(b)                                 the execution, delivery and performance by such party of this Deed do not require any stockholder (or equivalent) approval or approval or consent of any trustee or holder of any indebtedness or obligations of such party, except such as have been duly obtained and are in full force and effect, and do not contravene or conflict with any law, governmental rule, regulation, judgment or order binding on such party or the Certificate of Incorporation or By-Laws (or equivalent constitutive documents) of

 

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such party or contravene or result in a breach of, or constitute a default under, or result in the creation of any lien or other lien upon the property of such party under, any indenture, mortgage, contract or other agreement to which such party is a party or by which it or any of its properties are bound.

 

9.             PAYMENT RELATED MATTERS

 

9.1          The fees and expenses of each party incurred in connection with the preparation of this Deed and any Definitive Document and all other related documents are for the respective accounts of each such party.

 

9.2          If either party requests any amendment, waiver or consent hereby then the requesting party shall, within thirty (30) Business Days of demand by the other party, reimburse such party for all reasonable and properly incurred costs and expenses (including reasonable legal fees) incurred by such party in responding to or complying with such request.

 

9.3          All payments by AerCap to LATAM or LATAM to AerCap under this Deed shall be made for value on the due date in United States Dollars and in immediately available funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of payments in Dollars by wire transfer to such account as AerCap or LATAM, as applicable, shall notify the other party in writing, giving at least five (5) Business Days prior notice. All such payments shall be made free and clear of any withholdings or deductions.

 

10.          ASSIGNMENTS

 

10.1        This Deed shall be binding upon and enure to the benefit of each party hereto and its or any subsequent successors.

 

10.2        Neither party may assign or otherwise transfer its rights or obligations under this Deed, in whole or in part, without the prior written consent of the other party.  Any such assignment or transfer without such consent shall be null and void.

 

11.          OTHER MATTERS

 

Financial Accommodation

 

11.1        The parties hereto acknowledge and agree that, with respect to each Aircraft that has not previously been purchased by any Purchaser, this Deed and the obligations of AerCap hereunder, or any Purchaser, Lessor and Owner Participant, if any, under an applicable Purchase Agreement (or Purchase Agreement Assignment), in each case with respect to such Aircraft, constitute, and are intended to constitute, (a) a “sale-leaseback” financing by such Purchaser, Lessor and Owner Participant, if any, of LATAM’s acquisition of such Aircraft and an extension of credit by AerCap, such Purchaser, Lessor and such Owner Participant, if any, to LATAM and (b) agreements to extend “financial accommodations”, within the meaning of Sections 365(c)(2) and 365(e)(2)(B) of the Bankruptcy Code of the United States of America, to LATAM.

 

Rights of Third Parties Act

 

11.2        A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or enjoy the benefit of any term of this Deed.

 

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11.3        The parties to this Deed do not require the consent of any person not a party to this Agreement to rescind, supplement, amend or vary this Deed (or any rights arising by virtue of the Third Parties Act as contemplated herein) from time to time.

 

Continuing Obligations

 

11.4        No failure to exercise, nor any delay in exercising any right or remedy under this Deed shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy.

 

Invalidity of any Provision

 

11.5        If, at any time, any provision of this Deed is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

Notices

 

11.6        Unless otherwise expressly provided herein, all notices, requests, demands or other communications to or upon the respective parties hereto in connection with this Deed shall:

 

(a)                                 in order to be valid be in English and in writing;

 

(b)                                 be deemed to have been duly served on, given to or made in relation to a party if it is:

 

(i)             posted by first class airmail postage prepaid or sent with an internationally recognised courier service in each case in an envelope addressed to that party at the address set out herein or at such other address as that party has specified by not less than five (5) days’ written notice to the other party; or

 

(ii)          sent by facsimile to the facsimile number of that party set out herein or to such other facsimile number as that party has specified by not less than five (5) days’ written notice to the other parties hereto;

 

(c)                                  be sufficient if:

 

(i)             executed under the seal of the party giving, serving or making the same; or

 

(ii)          signed or sent on behalf of the party giving, serving or making the same by any attorney, director, secretary, agent or other duly authorised officer or representative of that party;

 

(d)                                 be deemed received:

 

(i)             in the case of a letter, on the tenth (10th) day after mailing; and

 

(ii)          in the case of a facsimile transmission, on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent.

 

11.7        For the purposes of clause 11.6, all notices, requests, demands or other communications shall be given or made by being addressed as follows:

 

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(a)                                 if to AerCap, to:

 

AerCap Holdings N.V.

AerCap House

Stationsplein 965

1117 CE Schiphol Airport

The Netherlands

 

[***]
[***]

 

(b)                                 if to LATAM at the following address:

 

LATAM Airlines Group S.A.

Avenida Presidente Riesco 5711

20th Floor

Las Condes,

Santiago

Chile

 

[***]

 

[***]

 

Confidentiality

 

11.8        Without prejudice to the provisions of clause 11.9, this Deed and the other Definitive Documents, including any information provided hereunder or thereunder, in each case to the extent not publicly disclosed, and all non-public information obtained by either party about the other, are confidential and are between AerCap and LATAM only and shall not be disclosed by a party to third parties (other than to any Owner Participant, an actual or prospective new lessor, or a party’s Affiliates and its or their (i) Board of Directors and employees, auditors, legal counsel, professional advisors, rating agencies, shareholders, prospective investors and actual or prospective financiers so long as such person is under a duty of confidentiality or is subject to a confidentiality agreement or, in the case of a rating agency, a practice of confidentiality); and (ii) as may be required to be disclosed under applicable law or regulations or for the purpose of legal proceedings) without the prior written consent of the other party.  If disclosure is required as a result of applicable law (including any SEC disclosure obligations), AerCap and LATAM will co-operate with one another to obtain confidential treatment as to the commercial terms and other material provisions of this Deed; provided that if they are unable to obtain such confidential treatment and disclosure is required by applicable law, then such disclosure may be made in accordance with such law.

 

11.9        AerCap and LATAM or any of their Affiliates agree to discuss in good faith the contents of any public announcement of the transactions contemplated by this Deed.

 

Amendments

 

11.10      This Deed can only be amended, modified or varied with the consent of all of the parties hereto.

 

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Counterparts

 

11.11      This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy.

 

12.          GOVERNING LAW AND DISPUTES; PROCESS AGENT

 

Governing Law and Jurisdiction

 

12.1        This Deed and any non-contractual obligations arising out of or in connection with it are governed by and construed in accordance English law.

 

12.2    (a)  The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or termination of this Deed or any non-contractual obligation arising out of or in connection with this Deed) (a Dispute).

 

(b)                                 The parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

(c)                                  This clause 12.2 is for the benefit of the parties to this Deed only.  As a result, no party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the parties may take concurrent proceedings in any number of jurisdictions.

 

Process Agent

 

12.3        AerCap hereby irrevocably designates, appoints and empowers LPA Process Limited (registered in England with company number 6439736) whose current address is at 3A Eghams Wood Road, Beaconsfield, Buckinghamshire, HP9 1JP, England (being its current registered office) to receive for it and on its behalf service of process issued out of the courts of England in any such legal action or proceedings.

 

12.4        LATAM hereby irrevocably designates, appoints and empowers the London office of LATAM, at present located at 2nd Floor, Landmark House, Hammersmith Bridge Road, London W6 9EJ England (Attention: Gonzalo Garcia) to receive for it and on its behalf service of process issued out of the courts of England in any such legal action or proceedings.

 

IN WITNESS whereof the parties to this Deed have caused this Deed to be duly executed as a deed and delivered on the date stated at the beginning of this Deed.

 

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SCHEDULE 1

 

AIRCRAFT DETAILS AND SCHEDULED DELIVERY QUARTERS

 

 

[***]

[***]

 

 

[***]

[***]

 

 

[***]

[***]

 

 

[***]

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[***]

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[***]

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[***]

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[***]

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[***]

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[***]

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[***]

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[***]

[***]

 

 

[***]

[***]

 

 

[***]

[***]

 

 



 

SCHEDULE 2

 

A330 AIRCRAFT

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

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[***]

[***]

[***]

[***]

[***]

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[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 



 

SCHEDULE 3

 

ESCALATION FORMULA AND SAMPLE CALCULATIONS

 

[***]

 



 

SCHEDULE 4

 

RELEVANT EVENTS

 

Each of the following is a Relevant Event:

 

1.                                      Discontinuation: LATAM suspends or ceases to carry on all or substantially all of its business.

 

2.                                      Disposal of Business: LATAM sells or otherwise disposes of all or substantially all of its business.

 

3.                                      Bankruptcy:

 

(a)                                 there shall have been commenced against LATAM an involuntary case or other proceeding under the bankruptcy laws of Chile, as now or hereafter constituted, or any other applicable foreign, federal, provincial, state or local bankruptcy, insolvency or other similar law or seeking the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of LATAM for all or substantially all of its property, or seeking the winding-up or liquidation of its affairs (and any such involuntary case or other proceeding shall not have been dismissed, vacated, or withdrawn within sixty (60) days, unless an order judgment or decree is entered during that period); or

 

(b)                                 an order, judgment or decree shall have been entered in any proceeding by any court of competent jurisdiction appointing a receiver, trustee or liquidator of LATAM for all or substantially all of LATAM’s property or sequestering all or substantially all of the property of LATAM and any such order, judgement or decree or appointment or sequestration shall be final or shall remain in force and effect, undismissed, unstayed or unvacated; or

 

(c)                                  there shall at any time be an order for relief under the Bankruptcy Code in effect with respect to LATAM.

 

4.                                      Insolvency:

 

(a)                                 LATAM suspends payment on its debts or other obligations, is unable to or admits its inability to pay its debts or other obligations as they fall due or shall have voluntarily commenced a case or other proceeding under the bankruptcy laws of Chile, as now constituted or hereafter amended, or any other applicable foreign, federal, provincial, state or local bankruptcy, insolvency or other similar law; or

 

(b)                                 LATAM shall have consented to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of LATAM for all or substantially all of the property of LATAM; or

 

(c)                                  LATAM shall have made any assignment for the benefit of creditors of LATAM; or

 

(d)                                 LATAM shall have taken any corporate action to authorise or facilitate any of the foregoing.

 



 

SCHEDULE 5

 

RELEVANT ADDITIONAL CLAUSES FOR PURCHASE AGREEMENT

ASSIGNMENT

 

The provisions of this Schedule 5 apply in the circumstances set out in clause 3.5 of this Deed:

 

1.             BFE

 

LATAM warrants that, with respect to any BFE to which title is being transferred to Purchaser, upon such transfer of title such BFE is transferred to Purchaser with full title guarantee.

 

2.             Satisfaction of condition of Aircraft

 

The requirements of the Original Purchase Agreement in relation to the condition of the Aircraft and its acceptance for delivery thereunder shall have been fulfilled and Purchaser shall have been afforded the opportunity to participate in the technical acceptance procedures in accordance with the relevant Lease and the Purchase Agreement, subject to Purchaser having entered into such documentation as the Manufacturer may require in order to permit such participation in the technical acceptance procedures.

 


 

SCHEDULE 6

 

FORM OF PURCHASE AGREEMENT

 



 

Dated                      20[    ]

 

[·]
as Seller

 

[·]
as Purchaser

 


 

AIRCRAFT SALE AND PURCHASE AGREEMENT

 

relating to one new [·] aircraft bearing manufacturer’s serial number [·]

 


 

I



 

CONTENTS

 

CLAUSE

 

PAGE

 

 

 

1.

INTERPRETATION

1

 

 

 

2.

AGREEMENT TO SELL AND PURCHASE

3

 

 

 

3.

PURCHASE PRICE

4

 

 

 

4.

CONDITIONS PRECEDENT

4

 

 

 

5.

TERMINATION SCENARIOS

5

 

 

 

6.

REPRESENTATIONS AND WARRANTIES

6

 

 

 

7.

DELIVERY

7

 

 

 

8.

PAYMENT MATTERS AND TAXES

8

 

 

 

9.

MISCELLANEOUS PROVISIONS

8

 

 

 

10.

NOTICES

11

 

 

 

11.

CONFIDENTIALITY

12

 

 

 

12.

GOVERNING LAW AND JURISDICTION

12

 

 

 

SCHEDULE 1 AIRCRAFT DETAILS

15

 

 

 

SCHEDULE 2 FORM OF BILL OF SALE

16

 

 

 

SCHEDULE 3 FORM OF CERTIFICATE OF ACCEPTANCE

17

 

I



 

THIS AIRCRAFT SALE AND PURCHASE AGREEMENT (this Agreement) is made on                        201[·]

 

BETWEEN:

 

(1)                                 [·], a company incorporated under the laws of [·] and having its registered office at [·] (Seller); and

 

(2)                                 [·], a company incorporated under the laws of [·] and having its registered office at [·] (Purchaser).

 

WHEREAS, the Seller, on the Delivery Date, is the legal and beneficial owner of one (1) [·] aircraft bearing manufacturer’s serial number [·], together with two (2) [·] model engines as described in Schedule 1 (collectively, the Aircraft).

 

WHEREAS, the Purchaser wishes to purchase the Aircraft from the Seller and the Seller wishes to sell and transfer title to the Aircraft to the Purchaser.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      INTERPRETATION

 

Definitions

 

1.1                               In this Agreement capitalised words and expressions have the meanings set out in the Lease unless otherwise defined in this Clause 1.1.

 

Acceptance Certificate means the purchase acceptance certificate in the form of Schedule 3;

 

Aircraft means the aircraft described in Schedule 1 and includes, where the context admits, a separate reference to all Engines, BFE, [Features](1), Parts and Aircraft Documents;

 

BFE means buyer furnished equipment, supplied or purchased by or on behalf of LATAM in respect of the Aircraft for installation by the Manufacturer pursuant to the Original Purchase Agreement on or before the Delivery Date;

 

BFE Bill of Sale means a bill of sale in relation to the BFE [or Features](2) as the case may be from Seller to Purchaser in form and substance agreed between the parties acting reasonably;

 

Bill of Sale means a bill of sale from Seller to Purchaser substantially in the form attached in Schedule 2;

 

Delivery means the transfer of title to the Aircraft by Seller to Purchaser;

 

Delivery Conditions mean that the Aircraft:

 


(1)  Boeing aircraft only.

 

(2)  Only relevant where no Manufacturer BFE Bill of Sale

 

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(a)                                 meets the relevant Aircraft Specification (defined in the Framework Deed) as amended by any and all SCNs and/or BFE [and/or Features] as applicable in accordance with the Framework Deed;

 

(b)                                 is airworthy; and

 

(c)                                  is in a condition for immediate commercial operations.

 

[Features means parts supplied or purchased by or on behalf of LATAM in respect of the Aircraft for installation by the Manufacturer pursuant to the Original Purchase Agreement on or before the Delivery Date;](3)

 

Final Delivery Date means [·] or such other date as Seller and Purchaser may agree in writing;

 

LATAM means LATAM Airlines Group S.A.

 

Lease means the aircraft operating lease agreement dated on or prior to the date hereof between Purchaser, as Lessor and LATAM Airlines Group S.A., as Lessee;

 

Manufacturer Bill of Sale means the bill of sale from Manufacturer to Seller;

 

[Manufacturer BFE Bill of Sale means the bill of sale from the manufacturer of the BFE to Seller;]

 

Original Purchase Agreement means the purchase agreement relating to the acquisition by Seller of the Aircraft from the Manufacturer dated [·] and bearing reference number [·];

 

Purchaser Conditions Precedent means the conditions precedent to be satisfied by Seller in accordance with clause 4.1;

 

Purchase Price has the meaning set out in clause 3;

 

Sale Documents means this Agreement, [the BFE Bill of Sale,] the Bill of Sale, the Acceptance Certificate and any agreement amending or supplementing any of the foregoing documents;

 

Seller Conditions Precedent means the conditions precedent to be satisfied by Purchaser in accordance with clause 4.4; and

 

VAT means any value added Tax, good and services Tax, consumption Tax or other Tax of a similar nature.

 

Construction

 

1.2                               References in this Agreement to:

 

(a)                                 any statutory or other legislative provision shall be construed as including any statutory or legislative modification or re-enactment thereof, or any provision enacted in substitution therefor;

 


(3)  Boeing aircraft only.

 

2



 

(b)                                the word “person” or “persons” or to words importing persons include, without limitation, individuals, partnerships, corporations, government agencies, committees, departments, authorities and other bodies, corporate or unincorporated, whether having distinct legal personality or not;

 

(c)                                  “Purchaser” or “Seller” include any permitted assignee or successor in title to Purchaser or Seller respectively;

 

(d)                                 any deed, agreement or instrument shall include any such deed, agreement or instrument as may from time to time be amended, supplemented or substituted;

 

(e)                                  an “agreement” also includes a concession, contract, deed, franchise, licence, treaty or undertaking (in each case, whether oral or written);

 

(f)                                   “law” includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure in any jurisdiction or any present or future directive, regulation, request or requirement (in each case, whether or not having the force of law but, if not having the force of law, the compliance with which is in accordance with the general practice of persons to whom the directive, regulation, request or requirement is addressed);

 

(g)                                  a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement;

 

(h)                                 “month” is a reference to a period which starts on one day in a calendar month and ends on the day immediately preceding the numerically corresponding day in the next calendar month, except that, if there is no numerically corresponding day in that next month, it shall end on the last day of that next month (and references to “months” shall be construed accordingly);

 

(i)                                     Clause and Schedule headings are for ease of reference only;

 

(j)                                    where the context so admits, words importing the singular number only shall include the plural and vice versa, and words importing neuter gender shall include the masculine or feminine gender;

 

(k)                                 the words “include(s)”, “including” and “in particular” shall be construed as being by way of illustration or emphasis only and shall not be construed as, nor shall they take effect as, limiting the generality of any preceding words; and

 

(l)                                     a reference to “parties” is a reference to the parties to this Agreement.

 

2.                                      AGREEMENT TO SELL AND PURCHASE

 

Aircraft on order from Manufacturer

 

2.1                               Seller has agreed to purchase the Aircraft from Manufacturer subject to the terms and conditions of the Original Purchase Agreement.

 

Direct Purchase

 

2.1     (a)              Seller shall purchase the Aircraft in accordance with the terms and conditions of the Original Purchase Agreement and upon completion of such purchase shall sell such Aircraft to Purchaser on the Delivery Date with full title guarantee and, subject to the

 

3



 

terms of this Agreement, Purchaser shall purchase such Aircraft from Seller on such date for an amount equal to the Purchase Price; and

 

(b)                                 Each of the parties hereto shall use reasonable efforts to effect Delivery at the Delivery Location on the date on which such Aircraft is delivered to Seller by Manufacturer pursuant to the Original Purchase Agreement.

 

Passage of Title & Risk

 

2.2                               Risk of loss or destruction of the Aircraft shall pass to the Purchaser upon Delivery.

 

3.                                      PURCHASE PRICE

 

3.1                               The purchase price in respect of the Aircraft payable by Purchaser shall be an amount calculated in accordance with clause 3.6(a) of the Framework Deed and separately agreed in writing by the Seller and the Purchaser on or prior to the date hereof (the Purchase Price).

 

4.                                      CONDITIONS PRECEDENT

 

Purchaser Conditions Precedent

 

4.1                               Purchaser’s obligation to purchase the Aircraft is subject to Purchaser being satisfied that the following conditions have been fulfilled on or prior to the Delivery Date in respect of the Aircraft:

 

(a)                                 satisfaction of each of the Conditions Precedent and the further conditions set forth in Section 6.2 of the Lease required on or before the Delivery Date shall be fulfilled in accordance with the terms of the Lease;

 

(b)                                 Purchaser shall be satisfied that Lessee will take the Aircraft on lease in accordance with the provisions of the Lease simultaneously with Purchaser taking title to the Aircraft pursuant to this Agreement;

 

(c)                                  the requirements of the Original Purchase Agreement in relation to the condition of the Aircraft and its acceptance for delivery thereunder shall have been fulfilled to Purchaser’s satisfaction and Purchaser shall, in accordance with the provisions of the Framework Deed, have been afforded the opportunity to participate in the technical acceptance procedures in accordance with the Lease and the Original Purchase Agreement;

 

(d)                                 the Aircraft is in a condition complying with the Delivery Conditions; and

 

(e)                                  all sums due and payable from Seller to Purchaser on or prior to the Delivery Date under any Operative Document shall have been received by Purchaser.

