AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT
among
RAYTHEON AIRCRAFT CREDIT CORPORATION,
as Servicer
RAYTHEON AIRCRAFT RECEIVABLES CORPORATION,
as Seller
THE PURCHASERS REFERRED TO HEREIN
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Managing Facility Agent and Documentation Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
and
THE CHASE MANHATTAN BANK,
as Co-Administrative Agents and Co-Lead Arrangers
THE CHASE MANHATTAN BANK,
as Syndication Agent
CITIBANK, N.A.
and
CREDIT SUISSE FIRST BOSTON,
as Co-Syndication Agents
and
EACH ADMINISTRATIVE AGENT REFERRED TO HEREIN
Dated as of March 18, 1999
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2
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, dated as of
March 18, 1999, among RAYTHEON AIRCRAFT RECEIVABLES CORPORATION, a Kansas
corporation (the "Seller"), RAYTHEON AIRCRAFT CREDIT CORPORATION ("Raytheon
Credit"), as Servicer (as defined herein), the financial institutions and
special purpose corporations from time to time parties to this Agreement (the
"Purchasers"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Managing Facility Agent for the Purchasers (in such capacity, the "Managing
Facility Agent"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION and THE
CHASE MANHATTAN BANK, as Co-Administrative Agents for the Purchasers (in such
capacity, a "Co-Administrative Agent"), THE CHASE MANHATTAN BANK, as Syndication
Agent (in such capacity, the "Syndication Agent"), CITIBANK, N.A. and CREDIT
SUISSE FIRST BOSTON, as Co-Syndication Agents (in such capacity, a
"Co-Syndication Agent") and each Administrative Agent referred to herein.
W I T N E S S E T H :
WHEREAS, the Seller, Raytheon Credit and certain of the Purchasers
herein are parties to the Purchase and Sale Agreement dated as of March 20, 1997
(as heretofore amended, supplemented or otherwise modified, the "1997
Agreement") pursuant to which such Purchasers have agreed to purchase, and have
purchased, certain Receivables from the Seller;
WHEREAS, the parties hereto desire to amend the 1997 Agreement to,
among other things, provide for the addition of certain parties in their
respective agency capacities described herein, modify certain of the
concentration limits provided in the 1997 Agreement and extend the Expiration
Date;
WHEREAS, certain of the Purchasers under the 1997 Agreement (the
"Withdrawing Purchasers") desire to sell their undivided interests in the
Receivables purchased thereunder and to terminate their respective Commitments
under the 1997 Agreement on the Amendment Effective Date;
WHEREAS, the Purchasers under the 1997 Agreement other than the
Withdrawing Purchasers (the "Extending Purchasers") desire to extend the
Expiration Date;
WHEREAS, certain new financial institutions and special purpose
corporations (such other financial institutions and corporations, the "New
Purchasers") desire to become "Purchasers" under the 1997 Agreement as amended
and restated hereby;
WHEREAS, each of the Extending Purchasers and the New Purchasers
desires to extend, increase or decrease its Commitment such that, on the
Amendment Effective Date, the Commitment of each such Purchaser will be as shown
on Annex A hereto opposite the name of such Purchaser; and
WHEREAS, the parties hereto desire to restate the 1997 Agreement as so
amended, modified and supplemented, in its entirety;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
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3
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Acceptable L/C Issuer": a financial institution whose senior long-term
unsecured debt is rated at least A and A2 by S&P and Moody's, respectively, if
rated by both such agencies, or at least A or A2 by S&P or Moody's respectively,
if rated by only one such agency, or if such senior, long-term, unsecured debt
is not rated, is issued by a bank whose long-term deposits are rated at least A+
and A1 by S&P and Moody's, respectively, if rated by both such agencies, or A+
or A1 by S&P or Moody's, respectively, if rated by only one such agency.
"Accrual Period": (i) with respect to any Settlement Date, the period from
and including the preceding Settlement Date (or, with respect to the initial
Accrual Period, from the Closing Date) to but excluding such Settlement Date and
(ii) a Special Settlement Date Accrual Period.
"Administrative Agent": the collective reference to the Managing Facility
Agent and the Old Administrative Agent, each in its role as administrative agent
hereunder.
"Affiliate": as to any Person, (a) any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person or (b) any other Person who is a director, officer, partner or
shareholder of such Person who, in the case of partners and shareholders, owns,
directly or indirectly, 10% or more of the voting securities (i) of such Person,
(ii) of any Subsidiary of such Person or (iii) of any Person described in the
preceding clause (a). For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (i) vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (ii) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Affiliate Obligor": each Affiliate of Raytheon Credit obligated to make
payments in respect of a Receivable; provided that, such Affiliate is a special
purpose entity created solely for the purpose of entering into Applicable Leases
and does not and is not expected to own any assets or incur any liabilities
except in connection with the performance of its obligations under the Contracts
pursuant to which it acquires Aircraft and the Applicable Leases of such
Aircraft.
"Affiliate Receivable": a Receivable created pursuant to a Contract (as
described in clause (i) of the definition thereof) between Raytheon Credit and
an Affiliate Obligor located (within the meaning of Section 9-103 of the New
York UCC) within the United States which Receivable (i) is created in connection
with the acquisition by such Affiliate Obligor of an Aircraft which is leased by
such Affiliate Obligor, as lessor, to an Unaffiliated Foreign Lessee pursuant to
an Applicable Lease and (ii) is secured by a Lien upon (x) such Aircraft and (y)
such Unaffiliated Foreign Lessee's obligations under such Applicable Lease. In
accordance with subsection 2.27, Affiliate Receivables may be categorized as
Certified Foreign Receivables or Uncertified Foreign Receivables.
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4
"Aggregate Exposure":
(a) at any time during the Revolving Period, an aggregate amount equal to the
Commitments in effect at such time and each Dissenting Purchaser's
Outstanding Purchase Price at such time; and
(b) at any time during the Amortization Period, an aggregate amount equal to
the Outstanding Purchase Price of each Purchaser (including each Dissenting
Purchaser) at such time.
"Aggregate Repurchase Obligation": at any time, the sum of the Repurchase
Obligation and the RAC Repurchase Obligation.
"Agreement": this Amended and Restated Purchase and Sale Agreement, as
amended, supplemented or otherwise modified from time to time.
"Aircraft": the collective reference to Commuter Aircraft and General
Aviation Aircraft. When used in connection with a Travel Air Receivable,
"Aircraft" shall mean the related Obligor's undivided interest in the applicable
Aircraft.
"Aircraft Accessories": any of the items listed in clause (ii) of the
definition of Commuter Aircraft and General Aviation Aircraft, as applicable.
"Amendment Accrual Period": as defined in Section 5.3.
"Amendment Effective Date": as defined in Section 5.1.
"Amortization Event": any of the events described in subsection 8.1,
whether or not any of the actions referred to in subsection 8.2 have been taken.
"Amortization Period": the period beginning on the first day after the
termination of the Revolving Period and ending on the earlier of (i) the day the
Outstanding Purchase Price is reduced to zero as a result of the application of
Collections and other payments and (ii) the day on which the Principal Balance
of all Purchased Receivables has been reduced to zero as a result of Collections
and Net Recoveries.
"Applicable Lease": with respect to any Affiliate Receivable, a lease
contract (substantially in the form described in clause (ii) of the definition
of Contract and which lease contract contains an option to purchase the related
Financed Aircraft by the Unaffiliated Foreign Lessee prior to the expiration of
such lease contract) between the Affiliate Obligor and the Unaffiliated Foreign
Lessee, a Lien upon which secures the repayment of such Affiliate Receivable.
"Applicable Margin": (a) for each Purchaser (other than a Dissenting
Purchaser) during the Revolving Period, a rate per annum equal to 0.50% plus the
Rating Adjustment, if any, and (b) for each 12-month period following (i) the
commencement of the Amortization Period and (ii) for each Dissenting Purchaser,
the commencement of amortization of such Dissenting Purchaser's Outstanding
Purchase Price pursuant to Section 2.8(b) (each 12-month period in clauses (i)
and (ii), a "Year"), the rate per annum set forth for such Year below plus the
Rating Adjustment, if any:
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5
Years Margin
One through three 0.50%
Four through six 0.55%
Seven through ten 0.65%
Eleven 0.80%
Twelve 0.95%
Thirteen 1.10%
Thereafter 1.25%
"Applicable Settlement Date": as defined in the definition of "Ineligible
Receivable".
"Assignment": an assignment, substantially in the form of Exhibit A-1 with
appropriate insertions and attachments, executed by the Seller or an Affiliate
Obligor, as the case may be, and delivered to the Managing Facility Agent or the
Seller, as the case may be, with respect to each purchase or substitution.
"Available Commitment": as to any Purchaser at any time, an amount equal to
the excess, if any, of (a) the amount of such Purchaser's Commitment over (b)
the product of such Purchaser's Available Commitment Percentage multiplied by
the aggregate Outstanding Purchase Price (excluding any Dissenting Purchaser's
Outstanding Purchase Price at such time).
"Available Commitment Percentage": as to any Purchaser at any time, a
fraction the numerator of which is the Commitment of such Purchaser at such time
and the denominator of which is the aggregate Commitments at such time.
"Aviation Act": the Federal Aviation Act of 1958, as amended, and all
applicable rules and regulations thereunder.
"Bailee": any Person (other than the Administrative Agent and the Seller)
which enters a Bailment Agreement.
"Bailment Agreement": each agreement, substantially in the form of Exhibit
F-1 or F-2 with such changes thereto as are reasonably satisfactory in form and
substance to the Managing Facility Agent, among an Administrative Agent, the
Seller and the Person therein designated, which Person shall be acceptable to
the Managing Facility Agent in its reasonable discretion, to maintain custody,
as the bailee of the Administrative Agent and the Purchasers, of the letter of
credit related to each L/C Receivable sold or substituted hereunder on the terms
and subject to the conditions set forth therein, as any of the same may be
amended, supplemented or otherwise modified from time to time.
"Base Rate": for any day, the higher of (a) 0.50% per annum above the
latest Federal Funds Rate and (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America National Trust and
Savings Association in San Francisco, California, as its"reference rate". The
"reference rate" is a rate set by Bank of America National Trust and Savings
Association based upon various factors including Bank of America National Trust
and Savings Association's costs and desired return, general economic conditions
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6
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change in the
reference rate announced by Bank of America National Trust and Savings
Association shall take effect at the opening of business on the day specified in
the public announcement of such change.
"Benefitted Purchaser": as defined in subsection 11.7(a).
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York, Wichita, Kansas, Boston, Massachusetts
or San Francisco, California are authorized or required by law to close.
"Buyout Amount": as defined in subsection 2.8(b)(iii).
"Cash Collateral Account": as defined in subsection 2.14(c)(i).
"Cash Equivalents": (a) securities issued or directly and fully guaranteed
or insured by the United States Government or any agency or instrumentality
thereof having maturities not later than the Settlement Date following the date
of acquisition, (b) certificates of deposit and eurodollar time deposits with
maturities not later than the Settlement Date following the date of acquisition,
bankers' acceptances with maturities not later than the Settlement Date
following the date on which such investment is made and overnight bank deposits,
in each case, with any commercial bank (i) the short-term indebtedness of which
is rated at least A-1 or P-1 by S&P or Moody's, respectively, and (ii) with
capital and surplus in excess of $500,000,000, (c) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) entered into with any financial institution
meeting the qualifications specified in clause (b) above, and (d) commercial
paper rated at least A-1 or P-1 by S&P or Moody's, respectively, and in each
case with maturities not later than the Settlement Date following the date of
acquisition.
"Cash Flow Cutoff Date": as of any Settlement Date and with respect to any
Extended Term Receivable, (i) so long as no Rating Event has occurred and is
continuing, the date which is thirteen years after such Settlement Date and (ii)
during the continuation of a Rating Event, the date which is ten years after
such Settlement Date.