 

4.2                               The Purchaser Conditions Precedent are inserted for the sole benefit of Purchaser and may be waived or deferred in whole or in part and with or without conditions by Purchaser in its sole discretion.

 

4.3                               If any of the Purchaser Conditions Precedent remain outstanding as of 5pm in London on the Final Delivery Date and are not waived or deferred in writing by the Purchaser, (save where failure to satisfy the relevant Purchaser Conditions Precedent is due to a breach by the Purchaser or AerCap Holdings N.V. of their respective obligations under this Agreement, the Framework Deed or any Operative Document), the Purchaser may at any time after 5pm in

 

4



 

London on the Final Delivery Date terminate the obligation of the Purchaser to purchase the Aircraft from the Seller by notice to the Seller, whereupon neither party to this Agreement shall have any further obligation or liability with respect to the Aircraft under this Agreement to the other party, other than as set out in the Framework Deed.

 

Seller Conditions Precedent

 

4.4                               Seller’s obligation to sell the Aircraft is subject to Seller being satisfied that the following conditions have been fulfilled on or prior to the Delivery Date:

 

(a)                                 the conditions precedent required on or before the Delivery Date pursuant to Clause 6.3 of the Lease shall be fulfilled by the Lessor in accordance with the Lease; and

 

(b)                                 the requirements of the Original Purchase Agreement in relation to the condition of the Aircraft and its acceptance for delivery thereunder shall have been fulfilled to Seller’s satisfaction.

 

4.5                               The Seller Conditions Precedent are inserted for the sole benefit of Seller and may be waived or deferred in whole or in part and with or without conditions by Seller in its sole discretion.

 

4.6                               If any of the Seller Conditions Precedent remain outstanding as of 5pm in London on the Final Delivery Date and are not waived or deferred in writing by the Seller, the Seller may at any time after 5pm in London on the Final Delivery Date terminate the obligation of the Seller to sell the Aircraft to the Purchaser by notice to the Purchaser, whereupon neither party to this Agreement shall have any further obligation or liability with respect to the Aircraft under this Agreement to the other party, other than as set out in the Framework Deed.

 

5.                                      TERMINATION SCENARIOS

 

Total Loss before Delivery

 

5.1                               If before Delivery, an Aircraft suffers a Total Loss, Seller shall, as soon as reasonably practicable after it has become aware of such Total Loss, notify Purchaser in writing thereof.  Following a Total Loss, the provisions of clause 4 of the Framework Deed shall apply.  If the Lease is terminated in accordance with Section 17.2 of the Lease, this Agreement shall terminate with respect to such Aircraft in accordance with Clause 5.2.

 

Termination of the Lease

 

5.2                               Without derogating from the terms of the Framework Deed, if before Delivery, the Lease is terminated for any reason then Seller’s obligation to sell and Purchaser’s obligation to purchase the Aircraft hereunder shall terminate, whereupon neither Seller nor Purchaser shall have any further obligation or liability to the other under this Agreement, in each case, with respect to the Aircraft, notwithstanding any rights, obligations or liabilities Seller and/or Purchaser may have under the Framework Deed.

 

5.3                               For the avoidance of doubt, the parties acknowledge that any termination of this Agreement under this clause 5 does not derogate from the rights and obligations of the parties under the Framework Deed.

 

5



 

6.                                      REPRESENTATIONS AND WARRANTIES

 

Seller Representations and Warranties

 

6.1                               Seller represents and warrants to Purchaser as of the date hereof and on the Delivery Date the following:

 

(a)                                 Corporate Status: Seller is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the full corporate power and authority to own its assets and to carry on its business as presently conducted and to perform its obligations hereunder;

 

(b)                                 Legal Validity: this Agreement, the Bill of Sale [and the BFE Bill of Sale] have been duly authorised, executed and constitute the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms except as enforceability may be limited by bankruptcy, insolvency, reorganisation or principles of equity or other Laws of general application affecting the enforcement of creditors’ rights;

 

(c)                                  Power and Authority: Seller has the corporate power to enter into and perform its obligations under and has taken all necessary corporate, shareholder and other action to authorise the entry into, performance and delivery of this Agreement, the Bill of Sale [and the BFE Bill of Sale] and the transactions contemplated hereby and/or thereby;

 

(d)                                 No Conflict: the entry into and performance by Seller of and the transactions contemplated by this Agreement do not and will not conflict with any applicable Laws or conflict with any provision of the constitutional documents or, by-laws of Seller or conflict with or result in any breach or default under any document which is binding upon Seller or any of its assets nor would it result in the creation of any Security Interest (except for Permitted Liens) over any of its assets other than as expressly created hereunder; and

 

(e)                                  Title: it is the legal and beneficial owner of the Aircraft and on the Delivery Date it shall transfer full legal and beneficial and good and marketable title to the Aircraft to the Purchaser, with full title guarantee, free and clear of all Security Interests other than any Permitted Liens; and

 

(f)                                   [BFE: Seller warrants that title to all BFE [and/or Features (as applicable)] is transferred to Purchaser and that upon such transfer of title the BFE [or Features (as applicable)] is transferred to Purchaser with full title guarantee free and clear of all Security Interests other than any Permitted Liens.]

 

Purchaser Representations and Warranties

 

6.2                               Purchaser represents and warrants to Seller as of the date hereof and on the Delivery Date the following:

 

(a)                                Corporate Status: Purchaser is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the full corporate power and authority to own its assets and to carry on its business as presently conducted and to perform its obligations hereunder;

 

6



 

(b)                                 Legal Validity: this Agreement and the other Sale Documents to which Purchaser is a party have been duly authorised, executed and constitute the legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms except as enforceability may be limited by bankruptcy, insolvency, reorganisation or principles of equity or other Laws of general application affecting the enforcement of creditors’ rights;

 

(c)                                  Power and Authority: Purchaser has the corporate power to enter into and perform its obligations under and has taken all necessary corporate, shareholder and other action to authorise the entry into, performance and delivery of this Agreement and each of the other Sale Documents to which it is, or will be, a party and the transactions contemplated hereby and/or thereby; and

 

(d)                                 No Conflict: the entry into and performance by Purchaser of and the transactions contemplated by this Agreement and the other Sale Documents to which it is a party do not and will not conflict with any applicable Laws or conflict with any provision of the constitutional documents or, by-laws of Purchaser or conflict with or result in any breach or default under any document which is binding upon Purchaser or any of its assets nor would it result in the creation of any Security Interest (except for Permitted Liens) over any of its assets other than as expressly created hereunder.

 

7.                                      DELIVERY

 

Delivery Location

 

7.1                               The Bill of Sale [and the BFE Bill of Sale, if relevant,] shall be delivered to the Purchaser while the Aircraft (including, for the avoidance of doubt, its Engines) is located at the Manufacturer’s facilities in [**                    ].

 

Delivery

 

7.2                               Subject to satisfaction (or waiver or deferral with the agreement in writing of the Seller) of the Seller Conditions Precedent, the Seller shall tender the Aircraft for Delivery and upon receipt by the Seller from Buyer of the Purchase Price in accordance with this Agreement, Seller shall effect the transfer of all of Seller’s right, title and interest in and to the Aircraft to Purchaser on the Delivery Date by execution and delivery of the Bill of Sale [and the BFE Bill of Sale, if relevant,] to Purchaser.  Simultaneously with the delivery of the Bill of Sale to Purchaser title to the Aircraft (including the Aircraft Documents) will pass from Seller to Purchaser but the Purchaser acknowledges that the Aircraft (including the Aircraft Documents) will, upon and following such transfer of title, remain in the possession of Lessee and Seller shall not be obliged to give or effect physical delivery of the Aircraft (including the Aircraft Documents) to Purchaser, and (ii) contemporaneously Lessor and Lessee shall execute and deliver the Acceptance Certificate under the Lease. Provided that the Purchaser Conditions Precedent in respect of the Aircraft have been satisfied (or waived by the Purchaser), the Purchaser shall pay to the Seller the Purchase Price and execute and deliver to Seller on the Delivery Date an Acceptance Certificate in respect of the Aircraft, which shall be conclusive evidence (as between Purchaser and Seller) of the matters therein stated.

 

As-Is, Where-Is

 

7.3                               Upon Delivery of the Aircraft, Purchaser agrees that the Aircraft is purchased as is-where.

 

7



 

8.                                      PAYMENT MATTERS AND TAXES

 

Payments

 

8.1                               All payments by Purchaser to Seller and Seller to Purchaser under this Agreement shall be made for value on the due date in United States Dollars and in immediately available funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of payments in dollars by wire transfer to such account as Seller and Purchaser shall notify the other party in writing, giving at least five (5) Business Days prior notice.

 

8.2                               No payment shall be considered made by a party hereto until it is received in the account of the other party. Promptly upon becoming aware of receipt of the Purchase Price in respect of the Aircraft, the Seller will ask its bank to send confirmation of receipt of such Purchase Price to it and, once received, the Seller will promptly send such confirmation to the Purchaser.

 

Taxes

 

8.3                               Seller agrees to pay promptly when due, and to indemnify and hold harmless Purchaser on demand on a full indemnity basis from and against all Taxes however and wherever imposed (whether imposed on Seller or Purchaser on all or part of the Aircraft, the Engines or otherwise) by any Government Entity or taxing authority in the jurisdiction where the Aircraft is located at the time of Delivery upon or with respect to the purchase of the Aircraft by Purchaser pursuant to this Agreement and the Bill of Sale.

 

Mitigation of taxes

 

8.4                               Seller and Purchaser agree that each will consult with the other in relation to mitigating any Tax, VAT or sale tax or equivalent which may arise on the sale and purchase of the Aircraft.

 

VAT

 

8.5                               The Purchase Price is exclusive of any VAT or sale tax or any equivalent tax payable in any jurisdiction.

 

9.                                      MISCELLANEOUS PROVISIONS

 

Assignments or Transfers

 

9.1                               No party shall assign or transfer all or any of its rights and / or obligations under this Agreement without the prior written consent of the other party, provided that the Purchaser may assign by way of security its benefits and interests under this Agreement insofar as they relate to the Aircraft to any Finance Party which is financing its acquisition of such aircraft and the Seller agrees to acknowledge any notice of assignment in relation to such security assignment provided by such Finance Party in form and substance reasonably satisfactory to the Seller.

 

Rights Cumulative, Waivers

 

9.2                               The rights of Seller and Purchaser under this Agreement are cumulative, may be exercised as often as each party considers appropriate and are in addition to its rights under applicable Law.  The rights of Seller and Purchaser in relation to the Aircraft (whether arising

 

8



 

under this Agreement or the general law) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing and signed by a duly authorised officer of the Purchaser. Any failure to exercise or any delay in exercising any of such rights shall (i) not operate as a waiver or variation of that or any other such right and (ii) not constitute an election to affirm any of the Operative Documents.  Any election to affirm any of the Operative Documents on the part of Purchaser shall be ineffective unless it is in writing and signed by a duly authorised officer of Purchaser.  Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right; and no act or course of conduct or negotiation on the part of either party or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right.

 

Entire Agreement

 

9.3                               This Agreement, the Framework Deed and the Lease are the sole and entire agreements between Seller and Purchaser in relation to the sale and purchase and leaseback of the Aircraft and together, supersede all previous agreements in relation to that sale and purchase and leaseback.

 

Rights of Third Parties Act

 

9.4                               A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 (the Act) to enforce any term of this Agreement.

 

9.5                               The parties to this Agreement do not require the consent of any person not a party to this Agreement to rescind, supplement, amend or vary this Agreement (or any rights arising by virtue of the Act as contemplated herein) from time to time.

 

Counterparts

 

9.6                               This Agreement may be executed in any number of separate counterparts and each counterpart shall when executed and delivered be an original document but all counterparts shall together constitute one and the same instrument.

 

Language

 

9.7                               All notices, requests, directions and other communications to be given under this Agreement will be in English.  All documents delivered to Purchaser pursuant to this Agreement will be in English or, if not in English, will be accompanied by a certified English translation upon which Purchaser shall be entitled to rely.  If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail.

 

Variation

 

9.8                               The provisions of this Agreement shall not be varied otherwise than by an instrument in writing executed by or on behalf of Seller and Purchaser.

 

Invalidity of any Provision

 

9.9                               If any provision of this Agreement becomes invalid, illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. To the extent such Law may not be waived, the parties shall use reasonable efforts to substitute for any affected provision(s) a valid, legal and

 

9


 

binding provision that will cover as closely as possible the interest and scope of such affected provision(s).

 

Further Assurance

 

9.10                        Each of the parties agree to perform (or procure the performance of) all further acts and things within its control, and execute and deliver (or procure the execution and delivery of) such further documents, as may be required by applicable law or as may be necessary or reasonably desirable to implement and/or give effect to this Agreement and the transactions contemplated by this Agreement. This includes entering into such additional documents in relation to the transfer of full title, free and clear of all Security Interest other than any Permitted Liens, of all BFE and/or Features as are reasonably requested by the Purchaser.

 

Costs and Expenses

 

9.11                        Except where an Operative Document states differently, each party shall be responsible for its own fees, costs and expenses (including but not limited to, fees of legal counsel, accounting and insurance advisors and equipment appraisers) arising out of or connected with this Agreement.

 

Survival

 

9.12                        All indemnities, representations and warranties of Seller and Purchaser shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Agreement.

 

Currency

 

9.13                        Each party to this Agreement acknowledges that the specification of Dollars in this Agreement is of the essence and that Dollars shall be the currency of account in any and all events between Purchaser and Seller. If a party (the recipient) receives an amount in respect of a liability of the other party under this Agreement or if such liability is converted into a claim, proof, judgment or order in a currency other than the currency (the contractual currency) in which the amount is expressed to be payable under this Agreement:

 

(a)                                 such other party will indemnify the recipient as an independent obligation against any loss arising out of or as a result of such conversion;

 

(b)                                 if the amount received by the recipient, when converted into the contractual currency (at the market rate at which the recipient is able to convert the amount received into the contractual currency) to purchase the contractual currently in New York or (at its option) London, with that other currency) is less than the amount owned in the contractual currency, such other party will, forthwith on demand, pay to the recipient an amount in the contractual currency equal to the deficit; and

 

(c)                                  such other party will pay to the recipient on demand any exchange costs and Taxes payable in connection with the conversion.

 

Brokers and other Third Parties

 

9.14                        Each party to this Agreement hereby represents and warrants to the other party that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement, to any Person.

 

10



 

9.15                        Each party to this Agreement agrees to indemnify and hold the other party harmless from and against any and all claims, suits damages, costs and expenses (including, but not limited to, reasonably attorneys’ fees) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon this Agreement or any of the other Operative Documents or the Aircraft, if such claim, suit damage, costs or expense arises out of any breach by the indemnifying party, its employees or agents of Clause 9.14.

 

10.                               NOTICES

 

10.1                        Unless otherwise expressly provided herein, all notices, requests, demands or other communications to or upon the respective parties hereto in connection with this Agreement shall:

 

(a)                                 in order to be valid be in English and in writing;

 

(b)                                 be deemed to have been duly served on, given to or made in relation to a party if it is:

 

(i)    posted by first class airmail postage prepaid or sent with an internationally recognised courier service in each case in an envelope addressed to that party at the address set out herein or at such other address as that party has specified by not less than five (5) days’ written notice to the other party; or

 

(ii)   sent by facsimile to the facsimile number of that party set out herein or to such other facsimile number as that party has specified by not less than five (5) days’ written notice to the other parties hereto;

 

(c)           be sufficient if:

 

(i)    executed under the seal of the party giving, serving or making the same; or

 

(ii)   signed or sent on behalf of the party giving, serving or making the same by any attorney, director, secretary, agent or other duly authorised officer or representative of that party;

 

(d)           be deemed received:

 

(i)    in the case of a letter, on the tenth (10th) day after mailing; and

 

(ii)   in the case of a facsimile transmission, on the date set forth on the confirmation of receipt produced by the sender’s fax machine immediately after the fax is sent.

 

10.2                        For the purposes of clause 10.1, all notices, requests, demands or other communications shall be given or made by being addressed as follows:

 

To Purchaser at:

 

Address:

[·]

 

 

 

 

Attention:

[·]

 

 

 

 

Facsimile:

[·]

 

 

 

 

Telephone:

[·]

 

 

11



 

To Seller at:

 

Address:

[·]

 

 

 

 

Attention:

[·]

 

 

 

 

Facsimile:

[·]

 

 

11.                               CONFIDENTIALITY

 

11.1                        The provisions of Clauses 11.8 and 11.9 of the Framework Deed apply to this Agreement, mutatis mutandis except that references to ‘this Deed’, ‘AerCap’ and ‘LATAM’ shall be read as references to ‘this Agreement’, ‘the Purchaser’ and ‘the Seller’ respectively.

 

12.                               GOVERNING LAW AND JURISDICTION

 

Governing Law

 

12.1                        This Agreement is, and any non-contractual obligations arising out of or in connection with it shall be, governed by and shall be construed in accordance with the laws of England.

 

Jurisdiction

 

12.2     (a)       The courts of England are to have jurisdiction to settle any disputes arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) and any dispute relating to non-contractual matters (a Dispute).

 

(b)                                 The parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no party will argue to the contrary.

 

(c)                                  This clause 12.2 is for the benefit of the parties to this Agreement only.  As a result, no party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the parties may take concurrent proceedings in any number of jurisdictions.

 

Process Agent

 

12.3                        Seller shall at all times maintain an agent for service of process in England.  Such agent shall be [·] and any claim form, judgement or other notice of legal process shall be sufficiently served on Seller if delivered to such agent at its address for the time being.  If for any reason, such agent no longer serves as agent of Seller to receive service of process in England, Seller shall promptly appoint another agent and advise Purchaser thereof.

 

12.4                        Purchaser shall at all times maintain an agent for service of process in England.  Such agent shall be [·] and any claim form, judgement or other notice of legal process shall be sufficiently served on Purchaser if delivered to such agent at its address for the time being.  If for any reason, such agent no longer serves as agent of Purchaser to receive service of process in England, Purchaser shall promptly appoint another agent and advise Seller thereof.

 

Waiver of Sovereign Immunity

 

12.5                        Each party hereto irrevocably and unconditionally:

 

12



 

(a)                                 agrees that if the other party brings legal proceedings against it or its assets in relation to this Agreement, no immunity from such legal proceedings (which will be deemed to include without limitation, suit, attachment prior to judgement, other attachment, the obtaining of judgement, execution or other enforcement) will be claimed by or on behalf of itself or with respect to its assets;

 

(b)                                 waives any such right of immunity which it or its assets now has or may in the future acquire; and

 

(c)                                  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 judgement which may be made or given in such proceeding.

 

13



 

IN WITNESS whereof this Agreement has been signed on the day and year first above written.

 

Seller

 

SIGNED by

 

)

 

for and on behalf of

)

 

[·]

)

 

in the presence of

)

 

 

 

 

 

 

 

 

 

Purchaser

 

 

 

 

 

 

SIGNED by

 

)

 

for and on behalf of

)

 

[·]

)

 

in the presence of

)

 

 

14



 

SCHEDULE 1
AIRCRAFT DETAILS

 

Aircraft

 

 

 

 

 

Manufacturer:

 

[·]

 

 

 

Model:

 

[·]

 

 

 

Serial Number:

 

[·]

 

 

 

 

 

 

Engines

 

 

 

 

 

Manufacturer:

 

[·]

 

 

 

Model:

 

[·]

 

 

 

Serial Numbers:

 

[·]

 

15



 

SCHEDULE 2
FORM OF BILL OF SALE

 

KNOW ALL MEN BY THESE PRESENTS that [·] (Seller) in consideration of value received, the receipt of which is hereby acknowledged, does hereby grant, sell, transfer and deliver to [·] (Purchaser) title in and to the following aircraft and engines and all Parts and all equipment, accessories and parts belonging to, installed in or appurtenant to such Aircraft or engines, together with the Aircraft Documents (collectively, the Equipment):

 

one (1) [·] model [·]aircraft bearing manufacturer’s serial number [·] and with two (2) installed [·] engines bearing manufacturer’s serial nos. [·] and [·] (the Aircraft),

 

TO HAVE AND TO HOLD said Equipment unto Purchaser forever.