"Certified Foreign Receivable": each Affiliate Receivable and each Foreign
Receivable (i) in the case of a Foreign Receivable which is not a Lease
Receivable, (x) in respect of which the obligations of the related Obligor are
secured by a Lien on the related Contract and Financed Aircraft in compliance
with subsections 5.2(e)(ii) and (vii), (y) which has been so designated as a
Certified Foreign Receivable in compliance with subsection 2.27 and (z) in
respect of which the Seller has satisfied the conditions specified in subsection
5.2 (including subsection 5.2(e)), (ii) in the case of a Foreign Receivable
which is a Lease Receivable (including a Registerable Lease Receivable with a
Foreign Obligor) (x) in respect of which the obligations of the related Obligor
are secured by a Lien on the related Contract and Financed Aircraft in
compliance with subsections 5.2(e)(iii), (iv) and (vii), (y) which has been so
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designated as a Certified Foreign Receivable in compliance with subsection 2.27
and (z) in respect of which the Seller has satisfied the conditions specified in
subsection 5.2 (including subsection 5.2(e)) and (iii) in the case of an
Affiliate Receivable (x) in respect of which the obligations of the related
Obligor are secured by a Lien on the related Contract and Financed Aircraft in
compliance with subsections 5.2(e)(vi) and (vii), (y) which has been so
designated as a Certified Foreign Receivable in compliance with subsection 2.27
and (z) in respect of which the Seller has satisfied the conditions specified in
subsection 5.2 (including subsection 5.2(e)).
"Certified Opinion Delivery Date": as defined in subsection 2.27(c).
"Closing Date": March 24, 1997.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in subsection 11.11(b).
"Collection Account": as defined in subsection 2.14(a).
"Collections": with respect to any Purchased Receivable, all cash
collections (including, without limitation, Principal Collections, Finance
Charge Collections and other payments (including penalties, if any)), rent paid
under any Contract (whether as Principal Collections or Finance Charge
Collections), all security deposits (including, without limitation, any engine
reserve account), any payments pursuant to guarantees and all amounts paid by
any Obligor or Unaffiliated Foreign Lessee upon the exercise of any purchase
option under any Contract (including any amounts financed by the Seller), the
amount of drawings under a letter of credit related to such Purchased
Receivable, any insurance paid in respect of an Exim Bank Receivable, any
curtailment payments made by an Obligor in respect of a Wholesale Receivable,
and any other cash proceeds of any Purchased Receivable or proceeds of such
Purchased Receivable, including, without limitation, any proceeds from
realization upon collateral (including, without limitation, any Financed
Aircraft, Applicable Lease, insurance proceeds, letters of credit, security
deposits, curtailment payments, indemnity payments or any other cash payments
under or with respect to the related Contract) and any amounts withdrawn from
the Cash Collateral Account pursuant to subsection 2.14(c).
"Commitment": as to any Purchaser, the obligation of such Purchaser to
purchase undivided interests in Eligible Receivables from the Seller in an
amount at any one time outstanding not to exceed the amount set forth opposite
such Purchaser's name on Schedule I, as reduced from time to time in accordance
with the terms hereof; as to all the Purchasers on the Amendment Effective Date,
not to exceed an aggregate amount of $2,700,000,000.
"Commitment Fee": as defined in subsection 2.17(d).
"Commitment Percentage":
(a) at any time during the Revolving Period and as to any Purchaser other than
a Dissenting Purchaser, a fraction, the numerator of which is the
Commitment of such Purchaser in effect at such time and the denominator of
which is equal to the Aggregate Exposure at such time;
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(b) at any time during the Revolving Period and as to a Dissenting Purchaser, a
fraction, the numerator of which is the Outstanding Purchase Price of such
Dissenting Purchaser at such time and the denominator of which is equal to
the Aggregate Exposure at such time; and
(c) at any time during the Amortization Period and as to any Purchaser,
including a Dissenting Purchaser, a fraction the numerator of which is
equal to the Outstanding Purchase Price of such Purchaser at such time and
the denominator of which is equal to the Aggregate Exposure at such time.
"Commitment Transfer Supplement": a Commitment Transfer Supplement,
substantially in the form of Exhibit D.
"Commonly Controlled Entity": with respect to a Person, an entity, whether
or not incorporated, which is under common control with such Person within the
meaning of Section 4001 of ERISA or is part of a group which includes such
Person and which is treated as a single employer under Section 414 of the Code.
"Commuter Aircraft": the Models 1300, 1900 and 99 Beechcraft manufactured
by RAC and comparable general aviation aircraft used for commuter airline
purposes manufactured by any other Person including, in all cases, without
limitation, (i) any and all airframes, engines, (including, without limitation,
any replacement or substituted engines) and avionics, equipment and accessories
at any time attached to, connected with or located in any such aircraft and, to
the extent covered by the recording system of the Aviation Act, all logs,
manuals and maintenance records with respect thereto and (ii) any and all
avionics, equipment and accessories removed from any Aircraft and, to the extent
not covered by the recording system of the Aviation Act, all logs, manuals and
maintenance records.
"Commuter Receivable": a Receivable the Obligor of which owns and operates
a commuter airline.
"Concentration Account": as defined in subsection 2.14(b).
"Concentration Receivables": as defined in subsection 2.7(b).
"Consolidated Capitalization": at a particular date, the sum of
Consolidated Debt and Consolidated Net Worth at such date.
"Consolidated Debt": at a particular date, all amounts which would be
included as indebtedness (including capitalized leases) on a consolidated
balance sheet of Raytheon and its consolidated Subsidiaries, determined in
accordance with GAAP.
"Consolidated EBIT": for any period, the sum of (a) Consolidated Net Income
for such period and (b) the aggregate amounts deducted in determining
Consolidated Net Income in respect of (i) Consolidated Net Interest Expense for
such period and (ii) income taxes of Raytheon and its consolidated Subsidiaries
for such period determined in accordance with GAAP.
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"Consolidated Net Income": for any period, the consolidated net income (or
deficit) of Raytheon and its consolidated Subsidiaries for such period,
determined in accordance with GAAP; provided that (i) for the fiscal quarter of
Raytheon and its consolidated Subsidiaries ending December 31, 1997, such
Consolidated Net Income shall be increased by $327,100,000 representing a
restructuring charge taken in connection with Raytheon's acquisition of Hughes
Aircraft Company and (ii) for the fiscal quarter of Raytheon and its
consolidated Subsidiaries ending September 30, 1998, such Consolidated Net
Income shall be increased by $284,000,000 representing restructuring charges and
a write-down in investments taken in such fiscal quarter.
"Consolidated Net Interest Expense": for any period, net interest expense
of Raytheon and its consolidated Subsidiaries for such period, determined in
accordance with GAAP.
"Consolidated Net Worth": at a particular date, all amounts which would, in
conformity with GAAP, be included under stockholders' equity on a consolidated
balance sheet of Raytheon and its consolidated Subsidiaries at such date.
"Contract": with respect to a Receivable, the collective reference to (a)
the promissory notes, security agreements, leases, financing and security
agreements, contracts, documents and instruments between the Seller and the
Obligor thereon on the Seller's standard form therefor (as in effect on the
Closing Date) or such other forms as shall contain substantially similar
provisions to such standard forms, pursuant to which the Seller has (i) lent the
Obligor funds to purchase an Aircraft or, in the case of the Travel Air
Receivables, an undivided interest therein, and the Obligor has agreed to make
installment payments in respect of such purchase, or (ii) leased an aircraft or,
in the case of the Travel Air Receivables, an undivided interest therein; to the
Obligor, in each case, as amended, supplemented or otherwise modified from time
to time and (b) upon the occurrence of an event of the type described in
subsection 8.1(j) affecting the Seller, each and every promissory note, security
agreement, lease, financing and security agreement, contract, document and
instrument executed in replacement or supersession of another Contract described
in clause (a) with the same Obligor, or executed upon extension, modification or
amendment of such Contract, whether in connection with an agreement pursuant to
Section 1110 of the Bankruptcy Code (11 USC ss. 1110) or otherwise. Whenever
used in connection with any Purchased Receivables, unless the context otherwise
requires "Contract" shall include any Applicable Lease securing the obligations
of the Affiliate Obligor under such Purchased Receivable.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Current Receivable": as defined in subsection 2.13(f).
"Credit and Collection Policy": those credit and collection policies and
practices of the Seller and the Servicer existing on the Closing Date relating
to the Receivables (including, without limitation, policies relating to
writeoffs of Receivables and policies and practices maintained by the Seller's
or the Servicer's computer system and policies set forth in the form previously
delivered to the Purchasers, as modified from time to time in accordance with
subsection 7.1(c).
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"Dealer": any independent dealer or Affiliate of Raytheon Credit which
markets and sells Aircraft.
"Debt Rating": at any date of determination, Raytheon's long-term unsecured
senior debt rating, determined in accordance with the following:
(i) if on any date on which a Debt Rating is to be determined, only two of
Moody's, S&P and Duff are providing long-term unsecured senior debt
ratings for Raytheon and such ratings are no more than one rating level
apart (e.g., the difference between B and B+ being one rating level), the
Debt Rating will be the lower of such ratings;
(ii) if on any date on which a Debt Rating is to be determined, only two of
Moody's, S&P and Duff are providing long-term unsecured senior debt
ratings for Raytheon but such ratings are more than one rating level
apart, the Debt Rating will be one rating level higher than the lower of
such ratings so provided;
(iii) if on any date on which a Debt Rating is to be determined, each of
Moody's, S&P and Duff is providing long-term unsecured senior debt ratings
for Raytheon, the Debt Rating will be the lower of the two highest of the
three ratings so provided; and
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(iv) if on any date on which a Debt Rating is to be determined, only one of
Moody's, S&P and Duff is providing a long-term unsecured senior debt rating
for Raytheon, the Debt Rating will be Raytheon's long-term unsecured senior
debt rating as provided by such rating agency.
A debt rating shall be deemed to be in effect on the date of announcement
or publication by the applicable rating agency. References in this Agreement to
alphabetical rating classifications are references to the S&P/Moody's ratings.
For purposes of clauses (i), (ii), (iii) and (iv) above, the ratings of Duff
shall be the rating provided by Duff which is comparable to the S&P alphabetical
classification. Notwithstanding the foregoing, the Seller and the Required
Purchasers may at any time and from time to time agree to utilize a rating
agency other than Moody's, S&P or Duff to determine the Debt Rating, in which
case the Debt Rating shall be such levels as quoted by such rating agencies as,
in each case, the Seller and the Purchasers, by unanimous consent, shall agree.
"Debt Ratio": at a particular date, the ratio of Consolidated Debt at such
date to Consolidated Capitalization at such date.
"Default Rate": as defined in subsection 2.17(c).
"Defaulted Applicable Lease": an Applicable Lease (i) as to which any
payment thereon or part thereof remains unpaid by the Unaffiliated Foreign
Lessee thereon for (x) 120 days in the case of a GA Receivable or (y) 150 days
in the case of a Commuter Receivable, from, in each case, the original due date
for such payment by such Unaffiliated Foreign Lessee, (ii) as to which the
Unaffiliated Foreign Lessee thereof has taken or suffered any action of the type
described in subsection 8.1(j) with respect to such Person or (iii) which,
consistent with the Credit and Collection Policy, would be written off the
Seller's books as uncollectible.
"Defaulted Receivable": a Receivable, (i) in the case of a GA Receivable or
a Travel Air Receivable, as to which any payment on such Receivable or part
thereof remains unpaid by the Obligor thereon for 120 days from the original due
date for such payment by such Obligor, (ii), in the case of a Commuter
Receivable, as to which any payment on such Receivable or part thereof remains
unpaid by the Obligor thereon for 150 days from the original due date for such
payment by such Obligor, (iii) in the case of a Wholesale Receivable, as to
which any payment on such Receivable or part thereof remains unpaid by the
Obligor thereon for 60 days from the original due date for such payment by such
Obligor, (iv) in the case of an Affiliate Receivable, as to which the Applicable
Lease related thereto is a Defaulted Applicable Lease or (v) any Receivable as
to which the Obligor thereof has taken or suffered any action of the type
described in subsection 8.1(j) with respect to such Obligor or which, consistent
with the Credit and Collection Policy, would be written off the Seller's books
as uncollectible.