 

Seller hereby warrants to the Purchaser that it is the legal and beneficial owner of the Equipment, that there is hereby conveyed to the Purchaser, on the date hereof, good and marketable title to the Equipment, with full title guarantee free and clear of all Security Interests other than any Permitted Liens.  This Bill of Sale is made and delivered pursuant to the provisions of that certain Aircraft Sale and Purchase Agreement dated [·] between the Seller and the Purchaser (the Sale Agreement).  The Delivery Location is [·] and the time of delivery of this Bill of Sale is [·].  Capitalised terms used in this Bill of Sale have the same meanings as in the Sale Agreement.  Seller will warrant and defend such title forever against all claims and demands whatsoever.

 

Except as otherwise provided in the Sale Agreement, the Aircraft is sold as-is and where-is.

 

This Bill of Sale and any non-contractual obligations arising out of or in connection with this Bill of Sale shall be governed by and construed in accordance with the laws of England.

 

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly executed, this              day of              20[·].

 

[·]

 

By:

 

Name:

 

16



 

SCHEDULE 3
FORM OF CERTIFICATE OF ACCEPTANCE

 

relating to one (1) [·]Aircraft,
manufacturer’s serial number [
·] (the Aircraft)

 

[·] (Purchaser) hereby certifies that pursuant to the aircraft sale and purchase agreement dated                              between [·] (Seller) and Purchaser (the Sale Agreement):

 

(a)                                 Purchaser has inspected the Aircraft, and found the Aircraft to be complete and satisfactory;

 

(b)                                 Purchaser has accepted delivery of the Aircraft at [·] hours [timezone] at [location];

 

(c)                                  Purchaser has inspected all of the Aircraft Documents (as defined in the Sale Agreement) and found them to be complete and satisfactory;

 

This Acceptance Certificate and any non-contractual obligations arising out of or in connection with this Acceptance Certificate shall be governed by and construed in accordance with the laws of England.

 

Date: [                                   ]

 

Duly executed for Purchaser by:

 

By:

 

Title:

 

17


 

SCHEDULE 7

 

FORM OF LEASE (A350-900 AIRCRAFT)

 



 

AGREED FORM

 


 

AIRCRAFT OPERATING LEASE AGREEMENT(1)

 

dated as of

 

[....]

 

between

 

[*]

(Lessor)

 

and

 

LATAM AIRLINES GROUP S.A.

(Lessee)

 


 

IN RESPECT OF

One Airbus A350-900 Aircraft

Bearing Manufacturer’s Serial Number [....]

Registration Mark [....]

 


 

Scheduled Delivery Date [·]

 


 


(1) This Lease has been drafted on the assumption that there will be a sub-lease from delivery and that the State of Registration of the Aircraft at Delivery will be Brazil.  If either of these assumptions are incorrect, various supplemental amendments will need to be made where indicated.

 



 

INDEX

 

R E C I T A L S

6

1.

SUMMARY OF TRANSACTION

6

1.1

Description of Aircraft.

6

1.2

Scheduled Delivery Date and Location.

6

1.3

Lease Term.

6

1.4

Country of Aircraft Registration.

6

1.5

Maintenance Programme.

6

1.6

Agreed Value.

6

1.7

Lessor’s Designated Bank Account(s).

7

2.

DEFINITIONS AND INTERPRETATION

7

2.1

Definitions.

7

2.2

Interpretation.

29

3.

PLACE AND DATE OF DELIVERY, DELIVERY CONDITION

30

3.1

Place of Delivery.

30

3.2

Scheduled Delivery Date.

30

3.3

Delivery Subject to Conditions Precedent.

30

3.4

Lessee Acceptance of Aircraft.

30

3.5

Delay or Failure in Delivery.

31

3.6

Cancellation for Delay.

31

4.

LEASE TERM

31

4.1

Lease Term.

31

4.2

Expiry Date.

31

4.3

Survival.

32

5.

RENT AND OTHER PAYMENTS

32

5.1

Basic Rent.

32

5.2

[***].

32

5.3

[***].

32

5.4

Lessor’s Designated Bank Account.

33

5.5

Lessee’s Bank Account.

33

5.6

Late Payment Interest.

33

5.7

No Deductions or Withholdings.

34

5.8

Sales or Value Added Taxes.

34

5.9

Net Lease.

35

5.10

Currency Indemnity.

36

5.11

Miscellaneous.

37

6.

CONDITIONS PRECEDENT

38

6.1

Conditions Precedent.

38

6.2

Further Conditions.

42

6.3

Lessee Conditions Precedent.

43

6.4

Conditions Subsequent.

44

6.5

Waiver.

44

6.6

Documents in English.

44

7.

DISCLAIMERS

44

7.1

“As Is-Where Is”.

44

7.2

Waiver of Warranty of Description.

45

7.3

Conclusive Evidence.

45

7.4

No Lessor Liability for Losses.

46

7.5

No Liability to Repair or Replace.

46

7.6

Lessee Waiver.

46

7.7

No Waiver.

46

7.8

Consideration for Rent and other Amounts.

47

7.9

Benefit of this Section 7.9.

47

 

1



 

8.

MANUFACTURER’S WARRANTIES

47

8.1

Warranties.

47

8.2

Warranty Claims.

47

8.3

Proceeds.

47

8.4

Assignment on Return.

48

9.

OPERATION OF AIRCRAFT

48

9.1

Compliance with Laws.

48

9.2

Costs of Operation.

49

9.3

Training.

49

9.4

No Violation of Insurance Policies.

49

9.5

No Relinquishment of Possession.

49

9.6

No Security Interests.

50

9.7

Non-Representation of Lessor.

50

9.8

Habitual Base.

50

9.9

International Registry

50

9.10

No Risk or Penalty or Appropriation.

50

10.

SUBLEASES

50

10.1

Initial Sublease

50

10.2

No Subleasing without Lessor Consent.

51

10.3

Wetlease.

54

10.4

[***].

54

10.5

Continued Responsibility of Lessee.

55

11.

MAINTENANCE OF AIRCRAFT

55

11.1

General Obligation.

55

11.2

Maintenance Performer.

55

11.3

Notification of Shop Visits and Additional Work Requested by Lessor.

56

11.4

Specific Obligations.

56

11.5

Replacement of Parts.

57

11.6

Removal of Engines.

58

11.7

Pooling.

59

11.8

Modifications.

60

11.9

Reporting Requirements.

61

11.10

Maintenance Programme.

61

11.11

Inspection of Aircraft.

61

12.

TITLE AND REGISTRATION

62

12.1

Title to the Aircraft.

62

12.2

Registration of Aircraft and Security Interests.

63

12.3

International Registry.

63

12.4

Discharge of Registration.

64

12.5

Irrevocable De-registration and Export Request Authorisation.

64

13.

IDENTIFICATION PLATES

64

13.1

Airframe and Engine Identification Plates.

64

14.

TAXES

65

14.1

General Obligation of Lessee.

65

14.2

After-Tax Basis.

66

14.3

Timing of Payment.

66

14.4

Tax Credit

66

14.5

Contest.

67

14.6

Mitigation.

67

14.7

Verification.

67

14.8

Co-operation in Filing Tax Returns.

68

 

2



 

14.9

Survival of Obligations.

68

15.

INDEMNITIES

68

15.1

General Indemnity.

68

15.2

Exceptions to General Indemnities.

69

15.3

Consultation, Mitigation and Reimbursement

70

15.4

After-Tax Basis.

71

15.5

Time of Payment.

71

15.6

Subrogation.

71

15.7

Notice.

71

15.8

Defence of Claims.

72

15.9

Survival of Obligation.

72

16.

INSURANCE

72

16.1

Insurances.

72

16.2

Date Recognition.

73

16.3

Renewal.

73

16.4

Assignment of Rights by Lessor.

73

16.5

Insurance Covenants.

73

16.6

Currency.

74

16.7

Failure to Insure.

74

16.8

Continuation of Insurances.

75

16.9

Application of Insurance Proceeds.

75

17.

RISK, LOSS, DAMAGE AND REQUISITION

76

17.1

Risk.

76

17.2

Total Loss of Aircraft prior to Delivery.

76

17.3

Notice of Total Loss.

76

17.4

Total Loss of Aircraft or Airframe.

77

17.5

Surviving Engine(s).

77

17.6

Total Loss of Engine and not Airframe.

77

17.7

Other Loss or Damage.

78

17.8

Requisition.

79

18.

REPRESENTATIONS AND WARRANTIES OF LESSEE

80

18.1

Lessee Representations.

80

18.2

Repeating Representations.

83

18.3

Survival:

83

19.

REPRESENTATIONS AND WARRANTIES OF LESSOR

83

19.1

Lessor Representations.

83

20.

FINANCIAL AND OTHER INFORMATION

85

20.1

Financial and Other Information.

85

21.

RETURN OF AIRCRAFT

86

21.1

General.

86

21.2

Return Report.

86

21.3

Inspection.

86

21.4

Demonstration Flight.

87

21.5

Certificate of Airworthiness Export and Deregistration Matters at Return.

87

21.6

Non-compliance.

87

21.7

Return Certificate.

88

21.8

Indemnities and Insurance.

89

22.

QUIET ENJOYMENT

89

22.1

Quiet Enjoyment.

89

23.

ASSIGNMENT

89

23.1

No Assignment by Lessee.

89

23.2

Transfer by Lessor.

89

 

3



 

23.3

Lessee Co-operation.

89

23.4

Conditions.

90

23.5

Protection.

91

23.6

Release.

92

24.

DEFAULT OF LESSEE

92

24.1

Lessee Notice to Lessor.

92

24.2

Events of Default.

92

24.3

Lessor’s General Rights.

95

24.4

Lessee Liability for Damages.

97

24.5

Waiver of Default.

98

25.

LESSEE ILLEGALITY AND LESSOR ILLEGALITY AND OTHER EVENTS

98

25.1

Lessee Illegality Event.

98

25.2

Lessor Illegality Event.

99

25.3

Other Events.

99

26.

NOTICES

99

26.1

Manner of Sending Notices.

99

26.2

Notice Information.

100

27.

GOVERNING LAW AND JURISDICTION

100

27.1

Governing Law.

100

27.2

[***].

100

27.3

Jurisdiction.

101

27.3.1

English Courts.

101

27.3.2

Non-Exclusive Jurisdiction.

101

27.3.3

Service of Process.

101

28.

MISCELLANEOUS

101

28.1

Confidentiality.

101

28.2

Delegation by Lessor.

102

28.3

Remedy.

102

28.4

Waiver, Remedies Cumulative.

102

28.5

Further Assurances.

103

28.6

Severability.

103

28.7

Time is of the Essence.

103

28.8

Amendments in Writing.

103

28.9

Third Party Rights.

103

28.10

Entire Agreement.

103

28.11

English Language.

104

28.12

No Brokers.

104

28.13

Execution in Counterparts.

104

28.14

[Concerning Lessor.

104

28.15

[Successor Owner Trustee.

104

Exhibit A

107

DESCRIPTION OF AIRCRAFT

107

Exhibit B

109

FINANCIAL PROVISIONS

109

Exhibit C

110

FORM OF DELIVERY ACCEPTANCE CERTIFICATE

110

Exhibit D

124

FORM OF RETURN ACCEPTANCE CERTIFICATE

124

Exhibit E

135

INSURANCE REQUIREMENTS

135

Exhibit F

139

OPERATING CONDITION OF THE AIRCRAFT AT DELIVERY

139

 

4



 

Exhibit G

140

Exhibit H

147

FORM OF QUARTERLY REPORT

147

Exhibit I

149

FORM OF NOTICE AND ACKNOWLEDGEMENT OF SECURITY ASSIGNMENT

149

PART A

149

PART B

152

Exhibit J

160

FORM OF CONFIRMATION OF QUIET ENJOYMENT

160

PART A

160

PART B

161

Exhibit K

162

EUROCONTROL AUTHORISATION LETTER

162

Exhibit L

163

AIRCRAFT DOCUMENTATION AND STANDARDS

163

Exhibit M

181

FORM OF IDERA [(BRAZIL)

181

Exhibit N

183

FORM OF DEREGISTRATION POWER OF ATTORNEY (BRAZIL)

183

 

5



 

AIRCRAFT OPERATING LEASE AGREEMENT

 

THIS AIRCRAFT OPERATING LEASE AGREEMENT (the “Agreement”) is made and entered into as of this        day of                       , between LATAM Airlines Group S.A., a company duly incorporated under the laws of Chile, through its office located at Av. Presidente Riesco 5711, 20th Floor Las Condes, Santiago, Chile (“Lessee”) and [*], a company duly incorporated under the laws of [*] through its office located at [*] (“Lessor”).

 

R E C I T A L S

 

WHEREAS, Lessee desires to lease from Lessor and Lessor is willing to lease to Lessee the Aircraft described herein upon and subject to the terms of this Agreement;

 

NOW, THEREFORE, in consideration of the mutual promises herein, Lessor and Lessee agree as follows:

 

1.                                      SUMMARY OF TRANSACTION

 

The following is a summary of the lease transaction between Lessee and Lessor. It is set forth for the convenience of the parties only and will not be deemed in any way to amend, detract from, simplify or affect the construction of the other provisions of this Agreement. In the event of a conflict with any such other provision, such other provision shall govern.

 

1.1                               Description of Aircraft.

Airbus 350-900; MSN [      ].

 

1.2                               Scheduled Delivery Date and Location.

In the month of [·] at the Delivery Location.

 

1.3                               Lease Term.

[***].

 

1.4                               Country of Aircraft Registration.

Brazil(2) or such other jurisdiction permitted in accordance with this Agreement.

 

1.5                               Maintenance Programme.

Initial Sub-Lessee’s Maintenance Programme, for so long as Aircraft is subject to the Initial Sub-Lease.

 

1.6                              Agreed Value.

The “Agreed Value” of the Aircraft is the amount shown in Exhibit B hereto as the “Agreed Value” and is the amount payable to Lessor (or its designee or assignee) in the event of a Total Loss.

 


(2) This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

6



 

1.7                               Lessor’s Designated Bank Account(s).

 

Account Name

 

[·]

 

Account Number

 

[·]

 

IBAN

 

[·]

 

Swift Code

 

[·]

 

Bank Name

 

[·]

 

Bank Address

 

[·]

 

USD Correspondent Bank

 

[·]

 

Swift Code

 

[·]

 

ABA/Fedwire

 

[·]

 

 

2.                                      DEFINITIONS AND INTERPRETATION

 

2.1                               Definitions.

 

Capitalised terms used in this Agreement shall have the following meanings for all purposes of this Agreement.

 

[***] Check” means each of the Airframe structural checks for [***] (or such other interval per the then applicable revision of the MPD).

 

Acceptable Bank” means a financial institution that:

 

(a)                                is registered in an OECD (Organisation for Economic Cooperation and Development) member country and has a long term unsecured, unsubordinated and unguaranteed debt obligations rating, as rated by Moody’s Investors Services Inc. or Standard & Poor’s Corporation, of at least equal to or better than Aa3 and AA- respectively; or

 

(b)                                is acceptable to Lessor (in its reasonable discretion).

 

Acceptable Guarantor” means AerCap Ireland Limited, AerFunding 1 Limited, AerCap Lease Securitisation IV Limited or such other guarantor notified by Lessor to Lessee provided that such other guarantor is a Qualifying Person.

 

Acceptable Repairs” shall mean fully documented structural repairs as set out in the Structural Repair Manual (“SRM”) or any other repair procedure prescribed by the Manufacturer or a DOA, for such repairs in writing or approved by the Aviation Authority and the Compliance Authority and complying with the following requirements:

 

(a)                               repairs shall be flush if feasible and applicable;

 

(b)                                repairs must be permanent and according to standard industry practice;

 

7



 

(c)                                 repairs shall not require inspection other than damage tolerance inspection, and the threshold and interval for such damage tolerance inspection shall not be less than the interval required by the Manufacturer or a DOA; and

 

(d)                                repairs must be fully documented and transferable to the next operator or purchaser of the Aircraft.

 

Accession Risk Country” means a country imposing accession risk with respect to pooling of aircraft engines and parts, including but not limited to The Netherlands, Finland, Greece, Jamaica, Sweden, Turkey, and any other country as Lessor may notify Lessee in writing from time to time.

 

Administrative User” means the person appointed by Lessee to carry out the functions of the administrator of a registered user entity under section 4 of the procedures for the International Registry as issued by the Supervisory Authority.

 

AerCap Group” means AerCap Holdings N.V. and Affiliates.

 

Aeronautical Registry” means the [Brazilian Aeronautical Registry (or any successor thereto), for so long as the Aviation Authority is the Agência Nacional de Aviação Civil](3).

 

Affiliate” means any other Person directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control with the Person specified, and includes any trust of which the beneficiary or Owner Participant (if applicable) is Lessor or Owner Participant (if applicable) or an Affiliate of Lessor or Owner Participant (if applicable).

 

Agent means such person as may be notified to Lessee by Lessor from time to time as being the Agent acting for the Financing Parties.

 

Agreed Expiry Date means the date falling [***] after the Delivery Date.

 

Agreed Form of Sublease means the form of sublease agreed by the parties prior to the date of this Agreement.

 

Agreed Value” is then applicable amount calculated as the “Agreed Value” pursuant to Exhibit B.

 

Agreement” means this Aircraft Operating Lease Agreement together with all Exhibits hereto.

 

Airbusmeans Airbus S.A.S., a societé par actions simplifiée organised under the Laws of France, having its principal office at Blagnac, France, or its successor in title.

 

Aircraft” means the Airframe to be delivered and leased hereunder together with the two (2) Engines whether or not such Engines are from time to time installed on the Airframe or any other airframe, the Parts and the Aircraft Documentation, as further described in Exhibit A and the Delivery Acceptance Certificate, collectively.  As the context requires, “Aircraft” may also mean the

 


(3) This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

8



 

Airframe, any Engine, any Part, the Aircraft Documentation or any part thereof individually.

 

Aircraft Activity” means the ownership (but only for purposes of Sections 14.1 and 15.1), possession, use, import, export, registration, re-registration, deregistration, non-registration, manufacture, performance, transportation, management, location, movement, disposal, transfer, exchange, control, design, condition, defect, testing, inspection, acceptance, delivery, redelivery, leasing, subleasing, wetleasing, pooling, interchange, maintenance, repair, loss, damage, emissions, refurbishment, insurance, reinsurance, service, modification, overhaul, replacement, alteration, storage, removal, operation of or to, or any Security Interest (other than a Lessor Lien) on the Aircraft, the Airframe, any Engine or any Part (whether in the air or on the ground or otherwise) at any time.

 

Aircraft Documentation” or “Aircraft Documents” means (i) all Manuals and Technical Records; (ii) all log books, Aircraft records, and other documents provided to Lessee at Delivery of the Aircraft or generated by Lessee, the Initial Sub-Lessee, or other Permitted Sub-Lessee or by third parties during the Lease Term; (iii) all documents listed in a schedule to the Delivery Acceptance Certificate and (iv) any other documents required by the Aviation Authority, the Compliance Authority or the Maintenance Programme to be maintained during the Lease Term (all of which will be maintained in English (excluding pilot reports)), and all additions, renewals, revisions and replacements from time to time made to any of the foregoing in accordance with this Agreement, each of which conforms to the standard set out in Exhibit L.

 

Airframe” means the airframe described in Exhibit A together with all Parts relating thereto (except Engines or engines).

 

[***]

 

Airframe Warranties Agreement” means the airframe warranties agreement relating to the Aircraft, entered, or to be entered into between, inter alios, Lessor, Lessee and Manufacturer in form and substance reasonably satisfactory to Lessor, as the same may be amended, modified or supplemented from time to time in accordance with the applicable provisions thereof.

 

Airworthiness Directive” or “AD” means each airworthiness directive (or equivalent) and other mandatory instruction of the Compliance Authority and/or the FAA and/or the Aviation Authority and any other mandatory instruction of the Aviation Authority applicable to the Aircraft.

 

AMM means the latest revision of the Airplane Maintenance Manual or Aircraft Maintenance Manual published by the Manufacturer in respect of the Aircraft.