"Delinquent Receivable": an Eligible Receivable a payment under which is
more than 90 days past due from the original due date therefor, but which is not
otherwise a Defaulted Receivable.
"Discount Event": any time when Raytheon's Debt Rating is lower than either
BBB+/Baa1.
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"Dissenting Purchaser": as defined in subsection 2.8(b).
"Domestic Wholesale Receivable": a Receivable arising under a wholesale
financing arrangement between Raytheon Credit and, as Obligor thereunder, a
Dealer which is located (within the meaning of Section 9-103 of the New York
UCC) in the United States.
"Duff": Duff & Phelps Credit Rating Company.
"Effective Date": as defined in Section 5.1 of the 1997 Agreement.
"Eligible Applicable Lease": (x) with respect to each Affiliate Receivable
other than an Existing Affiliate Receivable, at the time of purchase or
substitution of such Affiliate Receivable pursuant to this Agreement, an
Applicable Lease related thereto:
(a) the Unaffiliated Foreign Lessee of which (i) is not an Affiliate of
Raytheon Credit or the Servicer, (ii) is not located in a Prohibited
Jurisdiction, (iii) is not, except to the extent permitted under subsection
2.7, a Governmental Authority unless the Affiliate Obligor, Raytheon Credit
and the Seller have complied with the requirements of each applicable
Requirement of Law pertaining to the assignment of accounts receivable the
obligor of which is a Governmental Authority, all in a manner satisfactory
to the Managing Facility Agent and the Required Purchasers in their
reasonable discretion and (iv) is not the Unaffiliated Foreign Lessee or
the Obligor, or an Affiliate of an Obligor or Unaffiliated Foreign Lessee,
on any Receivable or Applicable Lease which is a Defaulted Receivable or
Defaulted Applicable Lease, as appropriate;
(b) which is neither more than 30 days past due from the original due date
therefor nor otherwise a Defaulted Applicable Lease;
(c) which arose in the ordinary course of Raytheon Credit's business from
financing the retail purchase or lease financing of an Aircraft and relates
to an Aircraft which will be used for general aviation purposes or with
respect to the ownership and operation of a commuter airline, but not for
military purposes;
(d) which is subject only to adjustment for changes in payments in accordance
with the terms thereof resulting from changes in the interest rates
thereunder and the payment terms of which are identical to the payment
terms set forth in the related Affiliate Receivable;
(e) which is an "account" or a "general intangible" or which constitutes
"chattel paper" within the meaning of the UCC of the State of Kansas or the
law of the state where the Seller or the Servicer maintains the books,
records and documents with respect to such Receivable;
(f) which is denominated and payable only in United States dollars in the
United States;
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13
(g) which (i) has been duly authorized by each party thereto (or, if any such
party is an individual, such party has the capacity to enter into) and each
of the parties thereto is in compliance therewith in all material respects,
(ii) was not originated with any conduct constituting fraud or a material
misrepresentation on the part of the Affiliate Obligor, Raytheon Credit or
the Seller, (iii) was not originated with any conduct constituting fraud or
a material misrepresentation by the Unaffiliated Foreign Lessee party
thereto of which Raytheon Credit, the Seller or the Affiliate Obligor
thereto knew or should have known based on the exercise of reasonable care,
(iv) constitutes the legal, valid and binding obligation of the
Unaffiliated Foreign Lessee thereof enforceable against such Unaffiliated
Foreign Lessee in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law), (v) contains enforceable provisions such
that the rights and remedies of the holder of the security interest created
therein are adequate for the realization of the benefits of such security
interest against the related Unaffiliated Foreign Lessee and the other
collateral therefor and (vi) if the engine for the related Financed
Aircraft has 750 or more rated takeoff horsepower (or the equivalent of
such horsepower), accurately describes the engines of such Financed
Aircraft as provided for in such Applicable Lease;
(h) which is not subject to any existing material dispute, offset, counterclaim
or defense whatsoever (including, but not limited to, breach of warranty)
of which Raytheon Credit, the Seller or the Servicer knows or should have
known;
(i) which does not, or at the time of lease of the Financed Aircraft did not,
contravene any Requirements of Law applicable thereto in any material
respect (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and privacy) and
with respect to which no party thereto is in violation of any such
Requirement of Law in any material respect;
(j) which was originated in accordance with the Credit and Collection Policy
and satisfied all requirements thereof;
(k) on which either at least one payment or a down payment (including a
trade-in) has been made prior to the Closing Date or the Settlement Date on
which the related Affiliate Receivable is purchased or substituted;
(l) the payment terms of which have not been modified other than (i) in
accordance with the Credit and Collection Policy and (ii) to an extent and
in an amount not in excess of the limitations specified in subsection
7.1(b)(iv)(x); and
(m) of which the Affiliate Obligor, at the time of transfer of the related
Affiliate Receivable to the Purchasers, has good and marketable title, free
and clear of any Lien other than any Permitted Receivable Lien; and
<PAGE>
14
(y) with respect to any Existing Affiliate Receivable, at the date of its
purchase or substitution under the Existing Agreement pursuant to which
such Receivable was sold to the Old Administrative Agent, the Applicable
Lease related thereto was an "Eligible Applicable Lease" (as defined in
such applicable Existing Agreement) at such date.
"Eligible Receivable": (x) with respect to each Receivable other than an
Existing Receivable, at the time of purchase or substitution pursuant to this
Agreement, a Receivable:
(a) except with respect to an Affiliate Receivable, the Obligor of which is not
an Affiliate of Raytheon Credit, the Seller or the Servicer;
(b) except with respect to a Foreign Receivable, the Obligor of which is
located (within the meaning of Section 9-103 of the New York UCC) within
the United States and is a Citizen of the United States (as defined in the
Aviation Act); and, with respect to a Foreign Receivable, the Obligor of
which is not located in a Prohibited Jurisdiction;
(c) except with respect to an ExIm Bank Receivable and except as otherwise
permitted in subsection 2.7(a)(xii), the Obligor of which is not a
Governmental Authority unless each of Raytheon Credit and the Seller has
complied with the requirements of the Federal Assignment of Claims Act or
any other applicable Requirement of Law pertaining to the assignment of
accounts receivable the Obligor of which is a Governmental Authority, all
in a manner satisfactory to the Managing Facility Agent and the Required
Purchasers in their reasonable discretion; provided that if a Rating Event
has occurred and is continuing, any Affiliate Receivable in respect of
which the Unaffiliated Foreign Lessee under the related Applicable Lease is
any Governmental Authority other than a United States Federal Governmental
Authority shall not be eligible for purchase or substitution under this
Agreement regardless of any action taken by Raytheon Credit or the Seller
with respect to the assignment of such Applicable Lease;
(d) the Obligor of which is not the Obligor or an Affiliate of an Obligor on
any other Receivable which is a Defaulted Receivable;
(e) which is neither more than 30 days past due from the original due date
therefor nor otherwise a Defaulted Receivable;
(f) which arose in the ordinary course of Raytheon Credit's business from
financing the retail purchase or lease or, in the case of a Wholesale
Receivable, the wholesale purchase of an Aircraft and relates to an
Aircraft which will be used for general aviation purposes or in connection
with commuter airline operations, but not for military purposes, and which
was purchased by the Seller from Raytheon Credit pursuant to the
Intercompany Purchase Agreement in the ordinary course of the Seller's
business;
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15
(g) with respect to GA Receivables, subject only to adjustment for changes in
payments in accordance with the related Contract resulting from changes in
the interest rates thereunder, (i) which, except as set forth in clause
(ii) below, is required to be paid in consecutive monthly installments or
is a Quarterly Receivable or a Semi-Annual Receivable or (ii) which is a
Nonstandard Receivable;
(h) which is an "account" or a "general intangible" or which constitutes
"chattel paper" within the meaning of the UCC of the State of Kansas or the
law of the state where the Seller or the Servicer maintains the books,
records and documents with respect to such Receivable;
(i) which is denominated and payable only in United States dollars in the
United States;
(j) which arises under a Contract which (i) has been duly authorized by each
party thereto (or, if any such party is an individual, such party has the
capacity to enter into) and each party thereto is in compliance therewith
in all material respects, (ii) was not originated with any conduct
constituting fraud or a material misrepresentation on the part of the
Seller or Dealer (if different from the Obligor thereto), (iii) was not
originated with any conduct constituting fraud or a material
misrepresentation by an Obligor party thereto of which the Seller or Dealer
(if different from the Obligor) knew or should have known based on the
exercise of reasonable care, (iv) constitutes the legal, valid and binding
obligation of the Obligor thereof enforceable against such Obligor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings
in equity or at law), (v) except with respect to each L/C Receivable,
contains enforceable provisions such that the rights and remedies of the
holder of the security interest created thereby are adequate for the
realization of the benefits of such security interest against the related
Financed Aircraft and the other collateral therefor and (vi) accurately
describes the engines, if any, of the related Financed Aircraft having 750
or more rated takeoff horsepower (or the equivalent of such horsepower) as
provided for in such Contract;
(j) (i) except with respect to a L/C Receivable, a Lease Receivable, a Travel
Air Receivable and an Unsecured Receivable, which is secured by a valid and
perfected first priority security interest in favor of the Seller in the
Financed Aircraft related thereto (other than, in the case of GA
Receivables, any engines having less than 750 or more rated takeoff
horsepower, or its equivalent) and, with respect to an Affiliate
Receivable, in the related Applicable Lease, (ii) with respect to a
Registerable Lease Receivable and with respect to an ExIm Bank Receivable,
the related Financed Aircraft of which is registered with the FAA Registry
in the name of the Seller and relates to a Financed Aircraft in which the
Seller has a valid ownership interest, (iii) with respect to a Lease
Receivable which is not a Registerable Lease Receivable, the related
Financed Aircraft of which is registered in the name of the Seller in each
jurisdiction necessary to evidence the valid ownership interest of the
Seller in the Financed Aircraft related thereto and (iv) with respect to a
Travel Air Receivable, which is secured by a valid and perfected first
priority security interest in favor of the Seller in the Obligor's
undivided interest in the Financed Aircraft and Travel Air Contracts
related thereto;"
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16
(l) except with respect to a L/C Receivable and an Unsecured Receivable, the
security or ownership interest, as the case may be, of Raytheon Credit in
the Financed Aircraft related thereto is assignable by Raytheon Credit and,
except as permitted under subsection 2.7(a)(x), has been so assigned as a
first priority security interest to the Seller and by the Seller to the
Administrative Agent for the ratable benefit of the Purchasers to secure
the obligations under the related Receivable and which Financed Aircraft is
subject to no other Liens other than Permitted Aircraft Liens; including
(i) except with respect to a Foreign Receivable (other than a Registerable
Lease Receivable with a Foreign Obligor), of which the security interest
granted by the Obligor in favor of Raytheon Credit and assigned to the
Seller and/or, in the case of a Lease Receivable, by the Seller in favor of
the Administrative Agent (including, with respect to a Registerable Lease
Receivable, the security interest in the Financed Aircraft in favor of the
Administrative Agent) encumbering the related Financed Aircraft (other
than, for GA Receivables, Aircraft Accessories with respect thereto and
engines of such Financed Aircraft, if any, having a rated takeoff power of
750 horsepower or its equivalent) has been duly registered and recorded
with the FAA Registry, (ii) with respect to a Foreign Receivable (other
than a L/C Receivable and a Lease Receivable with a Foreign Obligor) of
which the security interest encumbering the related Financed Aircraft has
been duly filed, registered or recorded with each office in each
jurisdiction in which such filing, registration or recordation is necessary
to perfect the security interest therein granted (x) by the Obligor thereon
in favor of Raytheon Credit, (y) by Raytheon Credit in favor of the Seller
and (z) by the Seller in favor of the Administrative Agent for the ratable
benefit of the Purchasers and (iii) with respect to a Lease Receivable with
a Foreign Obligor (other than a Registerable Lease Receivable with a
Foreign Obligor) of which the security interest encumbering the related
Financed Aircraft has been duly filed, registered or recorded with each
office in each jurisdiction in which such filing, registration or
recordation is necessary to perfect the security interest therein granted
by the Seller in favor of the Administrative Agent for the ratable benefit
of the Purchasers;
(m) as to which, upon the transfer of such Receivable pursuant to this
Agreement, either (i) the Purchasers have a perfected, valid and
enforceable first priority ownership interest in such Receivable or (ii)
the Administrative Agent for the ratable benefit of the Purchasers has a
valid, perfected and first priority security interest in such Receivable,
in each case free and clear of all Liens other than Permitted Receivable
Liens;
(n) of which (i) with respect to each Receivable other than a Lease Receivable
and a Travel Air Receivable, the related Financed Aircraft is owned by the
Obligor on the related Contract, (ii) with respect to each Lease
Receivable, except as permitted under subsection 2.7(a)(x), the related
Financed Aircraft is owned by the Seller and (iii) with respect to each
Travel Air Receivable, an undivided interest in the related Financed
Aircraft is owned by the related Obligor;
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17
(o) of which the related Financed Aircraft is (i) with respect to each Financed
Aircraft registered in the name of the Seller, Raytheon Credit, Travel Air
or the related Obligor with the FAA, duly certified by the FAA as to type
and airworthiness and (ii) in all other cases, duly certified by the
appropriate governmental authorities in the applicable foreign jurisdiction
as to type and airworthiness;
(p) which is not subject to any existing material dispute, offset, counterclaim
or defense whatsoever (including, but not limited to, breach of warranty)
of which Raytheon Credit, the Seller or the Servicer knows or should have
known;
(q) which, together with the Contract and the Financed Aircraft related
thereto, does not, or at the time of sale (or lease, as the case may be) of
the Financed Aircraft did not, contravene any Requirements of Law
applicable thereto in any material respect (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party to the
Contract related thereto is in violation of any such Requirement of Law in
any material respect;
(r) which was originated in accordance with the Credit and Collection Policy
and satisfied all requirements thereof and of the related Contract;
(s) which, except for an Extended Term Receivable, has a Final Payment Date not
later than (i) so long as no Rating Event has occurred and is continuing,
thirteen years after the Settlement Date on which such Receivable is
purchased or substituted and (ii) during the continuance of a Rating Event,
ten years after the Settlement Date on which such Receivable is purchased
or substituted;
(t) with respect to which the related Financed Aircraft has been delivered to
the Obligor (x), so long as Raytheon's Debt Rating is no lower than
BBB/Baa2, no later than the second Settlement Date following the Settlement
Date on which undivided interests in such Receivable are sold to the
Purchasers and (y) in all other cases, no later than the Settlement Date on
which undivided interests in such Receivable are sold to the Purchasers;
(u) except with respect to a Wholesale Receivable, on which either at least one
payment or a down payment (including a trade-in) has been made prior to the
Settlement Date on which it is purchased or substituted;
(v) the payment terms of which have not been modified other than (i) in
accordance with the Credit and Collection Policy and (ii) to an extent and
in an amount not in excess of the limitations specified in subsection
7.1(b)(iv)(x);
(w) of which the related Financed Aircraft is insured against loss, damage,
theft, hull and such other casualties as may be required pursuant to the
related Contract, including without limitation passenger legal liability,
public legal liability and property damages legal liability, the policy or
policies of which shall (i) provide that Raytheon Credit or any Affiliate
Obligor, as the case may be, is named thereunder as loss payee and is
entitled to receive 30 days prior notice of cancellation thereof, (ii)
<PAGE>
18
contain a breach of warranty endorsement in favor of Raytheon Credit or any
Affiliate Obligor as the case may be, (iii) provide for insurance in an
amount, after calculation of any deductible, at least equal to the
outstanding principal of the Contract at any time and (iv) be maintained
with financially sound and reputable insurance companies;
(x) if a Lease Receivable (i) prior to the Settlement Date on which such Lease
Receivable is purchased or substituted, with respect to which all actions
required under the related lease to assign to the Administrative Agent on
behalf of the Purchasers the Seller's and Raytheon Credit's respective
rights thereunder (including, without limitation, any notice to, consent of
or acceptance by the lessee party thereto) shall have been duly performed,
(ii) prior to the Settlement Date on which such Lease Receivable is
purchased or substituted, a determination shall have been made if such
Receivable is a Registerable Lease Receivable in accordance with the
definition of such term, (iii) on the Settlement Date on which such Lease
Receivable is purchased or substituted, no Rating Event shall have occurred
and be continuing and (iv), except to the extent permitted in subsection
2.7(a)(xv), such Lease Receivable is carried on the books of the Seller as
a "sale" under GAAP;
(y) if a L/C Receivable, with respect to which the related letter of credit (i)
either (A) is issued by an Acceptable L/C Issuer or (B) if the issuer of
the related letter of credit is not an Acceptable L/C Issuer, at the time
of purchase or substitution no Rating Event has occurred and is continuing,
(ii) is issued or confirmed by a financial institution located in the
United States or which otherwise provides that drawings thereunder may be
made in the United States, (iii) is an irrevocable standby letter of credit
providing for drawings upon the occurrence of a default under the related
Contract on sight or upon presentation of certificates specified therein,
(iv) at any date of determination has an available amount equal to the then
outstanding Principal Balance of such Receivable, (v) is in full force and
effect and (vi) either (A) has an expiration date which is at least five
Business Days following the last scheduled payment date under the related
Contract or (B) provides for automatic extensions without amendment, notice
or other act by or to any Person or permits the Seller to draw the
aggregate amount then available to be drawn thereunder if not extended;
(z) intentionally omitted;
(aa) if an ExIm Bank Receivable, (i) at least 85% of the Principal Balance of
which is insured by the related insurance policy and such insurance policy
is in full force and effect and all premiums have been paid in full, (ii)
the related Contract of which requires the Obligor to purchase the Aircraft
at the end of the term thereof, (iii) at the time of purchase or
substitution of which no Rating Event has occurred and is continuing and
(iv) prior to the Settlement Date on which such ExIm Bank Receivable is
purchased or substituted, all actions required to assign to the
Administrative Agent on behalf of the Purchasers the Seller's and Raytheon
Credit's respective rights to amounts payable under the related insurance
policy and the Seller's rights under any lease of the related Aircraft by
an Obligor on such ExIm Bank Receivable (including, without limitation, any
notice to, consent of or acceptance by the insurer or lessee thereunder)
shall have been duly performed;
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19
(bb) if a Wholesale Receivable, (i) the Principal Balance of which (together
with interest thereon) is payable in accordance with the original terms
thereof no later than 180 days after the original date of the Contract
related thereto, and (ii) the original maturity date thereof has not been
extended more than twice;
(cc) if a Domestic Wholesale Receivable, the related Financed Aircraft of which
has not been sold more than once or to more than one other independent
Dealer (exclusive of Dealers owned by Raytheon Credit or RAC);
(dd) if a Nonstandard Receivable, a Rating Event shall not have occurred and be
continuing;
(ee) if an Affiliate Receivable, (x) prior to the Settlement Date on which such
Affiliate Receivable is purchased or substituted, all actions required to
assign (1) to Raytheon Credit, and from Raytheon Credit to the Seller, the
Affiliate Obligor's rights under the Applicable Lease and Financed Aircraft
and (2) to the Administrative Agent, the Seller's rights under the Financed
Aircraft and the Applicable Lease (including, without limitation, in case
of clauses (1) and (2), any notice to, consent of or acceptance by the
Unaffiliated Foreign Lessee party thereto) shall have been duly performed
and the Administrative Agent, for the ratable benefit of the Purchasers,
shall have a valid, perfected and first priority security interest in such
Financed Aircraft and Applicable Lease as collateral security for the
Affiliate Obligor's obligations under such Affiliate Receivable, free and
clear of all Liens other than (i) the Lien created in favor of Raytheon
Credit and the Seller, (ii) the Lien created under this Agreement in favor
of the Administrative Agent for the ratable benefit of the Purchasers and
(iii) any Permitted Receivable Lien, (y) on the Settlement Date on which
such Affiliate Receivable is purchased or substituted, no Rating Event
shall have occurred and be continuing and (z) the Applicable Lease related
thereto is an Eligible Applicable Lease; and
(ff) which is an "Eligible Receivable" under and as defined in the Intercompany
Purchase Agreement; and
(y) with respect to any Existing Receivable, at the date of its purchase or
substitution under the Existing Agreement pursuant to which it was sold to
the Old Administrative Agent, such Receivable which was an "Eligible
Receivable" (as defined in such applicable Existing Agreement) at such
date.
Notwithstanding any provision set forth in this definition of "Eligible
Receivable" (except clause (x)(ff)), any Receivable which otherwise qualifies to
be an "Eligible Receivable" and for which the Financed Aircraft related thereto
receives a conveyance number from the FAA on or prior to the Applicable
Settlement Date after the sale or substitution of such Receivable shall be
deemed to be an "Eligible Receivable".
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"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Excess MGL Receivables": as of any date of determination, the Principal
Balances of all Purchased Receivables in respect of each of Mesa and Great Lakes
and all of their respective Affiliates to the extent such aggregate Principal
Balances exceed an amount equal to 10% of the Outstanding Purchase Price on such
date of determination (calculated after giving effect to all proposed purchases
and substitutions on such date but excluding the Outstanding Purchase Price of
Wholesale Receivables).
"Excess Spread": as defined in subsection 2.16(b)(vi).
"Excluded Taxes" means, with respect to the Managing Facility Agent, the
Administrative Agent, either Co-Administrative Agent, any Purchaser or any other
recipient of any payment to be made by or on account of any obligation of the
Seller hereunder, (a) income or franchise taxes imposed on (or measured by) its
net income by the United States of America or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Purchaser, in which its applicable purchasing office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Seller is located
and (c) in the case of a Foreign Purchaser (other than an assignee pursuant to a
request by the Seller under subsection 2.26(b)), any withholding tax that is
imposed on amounts payable to such Foreign Purchaser at the time such Foreign
Purchaser becomes a party to this Agreement or is attributable to such Foreign
Purchaser's failure or inability to comply with Section 2.23(e), except to the
extent that such Foreign Purchaser's assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from the Seller with respect to
such withholding tax pursuant to Section 2.23(a).
"ExIm Bank": the Export-Import Bank of the United States and any successor
thereto.
"ExIm Bank Receivable": a Receivable, the payments of which are insured by
the ExIm Bank.
"Existing Agreements": the collective reference to the Existing Commuter
Agreement and the Existing GA Agreement.
"Existing Affiliate Receivable": each Existing Receivable which, on and as
of the Effective Date, is an "Affiliate Receivable" under and as defined in the
Existing Agreement pursuant to which the Old Administrative Agent purchased such
Receivable.
"Existing Certified Receivable": each Existing Receivable which, on and as
of the Effective Date, is a "Certified Foreign Receivable" under and as defined
in the Existing Agreement pursuant to which the Old Administrative Agent
purchased such Receivable.
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21
"Existing Commuter Agreement": the Amended and Restated Purchase and Sale
Agreement dated as of March 8, 1996 among Raytheon Credit, the purchasers
referred to therein, Swiss Bank Corporation, New York Branch, as administrative
agent, Bank of America NT&SA, as documentation agent and co-agent, and Swiss
Bank Corporation, New York Branch, as co-agent, as amended, supplemented or
otherwise modified from time to time.