 

AOC means Lessee’s Air Operator’s Certificate issued by the Chilean Aviation Authority (Dirección General de Aeronáutica Civil) or any Sub-Lessee’s Air Operator’s Certificate issued by the Aviation Authority of the State of Registration.

 

Applicable Swap Rate” means the [***] rate as stated on Bloomberg screen service page IRSB18 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those current provided on such page of such service), expressed

 

9



 

as a percentage rounded to two (2) decimal places at 11:00 AM New York City time two (2) Business Days prior to the Delivery Date.

 

[***]

 

APU” means the auxiliary power unit installed on the Aircraft on the Delivery Date or any replacement auxiliary power unit installed in accordance with this Agreement.

 

[***]

 

Assignment of Insurances” means the assignment of insurances and requisition compensation granted, or to be granted, by Lessee or Initial Sub-Lessee in favour of Lessor in relation to the Aircraft, in form and substance acceptable to Lessor.

 

Aviation Authority”(4) means, as of any time of determination, (i) National Agency of Civil Aviation (“ANAC”) or any Government Entity which under the Laws of Brazil from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in Brazil or (ii) if, in accordance with this Agreement, the Aircraft is registered in a country other than Brazil, the relevant governmental airworthiness authority having jurisdiction over the Aircraft or which regulates and/or controls civil aviation under the laws of the country or state in which the Aircraft is then registered or having jurisdiction over the registration, airworthiness and operation of, or other matters relating to the Aircraft.

 

Aviation Documents” means any or all of the following which at any time may be required to be obtained from the Aviation Authority in the State of Registration: (i) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration; (ii) if applicable, an application for registration of the Aircraft with the appropriate authority in the State of Registration; (iii) the certificate of registration for the Aircraft issued by the State of Registration; (iv) a full certificate of airworthiness for the Aircraft specifying transport category (passenger); (v) an air transport licence, (vi) an air operator’s certificate; (vii) such recordation of Lessor’s rights, title and interest in and to the Aircraft and the Operative Documents as may be available in the State of Registration; and (viii) all such other authorisations, approvals, consents and certificates in the State of Registration and/or the State of Incorporation as may be required to enable Lessee lawfully to operate the Aircraft (such as noise certificates, radio station licences, flight manual approval sheets, etc).

 

Bankruptcy Code means:

 

(a)                                Title 11 of the United States Code, as amended from time to time, and any successor statute; or

 

(b)                                [Brazilian Law No. 11,101 of February 9, 2005, as amended from time to time, and any successor statute](5); or

 


(4) This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

(5) This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

10


 

(c)                                 Chilean Law No. 18175 of October 28, 2982, as amended from time to time, and any successor statute; or

 

(d)                                any other applicable foreign, federal, provincial, state or local bankruptcy, insolvency or other similar law applicable to which Lessee may resort to.

 

Basic Rent” has the meaning set forth in Section 5.1.

 

BFE” means buyer furnished equipment, supplied or purchased by or on behalf of Lessee in respect of the Aircraft for installation by Manufacturer pursuant to the Original Purchase Agreement or the Purchase Agreement Assignment on or before the Delivery Date.

 

[“BFE Bill of Sale” means the bill of sale in relation to the BFE to be executed by Lessee [or Airbus] in favour of Lessor on the Delivery Date.]

 

Bill of Sale” means, collectively, the Manufacturer’s Bill of Sale[, the Seller Bill of Sale], [Manufacturer BFE Bill of Sale] and the [BFE Bill of Sale].

 

Business Day” means any day other than a Saturday or a Sunday on which business of the nature required by this Agreement is carried out in Amsterdam, the Netherlands, Dublin, Ireland, [Sao Paulo, Brazil](6), Santiago, Chile and the state in which the principal place of business of Lessor, Owner, Security Trustee and Lessee is located and, where used in relation to payments, on which commercial banks are open for business in New York, New York, United States of America, [in Sao Paulo, Brazil](7) and in Santiago, Chile.

 

C-Check” means an Airframe check during which all those tasks prescribed by the MPD which have an interval of [36 months](8) (or such other interval per the then current revision of the MPD) are accomplished including all tasks with an interval less than [36 months](9) (or such other interval per the then current revision of the MPD) which, in accordance with typical industry practice, would normally be accomplished at the same time.

 

Cape Town Convention means the English language version of the Convention on International Interests in Mobile Equipment (the “Convention”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the “Protocol”), both signed in Cape Town, South Africa on November 16, 2001, together with any protocols, regulations, rules, orders, agreements, instruments, amendments, supplements, declarations, revisions or otherwise that have or will be subsequently made in connection with the Convention and/or the Protocol by the “Supervisory Authority” (as defined in the Protocol), the “International Registry” or “Registrar” (as defined in the Convention) or an appropriate “registry authority” (as defined in the Protocol) or any other international or national body or authority.

 

Certificated Air Carrier” means any Person (except the United States government) that: (a) is a “citizen of the United States”, as defined in Section 40102(a)(15)(c) of the Title 49 of the United States Code and (b) holds both (i) a

 


(6)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

(7)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

(8)  To be updated to the interval in the Airbus MPD.

(9)  To be updated to the interval in the Airbus MPD.

 

11



 

Certificate of Public Convenience and Necessity issued under Section 41102 of Title 49 of the United States Code by the Department of Transportation or predecessor or successor agency thereto, or in the event such certificates are no longer issued, a Person meeting the requirements set forth immediately above holding all necessary certificates, authorizations and licenses and legally engaged in the business of transporting passengers or cargo for hire by air predominantly to, from or between points within the United States of America, and (ii) an air carrier operating certificate issued pursuant to Chapter 447 of Title 49 of the United States Code for aircraft capable of carrying ten or more individuals or 6,000 pounds or more of cargo and which is certificated within the meaning of and thus entitling Lessor to the benefits of, Section 1110.

 

Compliance Authority” means the certifying authorities of the State of Design (as such expression is defined in Annex 8 of the Convention on International Civil Aviation) of the Aircraft, which means any of the Airframe, any Engine or any Part Manufacturer or such other agency or authority as shall succeed its functions.

 

Conditions Precedent has the meaning set forth in Section 6.1.

 

Contracting State” has the meaning given to such term in the Cape Town Convention.

 

Creditors” has the meaning given to such term in the Cape Town Convention.

 

Cycle” or “FC” means one take-off and landing of the Aircraft or, in respect of any Engine or Part temporarily installed on another aircraft, of that other aircraft and for this purpose one (1) “touch and go” shall count as one (1) take-off and landing.

 

Damage Notification Threshold” means US$[***].

 

Damage Proceeds Threshold” means US$[***].

 

Default” means (i) any Event of Default and/or (ii) any event, which with the giving of notice or the lapse of time or both would become an Event of Default.

 

Delivery” means the delivery of the Aircraft by Lessor to Lessee.

 

Delivery Acceptance Certificate means the delivery acceptance certificate in the form of Exhibit C.

 

Delivery Conditions” means the operating condition of the Aircraft at Delivery as set out in Exhibit F.

 

Delivery Date” means the date on which Delivery takes place.

 

Delivery Location” has the meaning given to it in the [Purchase Agreement][Purchase Agreement Assignment].

 

DER Repair” means a repair which is not covered by the SRM and has not been approved for use on the Airframe by the Manufacturer of the Airframe or on an Engine by the Engine Manufacturer or on a Part by the Manufacturer of such Part is not approved by a person or organization holding a DOA and is not approved by the Aviation Authority and the Compliance Authority.

 

12



 

Deregistration Power of Attorney” means each de-registration power of attorney that may from time to time be issued by Lessee or any Permitted Sub-Lessee, authorizing inter alia Lessor and any employee or representative of Lessor or such other Person as Lessor may specify from time to time to do anything or any act or to give any consent or approval which may be required to obtain deregistration of the Aircraft from the register of aircraft in the State of Registration upon termination of the leasing of the Aircraft, and in relation to an Aircraft registered in [Brazil](10), substantially in the form set out in Exhibit N.

 

Dispute” has the meaning set forth in Section 27.2.1.

 

DOA” means a Design Organisation Approval issued pursuant to EASA Part 21.

 

Dollars”, “United States Dollars”, “U.S. Dollar”, “USD”, “US$” and “$” means the lawful currency of the United States of America.

 

EASA means the European Aviation Safety Agency as established by European Parliament and Council Regulation (EC) No. 216/2008 (repealing European Parliament and Council Regulation (EC) No. 1592/2002), or any successor thereof.

 

EASA Certification Specification or “EASA CS” means certification specifications issued by EASA pursuant to Article 18 and Article 19 of European Parliament and Council Regulation (EC) No. 216/2008 and 21A.16A of EASA Part 21 or such amendment and/or equivalent standard as might be promulgated by the European Union and/or EASA.

 

EASA Member State means each of (i) the member states of the European Union and (ii) any other country or state which has entered into an agreement with the European Community (or European Union) pursuant to Article 66 of European Parliament and Council Regulation (EC) No. 216/2008 or any successor thereof.

 

EASA Part 145 means Annex II to European Union Commission Regulation (EC) 2042/2003 or such amendment and/or equivalent standard as might be promulgated by the European Union and/or EASA.

 

EASA Part 21 means the Annex to European Union Commission Regulation (EC) 1702/2003 or such amendment and/or equivalent standard as might be promulgated by the European Union and/or EASA.

 

EASA Part M means Annex I to European Union Commission Regulation (EC) 2042/2003 or such amendment and/or equivalent standard as might be promulgated by the European Union and/or EASA.

 

Engine” means (i) each of the engines listed in Exhibit A or each of the engines installed on or furnished with the Aircraft at Delivery and listed in the Delivery Acceptance Certificate, such Engines being identified as to manufacturer, type and serial numbers (serial numbers to be identified as per the Delivery Date); (ii) any replacement engine (including any Replacement Engine) and title to which has, or should have passed to Owner in accordance with this Agreement; and (iii) all Parts installed in or on any of such engines at Delivery (or substituted,

 


(10)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

13



 

renewed or replacement Parts in accordance with this Agreement) so long as title to such Parts is or remains or should be vested in Owner in accordance with the terms of Section 12.5. At such time as a replacement engine (including a Replacement Engine) becomes an Engine, the Engine it is replacing shall cease to be an Engine.

 

Engine Manufacturer” means Rolls Royce Plc or its successor in title.

 

Engine Warranties Agreement” means the engine warranties agreement relating to an Engine, entered, or to be entered into between, inter alios, Lessee, Lessor and Engine Manufacturer in form and substance satisfactory to Lessor, as the same may be amended, modified or supplemented from time to time in accordance with the applicable provisions thereof.

 

EU ETS Authority” means any Government Entity of a member state of the European Union with jurisdiction for the application and administration of EU ETS Laws in relation to any of Lessee, Permitted Sub-Lessee or the Aircraft.

 

EU ETS Directive” means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emissions allowance trading and amending Council Directive 96/61/EC, as amended by Directive 2008/101/EC so as to include aviation activities, as the same may be amended, supplemented, superseded or re-adopted from time to time (whether with or without modifications).

 

EU ETS Laws” means (a) the EU ETS Directive; and (b) any applicable Law of a member state of the European Union implementing the EU ETS Directive.

 

EU-OPS means Annex III to European Union Council Regulation (EEC) No 3922/91, as amended by Council Regulation (EC) no 1899/2006 or such amendment and/or equivalent standard as might be promulgated by the European Union and/or EASA.

 

Eurocontrol means the European Organisation for the Safety of Air Navigation established by the Eurocontrol International Convention relating to Co-operation for the Safety of Air Navigation of 13 December 1960, as amended from time to time.

 

Eurocontrol Authorisation Letter” means the letter in the form set out in Exhibit K.

 

Event of Default” means any of the events referred to in Section 24.2 and each such Event of Default shall be a “default” for the purposes of Article 11(1) of the Cape Town Convention.

 

Excluded Taxes” means, in relation to a Tax Indemnitee:

 

(a)                                 any Tax on, based on, measured by or with respect to the net or gross income or profits, net or gross receipts (including any capital gains Taxes, minimum Taxes), Taxes on or measured by any items of tax preference, capital, net worth or taxes in the nature of income taxes imposed by any government entity or taxing authority on such Tax Indemnitee, provided that this paragraph (a) shall not include any such Taxes to the extent they are imposed: (i) as a consequence of the operation, presence or registration in the jurisdiction imposing the Tax of the Aircraft or any Part;

 

14



 

(ii) as a result of the presence in the jurisdiction imposing the Tax of a permanent establishment of Lessee; or (iii) as a result of the payment by Lessee from the jurisdiction imposing the Tax of any amount due under this Agreement;

 

(b)                                 Taxes imposed on such Tax Indemnitee as a result of a sale, assignment, novation, transfer or other disposition, whether voluntary or involuntary (each a “Disposition”), by Lessor or any person, other than Lessee, of the Aircraft or any legal or beneficial interest in the Aircraft, or any Engine or Part, this Agreement or any other Operative Document; provided however, that such Disposition does not result from the exercise of any remedy as a result of an Event of Default; or is not a Disposition expressly contemplated by this Agreement pursuant to Sections 17.2, 17.4 and 17.6;

 

(c)                                  Taxes imposed on such Tax Indemnitee with respect to any period or event occurring (i) after the Return of the Aircraft in accordance with the conditions set out in this Agreement except to the extent that such Taxes are attributable to such Return or to the period prior to such Return, and (ii) at any time during which Lessee shall have been deprived of the use or possession of the Aircraft as a result of a breach by Lessor, or any person claiming by or through Lessor, of the covenant of quiet and peaceful use and enjoyment of the Aircraft as set forth in Section 22.1 or in any document or instrument delivered in connection herewith;

 

(d)                                 Taxes to the extent caused by any failure by Lessor to issue or provide punctually any notice or information which is reasonably required and requested by Lessee in order to file punctual and accurate returns, statements or other documents which are required to be filed by the revenue or similar laws of any government entity, or which Lessor is otherwise required to furnish to Lessee by the terms of this Agreement; provided that nothing in this paragraph shall (i) interfere with the right of Lessor to arrange its tax affairs as it thinks fit, or (ii) oblige Lessor to disclose any information relating to its affairs which it determines to be commercially sensitive or confidential;

 

(e)                                  any Tax liability which such Tax Indemnitee would have had even if the Operative Documents had not been entered into;

 

(f)                                   any Tax which arises or is imposed on such Tax Indemnitee in respect of, or as a consequence of, any Lessor Lien or any financing arrangements which may from time to time be effected by Lessor to the extent that the amount of any such Tax exceeds the amount of Tax what would otherwise have been payable under this Agreement in the absence of any such financing arrangement;

 

(g)                                  penalties, additions to Tax, fines or interest on Taxes of such Tax Indemnitee which would not have arisen in relation to any Taxes but for avoidable delay or failure by such Tax Indemnitee in notifying Lessee of the same or in filing the necessary tax returns or in paying the relevant Taxes, or but for an error on the part of such Tax Indemnitee in completing the necessary tax returns or in paying the relevant Taxes, unless such delay or failure or error has been consented to, caused by, or requested by, Lessee;

 

15



 

(h)                                 Taxes to the extent imposed on such Tax Indemnitee as a result of (i) the willful misconduct, or reckless disregard with knowledge of the probable consequences thereof, on the part of such Tax Indemnitee, or any person claiming by or through such Tax Indemnitee; or (ii) any breach by such Tax Indemnitee, or any person claiming by or through such Tax Indemnitee, of any representations, warranties, covenants or obligations contained in this Agreement or any other Operative Document or any other document or instrument delivered under or in connection with this Agreement or any other Operative Document, or the transactions contemplated herein or therein; and

 

(i)                                     any Tax to the extent that such Tax Indemnitee or any person claiming by or through such Tax Indemnitee has received and retained a payment in respect thereof pursuant to any other provision of this Agreement or any other Operative Document.

 

Expiry Date” means the date determined in accordance with Section 4.2.

 

FAA” means, as the context requires, the U.S. Federal Aviation Administration of the U.S. Department of Transportation and/or the Administrator of the U.S. Federal Aviation Administration or any successor thereto under the Laws of the United States of America.

 

FAR” means the Federal Aviation Regulations embodied in Title 14 of the U.S. Code of Federal Regulations, as amended from time to time, or any successor regulations thereto.

 

Financing Documents means any Mortgage, lease assignment, loan agreement, conditional sale agreement, head lease, security assignment, sublease security assignment, Trust Agreement or any other documents entered into by Lessor or Owner or Owner Participant (if applicable) with any Financing Party in connection with Lessor’s or Owner’s or Owner Participant (if applicable) financing of the Aircraft.

 

Financing Parties” means any Person from time to time notified by Lessor to Lessee as making any loan, superior lease or other financing arrangement available to Lessor, Owner, any Owner Participant or any of their Affiliates which is for the financing or refinancing of the Aircraft and/or in relation to which such Person (or any Security Trustee on its behalf) acquires title to or any right or interest (present or future) in the Aircraft and/or any of the Operative Documents, and “Financing Parties” includes the Agent and Security Trustee, if any.

 

First Run” with respect to an Engine shall refer to the period from new manufacture of the Engine until completion of the first accomplishment of a Performance Restoration of such Engine since new manufacture.

 

Flight Hour” or “FH” means each hour or fraction thereof elapsing from the moment at which the wheels of the Aircraft, or in the case of any Part or Engine temporarily installed on another aircraft, the wheels of that other aircraft, leave the ground on the take-off of such Aircraft or aircraft until the wheels of such Aircraft or aircraft touch the ground on the landing of such Aircraft or aircraft following such flight.

 

16



 

Framework Deed” means the agreement dated on or about 28 May 2013 among Lessee and AerCap Holdings N.V. in respect of, amongst other things, the purchase and leaseback of the Aircraft.

 

Geneva Convention” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the State of Registration does not accede.

 

Government Entity” means and includes (whether having a distinct legal personality or not) any: (i) national, state or local government; (ii) board, commission, department, division, instrumentality, court, agency or political subdivision thereof, however constituted; and (iii) association, organisation or institution (international or otherwise) of which any thereof is a member or to whose jurisdiction any thereof is subject or in whose activities any thereof is a participant.

 

Gross Negligence” means any intentional or conscious action or decision or failure to act with reckless disregard for the consequences of such action or decision or failure to act.

 

Habitual Base” means: (i) Brazil(11); (ii) the principal operations base of any Permitted Sub-Lessee provided such base is not in a country or countries which is a Prohibited Country; or (iii) subject to the prior written consent of Lessor acting reasonably, any other country or countries not being a Prohibited Country in which the Aircraft is for the time being habitually based (and for this purpose, the Aircraft shall be “habitually based” at the location from which the Aircraft departs on a flight (or a series of flights) and to which it customarily returns and remains between such flights (or series of flights)).

 

Hard Time Component” means a Part, which must be removed from service for a Hard Time Event at specified intervals per the MPD and/or the Maintenance Programme and/or a specified maintenance programme.

 

Hard Time Event” means a check, inspection, maintenance, overhaul or scrap for life limit for a Hard Time Component in accordance with the requirements of the MPD and/or the Maintenance Programme and/or a specified maintenance programme.

 

Headlease” means any aircraft lease agreement entered, or to be entered into from time to time between Owner and Lessor in respect of the Aircraft.

 

IATA” means the International Air Transport Association.

 

IDERA” means the irrevocable deregistration and export request authorisation letter addressed by Initial Sub-Lessee (or any other Permitted Sub-Lessee, as applicable) to the relevant registry authority containing an irrevocable deregistration and export request authorisation, in the form required by the Cape Town Convention and otherwise in the form set forth in Exhibit M.

 

IFRS means the international financial reporting standards.

 


(11)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

17



 

Indemnitees” means the Relevant Parties and their successors, assigns, Affiliates, partners, officers, directors, employees, servants, transferees and agents.

 

Initial Sublease” means the sublease of the Aircraft entered into between Lessee and Initial Sub-Lessee on or about the date of this Agreement.

 

Initial Sub-Lessee” means [·].

 

Insurances has the meaning set forth in Section 16.1.

 

International Interest” has the meaning given to such term in the Cape Town Convention.

 

International Registry” has the meaning given to such term in the Cape Town Convention.