"Existing GA Agreement": the Second Amended and Restated Purchase and Sale
Agreement dated as of March 8, 1996 among Raytheon Credit, the purchasers
referred to therein and Swiss Bank Corporation, New York Branch, as agent, as
amended, supplemented or otherwise modified from time to time.
"Existing Outstanding Balance": as of any date of determination for any
Existing Receivable, the "Outstanding Balance" thereof as determined under the
Existing Agreement pursuant to which such Existing Receivable was purchased
prior to the Effective Date.
"Existing Outstanding Purchase Price": as of any date of determination for
any Purchaser, the sum of such Purchaser's "Outstanding Purchase Price", if any,
under each of the Existing Agreements.
"Existing Principal Balance": as of any date of determination for any
Existing Receivable, the "Principal Balance" thereof as determined under the
Existing Agreement pursuant to which such Existing Receivable was purchased by
the administrative agent or agent under such Existing Agreement.
"Existing Receivables": on the Effective Date, the collective reference to
the outstanding "Purchased Receivables" under and as defined in the Existing
Agreements.
"Existing Registerable Lease Receivables": on the Effective Date, the
collective reference to the outstanding "Registerable Lease Receivables" under
and as defined in the Existing Agreements.
"Existing Uncertified Foreign Receivables": on the Effective Date, the
collective reference to the outstanding "Foreign Uncertified Receivables" under
and as defined in the Existing Agreements.
"Expense Amounts": the collective reference to amounts required to be paid
pursuant to (i) subsections 2.17(a), 2.17(b), 2.17(c) and 2.17(d) and (ii)
subsections 2.22, 2.23, 2.24 and 11.5 (to the extent that the Managing Facility
Agent, the Administrative Agent or a Purchaser has made a demand therefor).
"Expiration Date": March 16, 2000 or, if the Revolving Period is extended
pursuant to subsection 2.8, 364 days after the date of the Expiration Date in
effect at the time of such extension.
"Extended Term Receivable": as of any Settlement Date, any Receivable the
Final Payment Date of which is later than (i) so long as no Rating Event has
occurred and is continuing, thirteen years after such Settlement Date and (ii)
during the continuance of a Rating Event, ten years after such Settlement Date,
and, for purposes of subsection 2.15, any Receivable the Final Payment Date of
which is extended pursuant to subsection 7.1(b)(iv) to such later date.
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"FAA": the Federal Aviation Administration or any successor thereto.
"FAA Assignment": the assignment, certificate or other document to be filed
with the FAA Registry on or before the Closing Date or any Settlement Date with
respect to a Financed Aircraft related to an Eligible Receivable to be purchased
on the Closing Date or purchased or substituted on such Settlement Date,
substantially in the form of (i) in the case of an assignment by the Seller of a
security interest in a Financed Aircraft granted by an Obligor in favor of the
Seller, Exhibit A-2 (for filing on the Closing Date) or Exhibit A-3 (for filing
on each Settlement Date) or, (ii) with respect to a Registerable Lease
Receivable or an ExIm Bank Receivable, if the Financed Aircraft related thereto
is (or the lessee under the related lease agrees will be) registered under the
Aviation Act, in the case of the grant by the Seller in favor of the
Administrative Agent for the ratable benefit of the Purchasers of a security
interest in a Financed Aircraft and amounts payable under the related lease
entered into with respect to such Lease Receivable or ExIm Bank Receivable,
substantially in the form of Exhibit A-4 (for filing on the Closing Date) or
Exhibit A-5 (for filing on a Settlement Date); in each case, with appropriate
modifications which may be required as a result of changes in any Requirements
of Law after the Closing Date pertaining to filings and recordings with the FAA
Registry.
"FAA Filing Date": as defined in subsection 6.1(n)(ii).
"FAA Registry": the FAA Aircraft Registry maintained on the Closing Date at
the office of the FAA located in Oklahoma City, Oklahoma.
"Final Payment Date": with respect to a Purchased Receivable, the scheduled
final maturity date (which, with respect to a Lease Receivable, shall be the
final scheduled rent payment date under the related Contract) of such
Receivable.
"Finance Charge Collections": (i) with respect to Purchased Receivables
constituting Lease Receivables a portion of the Collections thereunder
representing the interest component of such lease, such interest component
reflecting the interest rate as set forth in such lease and such portion being
calculated in accordance with Credit and Collection Policy and (ii) with respect
to all other Purchased Receivables, Collections on account of accrued finance
charges, late fees and similar items in respect of such Purchased Receivables
calculated, in each case, in accordance with the Credit and Collection Policy.
"Financed Aircraft": the Aircraft, together with all accessions thereto,
securing an Obligor's indebtedness under a Contract; provided that, the term
"Financed Aircraft" when used herein or in any other document, instrument or
certificate delivered pursuant hereto shall mean or refer to, with respect to a
Lease Receivable or an ExIm Bank Receivable, the Aircraft leased under the
Contract pursuant to which such Lease Receivable was created, together with all
accessions thereto.
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23
"Foreign Assignment": with respect to each Foreign Receivable (other than
a L/C Receivable) and each Affiliate Receivable, each document, instrument,
agreement (whether an assignment, security agreement, mortgage or otherwise) and
certificate appropriate for filing in the applicable office in the applicable
jurisdiction and necessary to evidence (i) in the case of Affiliate Receivables
and of Foreign Receivables which are not Lease Receivables, the Lien in the
related Financed Aircraft granted by the Obligor thereon in favor of Raytheon
Credit and the assignment thereof by Raytheon Credit to the Seller and (ii) in
the case of all such Foreign Receivables and all Affiliate Receivables, the Lien
in the related Financed Aircraft granted by the Seller (or, as applicable, the
Lien thereon assigned by the Seller) in favor of the Administrative Agent for
the ratable benefit of the Purchasers; and all other filings and recordings
necessary to perfect the Purchasers' first priority ownership or security
interests in and to the Foreign Receivables or the Affiliate Receivables, as the
case may be, and the related Contracts (including Applicable Leases) and
Financed Aircraft.
"Foreign Obligor": an Obligor which is not located (within the meaning of
Section 9-103 of the New York UCC) within the United States and is not a citizen
of the United States (as defined in the Aviation Act).
"Foreign Purchaser" means any Purchaser that is not organized under the
laws of the United States of America or a state thereof.
"Foreign Receivable": a Receivable the Obligor of which is a Foreign
Obligor.
"Foreign Wholesale Receivable": a Receivable arising under a wholesale
financing arrangement entered into by Raytheon Credit and, as Obligor
thereunder, a Dealer located (within the meaning of Section 9-103 of the New
York UCC) outside the United States.
"Frozen Pool": as defined in subsection 2.8(b)(ii).
"GAAP": generally accepted accounting principles applied on a consistent
basis.
"GA Receivable": a Receivable as to which the related Aircraft is a General
Aviation Aircraft and the Obligor of which does not own and operate a commuter
airline.
"General Aviation Aircraft": the collective reference to any aircraft
manufactured (including sub-assembly) by RAC for general aviation purposes, and
comparable general aviation aircraft manufactured by any other Person including,
in all cases, without limitation, (i) any airframe, engines (whether or not any
such engine has 750 or more rated takeoff horsepower or the equivalent of such
horsepower, and including any replacement or substituted engine), and avionics,
equipment and accessories at any time attached to, connected with or located in
any such aircraft and, to the extent covered by the recording system of the
Aviation Act, all logs, manuals and maintenance records with respect thereto and
(ii) any avionics, equipment and accessories removed from any Aircraft and, to
the extent not covered by the recording system of the Aviation Act, all logs,
manuals and maintenance records.
<PAGE>
24
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Great Lakes": Great Lakes Aviation, Ltd., an Iowa corporation.
"Guarantee": the Amended and Restated Guarantee, substantially in the form
of Exhibit B, to be made by Raytheon in favor of the Managing Facility Agent and
the Purchasers, as the same may be amended, supplemented or otherwise modified
from time to time.
"Guarantor": Raytheon.
"Increasing Purchaser": as defined in Section 5.3.
"Indebtedness": with respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities incurred in the
ordinary course of business and payable in accordance with customary trade
practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person and (d) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Indemnified Amounts": as defined in subsection 9.1(a).
"Indemnified Person": as defined in subsection 9.1(a).
"Indemnified Taxes": Taxes other than Excluded Taxes.
"Indemnitee": as defined in subsection 11.5(c).
"Ineligibility Event": with respect to any Purchased Receivable, any event
of the type specified in (1) clauses (i), (ii) or (iii) of subsection 2.11 or
(2) clauses (vi) or (xii) of subsection 9.1(a).
"Ineligible Receivable": (a) with respect to any Purchased Receivable other
than an Existing Receivable, such Receivable, (i) at the date of its purchase or
substitution, was not an Eligible Receivable at such date, (ii) relates to a
Financed Aircraft which did not receive a conveyance number from the FAA on or
prior to the third Settlement Date (or if Raytheon's Debt Rating is no lower
than A/A2, the fourth Settlement Date; the third or fourth Settlement Date, as
applicable, the "Applicable Settlement Date") following the date of its purchase
or substitution or (iii) relates to a Financed Aircraft which becomes a
Remarketed Aircraft; and
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25
(b) with respect to any Existing Receivable, such Receivable (x)(i) at the date
of its purchase or substitution under the Existing Agreement pursuant to
which it was sold to the administrative agent or agent under such Existing
Agreement, was not an "Eligible Receivable" (as defined in such applicable
Existing Agreement) at such date or (ii) relates to a Financed Aircraft
which did not receive a conveyance number from the FAA on or prior to the
third Settlement Date (or if Raytheon's Debt Rating is no lower than A/A2,
the fourth Settlement Date following the date of its purchase or
substitution under the applicable Existing Agreement; or
(y) relates to a Financed Aircraft which becomes a Remarketed Aircraft; or
(z) on and as of the Closing Date (after giving effect to the transactions
contemplated under the Intercompany Purchase Agreement on such date) such
Receivable did not satisfy the criteria specified in the following clauses
under the definition of "Eligible Receivable" herein (assuming for purposes
hereof, that such clauses are applicable to the Existing Receivables):
clauses (c), (h), (k), (l) (other than any requirement that the related
Financed Aircraft be free and clear of Liens on such Effective Date), (m)
(other than any requirement that such Receivable be free and clear of Liens
on such Effective Date), (n)(ii), (o)(i), (x)(i), (y)(vi)(B), (aa)(iv) or
(ee)(x) except, that, (1) with respect to Existing Certified Receivables,
prior to the Certified Opinion Delivery Date, and with respect to all
Existing Registerable Lease Receivables, prior to the FAA Filing Date, any
such Existing Registerable Lease Receivable which does not satisfy any of
the criteria specified in such clauses (to the extent such clauses are
applicable to Existing Registerable Lease Receivables) solely as a result
of the failure to make any of the filings, if any, required by subsection
6.1(n) shall not be an Ineligible Receivable and (2) with respect to
Existing Uncertified Foreign Receivables, any such Existing Receivable
which does not satisfy any of the criteria specified in such clauses (to
the extent such clauses are applicable to such type of Existing Receivable)
solely as a result of the failure to make any filing, if any, necessary to
(x) continue the Lien, if any, of the Administrative Agent, on behalf of
the Purchasers, in such Receivables, related Financed Aircraft and
Applicable Leases (if applicable) and Collections thereon with the same
priority thereon as in effect immediately prior to the Effective Date or
(y) perfect the transfer by Raytheon Credit of such Receivables, the
related Financed Aircraft and Applicable Leases (if applicable) and
Collections thereon to the Seller pursuant to the Intercompany Purchase
Agreement shall not be an Ineligible Receivable.