 

Landing Gear” means the landing gear assemblies (and their constituent sub-assemblies and Parts) of the Aircraft, meaning the Nose Landing Gear Assembly and the Left Main Landing Gear Assembly and the Right Main Landing Gear Assembly, whether or not for the time being installed in or attached to the Airframe.  As the context requires, “Landing Gear” may also mean each of such landing gear assemblies of the Aircraft individually.

 

[***]

 

Late Payment Interest” has the meaning set forth in Section 5.6.

 

Late Payment Interest Rate means [***] above 1 month USD LIBOR. During the calendar month in which any amount shall become due, the applicable USD LIBOR rate is the rate in effect at the applicable due date. The Late Payment Interest Rate shall be revised each subsequent month, in accordance with the applicable USD LIBOR rate in effect at the first Business Day of such month.

 

Late Payment Interest Payment Date” means the 5th (fifth) day of each calendar month except that if such day is not a Business Day, the Late Payment Interest shall be due on the immediately preceding Business Day.

 

Law” means any: (i) statute, decree, constitution, regulation, order or any directive of any Government Entity; (ii) treaty, convention, pact or other agreement to which any Government Entity is a signatory or party; and (iii) judicial or administrative interpretation or application of any of the foregoing and “law”, “laws” and “lawfully” shall be construed accordingly.

 

Lease Term” means the period commencing on the Delivery Date and ending on the Expiry Date.

 

Leasing Affiliate” means any of:

 

(a)                                 a Subsidiary of Lessee;

 

(b)                                 an Affiliate of Lessee;

 

(c)                                  any other person controlled by Lessee,

 

18



 

in each case that is, if the relevant person is the operator, or proposed operator of the Aircraft, a commercial air carrier possessing at all relevant times whilst the Aircraft is operated by such person, all necessary authorisations, consents and licences.

 

For the purpose of this definition, Lessee shall be deemed to control another person if:

 

(i)                                     Lessee possesses directly or indirectly the power to direct the management or policies of such other person whether through:

 

(x)                                 the ownership of voting rights;

 

(y)                                 control of the board (including control of its composition) of the other person; or

 

(z)                                  indirect control of (x) and (y); or

 

(ii)                                  such other person would, under relevant accounting principles, be consolidated for accounting purposes with Lessee.

 

“Lessee Illegality Event” means an event or circumstance which makes it (or will make it) unlawful in (i) any jurisdiction for Lessee to fulfil or perform any of the covenants or obligations expressed to be assumed by it under this Agreement or any other Operative Document to which it is a party, or (ii) the State of Registration, the State of Incorporation of Lessee or the Habitual Base for Lessor to give effect to any of its obligations under this Agreement, other than where such unlawfulness is not specific to this Agreement or Lessor’s dealings with Lessee or is unrelated to any of the jurisdictions mentioned in sub-clause (ii) of this definition.

 

Lessor Group” means Lessor and any Owner Participant and Lessor’s and any Owner Participant’s Subsidiaries or Affiliates, any other Person that is the lessor of an aircraft where the subject aircraft is managed by a Servicer and any Person that is an Affiliate of a Servicer.  For the purposes of this definition only, where a Person described herein is either acting as a trustee or is the beneficiary of a trust, the reference to such Person shall be deemed to include both the trustee and the beneficiary of the trust.

 

Lessor Guarantee” means the guarantee dated as of the Delivery Date between an Acceptable Guarantor and Lessee in form and substance satisfactory to Lessee, acting reasonably, pursuant to which such guarantor guarantees the performance of the obligations and liabilities of Lessor under this Agreement and the other Operative Documents.

 

Lessor Illegality Event” means an event or circumstance which makes it or will make it unlawful in any jurisdiction for Lessor to give effect to any of its obligations under this Agreement or any other Operative Document to which it is a party, save where a Lessee Illegality Event has occurred and is continuing.

 

Lessor Lien means:

 

(a)                              the Mortgage and any other Security Interest from time to time created by or through Lessor and/or Owner in favour of any Financing Party;

 

19



 

(b)                              any other Security Interest in respect of the Aircraft that results from acts of or claims against Lessor, and/or Owner or any Owner Participant not related to the transactions contemplated by or permitted under this Agreement; or

 

(c)                               any Security Interest in respect of the Aircraft for Excluded Taxes.

 

Lessor’s Designated Bank” has the meaning set forth in Section 5.5.

 

Life Limited Part or “LLP” means a Hard Time Component, which must be removed from service and discarded before a maximum life as specified by the Manufacturer and approved by the Compliance Authority is reached.

 

[***]

 

Losses means any and all liabilities, obligations, losses, damages, proceedings, claims, demands, actions, suits, judgments, orders or other sanctions, payments, charges, penalties, fines (whether criminal or civil), fees, costs, disbursements and expenses (including legal fees and related expenses, including legal fees and expenses incurred in enforcing any applicable indemnity) of every kind and nature, including any of the foregoing arising or imposed with or without any Indemnitee’s fault or negligence, active or passive, or under the doctrine of strict liability.

 

Maintenance Performer” means an EASA Part 145 and/or JAR 145 and/or FAR 145 approved maintenance, overhaul, repair and modification facility approved for the type of maintenance required on aircraft or engines or parts of the same type as the Aircraft, Engines or Parts or such other person approved in advance in writing by Lessor.

 

Maintenance Programme” means Lessee’s or any Permitted Sub-Lessee’s maintenance programme as approved by the Aviation Authority and which conforms as a minimum to the MPD or such other maintenance programme as Lessor and Lessee may agree upon in writing.

 

[***]

 

Manuals and Technical Records” means all records, logs, books, operational and maintenance manuals, technical data, aircraft delivery documents, customised specification, interior material specification, material certifications, operator non-incident statements and other materials and documents (whether kept or to be kept in compliance with any regulation of the Aviation Authority or otherwise) relating to the Aircraft.

 

Manufacturer” means with respect to the Airframe, Airbus, with respect to the Engines, the Engine Manufacturer, and with respect to any Part, the manufacturer of such Part, or its successor in title.

 

[“Manufacturer BFE Bill of Sale” means the bill of sale from the manufacturer of the BFE to [Seller] [in the case of a Purchase Agreement] [Lessor] [in the case of a Purchase Agreement Assignment].]

 

20


 

Manufacturer Bill of Sale” means the bill of sale relating to the Aircraft to be delivered by Manufacturer [to Seller] [in the case of a Purchase Agreement] [to Lessor] [in the case of a Purchase Agreement Assignment].

 

Minimum Liability Coverage” is the amount shown as the “Minimum Liability Coverage” in Exhibit B.

 

[***]

 

Modification” has the meaning set forth in Section 11.8.1.

 

Month” means a period commencing on one day in a calendar month and ending on the day immediately preceding the numerically corresponding day in the next calendar month, except that if there is no numerically corresponding day in that next month it shall end on the last day of that next month (and “month”, “months”, and “monthly” shall be construed accordingly).

 

Mortgage” means any mortgage or similar Security Interest over the Aircraft from time to time granted by Lessor or Owner to Security Trustee or any other Financing Party in connection with the financing or re-financing of the Aircraft and notified to Lessee in writing from time to time.

 

MPD means the latest revision of the Maintenance Planning Document or Maintenance Planning Data document published by the Manufacturer in respect of the Aircraft, provided always that at Return reference to the MPD shall not require any revision to the MPD issued within three (3) months prior to Return.

 

MRB Report” means the latest revision of the Maintenance Review Board document published by the Manufacturer.

 

New Lessor” has the meaning set forth in Section 23.2.

 

Notice and Acknowledgement of Security Assignment” means the notice delivered or to be delivered by Lessor to Lessee in respect of the Security Assignment and the acknowledgement by Lessee thereof, substantially in the form of Part A or Part B, of Exhibit I.

 

Operative Documents means this Agreement, the Assignment of Insurances, the Delivery Acceptance Certificate, the Return Certificate, any Notice and Acknowledgement of Security Assignment, any Quiet Enjoyment Letter, the Airframe Warranties Agreement, the Engine Warranties Agreement, each Bill of Sale, [the Purchase Agreement/ the Purchase Agreement Assignment,] the Lessor Guarantee, the Framework Deed, the Initial Sublease, the Subordination Agreement, any Security Assignment of Sublease, any Sublease and any schedules or documents executed pursuant to this Agreement or any of the foregoing documents and/or any other documentation in connection with the leasing of the Aircraft from Lessor to Lessee or the purchase of the Aircraft by Lessor.

 

[“Original Purchase Agreement” means the purchase agreement dated 20 December 2005 between Manufacturer, as seller, and TAM Linhas Aéreas S.A., as purchaser in respect of the Aircraft.]

 

Other Agreements” means and includes the Framework Deed and other operating lease agreements between:  (i) Lessee and (a) Lessor, or (b) any of

 

21



 

Lessor’s Subsidiaries, or (c) any of Lessor’s Affiliates, or (d) any Trustee; (ii) any of Lessee’s Subsidiaries and (a) Lessor, or (b) any of Lessor’s Subsidiaries, or (c) any of Lessor’s Affiliates, or (d) any Trustee; or (iii) Lessee (or any of Lessee’s Subsidiaries) and any other Person where the subject aircraft is managed by a Servicer (where such Servicer is an Affiliate of Lessor or a member of Lessor Group).  For the purposes of this definition only, where a Person described herein is either acting as a trustee or is the beneficiary of a trust, the reference to such Person shall be deemed to include both the trustee and the beneficiary of the trust and any reference to “Trustee” means a Person acting as Trustee (or in a fiduciary capacity) for Lessor or any of Lessor’s Subsidiaries or any of Lessor’s Affiliates.

 

Overhaul” shall mean the work necessary to return an item or Part to the highest standard specified in the relevant overhaul manual.

 

Owner” means Lessor or such other Person who, from time to time, Lessor may notify Lessee in writing as being the owner of the Aircraft for the time being. At the date of execution of the Agreement, Owner is Lessor.

 

Owner Participant” means such entity as Lessor shall advise Lessee in writing as being the owner participant.

 

Owner Trustee” means such entity as Lessor shall advise Lessee in writing, not in its individual capacity but solely as owner trustee under the Trust Agreement.

 

[“Owner’s Consent to Registration” means the standard form notice from the Owner to the Aeronautical Registry in Brazil in relation to registration of the Initial Sublease.](12)

 

Part” means, whether or not for the time being installed in or attached to the Airframe or any Engine: (i) any component, furnishing or equipment (other than a complete Engine) installed on or attached to or furnished with the Airframe or any Engine on the Delivery Date or thereafter; and/or (ii) any other component, furnishing or equipment (other than a complete Engine) title to which has or should have passed to Owner pursuant to this Agreement from time to time; but excluding any such items title to which has or should have passed to Lessee pursuant to this Agreement.

 

Performance Restoration or “PR” with respect to:

 

(a)                                 an Engine shall mean a shop visit at which such Engine undergoes as a minimum a workscope which includes a core restoration (refurbishment of the High Pressure Compressor, Combustor and High Pressure Turbine modules) and also includes as necessary refurbishment for each other module where such would be recommended by the Engine Manufacturer’s workscope planning guidance documents for the Required Engine Build Level.  The workscope accomplished for each individual module of such Engine during such shop visit and the performance of the Engine demonstrated during test cell for such shop visit shall be sufficient to achieve a full operating interval until the next anticipated Performance Restoration shop visit and in any event not less than [***] Flight Hours,

 


(12)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

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with an assumed FH:FC ratio of [***] (the “Required Engine Build Level”); and

 

(b)                                 an APU shall mean a shop visit at which a prescribed package of inspection, checks, repair and replacement of Parts on the hot section is accomplished in accordance with the APU manufacturer’s shop manual.

 

Performance Restoration Ratemeans the rate set forth in Exhibit B as the Performance Restoration Rate, subject to escalation as provided in Section 5.1.

 

Permitted Lien” means:

 

(a)                                 this Agreement and any subleases entered into in accordance with the provisions of this Agreement;

 

(b)                                 any Lessor Lien;

 

(c)                                  any lien arising after the Delivery Date for Taxes either not yet assessed or, if assessed, not yet due; or

 

(d)                                 material men’s, mechanic’s, workmen’s, repairmen’s, employees, or other like liens arising by operation of Law in the ordinary course of Lessee’s business for amounts which are either not yet due or which are not overdue for a period of more than 30 (thirty) days;

 

and which, in the case of (c) and (d) are being diligently contested in good faith by appropriate proceedings in accordance with this Agreement and for which adequate reserves have been made (or, when required in order to pursue such proceedings, an adequate bond has been provided) and such contest does not involve any risk of sale, forfeiture or loss of the Aircraft or any Engine or of imposition of any civil or criminal liability or penalty upon Lessor or any other Relevant Party.

 

Permitted Sub-Lessee” means, at any time, (a) a Leasing Affiliate or (b) any other permitted air carrier to whom the Aircraft may be sub-leased, wet-leased or chartered at such time by Lessee in accordance with the provisions of Section 10 and includes, as at the date of this Agreement the Initial Sub-Lessee.

 

Person” means any individual, firm, partnership, joint venture, trust, corporation, company, Government Entity, association, committee, department, authority or any other entity, incorporated or unincorporated, whether having distinct legal personality or not, or any member of the same and “person” and “persons” shall be construed accordingly.

 

PMA Part” means a Part which has not been manufactured by, or with the written permission of, the Manufacturer or the Engine Manufacturer, as the case may be.

 

Prohibited Country” means any state, country or jurisdiction to which the export and/or use of the Aircraft, as applicable, is not permitted under any sanctions, orders or legislation from time to time promulgated by any of:

 

(a)                                 the United Nations;

 

(b)                                 the European Union;

 

23



 

(c)                                  US export controls;

 

(d)                                 any country which is prohibited under Lessee’s insurance coverage from time to time in effect; or

 

(e)                                  any Government Entity of the State of Registration,

 

the effect of which prohibits or restricts the location and/or consigning for use of the Aircraft in such state, country or jurisdiction.

 

Prohibited Person” means any Person with whom any Relevant Party (other than any of the Financing Parties) or Lessee is prohibited by any applicable law, regulation, decree or order (including without limitation, any regulation or order of the Office of Foreign Assets Control United States Department of Treasury) in effect from time to time from transacting business.

 

[“Purchase Agreement” means the purchase and sale agreement dated on or about the date of this Agreement between Seller, as seller, and Lessor, as purchaser in respect of the Aircraft. / “Purchase Agreement Assignment” means the purchase agreement assignment in respect of the Aircraft to be entered into and dated on the Delivery Date between Lessor and Lessee, and consented and agreed to by Manufacturer.](13)

 

Qualifying Person” has the meaning given to that term in Section 23.4(v)(a).

 

Quarterly Report means a quarterly report substantially in the form of

 


(13)  References to Purchase Agreement/Purchase Agreement Assignment to reflect method of purchase for each Aircraft.

 

24



 

Exhibit HExhibit H.

 

Quiet Enjoyment Letter means each covenant of quiet enjoyment issued by Security Trustee and/or Owner to Lessee substantially in the form of Part A or Part B of Exhibit I.

 

[***]

 

Relevant Parties” means Lessor, Owner, Owner Participant (if any), the Servicer, each of the Financing Parties (and any other Person who, from time to time, Lessor shall notify Lessee as having a right, title or interest in or to the Aircraft) and the expression “Relevant Party” means any of them individually.

 

Rent” means Basic Rent and Supplemental Rent, collectively.

 

Rent Payment Date” means the first day of each Rent Period.

 

Rent Period means each of the consecutive monthly periods throughout the Lease Term, the first such period commencing on and including the Delivery Date up to and including the day preceding the next Rent Payment Date.

 

Replacement Engine means an engine of the same type, model, thrust rating and same or lesser age as the Engine it is replacing, which: (a) is suitable for installation and use on the Airframe without impairing the value or utility of the Aircraft; and (b) having a value, utility, build standard, modification status, serviceability status (including but not limited to trend monitoring data and EGT margin), complete maintenance history and useful life at least equal to, and being in as good operating condition (including the incorporation of all Airworthiness Directives and services bulletins) and no greater number of Flight Hours or Cycles accumulated since new or since last Performance Restoration completed on such engine as the Engine such Replacement Engine is replacing. In addition the documentation and records of such engine shall comply in all respects with the requirements of this Agreement.

 

Required Engine Build Level” has the meaning set forth in the definition of Performance Restoration in this Section 2.1.

 

Return means the return of the Aircraft by Lessee to Lessor in accordance with Section 21.

 

Return Certificate means the return certificate in the form of Exhibit D.

 

Return Conditions” means the operating condition of the Aircraft at Return as set out in Exhibit G.

 

Return Location means an airport in [Brazil](14) or any other airport as may be mutually agreed between Lessee and Lessor.

 

Scheduled Delivery Date” has the meaning set forth in Section 3.2.

 

Second Currency” has the meaning set forth in Section 5.10.2.

 


(14)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

25



 

Second Run” with respect to an Engine shall refer to the period after completion of the first accomplishment of a Performance Restoration on such Engine since new manufacture.

 

Section 1110” means Section 1110 of the Bankruptcy Code of the United States of America.

 

Security Assignment” means any security assignment granted by Lessor or Owner or Owner Participant (if applicable) from time to time in respect, inter alia, of the rights of Lessor under this Agreement.

 

Security Assignment of Sublease” means any assignment of sublease entered into between Lessee and Lessor and acknowledged by Sub-Lessee.

 

Security Interest” means any encumbrance or security interest whatsoever, however and wherever created or arising including (without prejudice to the generality of the foregoing) any right of ownership, security, mortgage, pledge, assignment by way of security, charge, encumbrance, lease, lien (including Permitted Lien), statutory or other right in rem, hypothecation, title transfer or retention, attachment, levy, claim or right of possession, seizure or detention, set-off or any other agreement or arrangement having the effect of conferring security.

 

Security Trustee” means any Person from time to time notified by Lessor to Lessee as the security or collateral agent or trustee (or similar representative) for any of the Financing Parties.

 

Seller means [·].

 

[“Seller Bill of Sale” means the warranty bill of sale relating to the Aircraft to be delivered by Seller to [Lessor/Owner] pursuant to the Purchase Agreement.]

 

Serviceable Tag means, (i) with respect to an Engine, a release to service certificate (FAA form 8130-3 or EASA Form 1) with dual maintenance release for both EASA and FAA, and (ii) with respect to a Part, a release to service certificate (FAA form 8130-3 or EASA Form 1).

 

Servicer” means AerCap Ireland Limited, AerCap Cash Manager II Limited, AerCap Administrative Services Limited, AerCap Group Services B.V. and/or any member of the AerCap Group that Lessor may notify Lessee in writing as being the Servicer from time to time.

 

Solvent means, when used with respect to any Person, that as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise” as of such date, as determined in accordance with and as defined under applicable Laws governing determination of the solvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they become due. For purposes of this definition, (i) “debt” means any liability on a claim, and (ii) “claim” means any right to payment, whether or not such right is reduced to judgement, liquidated,

 

26



 

unliquidated, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

 

SRM” means Structural Repair Manual.

 

State of Incorporation” means Chile under whose laws Lessee is incorporated.

 

State of Registration” means Brazil(15) or (i) the state of registration of Lessee or any Leasing Affiliate provided such country is not a Prohibited Country, or (ii) such other country or state of registration of the Aircraft not being a Prohibited Country as Lessor may, in its reasonable discretion, approve in writing.

 

Sub-Lessee” means Initial Sub-Lessee or any other Permitted Sub-Lessee as applicable.

 

Subordination Agreement” means the subordination agreement entered into between Sub-Lessee, Lessee and Lessor in relation to a sublease.

 

Subsidiary” means:

 

(a)                                 in relation to any reference to accounts, any company whose accounts are consolidated with the accounts of Lessee in accordance with accounting principles generally accepted under accounting standards of the State of Incorporation; and

 

(b)                                 for any other purpose an entity from time to time (i) of which another has direct or indirect control or owns directly or indirectly more than 50 per cent of the voting share capital, or (ii) which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation.

 

Supervisory Authority” has the meaning given to it in the Cape Town Convention.

 

Supplemental Rent” means all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay to Lessor (a) under this Agreement, including, without limitation, the Agreed Value, [***] and indemnity payments, or (b) under any of the other Operative Documents.

 

Taxes” means all present and future taxes, fees, levies, imposts, duties (including without limitation customs duties), charges, deductions or withholdings of in the nature of taxes (including without limitation any value added, franchise, transfer, sales, gross receipts, use, business, occupation, excise, personal property, real property, asset, stamp or other tax), together with any assessments, penalties, fines, surcharge, additions to tax or interest thereon whether imposed upon any Person, the Aircraft or any part thereof by any Government Entity or other taxing authority (whether federal, state, local, municipal, national, international or multinational) in any country.

 

Tax Indemnitee” means Lessor and any Owner Participant and the expression “Tax Indemnitee” means either of them individually.

 


(15)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

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Total Loss” means any of the following in relation to the Aircraft, Airframe or any Engine:

 

(a)                                 the actual or constructive total loss of the Aircraft, Airframe or any Engine (including any damage to the Aircraft or any Engine or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or

 

(b)                                 the Aircraft, Airframe or any Engine being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or

 

(c)                                  the requisition of title or other compulsory acquisition of title for any reason of the Aircraft, Airframe or any Engine by any Government Entity or other Person, whether de jure or de facto; or

 

(d)                                 the hi-jacking, theft, disappearance, confiscation, detention, or hire of the Aircraft, Airframe or any Engine which deprives any person permitted by this Agreement to have possession and/or use of the Aircraft of its possession and/or use for more than [***] or beyond the Expiry Date.  If, within [***] following the Total Loss Date in relation to such hi-jacking, theft, disappearance, confiscation, detention, seizure or requisition for use or hire of the Aircraft, Airframe or any Engine, the Aircraft, Airframe or Engine are restored to the possession of Lessee, then the Agreed Value should not be payable and the Lease Term should continue.

 

Total Loss Date means:

 

(a)                                in the case of an actual total loss or destruction, damage beyond economic repair, or being rendered permanently unfit, the date on which such loss, destruction, damage or rendition occurs (or, if the date of loss or destruction is not known, the date on which the Aircraft or Engine was last heard of);

 

(b)                                in the case of a constructive, compromised, arranged or agreed total loss, whichever shall be earlier of (i) the date being thirty (30) days after the date on which notice claiming such total loss is issued to the insurers or brokers, and (ii) the date on which such loss is agreed or compromised by the insurers;

 

(c)                                 in the case of requisition for title or compulsory acquisition, the date on which the same takes effect; and

 

(d)                                in the case of hi-jacking, theft, disappearance, confiscation, detention, seizure or requisition for use or hire (other than by the State of Registration), the earlier of (i) the last day of the period referred to in paragraph (d) of the definition of Total Loss, and (ii) the date on which the insurers make payment on the basis of a Total Loss.

 

Total Loss Proceeds” means the proceeds of any insurance or any other compensation or similar payment arising in respect of a Total Loss.

 

Transfer” means Delivery and/or Return, as applicable.

 

28



 

Transfer Conditions” means Delivery Conditions and/or Return Conditions, as applicable.

 

Trust Agreement means any Trust Agreement in relation to the Aircraft between Owner Trustee and Owner Participant.

 

USD LIBOR” means, with respect to any period, the rate of interest per cent per annum (rounded upward, if not already such a multiple, to the nearest whole multiple of 1/16th of one per cent), at which deposits in Dollars for such period are displayed on the Bloomberg BBAM1 page (or such other page as may replace it from time to time) at or about 11.00 a.m. (London Time).

 

U.S.” means the United States of America.

 

2.2                               Interpretation.

 

2.2.1                      The term “including” is used herein without limitation and by way of example only.

 

2.2.2                      Section headings and the Contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

 

2.2.3                      In this Agreement, unless the context otherwise requires:

 

(i)                                     references to Sections, Exhibits and Schedules are to be construed as references to the sections of, and exhibits and schedules to this Agreement and references to this Agreement include its Exhibits;

 

(ii)                                  references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended, modified or supplemented in accordance with the terms hereof or thereof, or as the case may be, with the agreement of the relevant parties and (where such consent is, by the terms of this Agreement or the relevant document required to be obtained as a condition to such amendment being permitted) the prior written consent of Lessor;

 

(iii)                               words importing the plural shall include the singular and vice versa;

 

(iv)                              references to any Law, or to any specified provision of any Law, is a reference to such Law or provision as amended, substituted or re-enacted; and

 

(v)                                 references to Lessor, Owner, Lessee, Security Trustee or any of the Financing Parties shall be construed as including each of its/their respective successors in title, permitted assignees and transferees.

 

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3.                                      PLACE AND DATE OF DELIVERY, DELIVERY CONDITION

 

3.1                               Place of Delivery.

 

Lessee shall accept the Aircraft at the Delivery Location on or around the Scheduled Delivery Date subject to and in accordance with the provisions of this Agreement.  Lessee and Lessor hereby acknowledge that the Aircraft will be delivered to Lessee in accordance with the terms and conditions of this Agreement, the Framework Deed and the [Purchase Agreement/Purchase Agreement Assignment].

 

3.2                               Scheduled Delivery Date.

 

As of the date of this Agreement, and subject to this Agreement, the Framework Deed and the [Purchase Agreement/Purchase Agreement Assignment], Delivery of the Aircraft to Lessee is scheduled to occur in [·] on such date as notified by Lessee to Lessor at least four (4) Business Days prior to such date as the date on which the Lessee expects “Delivery” to take place under and in accordance with the [Purchase Agreement/Purchase Agreement Assignment] (the “Scheduled Delivery Date”).

 

3.3                              Delivery Subject to Conditions Precedent.

 

Lessor’s obligation to purchase the Aircraft under the [Purchase Agreement/Purchase Agreement Assignment] and to lease the Aircraft under this Agreement and therefore the commencement of the leasing, is subject to (i) satisfaction of each of the Conditions Precedent, and (ii) the further conditions set forth in Section 6.2.

 

3.4                               Lessee Acceptance of Aircraft.

 

Immediately upon acquisition of title of the Aircraft by Lessor, Lessee shall be deemed to have accepted the Aircraft and shall evidence its acceptance of the Aircraft by the execution in twofold and delivery to Lessor of one (1) original Delivery Acceptance Certificate.

 

Lessee acknowledges that in accepting the Aircraft it is relying on its own inspection and knowledge of the Aircraft in determining whether it meets the requirements of this Agreement.

 

Lessee shall accept Delivery of the Aircraft in “AS IS, WHERE IS” condition, subject to all faults and defects (whether known or unknown, whether discoverable or undiscoverable (by inspection or otherwise) of whatever nature or degree) and subject to each and every disclaimer and waiver set forth in Section 7.

 

Lessee acknowledges that Lessor shall not be obligated to purchase the Aircraft and lease it to Lessee hereunder, unless and until Lessor provides written notice to Lessee that the Conditions Precedent and the further conditions set forth in Section 6.2 have been satisfied or waived.

 

The parties hereby acknowledge that the leasing of the Aircraft hereunder is expressly subject to the Delivery of the Aircraft under the [Purchase Agreement/Purchase Agreement Assignment].

 

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3.5                               Delay or Failure in Delivery.

 

Subject to the terms of the Framework Deed, Lessor shall not be liable for any Losses (including loss of profit) arising from any delay in the delivery of, or failure to purchase the Aircraft pursuant to the Framework Deed or the [Purchase Agreement/Purchase Agreement Assignment], or to deliver the Aircraft to Lessee under this Agreement, unless such delay or failure arises as a direct consequence of the wilful misconduct or Gross Negligence of Lessor. Lessee shall not be entitled on the grounds of such delay or failure to reject the Aircraft when tendered for delivery by Lessor or to terminate this Agreement, save as expressly stated in Section 3.6. In no event shall Lessor be liable for any delay or failure which is caused by Lessee’s or any Leasing Affiliate’s performance or non-performance under the Framework Deed or the [Purchase Agreement/Purchase Agreement Assignment].

 

3.6                               Cancellation for Delay.

 

If for any reason the Aircraft becomes a Cancelled Aircraft (as defined in the Framework Deed),then either party (provided it has not breached the terms of any Operative Document) will have the right to terminate this Agreement by giving written notice to the other party within ten (10) Business Days after such date and this Agreement shall terminate on the date of receipt of such notice. Subject to the terms of the Framework Deed, in the event of such termination, neither party will have any further liability (provided it has not breached the terms of any Operative Document) to the other except: (i) that both Lessee and Lessor shall comply with the confidentiality provision set forth in Section 28.1, (ii) for any indemnities which survive the termination of this Agreement, and (iii) for any obligations or liabilities that exist between Lessee and Lessor pursuant to any Operative Document.

 

4.                                      LEASE TERM

 

4.1                               Lease Term.

 

Lessor shall lease the Aircraft to Lessee and Lessee shall take the Aircraft on lease in accordance with this Agreement for the duration of the Lease Term.

 

4.2                               Expiry Date.

 

The Expiry Date shall be the Agreed Expiry Date, subject to the following provisions:

 

(i)                                     if there is a Total Loss of the Aircraft after Delivery, the Expiry Date shall be the date on which full payment is made to (and received by) Lessor of the Agreed Value and all other sums due from Lessee to Lessor under this Agreement and the other Operative Documents and Lessee has fully complied with all of its other obligations under this Agreement and the other Operative Documents (other than such obligations the performance of which is rendered impossible as a result of the occurrence of such Total Loss);

 

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(ii)                                  if the leasing of the Aircraft to Lessee under this Agreement is terminated pursuant to Section 24.3, the date of such termination shall be the Expiry Date and Sections 24.3 to 24.6 shall apply;

 

(iii)                               if Section 21.6 becomes applicable, the Expiry Date shall be, with respect to Section 21.6(i), the date when any non-compliance referred to in Section 21.6 has been fully rectified and the Aircraft has been returned by Lessee to Lessor in accordance with this Agreement and, with respect to Section 21.6(ii) the date upon which the payments and/or indemnities specified therein are provided to Lessor and the Aircraft is returned to Lessor;

 

(iv)                              if Section 25 becomes applicable, the Expiry Date shall be the applicable Effective Date (as defined in Section 25); and

 

(v)                                 if Section 17.8.4 becomes applicable, the Expiry Date shall be extended until the earlier of (a) the date on which the Aircraft ceases to be subject to the relevant requisition for hire and (b) the date falling [***] after the date on which the relevant requisition commenced.

 

4.3                               Survival.

 

All representations and warranties of Lessee shall survive Delivery of the Aircraft.  All indemnities and other obligations of Lessee which shall arise or are attributable to circumstances occurring during the Lease Term shall survive and remain in full force and effect, notwithstanding the expiration of this Agreement or other termination of the leasing of the Aircraft hereunder.

 

5.                                      RENT AND OTHER PAYMENTS

 

5.1                               Basic Rent.

 

5.1.1                     Lessee shall pay Basic Rent to Lessor with respect to each Rent Period on each Rent Payment Date in advance in the amount shown in Exhibit B, adjusted as set out in Exhibit B, to be the Basic Rent (the “Basic Rent”). Lessee shall initiate payment adequately in advance to ensure that Lessor receives credit for the payment on such Rent Payment Date. If a Rent Period does not constitute the duration of the entire applicable Month, the Basic Rent for such period shall be prorated on the basis of a thirty (30) day month.

 

5.1.2                     The first payment of Basic Rent shall be paid no later than the day of   Delivery. Each subsequent payment of Basic Rent shall be due thereafter on each Rent Payment Date, except that if such day is not a Business Day, the Basic Rent shall be due on the immediately succeeding Business Day.

 

5.2                               [***]

[***]

 

5.3                               [***]

[***]

 

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5.4                               Lessor’s Designated Bank Account.

 

All payments by Lessee to Lessor under this Agreement and any other Operative Documents (unless otherwise specified therein) shall be paid by wire transfer of immediately available Dollar funds to:

 

Account Name

 

[·]

Account Number

 

[·]

IBAN

 

[·]

Swift Code

 

[·]

Bank Name

 

[·]

Bank Address

 

[·]

USD Correspondent Bank

 

[·]

Swift Code

 

[·]

ABA/Fedwire

 

[·]

 

or to such other bank account as Lessor or the Security Trustee may from time to time designate (provided Lessor has given Lessee not less than five (5) Business Days written notice and it does not result in any increased cost to Lessee) (“Lessor’s Designated Bank”). In the event of a conflict between a written notice of Lessor and a written notice of the Security Trustee, that of the Security Trustee shall prevail. Payments under this Agreement shall be deemed made only when actually credited to such account. Receipt of immediately available funds at Lessor’s Designated Bank on the due date shall constitute discharge in respect of such payment by Lessee and receipt of funds after such time on the date due shall be deemed received on the day following the due date.

 

5.5                               Lessee’s Bank Account.

 

All payments by Lessor to Lessee under this Agreement shall be paid by wire transfer of immediately available U.S. Dollar funds to such bank account as Lessee may from time to time designate by written notice to Lessor.

 

5.6                               Late Payment Interest.

 

5.6.1                      If Lessee fails to pay any amount payable under the Operative Documents when due, Lessee shall pay on the Late Payment Interest Payment Date as Supplemental Rent (by way of liquidated damages and not as a penalty) interest (both before and after judgment) on that amount, until and including the date of payment in full by Lessee to Lessor at the Late Payment Interest Rate based upon actual days elapsed in an assumed year of 360 days and twelve months of thirty (30) days each. Late Payment Interest will accrue (at the Late Payment Interest Rate) on a

 

33



 

day-to-day basis and will be compounded monthly at the end of each calendar month.

 

5.6.2                      Notwithstanding anything to the contrary in this Agreement or the other Operative Documents, Lessee shall not be obligated to pay Late Payment Interest or other interest in excess of the maximum non-usurious interest rate, as in effect from time to time, which may by applicable Law be charged, contracted for, reserved, received or collected by Lessor in connection with this Agreement or the other Operative Documents. During any period of time in which the then applicable highest lawful rate of interest is lower than the Late Payment Interest Rate, Late Payment Interest shall accrue and be payable at such highest lawful rate; however, if at later times such highest lawful rate of interest is greater than the Late Payment Interest Rate, then Lessee shall pay Late Payment Interest at the Late Payment Interest Rate.

 

5.7                               No Deductions or Withholdings.

 

All payments by Lessee or Lessor under the Operative Documents shall be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes, unless Lessee (or Lessor) is prohibited by Law from doing so, in which event Lessee (or Lessor) shall gross up the payment amount such that the net after-tax payment received by Lessor (or Lessee) after any deduction or withholding equals the amounts called for under this Agreement. Lessee (or Lessor) shall also do the following:

 

(i)                                     ensure that the deduction or withholding does not exceed the minimum amount legally required;

 

(ii)                                  pay to the relevant Government Entities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including the full amount of any deduction or withholding from any additional amount paid pursuant hereto); and

 

(iii)                               furnish to Lessor (or Lessee) within thirty (30) days after each payment an official receipt of the relevant Government Entities involved (to the extent that such receipts are provided) for all amounts so deducted or withheld.

 

5.8                               Sales or Value Added Taxes.

 

The Rent and other amounts payable by Lessee under this Agreement or any other Operative Document are exclusive of any sales tax, value added tax, stamp duty (provided any such stamp duty is unrelated to Lessor’s financing or refinancing of the Aircraft), turnover tax, or similar tax or duty.  If a sales tax, use and excise tax, value added tax, stamp duty (provided any such stamp duty is unrelated to Lessor’s financing or refinancing of the Aircraft), turnover tax, or any similar tax or duty (other than an Excluded Tax) is payable in any jurisdiction in respect of any Rent or other amounts as aforesaid, Lessee shall pay all such tax or duty and indemnify Lessor against any claims for the same and any related Losses.  The provisions of Section 14.6 shall apply in relation to this clause.

 

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5.9                               Net Lease.

 

5.9.1                      This Agreement is a net lease and Lessee’s obligations to pay Rent and to perform any of its other obligations pursuant to the Operative Documents are absolute and unconditional, irrespective of any circumstance or contingency whatsoever, including (but not limited to) any of the following:

 

(i)                                     any right of set-off, withholding, counterclaim, recoupment, defence or other right (including any right of reimbursement) which Lessee may have against Lessor, Manufacturer or any other Person for any reason whatsoever, including any claim Lessee may have for the foregoing;

 

(ii)                                    any unavailability of or interruption in use of the Aircraft for any reason, including a requisition thereof or any prohibition or interference with or other restriction against Lessee’s use, operation or possession of the Aircraft (whether by Law or otherwise);

 

(iii)                                 any lack or invalidity or other defect in title, registration, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration or documentation under the Laws of any jurisdiction, or, except as expressly provided herein, any Total Loss in respect of or any damage to the Aircraft;

 

(iv)                              any insolvency, bankruptcy, reorganisation, arrangement, readjustment of debt, dissolution, liquidation, receivership, administration or similar proceedings by or against Lessor, Lessee, Manufacturer or any other Person;

 

(v)                                 any illegality, invalidity or unenforceability or lack of due authorisation of or defect (procedural or otherwise) in or relating to any of the Operative Documents;

 

(vi)                              any failure or delay on the part of Lessor to perform any of its obligations under or in connection with this Agreement and/or the Operative Documents;

 

(vii)                           Security Interests or Taxes; and

 

(viii)                        any other cause or circumstance which (but for this provision) would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under any Operative Document.

 

5.9.2                      Lessee hereby waives, to the extent permitted by applicable Law, any and all rights which it may have or which at any time hereafter may be conferred upon Lessee by statute or otherwise, to terminate, cancel, quit or surrender this Agreement, except termination in accordance with the express provisions hereof. Each Rent payment made by Lessee will be final and Lessee shall not seek to recover all or any part of such payment

 

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from Lessor for any reason whatsoever (except that Lessee may seek to recover the amount of any inadvertent overpayment by Lessee).

 

5.9.3                      Nothing in this Section 5.12 shall be construed to limit Lessee’s rights and remedies in the event of Lessor’s breach of its covenant of quiet enjoyment set forth in Section 22.1, provided no Event of Default has occurred and is continuing, or to take legal proceedings to recover damages from Lessor or to limit Lessee’s rights and remedies to pursue in a court of law any claim it may have against any other Person.

 

5.10                        Currency Indemnity.

 

5.10.1               The obligation of Lessee and Lessor to pay amounts due under this Agreement and the Operative Documents in Dollars at the designated place and time of payment is of the essence to Lessor and Lessee. Dollars shall be the currency of account in all events. Each of Lessor and Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than Dollars.

 

5.10.2               If for the purpose of obtaining judgment in any court or for any other reason it is necessary to convert a sum due hereunder in Dollars into another currency (hereinafter the “Second Currency”), the rate of exchange that shall be applied shall be that at which in accordance with normal banking procedures Lessor or Lessee (as applicable) could purchase Dollars with the Second Currency in New York, New York on the Business Day on which such payment is received. The obligation of Lessee and Lessor in respect of any such sum due from it to Lessor (or Lessee) hereunder shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be discharged only to the extent that on the Business Day of receipt by Lessor (or Lessee) of any sum adjudged to be due hereunder in the Second Currency, Lessor (or Lessee) may in accordance with normal banking procedures purchase and transfer to New York, New York, Dollars with the amount of the Second Currency so adjudged to be due.

 

5.10.3               Lessee shall indemnify Lessor against and pay to Lessor on demand, in Dollars as a separate obligation and notwithstanding any such judgment: (i) any difference between the sums originally due to Lessor in Dollars and the amount of Dollars so purchased and transferred; (ii) any exchange costs and Taxes payable in connection with the conversion; and (iii) all other Losses arising out of or as a result of such conversion.

 

5.10.4               If for any reason any exchange control or other legal prohibition or restriction shall be imposed with respect to the payment in Dollars, Lessee or Lessor (as applicable) shall forthwith obtain any permit, authorization, waiver or exemption as may be necessary to permit the free transfer of such Dollars to designated places and if Lessee (or Lessor) shall for any reason, because of legal restrictions or otherwise, be unable to obtain such permit, authorization waiver or exemption, it shall forthwith make all necessary and satisfactory arrangements with reputable banking or other financing institutions to provide satisfactory assurance to Lessor (or Lessee) that all of its obligations hereunder and under the Operative Documents will be satisfied as they arise in the manner contemplated by this Agreement or the Operative Documents, as the case may be.