"Interbank Rate ": for any Special Settlement Date Accrual Period or the
Amendment Accrual Period, the sum of (i) .50% plus the rate of interest per
annum (rounded upward to the next 1/16th of 1%) determined by the Managing
Facility Agent as follows:
IBOR
-------------------------------------
1.00 - Eurodollar Reserve Percentage
plus (ii) a Rating Adjustment, if applicable;
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26
Where,
Eurodollar Reserve Percentage means for any day for any Special Settlement Date
Accrual Period or the Amendment Accrual Period, the maximum reserve percentage
(expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on
such day (whether or not applicable to any Purchaser) under regulations issued
from time to time by the Board of Governors of the Federal Reserve System for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"); and
IBOR means the rate of interest per annum determined by the Managing Facility
Agent as the rate at which dollar deposits in the approximate amount of the
Managing Facility Agent's Purchase amount for such Special Settlement Date
Accrual Period, or the Amendment Accrual Period, as the case may be, would be
offered by Bank of America National Trust and Savings Association's Grand Cayman
Branch, Grand Cayman B.W.I. (or by Bank of America National Trust and Savings
Association), to major banks in the offshore dollar interbank market at their
request at approximately 11:00 a.m. (New York City time) two Business Days prior
to the commencement of such Special Settlement Date Accrual Period, or the
Amendment Accrual Period, as the case may be.
"Intercompany Purchase Agreement": the Intercompany Purchase and
Contribution Agreement, dated as of March 20, 1997, between Raytheon Credit and
the Seller, as amended, supplemented or otherwise modified from time to time.
"Interest Coverage Ratio": for any period, the ratio of Consolidated EBIT
for such period to Consolidated Net Interest Expense for such period.
"L/C Receivable": a Foreign Receivable which at any time is supported by a
standby letter of credit in an amount at least equal to the outstanding
Principal Balance on such Receivable issued in favor of the Seller and otherwise
satisfying the requirements of clause (y) of the definition of "Eligible
Receivables".
"Lease Collateral": as defined in subsection 11.12(a).
"Lease Obligations": as defined in subsection 11.12(a).
"Lease Receivable": any Receivable (other than an ExIm Bank Receivable)
created pursuant to a Contract which is a lease between Raytheon Credit, as
lessor, and the Obligor thereunder, as lessee, with respect to the Aircraft
described therein, other than any such Receivable which is also a L/C
Receivable.
"LIBO Rate": for any Accrual Period (other than a Special Settlement Date
Accrual Period), (A) the per annum rate (carried to the fifth decimal place)
equal to (i) the rate determined by the Managing Facility Agent to be the
offered rate that appears on the page of the Telerate Screen that displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3750) for deposits (for delivery on the Settlement
Date which is the first day of such Accrual Period) with a term approximately
<PAGE>
27
equivalent to such Accrual Period, determined as of approximately 11:00 a.m.
(London, England time) two Working days prior to the Settlement Date which is
the first day of such Accrual Period or (ii) in the event the rate referenced in
the preceding clause does not appear on such page or service if such page or
service shall cease to be available, the rate determined by the Managing
Facility Agent to be the offered rate on such other page or other service that
displays an average British Bankers Association Interest Settlement Rate for
deposits (for delivery on the Settlement Date which is the first day of such
Accrual Period) with a term approximately equivalent to such Accrual Period,
determined as of approximately 11:00 a.m. (London, England time) two Working
Days prior to the Settlement Date which is the first day of such Accrual Period,
(B) if such rate cannot be calculated in accordance with clause (A), the "LIBO
Rate" for that Accrual Period will be the rate per annum equal to the average
(rounded upward to the nearest 1/16th of 1%) of the respective rates notified to
the Managing Facility Agent by each Reference Bank as the rate at which such
Reference Bank is offered U.S. dollar deposits in the London interbank
eurodollar market for a period comparable in length to such Accrual Period, at
or about 11:00 a.m. (London, England time) two Working Days prior to such
Settlement Date and in an amount comparable to such Reference Bank's pro rata
share of the Outstanding Purchase Price; or (C) if the LIBO Rate is not able to
be determined pursuant to clauses (A) or (B), the rate per annum determined by
the Managing Facility Agent in good faith, after consultation with the
Purchasers, as reasonably reflecting the aggregate funding costs of the
Purchasers.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement or any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction in respect of any
of the foregoing).
"Liquidity Bank": for any SPC, at any date of determination, the collective
reference to the financial institutions which at such date are providing
liquidity and/or credit facilities to or for the account of such SPC to fund
such SPC's obligations hereunder or to support the securities (if any) issued by
such SPC to fund such obligations.
"Low Wholesale Value": of any Aircraft at any date of determination, the
low wholesale value shown in the Aircraft Blue Book Price Digest most recently
published prior to such date of determination for aircraft of substantially
similar age and with comparable features as such Aircraft.
"Majority Purchasers": at any time, Purchasers the Commitment Percentages
of which aggregate at least 51%; provided that the Commitment Percentage of any
Dissenting Purchaser shall not be included in determinations of Majority
Purchasers with respect to purchases or substitutions of Receivables or other
matters not otherwise affecting Dissenting Purchasers; provided, further, that
any action taken by the Managing Facility Agent and the Purchasers under
subsection 8.2 (with the exception of subsection 8.2(b)) shall be deemed to
affect a Dissenting Purchaser.
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28
"Managing Facility Agent": as defined in the preamble to this Agreement.
"Material Adverse Effect": (i) with respect to the Seller, a material
adverse effect on (a) the Purchased Receivables taken as a whole, (b) the
ability of the Seller to perform its obligations under this Agreement, (c) the
validity or enforceability of this Agreement or the rights or remedies of the
Managing Facility Agent or the Purchasers under any Purchase Document or (d) the
business, assets, properties or condition (financial or other) of the Seller and
(ii) with respect to the Servicer, a material adverse effect on (a) the
Purchased Receivables taken as a whole, (b) the ability of the Servicer to
perform its obligations under this Agreement, (c) the validity or enforceability
of this Agreement or the rights or remedies of the Managing Facility Agent or
the Purchasers under any Purchase Document or (d) the business, assets,
properties or condition (financial or other) of the Servicer.
"Mesa": Mesa Airlines, Inc., a New Mexico corporation.
"Moody's": Moody's Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Recoveries": all monies collected by the Seller, the Servicer or any
other Person (from whatever source, including, without limitation, from the
refinancing of the related Financed Aircraft) on account of a Defaulted
Receivable (including, without limitation, from the sale or other disposition of
the Financed Aircraft) net of any expenses incurred by the Seller, the Servicer
or such Person in connection with the collection on such Defaulted Receivable
and the refurbishment, disposition or disposal of the related Financed Aircraft.
"1997 Agreement": as defined in the recitals hereto.
"90% Repurchase Receivables": at any date of determination, the collective
reference to the following types of Receivables:
(a) L/C Receivables, the related letters of credit of which are not issued by
commercial banks which qualify as Acceptable L/C Issuers at such date, it
being understood that an L/C Receivable shall be a 25% Repurchase
Receivable if the issuer of the related letter of credit does not qualify
as an Acceptable L/C Issuer at the time such Receivable is purchased or
substituted hereunder but does so qualify on such date of determination;
(b) Uncertified Foreign Receivables (including Affiliate Receivables which are
Uncertified Foreign Receivables) which are not L/C Receivables;
(c) Foreign Wholesale Receivables;
(d) Receivables which have not received conveyance numbers from the FAA on or
prior to the Applicable Settlement Date after the sale or substitution of
such Receivable; provided, however, that (i) any such Receivable shall be
repurchased by the Seller on such Applicable Settlement Date and (ii)
Receivables which are subject to this paragraph (d) that are so repurchased
by the Seller shall not be subject to subsection 2.7(a)(viii);
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29
(e) Excess MGL Receivables;
(f) Operating Lease Receivables; and
(g) all other Receivables which are not 25% Repurchase Receivables or 75%
Repurchase Receivables.
"Nonstandard Receivable": a Receivable (other than a Wholesale Receivable)
created pursuant to a Contract which provides (at the time of purchase or
substitution thereof) that the amount scheduled to be outstanding on the eighth
anniversary of the execution date of such Contract (assuming all scheduled
payments have been made prior to such date) is greater than 15% of the amount
which would have been so outstanding if payments on such Contract prior to such
anniversary had been made on the straight-line amortization method; provided
that no Receivable shall be permitted to have a balloon payment of greater than
(i) 15% in the case of a GA Receivable, or (ii) 30% in the case of a Commuter
Receivable, of the original sales price scheduled for repayment in the last two
years of such Contract.
"Note Rate": with respect to any Accrual Period, a rate per annum equal to
the LIBO Rate plus the Applicable Margin, calculated in accordance with this
Agreement.
"Note Rate Amortization Event": an Amortization Event of the type described
in subsection 8.1(b), (c), (d), (e), (f), (g), (h), (i), (j), (l), (m) or (n).
"Obligations": as defined in the Guarantee.
"Obligor": each Person obligated to make payments in respect of a
Receivable, including each Affiliate Obligor under an Affiliate Receivable.
"Occurrence": as defined in subsection 10.5.
"Old Administrative Agent": UBS AG, Stamford Branch, as successor to Swiss
Bank Corporation, Stamford Branch, as successor to Swiss Bank Corporation, New
York Branch.
"Operating Lease Receivables": as defined in subsection 2.7(a)(xv).
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Purchase Document.
"Outstanding Balance": with respect to any Receivable at any date of
determination, the Purchase Price paid with respect to such Receivable less all
Principal Collections applied to such Receivable on and prior to such date of
determination.
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30
"Outstanding Purchase Price": (a) as to all the Purchasers at any date of
determination, the aggregate Purchase Prices which at such date have been paid
to purchase Purchased Receivables (or portions thereof) in accordance with this
Agreement minus the amount of Principal Collections which have been received by
the Purchasers (including, without limitation, Principal Collections which have
been used to purchase additional Eligible Receivables pursuant to subsection
2.15(b)) minus the amount, if any, of Excess Spread which has been paid to the
Purchasers pursuant to subsection 2.16(b)(vi)(2) and (b) as to any Purchaser,
its pro rata share of the Outstanding Purchase Price, as determined pursuant to
clause (a) above.
"Participant": as defined in subsection 11.6(b).
"Participated Receivable": a Receivable in which the Seller has a Seller's
Interest pursuant to subsection 2.4(a).
"Permitted Aircraft Lien": with respect to any Financed Aircraft which is
related to a Purchased Receivable, (A) any materialman's, mechanic's, workman's,
repairman's or other like Lien which (i) arises in favor of a Person contracted
by and on behalf of the Obligor or the Unaffiliated Foreign Lessee on the
related Contract, (ii) arises in the ordinary course of business and (iii) (X)
has been released or bonded against (or other credit assurances provided) in
favor of the Administrative Agent and the Purchasers in an amount at least equal
to the obligations secured by such Lien and otherwise in a manner reasonably
satisfactory to the Managing Facility Agent and the Required Purchasers not more
than 90 days after the earliest date on which the Seller, the Servicer or RAC
knew of such Lien or (Y) secures obligations which are being contested in good
faith by appropriate proceedings, so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of such Financed Aircraft or any
interest therein, or (B) any Lien which (i) is involuntary in nature, (ii)
secures either (X) state taxes not yet due by the Obligor on the related
Contract or which are being contested in good faith by appropriate proceedings
by the Obligor or (Y) any judgment or decree entered against such Obligor, (iii)
secures obligations which are immaterial in amount in relation to such Purchased
Receivable and (iv) does not involve any material danger of the sale, forfeiture
or loss of such Financed Aircraft, or (C) solely with respect to a Lease
Receivable, a Lien on the Financed Aircraft related thereto arising under the
related lease if the obligations of the lessee thereunder are, in accordance
with GAAP, required to be capitalized on such lessee's balance sheet or (D)
solely with respect to a Travel Air Receivable, Liens on the undivided
interest(s) in the related Financed Aircraft which are not owned by the Seller,
any affiliate of the Seller, or any Obligor under such Travel Air Receivable.