 

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5.11                        Miscellaneous.

 

5.11.1               Set-Off.

 

Following the occurrence of an Event of Default that is continuing, Lessor may set-off any matured obligation of Lessee under any Operative Document or Other Agreement to which Lessee is a party against any obligation, whether or not matured, owed by Lessor towards Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London, or at its option, New York for the purpose of such set-off. If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained or liquidated.  Neither Lessor nor any of its Affiliates shall be obliged to pay any amounts to Lessee under any Operative Document or Other Agreement if a Default is then subsisting so long as any sums which are then due from Lessee under the Operative Documents or under any Other Agreement remain unpaid and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums, except to the extent Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing.

 

5.11.2               Application of Payments.

 

After an Event of Default has occurred and is subsisting, any amounts paid or recovered in respect of Lessee’s liabilities under this Agreement and any other Operative Documents or Other Agreements may be applied to Rent, fees or any other amount due under this Agreement and the other Operative Documents or Other Agreements in such proportions, order and manner as Lessor determines in its sole discretion.

 

5.11.3               Expenses.

 

Whether or not the Aircraft is delivered to Lessee pursuant to this Agreement, Lessee shall pay to Lessor on demand (i) all fees, costs and expenses (including legal, professional and out-of-pocket expenses) directly associated with filing and/or perfecting the Operative Documents in the State of Incorporation, the State of Registration and/or the Habitual Base (and any other state or country as appropriate having regard to the operation of the Aircraft) including (but not limited to) reasonable fees, costs and expenses directly associated with legal opinions, translations and registrations, and the payment of documentary Taxes and any other Taxes (save for Excluded Taxes and stamp duties payable exclusively in relation to any financing) and fees, whether required by Lessor or Lessee; and (ii) all fees, costs and expenses (including legal, professional, inspection, out-of-pocket expenses and other costs) payable or incurred by Lessor in connection with any amendment, waiver or other modification of any Operative Document (unless requested by Lessor) or with the enforcement of or preservation of any of its/their rights under the Operative Documents (including the enforcement of any indemnity hereunder) or in respect of the repossession of the Aircraft. All amounts payable pursuant to this Section 5.11.3 shall be paid in the currency in which they were incurred by Lessor or the Owner.  For avoidance of doubt and as further described in

 

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Section 12.2 (ii) the parties hereby acknowledge and agree that Lessor shall be always responsible for all fees, costs and expenses incurred in registering the Financing Documents in any jurisdiction and for any legal opinion and translations in relation to such Financing Documents save as to any sublease.

 

5.11.4               Costs of Negotiation.

 

The fees and expenses of each party incurred in connection with the preparation of any Operative Document and all other related documents are for the respective accounts of each such party.

 

5.11.5               Certificates.

 

Save where expressly provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any other amount payable under this Agreement will, in the absence of manifest error, be conclusive and binding on Lessee.  Lessor shall provide reasonable details of any calculation made in any such certificate or determination.

 

6.                                      CONDITIONS PRECEDENT

 

6.1                               Conditions Precedent.(16)

 

Lessor’s obligation to lease the Aircraft to Lessee under this Agreement is subject to Lessor having received from Lessee the following before the Scheduled Delivery Date in form and substance reasonably satisfactory to Lessor (the “Conditions Precedent”):

 

(i)                                     Constitutional Documents: an up-to-date copy of the constitutional documents and by-laws (or equivalent) of Lessee;

 

(ii)                                  Board of Trade Register Extract: a recent extract of the relevant board of trade register or similar document evidencing the legal existence of Lessee;

 

(iii)                               Resolutions: a copy of a resolution of the appropriate management authority of Lessee approving the terms of and the transactions contemplated by this Agreement and the other Operative Documents, resolving that it enter into this Agreement and the other Operative Documents to which Lessee is a party and authorizing one or more specified person or persons to execute this Agreement and the other Operative Documents and accept delivery of the Aircraft on its behalf;

 

(iv)                              Opinions: (a) a legal opinion in form and substance reasonably acceptable to Lessor from in-house legal counsel for Lessee; and (b) a legal opinion from in-house counsel of the Initial Sub-Lessee reasonably acceptable to Lessor in each case relating to the due execution, and enforceability of, the Operative Documents to which Lessee and Initial Sub-Lessee are respectively a party; and (c) such

 


(16)  These CPs assume that there will be an Initial Sub-Lessee in Brazil at Delviery.  If this is not the case, all CPs are to be satisfied by the Lessee and the CPs amended accordingly.

 

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information, documents and certificates as reasonably requested by Lessor’s legal counsel to prepare a legal opinion in respect of the registrations required to be made in accordance with 6.1(xxvii);

 

(v)                                 Approvals: (except to the extent required under sub-clause (vii) below) evidence of the issue of all governmental or other approvals, licences and consents which may be required in relation to, or in connection with the performance by Lessee of any of its obligations hereunder, including but not limited to the remittance to Lessor in Dollars of all amounts payable under this Agreement and the export of the Aircraft;

 

(vi)                              [Import: a copy of a Declaration of Importation (“DI”) and Proof of Importation (“CI”) valid for the term of the Initial Sub-Lease and evidence that any required import licence, and all customs formalities, relating to the import of the Aircraft into the State of Registration and/or the State of Incorporation have been obtained or complied with (to include certified copies of the customs import declaration(s), documentation evidencing the declared value, customs classifications, certificate of release of duty), and that the import of the Aircraft into the State of Registration is under the temporary importation regime](17);

 

(vii)                           Licences: certified copies of (a) the Aircraft’s Certificate of Airworthiness and certificate of registration and nationality issued by the Aeronautical Registry, and (b) Initial Sub-Lessee’s valid air transport licence, air operator’s certificates and all other licences, certificates and permits required by Initial Sub-Lessee in relation to or in connection with the operation of the Aircraft;

 

(viii)                        Accounts: if the audited balance sheet and other financial statements of Lessee are not available on the following website:  www.latamairlinesgroup.net, a certified copy of the audited balance sheet and other financial statements of Lessee for the financial year ended [·], and if available the most recent quarterly financial statements, prepared in accordance with IFRS and, if available, the most recent quarterly results;

 

(ix)                              Process Agent: evidence of acceptance of appointment by an agent for the service of process to accept service of process on behalf of Lessee and the Initial Sub-Lessee in England, together with copies of such appointment by Lessee and the Initial Sub-Lessee;

 

(x)                                 Letter of Authority: evidence that the Eurocontrol Authorisation Letter duly executed by Lessee or Initial Sub-Lessee has been submitted to Eurocontrol pursuant to which Lessee or Initial Sub-Lessee authorizes Eurocontrol to provide Lessor with statement(s) of account in relation to air navigation charges incurred by Lessee or Initial Sub-Lessee and due to Eurocontrol;

 


(17)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

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(xi)                              Security Assignment: if requested by Lessor, the Notice and Acknowledgement of Security Assignment countersigned by Lessee;

 

(xii)                           Air Authorities Letter: an irrevocable letter from Initial Sub-Lessee addressed to the airport and air traffic authorities in the State of Registration in a form and substance reasonably satisfactory to Lessor, pursuant to which Initial Sub-Lessee authorises the addressee to: (a) allow Lessor access rights to any applicable on line service to monitor relevant information during the Lease Term; and (b) issue to Lessor, upon written request of Lessor, a statement of account of any sums due by Initial Sub-Lessee to the authority in respect of the Aircraft;

 

(xiii)                        Maintenance Programme: a summary of the Maintenance Programme, including the Aviation Authority’s approval of the Maintenance Programme;

 

(xiv)                       Basic Rent:  the first monthly instalment of Rent in accordance with Section 5.1;

 

(xv)                          Acceptance power of attorney: if required, a power of attorney empowering Lessee’s representative to accept the Aircraft on behalf of Lessee;

 

(xvi)                       Deregistration power of attorney: a Deregistration Power of Attorney;

 

(xvii)                    Insurance: a Certificate of Insurance and Brokers’ Letter of Undertaking in form and substance reasonably acceptable to Lessor, from Lessee’s insurance broker evidencing that insurance of the Aircraft will be in place in accordance with this Agreement with effect from the Delivery Date;

 

(xviii)                 Assignment of Insurances: a duly executed Assignment of Insurances, including, but not limited to, the notice and acknowledgement of such Assignment of Insurances in the form and substance reasonably acceptable to Lessor;

 

(xix)                       [IDERA: the IDERA executed on behalf of Initial Sub-Lessee](18);

 

(xx)                          Airframe Warranties Agreement: an original copy of the Airframe Warranties Agreement duly executed by all parties thereto (other than any Relevant Party which is party thereto);

 

(xxi)                       Engine Warranties Agreement: an original copy of the Engine Warranties Agreement duly executed by all parties thereto (other than any Relevant Party which is party thereto);

 

(xxii)                    Delivery Acceptance Certificate: one (1) original duly executed Delivery Acceptance Certificate covering the Aircraft and effective as of the Delivery Date. Execution of the Delivery Acceptance

 


(18)  This drafting reflects the aircraft being registered in Brazil.  A form of IDERA for the State of Registration to be used if this is not the case.

 

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Certificate will be conclusive proof that Lessee has unconditionally accepted the Aircraft for lease under this Agreement without any reservations or exceptions whatsoever;

 

(xxiii)                 Purchase Documents: the Purchase Agreement/Purchase Agreement Assignment and each Bill of Sale duly executed by Seller, or Manufacturer, as applicable;

 

(xxiv)                Officer’s Certificate: a certificate from a duly authorized officer of Lessee (a) setting out a specimen of each signature of the authorized person(s) referred to in Section 6.1 (iii) above; and (b) certifying that each copy of each document specified in Section 6.1 (i), (ii) and (v) is true, correct and complete and in full force and effect and (c) certifying that Lessee’s representations and warranties as set out herein are true and correct on the Delivery Date as if given on such date and (d) certifying that there has been no material change in Lessee’s constitutional documents since originally delivered by Lessee to Lessor;

 

(xxv)                   Registration: evidence that on the Delivery Date all filings, registrations and recordings where possible have been made and other actions have been taken which are necessary or advisable to ensure the validity and enforceability of the Operative Documents to which Lessee and Initial Sub-Lessee is a party and to protect the rights, title and interests of Lessor and each Relevant Party in and to the Aircraft, the Operative Documents and/or the Financing Documents, as applicable;

 

(xxvi)                International Registry: if applicable, evidence satisfactory to Lessor, acting reasonably, that immediately after Delivery the prospective International Interests constituted by this Agreement and the Initial Sub-Lease will be duly registered in the International Registry in accordance with the terms of this Agreement;

 

(xxvii)             [Sublease: certified copy of the Initial Sub-Lease and an original of the Subordination Agreement and if requested, a Security Assignment of Sublease, duly executed by Lessee and Initial Sub-Lessee];

 

(xxviii)          [Filing with the Aeronautical Registry and the Registry of Titles and Documents in Brazil](19): evidence satisfactory to Lessor of (i) lodging of the Initial Sub-Lease and the Owner’s Consent to Registration with the Aeronautical Registry and registration of the Initial Sub-Lease with the Registry of Titles and Documents, and (ii) that following Delivery, any Mortgage, any Notice and Acknowledgement of Security Assignment, any Security Assignment and any Security Assignment of Sublease will be lodged or registered with the Aeronautical Registry and/or Registry of Titles and Documents as applicable, in each case along with their sworn translation into Portuguese, provided that Lessee shall have received the relevant documents from the appropriate Relevant Parties;

 


(19)  This drafting reflects the aircraft being registered in Brazil.  To be updated if this is not the case.

 

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(xxix)                Fees: evidence that all registration, notarial, consular and translation fees (if any) due and payable in any applicable jurisdiction in connection with any document (other than Financing Documents) have been duly paid in full;

 

(xxx)                   General: on giving as much prior notice as is reasonably practicable, such other additional documents, certificates, opinions, filings, approvals and consents as Lessor may reasonably request; and

 

(xxxi)                Electronic Tool Box: Lessee shall provide a letter to Airbus which will allow Lessor full and complete access to the Manufacturer’s “electronic toolbox” or equivalent, used to upload configuration changes, software updates, and other technical data for the Aircraft following an Event of Default which is continuing.

 

6.2                               Further Conditions.

 

The obligation of Lessor to lease the Aircraft to Lessee under this Agreement is subject to the further conditions that:

 

(i)                                     the representations and warranties set out in Section 18 are true and correct as if each were made with respect to the facts and circumstances existing immediately prior to Delivery;

 

(ii)                                  no Default shall have occurred and be continuing or would arise by reason of Delivery taking place;

 

(iii)                               Lessor is satisfied that in its reasonable opinion since the date of this Agreement there has not occurred a material adverse change in the financial condition of Lessee or a material change in the ownership of Lessee which, in either case, would have a material adverse effect on the ability of Lessee to comply with its obligations under any of the Operative Documents;

 

(iv)                              compliance by Lessee with its obligations under the Framework Deed and by Seller with its obligations under the [Purchase Agreement/Purchase Agreement Assignment] in respect of the Aircraft;

 

(v)                                 the Aircraft shall be tendered in accordance with the terms and conditions of the [Purchase Agreement/Purchase Agreement Assignment] including:

 

(vi)                              the Aircraft shall be in the condition required under the [Purchase Agreement/Purchase Agreement Assignment] and by the Delivery Conditions and Exhibit A;

 

(vii)                           [Seller shall have transferred good and marketable title to the Aircraft to Lessor free and clear of all Security Interests, except as contemplated by the Operative Documents, and Lessor shall have accepted the same, in each case, in accordance with the [Purchase Agreement/Purchase Agreement Assignment]]; and

 

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(viii)                        Lessee shall have performed in full its obligations and undertakings in respect of the Aircraft under the Framework Deed.

 

6.3                               Lessee Conditions Precedent.

 

Lessee will receive from Lessor the following before the Scheduled Delivery Date in form and substance reasonably satisfactory to Lessee:

 

(i)                                     Constitutional Documents: an up-to-date copy of the constitutional documents of Lessor and the Acceptable Guarantor;

 

(ii)                                  Resolutions: a copy of a resolution of the appropriate management authority of Lessor and the Acceptable Guarantor approving the terms of and the transactions contemplated by this Agreement and the other Operative Documents, resolving that it enter into this Agreement and the other Operative Documents and authorizing one or more specified person or persons to execute this Agreement and the other Operative Documents and accept delivery of the Aircraft on its behalf;

 

(iii)                               Process Agent: evidence of acceptance of appointment by an entity to accept service of process on behalf of Lessor and Acceptable Guarantor in England, together with copies of such appointment by Lessor and Acceptable Guarantor;

 

(iv)                              Approvals: evidence of the issue (if any) of all approvals and consents which may be required in relation to, or in connection with the performance by Lessor and Acceptable Guarantor of any of their respective obligations under the Operative Documents to which they are a party;

 

(v)                                 Officer’s Certificate: a certificate from a duly authorized officer of each of Lessor and Acceptable Guarantor: (a) setting out a specimen of each signature of the authorized person(s) referred to in Section 6.3(ii) certifying that each copy of each document specified in Section 6.3 is true, correct and complete and in full force and effect as at the date of the certificate; and (b) certifying that Lessor’s representations and warranties as set out herein are true and correct on the Delivery Date as if given on such date; and (c) certifying that there has been no material change in Lessor’s and Acceptable Guarantor’s constitutional documents since originally delivered to Lessee by Lessor;

 

(vi)                              Lessor Guarantee: a copy of the Lessor Guarantee duly executed by an Acceptable Guarantor;

 

(vii)                           Purchase Documents: the [Purchase Agreement/Purchase Agreement Assignment] duly executed by Lessor and Manufacturer, as applicable;

 

(viii)                        Representation and Warranties:  the representations and warranties set out in Section 19 are true and correct as if each were made with respect to the facts and circumstances existing immediately prior to Delivery;

 

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(ix)                              Quiet Enjoyment Letter: a duly executed Quiet Enjoyment Letter; and

 

(x)                                 Opinions: a legal opinion in form and substance reasonably acceptable to Lessee from in-house or external legal counsel for Acceptable Guarantor relating to the Lessor Guarantee.

 

6.4                               Conditions Subsequent.

 

Lessee shall deliver to Lessor, as soon as practicable but in all events within forty five (45) Business Days after the Delivery Date the following documents each duly authenticated as required by Lessor: a copy of the (a) certificate of registration issued by the Aeronautical Registry specifying the Owner as owner of the Aircraft and the Initial Sub-Lessee as operator of the Aircraft; and (b) certificate issued by the Aeronautical Registry confirming that the Initial Sub-Lease, any Security Assignment, any Security Assignment of Sublease and any Mortgage have each been duly registered and the interests of Lessor, the Owner, the Owner Participant and any other Relevant Parties in the Aircraft are properly recorded, to the extent possible under applicable Law.

 

6.5                               Waiver.

 

The applicable Conditions Precedent are inserted for the sole benefit of Lessor and Lessee respectively and may be waived or deferred in whole or in part and with or without conditions by Lessor or Lessee (as applicable) in its sole discretion.

 

6.6                               Documents in English.

 

All documents delivered to Lessor pursuant to this Section will be in English or, if not in English, will be accompanied by an English translation if requested by Lessor acting reasonably.

 

7.                                      DISCLAIMERS

 

7.1                               “As Is-Where Is”.

 

LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT “AS IS-WHERE IS”. LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY STATED IN THE OPERATIVE DOCUMENTS, NEITHER LESSOR NOR ANY OTHER INDEMNITEE HAVE MADE OR SHALL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO: (I) THE CAPACITY, AGE, AIRWORTHINESS, TITLE, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF ANY AGREEMENT RELATING TO THE SALE OR PURCHASE OF THE AIRCRAFT, AND/OR THE OPERATIVE DOCUMENTS, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY REPLACEMENT ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT OR AIRCRAFT DOCUMENTATION IN ANY

 

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OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT, INHERENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR; (II) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS; (III) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; OR (IV) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, THE USE, MAINTENANCE, OPERATION OF THE AIRCRAFT OR ANY PART THEREOF, AND ANYTHING THAT HAS BEEN DONE OR OMITTED TO BE DONE WITH RESPECT TO THE AIRCRAFT, ANY PART THEREOF OR ANY AIRCRAFT DOCUMENTS, BY OR ON BEHALF OF THE PREVIOUS OPERATOR (WHOM LESSEE ACKNOWLEDGES WAS RESPONSIBLE FOR THE MAINTENANCE OF THE AIRCRAFT) OR OWNER (IF ANY), THEIR RESPECTIVE EMPLOYEES, SERVANTS, OFFICERS, AGENTS OR REPRESENTATIVES, ALL OF WHICH ARE HEREBY EXPRESSLY, UNCONDITIONALLY AND IRREVOCABLY EXCLUDED AND EXTINGUISHED. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING, INSPECTING AND ACCEPTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER OF THE AIRCRAFT, REPAIRER OR DEALER IN THE AIRCRAFT. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, LESSEE HEREBY WAIVES ANY RIGHTS IT MAY HAVE IN TORT OR OTHERWISE IN RESPECT OF ANY OF THE MATTERS REFERRED TO ABOVE AND IRREVOCABLY AND UNCONDITIONALLY AGREES THAT NEITHER LESSOR NOR ANY OTHER INDEMNITEE SHALL HAVE ANY GREATER LIABILITY IN TORT IN RESPECT OF ANY SUCH MATTER THAN SUCH PERSON WOULD HAVE IN CONTRACT AFTER TAKING ACCOUNT ALL OF THE EXCLUSIONS CONTAINED IN THE OPERATIVE DOCUMENTS. LESSEE ACKNOWLEDGES THAT NO THIRD PARTY IS MAKING OR HAS MADE ANY REPRESENTATION OR WARRANTY RELATING TO THE AIRCRAFT OR ANY PART THEREOF NOR HAS SUCH THIRD PARTY AUTHORITY TO BIND OR REPRESENT LESSOR.