"Permitted Receivable Lien": with respect to any Purchased Receivable, if
for any reason the Purchased Receivables are held to be the property of the
Seller or the Affiliate Obligor, as the case may be, or if for any other reason
this Agreement and the Assignments are held or deemed not to effect an absolute
sale of the Purchased Receivables, any Lien which (i) is involuntary in nature,
(ii) secures either (A) state taxes not yet due by the Seller or which are being
contested in good faith by appropriate proceedings by the Seller or any of its
Affiliates (so long as adequate reserves with respect thereto are maintained on
<PAGE>
31
the books of the Seller or such Affiliate in conformity with GAAP) or (B) any
judgment or decree entered against the Seller or, with respect to an Affiliate
Receivable, the related Affiliate Obligor, (iii) secures obligations which are
immaterial in amount in relation to the Purchased Receivables taken as a whole
and the related Contracts and Financed Aircraft and (iv) does not involve any
material danger of the sale, forfeiture or loss of any Purchased Receivable, the
Collections with respect thereto and the related Contract (including any
Applicable Lease), and Financed Aircraft or any other Material Adverse Effect.
"Person": an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": with respect to a Person, at a particular time, any employee
benefit plan which is covered by ERISA and in respect of which such Person or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Principal Balance": at any date of determination, whether before or after
the occurrence and continuance of a Rating Event, the actual unpaid principal
balance (or with respect to a Lease Receivable the aggregate amount of unpaid
lease payments discounted at the lessor's implicit interest rate for the
respective lease Contract) of a Receivable at such date of determination;
provided that the Principal Balance of any Participated Receivable or Extended
Term Receivable shall be a reference only to that portion of the actual unpaid
principal balance of such Participated Receivable or Extended Term Receivable
sold to the Purchasers hereunder at such date of determination.
"Principal Collections": with respect to each Purchased Receivable during
any Settlement Period, Collections on account of such Purchased Receivable
received during such Settlement Period minus the amount of Finance Charge
Collections for such Purchased Receivable for such Settlement Period. Principal
Collections shall include, without limitation, payments by the Seller in respect
of repurchases of Purchased Receivables pursuant to subsections 2.7(b), 2.10,
2.11, 2.12, the first sentence of subsection 2.13 and subsection 7.1(b)(iv) and
after the occurrence and continuance of a Rating Event, the portion of Net
Recoveries allocated as Principal Collections pursuant to subsection 2.15(d).
"Pro Rata Credit": as defined in subsection 2.1(d)(iii).
"Pro Rata Debit": as defined in subsection 2.1(d)(iii).
"Prohibited Jurisdiction": each jurisdiction listed on Schedule III and any
jurisdiction notified from time to time to the Seller and the Servicer by the
Managing Facility Agent, on behalf of the Purchasers, as a jurisdiction in which
any Purchaser (an "Affected Purchaser") is prohibited, as a result of any
conflict with a Requirement of Law or with any policy of such Affected
Purchaser, from making loans or other extensions of credit.
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32
"Purchase Discount": (a) during the continuance of a Rating Event, (i) with
respect to 25% Repurchase Receivables, 35%, (ii) with respect to 75% Repurchase
Receivables, 85% and (iii) with respect to 90% Repurchase Receivables, 100% and
(b) during the continuance of a Discount Event (which is not also a Rating
Event), with respect to all Receivables, 10%.
"Purchase Documents": the collective reference to this Agreement, the
Intercompany Purchase Agreement, each Assignment, each FAA Assignment, each
Foreign Assignment, the Repurchase Agreement and the Guarantee.
"Purchase Price": (a) with respect to any Receivable to be purchased from
the Seller or substituted by the Seller on any Settlement Date, an amount equal
to the Principal Balance of such Receivable on the last day of the Settlement
Period preceding such Settlement Date on which such Receivable is purchased or
substituted, and
(b) with respect to a Substituted Lease Receivable substituted pursuant to
subsection 2.13(e), the amount equal to the Principal Balance of such
Receivable on the date on which such Substituted Lease Receivable is
substituted;
provided that, (x) if a Rating Event has occurred and is continuing as of such
Settlement Date, the Purchase Price for a Wholesale Receivable purchased or
substituted shall be reduced by the amount of the security or other deposit made
by the Obligor thereon and (y) if a Rating Event or a Discount Event has
occurred and is continuing as of such Settlement Date, the Purchase Price for
each Receivable purchased shall be the Principal Balance thereof multiplied by a
percentage equal to 100% less the applicable Purchase Discount (and less amounts
referred to in clause (x), if applicable).
"Purchased Receivable": a Receivable (or a portion thereof in the case of a
Participated Receivable or an Extended Term Receivable) which is purchased or
substituted pursuant to Section 2 (including, without limitation, subsection
2.3).
"Purchase Report": each purchase report, substantially in the form of
Exhibit I, to be delivered by the Seller on each Settlement Date.
"Purchasers": as defined in the preamble of this Agreement.
"Purchasing Party": as defined in subsection 11.6(c).
"Quarterly Receivable": any Receivable which is required to be paid in
quarterly installments.
"RAC": Raytheon Aircraft Company, a Kansas corporation and an Affiliate of
Raytheon Credit.
"RAC Repurchase Obligation": at any time, the aggregate amount of the
"Repurchase Obligation" under and as defined in the Repurchase Agreement.
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33
"Rating Adjustment": the increase in (i) the Applicable Margin for any
Accrual Period and (ii) the Interbank Rate applicable for any Special Settlement
Date Accrual Period, as applicable, to be applied if Raytheon's Debt Rating is
at the levels set forth below on the last day of the immediately preceding
Accrual Period:
Applicable Margin and
Debt Rating Interbank Rate Increase
A+ or A1 .030%
A or A2 .065%
A- or A3 .100%
BBB+ or Baa1 .125%
below BBB+ or Baa1 or not rated .225%
"Rating Event": any time when (a) Raytheon's Debt Rating is below either
BBB/Baa2, or if for any reason Raytheon's long-term senior unsecured debt is not
rated (whether by reason of suspension or withdrawal of a rating, or otherwise)
or (b) an Amortization Event described in subsection 8.1(o) shall have occurred
and be continuing.
"Raytheon": Raytheon Company, a Delaware corporation and indirect parent of
the Seller, and its successors and assigns (as permitted by the Guarantee).
"Raytheon Authorized Officers": the Chairman of the Board of Directors, the
President, the Executive Vice President-Chief Financial Officer and the Senior
Vice President-Treasurer of Raytheon.
"Receivable": the right to receive all amounts (including fees and premiums
if any) payable by the Obligor under a Contract including without limitation any
amounts payable by the Obligor or an Unaffiliated Foreign Lessee upon the
exercise of a purchase option or a prepayment option under any Contract,
security deposits, engine reserve accounts and all other right, title and
interest of the Seller under and with respect to a Contract, including, without
limitation, all amounts from time to time payable and all rights to damages and
to exercise remedies thereunder (including fees and premiums, if any), all
collateral security therefor (including, without limitation, any Applicable
Lease related thereto, and the related Financed Aircraft), guarantees thereof
(whether by the Obligor, RAC or any of such Person's Affiliates or by any
financial institution pursuant to a letter of credit issued in favor of the
Seller or any of its Affiliates), rights to payment (whether by the Obligor
thereon, any insurer or letter of credit issuer with respect thereto or any
other Person) with respect thereto and all agreements or inducements made by or
on behalf of RAC with respect to such related Contract or Financed Aircraft and
all proceeds of the foregoing.
"Reference Banks": The Chase Manhattan Bank and Bank of America National
Trust and Savings Association.
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"Refinanced Aircraft": except with respect to a new Aircraft related to a
Domestic Wholesale Receivable sold or substituted hereunder which has been sold
to more than one Dealer, any Financed Aircraft (i) manufactured (including
subassembly) by RAC, the related Obligor or Unaffiliated Foreign Lessee of which
is not the initial purchaser or lessee thereof (including any Person who has
assumed the obligations of an Obligor or Unaffiliated Foreign Lessee under a
Contract in connection with the transfer of the related Aircraft, but excluding
any Obligor or Unaffiliated Foreign Lessee who is a wholly-owned Affiliate of
such initial purchaser) or (ii) manufactured by any other Person the acquisition
of which has been financed or refinanced by Raytheon Credit.
"Register": as defined in subsection 11.6(d).
"Registerable Lease Receivable": any Lease Receivable the related Financed
Aircraft of which is determined to be property registerable in accordance with
the Aviation Act in the Seller's name with the FAA Registry, such determination
to be made by either (i) an opinion of counsel of the FAA or (ii) an opinion of
Crowe & Dunlevy (or any other law firm acceptable to the Managing Facility Agent
in its reasonable discretion) issued, in each case, as a result of a review of
the related lease prior to filing thereof in accordance with this Agreement.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System.
"Reimbursable Obligations": as defined in subsection 2.14(c)(iii).
"Remarketed Aircraft": any Financed Aircraft which Raytheon Credit or any
of its Affiliates, at the request of the Obligor or Unaffiliated Foreign Lessee
on the related Contract, has agreed to market and sell on behalf of such Person
after such Person has notified the Seller or any of its Affiliates (in writing
or otherwise) that it is or will be on the date its next scheduled payment is
due unable to continue to meet its obligations under the related Contract. A
Financed Aircraft shall be deemed to be a Remarketed Aircraft on the date
Raytheon Credit or any of its Affiliates agrees to market such Financed Aircraft
on such Person's behalf.
"Remittance Event": any time Raytheon's short-term unsecured debt is rated
below (a) A-3 and P-2 or (b) A-2 and P-3 by S&P and Moody's, respectively, at
such time, or if for any reason Raytheon's short-term unsecured debt is not
rated (whether by reason of suspension or withdrawal of a rating, or otherwise).
"Removed Receivable": as defined in subsection 2.13(a).
"Replaced Lease Receivable": as defined in subsection 2.13(e).
"Reporting Date": with respect to a Settlement Period, the fifth Business
Day following the last day of such Settlement Period, with the first such
Reporting Date occurring hereunder on April 10, 1997.
"Repurchase Agreement": that certain Amended and Restated Repurchase
Agreement, substantially in the form of Exhibit G, dated as of March 18, 1999,
between RAC and the Managing Facility Agent on behalf of the Purchasers, as
amended, supplemented or otherwise modified from time to time.