 

7.2                               Waiver of Warranty of Description.

 

MOREOVER, IN CONSIDERATION OF (I) LESSEE’S RIGHTS WITH RESPECT TO THE FINAL INSPECTION OF THE AIRCRAFT PURSUANT TO THIS AGREEMENT, AND (II) LESSOR PROVIDING TO LESSEE THE BENEFIT OF MANUFACTURER’S WARRANTIES UNDER THIS AGREEMENT, IF APPLICABLE, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF THE DELIVERY ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF ANY WARRANTY OF DESCRIPTION, EXPRESS OR IMPLIED, AND ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION.

 

7.3                               Conclusive Evidence.

 

LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND CONFIRMATIONS SET FORTH IN THIS SECTION SHALL APPLY AS BETWEEN LESSOR AND LESSEE AT ALL TIMES WITH EFFECT FROM LESSEE’S ACCEPTANCE OF THE AIRCRAFT BY EXECUTION OF THE DELIVERY ACCEPTANCE CERTIFICATE, WHICH SHALL BE CONCLUSIVE

 

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EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTATION ARE IN ALL RESPECTS ACCEPTABLE TO LESSEE.

 

7.4                               No Lessor Liability for Losses.

 

LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO LESSEE, ANY PERMITTED SUB-LESSEE OR ANY OTHER PERSON WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE AND WHETHER ARISING BY REFERENCE TO NEGLIGENCE OR STRICT LIABILITY OR OTHERWISE FOR:

 

(i)                                     any liability, loss or damage (consequential or otherwise) or delay of or to or in connection with the Aircraft or any Person or property whatsoever, whether on board of the Aircraft or elsewhere, irrespective of whether such liability, loss, damage or delay is caused or alleged to be caused directly or indirectly by the Aircraft or any Engine or any Part or by any inadequacy or deficiency or defect thereof or by any other circumstance in connection therewith;

 

(ii)                                  the use, operation or performance of the Aircraft or any risks relating thereto;

 

(iii)                               any interruption of service, loss of business or anticipated profits or any other direct, indirect or consequential loss or damage (except if any interruption of service is a direct consequence of a breach of the quiet enjoyment obligations under Section 22.1; and/or

 

(iv)                              the delivery, operation, servicing, maintenance, repair, improvement or replacement of the Aircraft, any Engine or any Part.

 

7.5                               No Liability to Repair or Replace.

 

Lessor shall not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use.

 

7.6                               Lessee Waiver.

 

Lessee hereby waives and agrees not to seek to establish or enforce any rights and remedies, express or implied (whether statutory or otherwise) against Lessor or any Indemnitee or the Aircraft relating to any of the matters mentioned in Sections 7.1, 7.2, 7.3, 7.4 and 7.5.

 

7.7                               No Waiver.

 

Nothing in Section 7 or elsewhere in this Agreement shall be deemed to be a waiver by Lessee of any rights it may have against Manufacturer or other supplier of any Part.

 

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7.8                               Consideration for Rent and other Amounts.

 

The amount of the Rent and other payments contained herein are based upon and in consideration of Lessee’s waiver of warranties and indemnities set forth in Sections 7, 14 and 15, respectively, and the other provisions of this Agreement.

 

7.9                               Benefit of this Section 7.9.

 

The provisions of this Section 7.9 are given by Lessee for the benefit of, and to and in the favour of, each Indemnitee.

 

8.                                      MANUFACTURER’S WARRANTIES

 

8.1                               Warranties.

 

During the Lease Term and so long as no Event of Default has occurred and is continuing, Lessor shall make available to Lessee pursuant to the Airframe Warranties Agreement and the Engine Warranties Agreement, the benefit of all subsisting warranties and other product support, if any, in respect of or related to the Aircraft given to Lessor by a Manufacturer, supplier, maintenance performers or other vendor of the Aircraft to the extent that Lessor is permitted to do so. Lessee shall be entitled to such warranties strictly on the terms and conditions as applicable thereto and Lessee hereby acknowledges that such entitlement is without warranty and expressly without recourse against Lessor in any respect whatsoever.

 

8.2                               Warranty Claims.

 

8.2.1                      Lessee shall properly and promptly pursue any valid claims it may have against a Manufacturer and others under such warranties with respect to the Aircraft and shall promptly provide Lessor with written notice of any major warranty claim of a value greater than [***].  Lessee shall not do or permit anything to be done or omit to do anything the omission of that would or would be likely to prejudice any material right that Lessor, Owner or Security Trustee may have against a Manufacturer or repairer under any agreement in respect of the Aircraft or any Part thereof.

 

8.2.2                      Lessee shall give Lessor prompt written notice of any warranty claim that is settled with Lessee on the basis of a total or partial cash payment. Any cash payment shall be applied to remedy the defect subject to such warranty claim unless Lessor otherwise consents in writing. Any cash payment to Lessee in respect of warranty claims that is not applied to the repair or remedy of such relevant defect in the Aircraft or to compensate Lessee for the costs incurred for any such repair or remedy and/or that is not in respect of compensation for loss of use of the Aircraft, an Engine or Part during the Lease Term due to a defect covered by such warranty, shall be for the benefit of Lessor and shall be paid promptly by Lessee to Lessor.

 

8.3                               Proceeds.

 

8.3.1                      So long as no Event of Default has occurred and is continuing, Lessor agrees, subject to Section 8.1, to reasonably co-operate with Lessee to cause any proceeds from any warranty referred to in Section 8.1 to be

 

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paid directly to Lessee, and if any such proceeds are nonetheless paid to Lessor, Lessor agrees to remit such proceeds to Lessee.

 

8.3.2                      If an Event of Default has occurred and is continuing, Lessor may immediately:

 

(i)                                     retain for its own account any such proceeds paid to Lessor that would have been remitted to Lessee under Section 8.3.1 in the absence of such Event of Default;

 

(ii)                                  cause any proceeds of any pending claims to be paid directly to Lessor, rather than to Lessee; and/or

 

(iii)                               recover from Lessee the (part of the) proceeds of any warranty claim previously paid to Lessee to the extent that such proceeds relate to any defect in the Aircraft not fully and completely rectified by Lessee.

 

8.4                               Assignment on Return.

 

With effect from the Expiry Date, all rights under such warranties to which this Section 8 applies shall immediately revert to Lessor, including all claims thereunder (whether or not perfected) in accordance with the provisions of the Airframe Warranties Agreement and the Engine Warranties Agreement and Lessee shall take steps and execute all documents (at Lessee’s cost) required to perfect such reversion.

 

9.                                      OPERATION OF AIRCRAFT

 

9.1                               Compliance with Laws.

 

Lessee shall not maintain, use or operate the Aircraft in any Prohibited Country or in violation of any Law of any Government Entity having jurisdiction in any country, state, province or other political subdivision in or over which the Aircraft is flown or in violation of any airworthiness certificate, licence or registration relating to the Aircraft issued by the Aviation Authority or any similar authority or any jurisdiction in or over which the Aircraft is flown. Lessee shall be responsible for obtaining any export or re-export approvals required under any jurisdiction in order for the Aircraft to operate to, from or through any destination or in any airspace for which such approvals might be required. Lessee will ensure that the Aircraft at all times during the Lease Term is operated by duly qualified pilots and air crew employees solely for commercial operations (save as to test, ferry and positioning flights and hijacking) and is not used to transport contraband or illegal narcotics or hazardous or perilous cargo or for any illegal purpose (save as for any hijacking) or in any illegal manner or for any purpose for which it is not designed or reasonably suited. Lessee further undertakes that, throughout the Lease Term, it will or will procure that any Permitted Sub-Lessee will, comply with all EU ETS Laws applicable to it or the Aircraft and ensure that it or any Permitted Sub-Lessee (and not Lessor or any Financing Party) shall be the “aircraft operator” for the purpose of the EU ETS Laws, and Lessee shall identify itself as such to any EU ETS Authority (or procure that any Permitted Sub-Lessee so identifies itself) whenever required under the EU ETS Laws or whenever requested by Lessor.

 

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9.2                               Costs of Operation.

 

Lessee shall promptly pay and discharge when due all costs incurred by it from any Aircraft Activity during the Lease Term, including the costs of flight crews, cabin personnel, fuel, oil, lubricants, maintenance, repair, insurance, storage, landing and navigation fees, airport charges, passenger service, custom duties raised by the customs authorities of the State of Registration, State of Incorporation and/or Habitual Base against Lessee in relation to the import and export of the Aircraft and any and all other expenses of any kind or nature, directly or indirectly incurred by it, in connection with or related to any Aircraft Activity. Lessee has no authority to pledge and shall not pledge the credit of Lessor or any other Relevant Party for any of the same.

 

9.3                               Training.

 

Lessee will not use the Aircraft or cause the Aircraft to be used, for purposes of training, qualifying or re-confirming the status of cockpit personnel, except for the benefit of Lessee’s own cockpit personnel (or the cockpit personnel of any Leasing Affiliate), and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee.

 

9.4                               No Violation of Insurance Policies.

 

Lessee will not fly or use or permit the Aircraft to be flown or used in or over any area or in any manner or for any purpose or for the carriage of any goods, materials or cargo, in each case which is not adequately covered by the policies of Insurances. Lessee will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could be expected to invalidate or limit any such policies. Lessee will not fly or use the Aircraft or permit the Aircraft to be flown or used in or over any recognised or, in the reasonable judgement of Lessor, threatened area of hostilities unless covered by war risk insurance.

 

9.5                              No Relinquishment of Possession.

 

Lessee will not, without the prior written consent of Lessor, deliver, transfer or relinquish possession of the Aircraft except for approved maintenance and repair in accordance with Section 11 or approved subleasing in accordance with Section 10. Lessee will not do, and will use all reasonable endeavours to prevent, any act which could reasonably be expected to result in the Aircraft or any of its Engines being arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory or other claim (save as to any Lessor Lien) or otherwise taken from the possession of Lessee and, if such arrest, confiscation, seizure, taking, impounding, forfeiture or detention occurs, Lessee will give Lessor and Security Trustee written notice thereof as soon as reasonably practicable (subject to Section 17.3) and will make reasonable efforts to procure the prompt release of the Aircraft and each of the Engines (save in the case of any enforcement or attempted enforcement of a Lessor Lien).

 

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9.6                               No Security Interests.

 

Lessee will not create, incur or permit to exist over the Aircraft or any Part thereof any Security Interest, other than Permitted Liens. Lessee shall forthwith upon becoming aware of the existence of any Security Interest give written notice thereof to Lessor and take all action as may be necessary to discharge or remove or procure the release of any Security Interest (other than a Permitted Lien).

 

9.7                               Non-Representation of Lessor.

 

Lessee will not represent or hold out Lessor or any other Relevant Party as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage being undertaken by Lessee or as having any operational interest in or responsibility for the Aircraft.

 

9.8                               Habitual Base.

 

Lessee shall ensure that the Aircraft is habitually based in the Habitual Base.

 

9.9                               International Registry

 

As and when the Aircraft Protocol of the Cape Town Convention has entered into force in the State of Incorporation or the State of Registration Lessee shall (and shall procure that the Initial Sub-Lessee shall):  (i) register as, and remain, a transacting user entity in the International Registry; (ii) remain capable of consenting to registrations and discharges of International Interests in accordance with the Cape Town Convention; and (iii) not allow (to the extent that Lessee is legally entitled under the Cape Town Convention to prevent any such registration) any interests conflicting with (whether or not taking priority over) the interests of Lessor or Owner to be registered at the International Registry without the prior written consent of Lessor or Owner (as the case may be).

 

9.10                        No Risk or Penalty or Appropriation.

 

Lessee shall not do or permit anything to be done that may reasonably be expected to expose the Aircraft, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, arrest, damage or destruction and (without prejudice to the foregoing), if any such penalty, forfeiture, impounding, detention or appropriation, arrest, damage or destruction occurs, Lessee shall give Lessor notice thereof and take such actions as may be necessary to procure the immediate release of the Aircraft, Engine or Part as the case may be.  This Section 9.10 shall not apply in relation to any enforcement or attempted enforcement of a Lessor Lien.

 

10.                               SUBLEASES

 

10.1                        Initial Sublease

 

Lessor and Lessee agree that Lessee has entered (or will enter) into the Initial Sublease with Initial Sub-Lessee on or shortly after the date of this

 

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Agreement and Lessor acknowledges that as the operator of the Aircraft, Initial Sub-Lessee will be responsible for providing some of the conditions precedent set out in Section 6.1 (which shall be deemed to also be included as conditions precedent under the Initial Sublease).

 

Lessor agrees that performance by any Sub-Lessee of any of Lessee’s obligations under this Agreement shall, pro tanto, constitute performance by Lessee of such obligations.

 

If the Initial Sublease is terminated for any reason and a replacement sublease is not entered into in accordance with the provisions of this Section 10 with the result that Lessee becomes the operator of the Aircraft and/or there is a change in the State of Registration of the Aircraft, Lessee undertakes to provide to Lessor evidence of those documents set out in Section 6.1 which had previously been provided by Initial Sub-Lessee and/or which related to the State of Registration being Brazil(20).

 

10.2                        No Subleasing without Lessor Consent.

 

Lessee will not sublease (included but not limited to dry-, damp-, ACMI- or wet lease), charter, hire or otherwise part with the possession or operational control of the Aircraft, Engine or Part (except as explicitly permitted in this Agreement) without the prior written consent of Lessor, which shall not be unreasonably withheld or delayed. Any permitted subleasing except such subleasing as is permitted under Section 10.4 shall be in accordance with such terms and conditions as Lessor may impose if it grants its consent, which shall not be unreasonably withheld or delayed, but shall at all times at least comply with the following terms:

 

(i)                                     the sublease agreement shall be in form and substance satisfactory to Lessor, acting reasonably;

 

(ii)                                  Lessor shall be notified of the name of the parties to any sublease in a timely manner;

 

(iii)                               the Aircraft, the Headlease (if applicable), the Mortgage (if applicable), this Agreement, the sublease, and such documents as evidence any Security Interest (including if requested by Lessor following advice from relevant local counsel that not having such security will be prejudicial to Lessor’s rights, a Security Assignment of Sublease) in the Aircraft shall remain registered with the relevant Aviation Authority and the International Registry (if applicable) throughout the term of the sublease and the interests created by such documents shall be in full force and effect and not in any way affected by such sublease;

 

(iv)                              the Permitted Sub-Lessee shall covenant for the benefit of Lessor and Owner and Security Trustee that it will not do or refrain from doing anything which could reasonably be expected to prejudice Owner’s title to the Aircraft and Lessor’s rights under this Agreement and the other Operative Documents, or the rights of

 


(20)  This drafting reflects the aircraft being registered in Brazil and assumes that there will be an Initial Sublease at Delivery.  To be updated if either of these assumptiosn is not the case.

 

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Owner and Security Trustee under any document granting a Security Interest, or the value of the Aircraft;

 

(v)                                 the rights of the Permitted Sub-Lessee under the sublease shall be expressly subject and subordinate to this Agreement, the other Operative Documents and to the rights, title and interests of the Relevant Parties hereunder, and the Permitted Sub-Lessee shall at least one (1) Business Day prior to the execution of the sublease execute and deliver to Lessor, Owner and if relevant, the Security Trustee, an acknowledgement of such rights and confirm that its right to possession of the Aircraft under the sublease will terminate immediately upon the termination of the leasing of the Aircraft under this Agreement, and that it will Return the Aircraft to Lessor upon notification from Lessor that an Event of Default under this Agreement has occurred and Lessor has, as a result thereof, terminated Lessee’s right to possession of the Aircraft under this Agreement, in a form set out in a subordination acknowledgment reasonably satisfactory to Lessor, Owner and the Security Trustee;

 

(vi)                             the term of any sublease, including any renewals and extensions, will in no event exceed or be capable of exceeding the end of the Lease Term;

 

(vii)                          Lessee shall cause the Permitted Sub-Lessee to provide Lessor with a Deregistration Power of Attorney;

 

(viii)                        Lessee shall, at Lessee’s cost and expense, provide to each of the Relevant Parties an opinion of counsel from the jurisdiction(s) in which the proposed Permitted Sub-Lessee is domiciled in the form and substance reasonably acceptable to Lessor and the Security Trustee to the effect that rights of the Relevant Parties in and to the Aircraft, the Operative Documents and the Financing Documents shall be protected and otherwise unaffected by the entry into and performance of the sublease or any consequent change in the State of Registration (if approved by Lessor) and that such sublease will not prejudice Lessor’s rights to repossess the Aircraft in the event of an Event of Default hereunder;

 

(ix)                              Lessee shall procure that all necessary translations and filings in respect of any sublease are made promptly in accordance with all applicable laws in any applicable jurisdiction;

 

(x)                                 the sublease shall not contain any provision which conflicts with any of the provisions of this Agreement relating to the respective rights, title and interest of the Relevant Parties to and in the Aircraft;

 

(xi)                              the Aircraft will, during the term of the sublease, continue to be operated and maintained in accordance with the applicable provisions of this Agreement;

 

(xii)                           the Aircraft shall continue to be insured in accordance with the terms of this Agreement and Lessee shall cause to provide an insurance certificate and broker’s letter of undertaking, both such

 

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documents acceptable to Lessor in form and substance and complying with Section 16 and Exhibit E;

 

(xiii)                        the Permitted Sub-Lessee shall: (a) have a valid air operators certificate and any other relevant licences required for the operation of the same type of aircraft as the Aircraft; (b) shall not be a Prohibited Person; (c) shall not be registered or domiciled in or incorporated in a Prohibited Country; and (d) be a certified air carrier, and if the Permitted Sub-Lessee’s State of Incorporation is the U.S. or any state of the U.S. then the Permitted Sub-Lessee shall be a Certificated Air Carrier;

 

(xiv)                       the terms of such subleasing shall not permit any further subleasing;

 

(xv)                          such sublease will not involve anything that would in any way diminish or discharge Lessee’s obligations hereunder or under any other Operative Document;

 

(xvi)                       Lessee shall remain primarily liable for the performance of all its obligations hereunder;

 

(xvii)                    if necessary pursuant to applicable Law, financing statements or similar documents shall be executed, if applicable, and delivered by Lessee and the Permitted Sub-Lessee, in the form prescribed by applicable Law, in order to protect the Operative Documents, the Financing Documents, as applicable, and/or the rights of any Relevant Parties;

 

(xviii)                 Lessee shall deliver to Lessor, prior to the commencement of the subleasing a Eurocontrol Letter of Authorisation (if required by Lessor) executed by the relevant Permitted Sub-Lessee;

 

(xix)                       Lessee shall cause the Permitted Sub-Lessee to provide Lessor with an IDERA executed on behalf of the Permitted Sub-Lessee and, when the Aircraft Protocol of the Cape Town Convention has entered into force in the State of Registration and/or the State of Incorporation of the Permitted Sub-Lessee, countersigned by the relevant registry authority to the extent possible;

 

(xx)                          the Aircraft: (a) shall remain registered with the Aviation Authority in a country which is not, at the time of that registration, a Prohibited Country; (b) shall be habitually based in a Habitual Base; and (c) shall not be operated in, a Prohibited Country;

 

(xxi)                       Lessee shall execute a Security Assignment of Sublease if requested by Lessor following advice from relevant local counsel that not having such security will be prejudicial to Lessor’s right, and Lessor shall receive the acknowledgment signed by the relevant Permitted Sub-Lessee in a form reasonably satisfactory to the Lessor; and

 

(xxii)                   Lessee shall provide or shall cause the Permitted Sub-Lessee to provide and/or to do and perform such other and further acts and

 

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execute and deliver any and all such other instruments as Lessor may reasonably request.

 

Within five (5) days after the execution of any sublease, Lessee shall provide Lessor with a fully executed copy of such sublease. Lessee will not amend the terms of any sublease relating to the governing law of such sublease or the subordination provisions without the prior written consent of Lessor.

 

10.3                        Wetlease.

 

The wet leasing of the Aircraft during the Lease Term, whereby: (i) the Aircraft will at all times be operated by air crew employed by and subject to the full operational control of Lessee; (ii) the Insurances required under this Agreement shall remain in full force and effect; and (iii) the Aircraft shall be maintained by Lessee and any Maintenance Performer as required under this Agreement, is permitted, provided:

 

(i)                           no Event of Default has occurred and is continuing;

 

(ii)                        the wet lease shall be expressly subject and subordinate in all respects to this A