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"Repurchase Factor": an amount equal to A + B, where:
A = 10% of the sum of (i) 25% of the aggregate
Outstanding Balances of the 25% Repurchase
Receivables, (ii) 75% of the aggregate Outstanding
Balances of the 75% Repurchase Receivables and (iii)
90% of the aggregate Outstanding Balances of the 90%
Repurchase Receivables, in each case at the time the
Repurchase Factor is calculated;
B = 10% of the sum of (i) 25% of the aggregate Outstanding Balances
of 25% Repurchase Receivables, (ii) 75% of the aggregate
Outstanding Balances of 75% Repurchase Receivables and (iii) 90%
of the aggregate Outstanding Balances of 90% Repurchase
Receivables, in each case which were Defaulted Receivables
repurchased pursuant to subsection 2.10 prior to such time (it
being understood that the purpose of this clause B is to ensur
that the Repurchase Factor is not reduced as a result of
reductions in the Outstanding Purchase Price relating to
payments under the Repurchase Obligation);
provided that (i) if an Amortization Event has occurred and is
continuing, the Repurchase Factor shall be equal to the Repurchase
Factor on the date such Amortization Event occurred,
(ii) if during the Amortization Period a Rating Event has occurred and is
continuing, the Repurchase Factor shall be equal to the Repurchase Factor
on the date such Rating Event occurred,
(iii) if during the Amortization Period any of the concentration limitations set
forth in subsection 2.7(a) are exceeded then, until each such breach is
cured, the Repurchase Factor shall be equal to the Repurchase Factor on
the date the first such breach occurred,
(iv) notwithstanding clauses (i), (ii) and (iii), the Repurchase Factor shall
not at any time decrease (x) with respect to any Purchaser other than a
Dissenting Purchaser, below an amount equal to the greater of (1) 1.5% of
the maximum aggregate Outstanding Balances of the Purchased Receivables
which existed at any time during the Revolving Period and (2) 10% of the
sum of the Outstanding Balances on the last day of the Revolving Period of
the three Obligors (and all of their Affiliates) of Purchased Receivables
with the largest aggregate outstanding Principal Balances and (y) with
respect to any Dissenting Purchaser, an amount equal to the greater of (1)
1.5% of the maximum aggregate Outstanding Balances of the sum of the
Purchased Receivables which existed at any time prior to the date such
Purchaser became a Dissenting Purchaser and (2) 10% of the sum of the
Outstanding Balances on the day on which such Purchaser became a
Dissenting Purchaser of the three Obligors (and all of their Affiliates)
of Purchased Receivables with the largest aggregate outstanding Principal
Balances, and
(v) notwithstanding clauses (i), (ii), (iii) and (iv), the Repurchase Factor
shall not at any time exceed 10% of the Outstanding Purchase Price.
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"Repurchase Percentage": the percentage equivalent of a fraction, the
numerator of which is "A" as used in the definition of the term "Repurchase
Factor" at such time and the denominator of which is the aggregate Outstanding
Balances of the Purchased Receivables at such time.
"Repurchase Obligation": as defined in subsection 2.10(b).
"Repurchase Price":
(a) with respect to a repurchase of or substitution for any Ineligible
Receivable, an amount equal to the Principal Balance of such Ineligible
Receivable on the last day of the Settlement Period preceding the
Settlement Date on which such repurchase or substitution is to be made (as
shown from the Settlement Statement delivered for such Settlement Period)
less, if such Ineligible Receivable was purchased after the occurrence of a
Discount Event or Rating Event at a discount pursuant to subsection 2.6, an
amount equal to such Principal Balance at such last day times the Purchase
Discount in effect on the Settlement Date such Ineligible Receivable was
purchased plus, after a Trigger Amortization Event, accrued interest;
(b) with respect to a repurchase of or substitution for any Purchased
Receivable which becomes a Defaulted Receivable during the Revolving
Period, an amount equal to the Principal Balance of such Defaulted
Receivable on the last day of the Settlement Period preceding the
Settlement Date on which such repurchase or substitution is to be made (as
shown from the Settlement Statement delivered for such Settlement Period)
less, if such Defaulted Receivable was purchased after the occurrence of a
Discount Event or Rating Event at a discount pursuant to subsection 2.6, an
amount equal to such Principal Balance at such last day times the Purchase
Discount in effect on the Settlement Date such Defaulted Receivable was
purchased; and
(c) with respect to a repurchase of or substitution for any Purchased
Receivable which becomes a Defaulted Receivable during the Amortization
Period, an amount equal to the Principal Balance of such Defaulted
Receivable on the last day of the Settlement Period preceding the
Settlement Date on which such repurchase or substitution is to be made (as
shown from the Settlement Statement delivered for such Settlement Period).
"Required Purchasers": at any time, Purchasers the Commitment Percentages
of which aggregate at least 67%; provided that the Commitment Percentage of any
Dissenting Purchaser shall not be included in determinations of Required
Purchasers with respect to purchases or substitutions of Receivables or other
matters not otherwise affecting Dissenting Purchasers; provided, further, that
any action taken by the Managing Facility Agent and the Purchasers under
subsection 8.2 (with the exception of subsection 8.2(b)) shall be deemed to
affect a Dissenting Purchaser.
"Requirement of Law": as to any Person, any law, treaty, rule or regulation
or final determination (after exhaustion of all appeals) of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
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"Responsible Officer": the president or chief credit officer of the Seller.
"Revolving Period": the period from and including the Amendment Effective
Date to and including the earlier of (i) the Expiration Date and (ii) the date
on which the Revolving Period is terminated pursuant to subsection 8.2(b) as a
result of the occurrence of an Amortization Event.
"S&P": Standard & Poor's Ratings Services.
"Secured Lease Receivables": the collective reference to (i) each
Receivable which is a Lease Receivable purchased after the date hereof and in
respect of which the filings referred to in subsection 5.2(e) have been made and
(ii) each Existing Receivable which is a "Registerable Lease Receivable" under
the Existing Agreement pursuant to which such Receivable was purchased by the
Old Administrative Agent and with respect to which all filings required under
subsection 6.1(n)(ii) have been made.
"Security Interest Leases": as defined in subsection 11.12.
"Seller": as defined in the preamble of this Agreement.
"Seller's Interest": an amount equal to the subordinated participating
interest in the Purchased Receivables purchased by the Seller (i) pursuant to
subsection 2.4(a) and subject to the terms of subsection 2.4(b), (ii) pursuant
to subsection 2.5(a) and subject to the terms of subsection 2.5(b) and (iii)
after the occurrence of a Rating Event or Discount Event, pursuant to subsection
2.6(b) and subject to the terms of subsection 2.6(c).
"Semi-Annual Receivable": any Receivable which is required to be paid in
semi- annual payments.
"Servicer": the Person appointed as servicer of the Purchased Receivables
pursuant to subsection 3.1.
"Servicer Letter of Credit": an irrevocable standby letter of credit issued
in favor of the Managing Facility Agent and the Purchasers which:
(a) supports the obligations of the Servicer under this Agreement;
(b) provides for drawings on sight or upon presentation of certificates
specified therein;
(c) is issued by a commercial bank, the short term unsecured indebtedness of
which, at the date the Servicer Letter of Credit is issued and at all times
thereafter, is rated at least A-1 and P-1 by S&P and Moody's, respectively;
(d) at any date of determination, has an expiration date which is not earlier
than the second succeeding Settlement Date after such date of
determination;
(e) at any date of determination, has an available amount equal to the
aggregate amount of Principal Collections and Finance Charge Collections
for the three Settlement Periods preceding such date of determination; and
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(f) is otherwise in form and substance satisfactory to the Managing Facility
Agent and the Majority Purchasers.
"Servicing Fee": the fee which the Servicer is entitled to receive pursuant
to subsection 3.4.
"Settlement Date": (i) with respect to a Settlement Period, the tenth
Working Day following the last day of such Settlement Period, with the first
such Settlement Date under this Agreement occurring on April 14, 1997 and (ii)
each Special Settlement Date.
"Settlement Period": each fiscal monthly period of the Seller during each
of its fiscal years during the term of this Agreement.
"Settlement Statement": a Settlement Statement delivered by the Seller
pursuant to this Agreement, substantially in the form of Exhibit C for delivery
during the Revolving Period and with appropriate modifications thereto for
delivery during the Amortization Period, in each case with appropriate
insertions.
"75% Repurchase Receivables": at any date of determination, the collective
reference to the following types of Receivables:
(a) Commuter Receivables the Obligor under which is located (within the meaning
of Section 9-103 of the New York UCC) in the United States;
(b) Certified Foreign Receivables (including Affiliate Receivables which are
Certified Foreign Receivables); and
(c) the Travel Air Receivables.
"Solvent": as to any Person at any time, that (a) the fair value of the
property of such Person is greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(31) of the
Bankruptcy Code (11 USC ss. 101(31)); (b) the present fair saleable value of the
property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
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"SPC": each Purchaser which is a special purpose corporation identified as
such on the signature pages hereto next to the caption "SPC" and each special
purpose corporation identified as such in a Commitment Transfer Supplement or a
Transfer Notice.
"SPC Bank": each Purchaser which is identified as such on the signature
pages hereto next to the caption "SPC Bank" and immediately below the signature
of its SPC.
"Special Settlement Date": April 2, 1999, July 2, 1999, October 1, 1999 and
December 31, 1999.
"Special Settlement Date Accrual Period": with respect to any Special
Settlement Date, the period beginning on the third Working Day after such
Special Settlement Date and ending on the next Settlement Date; provided that,
if the notice provided for in Section 2.3 is delivered to the Managing Facility
Agent at least three Working Days before any Special Settlement Date, the
Special Settlement Date Accrual Period with respect to such Special Settlement
Date shall begin on such Special Settlement Date.
"Specified Amortization Event": (i) an Amortization Event of the type
described in subsection 8.1(a), (b), (e), (f), (j) (unless applicable to the
Servicer which is neither Raytheon Credit nor an Affiliate of Raytheon Credit),
(m), (n) or (o), or (ii) an Amortization Event of the type described in
subsection 8.1(d) if such Amortization Event could reasonably be expected to
have a Material Adverse Effect.
"Stipulated Aircraft Value": the Stipulated Aircraft Value as set forth in
any lease Contract with respect to the related Financed Aircraft.
"Subsidiary": as to any Person, a corporation, partnership or other entity
of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
"Substituted Receivable": as defined in subsection 2.13(a).
"Substituted Lease Receivable": as defined in subsection 2.13(e).
"Syndication Materials": the collective reference to (i) the document dated
February 1999 furnished on behalf of the Seller to the Purchasers with respect
to the transactions contemplated by the Purchase Documents and (ii) those
materials relating to the Receivables and related Contracts and Financed
Aircraft and the business and operations of the Seller, RAC, Raytheon Credit and
Raytheon.
"Taxes": means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
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"Transferee": as defined in subsection 11.6(f).
"Transfer Notice": as defined in subsection 11.6(c).
"Transferred Property": as defined in subsection 11.13(a)(i).
"Travel Air": Raytheon Travel Air Company, a Kansas corporation.
"Travel Air Aircraft": Aircraft the undivided interests in which are sold
to Obligors pursuant to Travel Air Contracts.
"Travel Air Contracts": those purchase, management and other agreements,
substantially in the form of Exhibit I hereto, pursuant to which Travel Air has
sold to an Obligor an undivided interest in an aircraft and agreed to the
management (including interchange arrangements) with respect thereto.
"Travel Air Receivables": the collective reference to each Receivable
secured by the applicable Obligor's rights and interests in and to the Travel
Air Aircraft and the Travel Air Contracts.
"Trigger Amortization Event": any Amortization Event which occurs during,
or which pursuant to subsection 8.2(b) results in the commencement of, the
Amortization Period.
"25% Repurchase Receivables": at any date of determination, the collective
reference to the following types of Receivables:
(a) Receivables arising from the financing of General Aviation Aircraft, the
Obligor under which is located (within the meaning of Section 9-103 of the
New York UCC) in the United States;
(b) ExIm Bank Receivables; and
(c) L/C Receivables with a letter of credit issued by an Acceptable L/C Issuer
and held by the Bailee under the Bailment Agreement.
"UCC": with respect to a specified jurisdiction, the Uniform Commercial
Code as from time to time in effect in such jurisdiction.
"Unaffiliated Foreign Lessee": with respect to any Affiliated Receivable,
the lessee under the related Applicable Lease.
"Uncertified Foreign Receivables": Foreign Receivables and Affiliate
Receivables which are not Certified Foreign Receivables.
"Unsecured Foreign Receivable": a Receivable arising from the purchase of
an Aircraft by an Obligor not located (within the meaning of Section 9-103 of
the New York UCC) within the United States, the Principal Balance of which is
less than $500,000 at the time of purchase or substitution hereunder.
"Uncertified Lease Receivables": A Foreign Receivable which is a Lease
Receivable with a Foreign Obligor for which a Lien on the Financed Aircraft has
not been granted by the Seller to the Administrative Agent under Sections
2.27(a)(iii)(A) and 2.27(a)(iii)(B).
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"Unsecured Receivables": the