EXECUTION COPY
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FOURTH 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, N.A.,
as Managing Facility Agent and Documentation Agent,
JPMORGAN CHASE BANK,
and
BANK OF AMERICA, N.A.,
as Co-Administrative Agents,
J.P. MORGAN SECURITIES INC.,
and
BANC OF AMERICA SECURITIES LLC,
as Co-Arrangers
and
Joint Bookrunners,
J.P. MORGAN SECURITIES INC.,
as Syndication Agent,
CITIBANK, N.A.,
CREDIT SUISSE FIRST BOSTON
and
FLEET SECURITIES, INC.
as Co-Documentation Agents,
and
EACH ADMINISTRATIVE AGENT REFERRED TO HEREIN
Dated as of March 8, 2002
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Table of Contents
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SECTION 1. DEFINITIONS.....................................................................................2
1.1 Defined Terms.....................................................................................2
1.2 Other Definitional Provisions....................................................................41
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................................................42
2.1 Agreement to Purchase and Sell; Special Purpose Purchasers; Initial Utilization
and Pro Ration...................................................................................42
2.2 Procedures for Making Purchases..................................................................42
2.3 Special Settlement Dates.........................................................................43
2.4 Participated Receivables.........................................................................43
2.5 Extended Term Receivables........................................................................44
2.6 Certain Actions Following a Rating Event and a Discount Event....................................45
2.6A. Certain Actions Following a Discount Event......................................................47
2.7 Concentration Limits.............................................................................47
2.8 Term of Revolving Period.........................................................................49
2.9 Termination or Reduction of Commitments..........................................................51
2.10 Defaulted Receivables; Application of Lease Security Deposits...................................52
2.10A Delinquent Receivables.........................................................................53
2.11 Ineligible Receivables...........................................................................54
2.12 Rebated Receivables..............................................................................55
2.13 Substitution of Receivables......................................................................55
2.14 Accounts.........................................................................................58
2.15 Remittance and Allocation of Collections.........................................................61
2.16 Distribution and Application of Collections......................................................62
2.17 Interest and Fees................................................................................64
2.18 Yield Adjustment.................................................................................65
2.19 Computations and Payments........................................................................65
2.20 Pro Rata Treatment...............................................................................66
2.21 Illegality.......................................................................................67
2.22 Requirements of Law..............................................................................67
2.23 Taxes............................................................................................68
2.24 Reemployment Costs...............................................................................69
2.25 Seller's Obligations Absolute and Unconditional..................................................69
2.26 Mitigation Obligations; Replacement of Purchaser.................................................70
2.27 Designation of Affiliate Receivables and Foreign Receivables.....................................70
SECTION 3. THE SERVICER AND SERVICING OF PURCHASED RECEIVABLES............................................76
3.1 Designation of Servicer; Removal.................................................................76
3.2 Duties of Servicer...............................................................................77
3.3 Servicer Reports.................................................................................77
3.4 Servicing Fee....................................................................................78
3.5 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer....................78
3.6 Limitation on Liability of the Servicer and Others...............................................79
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3.7 Indemnification of the Seller, the Managing Facility Agent, the Administrative Agent, the
Co-Administrative Agents and each Purchaser......................................................79
3.8 The Servicer Not to Resign.......................................................................80
3.9 Access to Certain Documentation and Information Regarding the Contracts..........................80
3.10 Marking of Records..............................................................................80
3.11 Additional Covenants of the Servicer............................................................80
(a) Contract Files...........................................................................80
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(b) Compliance with Law......................................................................81
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(c) Preservation of Security Interest........................................................81
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(d) Obligations with Respect to Contracts; Modifications.....................................81
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(e) No Bankruptcy Petition...................................................................81
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SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................82
4.1 Representations and Warranties Relating to the Seller............................................82
(a) Corporate Existence; Compliance with Law.................................................82
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(b) Corporate Power; Authorization; Enforceable Obligations..................................82
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(c) No Legal Bar.............................................................................83
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(d) No Material Litigation...................................................................83
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(e) No Default...............................................................................83
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(f) Federal Regulations......................................................................83
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(g) ERISA....................................................................................83
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(h) Investment Company Act; Other Regulations................................................84
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(i) Place of Business........................................................................84
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(j) Information..............................................................................84
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4.2 Representations and Warranties Relating to the Receivables.......................................84
(a) Eligible Receivables.....................................................................84
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(b) Ownership or Perfected First Security Interest...........................................85
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(c) Assignment...............................................................................85
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(d) No Material Adverse Change...............................................................85
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(e) Substituted Receivables..................................................................86
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(f) No Violation.............................................................................86
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(g) Entitlement to Section 1110 Benefits.....................................................86
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(h) Stipulated Aircraft Value................................................................86
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(i) Finance Charge Collections...............................................................86
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4.3 Representations and Warranties Relating to the Servicer..........................................86
(a) Corporate Existence; Compliance with Law.................................................87
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(b) Corporate Power; Authorization; Enforceable Obligations..................................87
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(c) No Legal Bar.............................................................................87
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(d) No Material Litigation...................................................................88
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(e) No Default...............................................................................88
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(f) ERISA....................................................................................88
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(g) Investment Company Act; Other Regulations................................................88
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(h) Place of Business........................................................................88
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(i) Information..............................................................................89
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SECTION 5. CONDITIONS PRECEDENT...........................................................................89
5.1 Conditions to Effectiveness......................................................................89
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(a) Purchase and Other Documents.............................................................89
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(b) Corporate Proceedings and Contracts......................................................89
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(c) Corporate Documents; Good Standing Certificates..........................................89
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(d) Evidence of Incumbency...................................................................90
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(e) Officer's Certificates...................................................................90
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(f) Legal Opinions...........................................................................90
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(g) Fees.....................................................................................91
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(h) Amendment to the Intercompany Purchase Agreement.........................................91
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5.2 Conditions to Each Purchase or Substitution......................................................91
(a) Representations and Warranties...........................................................91
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(b) Amortization Event.......................................................................92
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(c) Settlement Statement.....................................................................92
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(d) Assignments..............................................................................92
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(e) Perfection Matters.......................................................................92
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(f) Certificates.............................................................................94
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(g) Marking Records..........................................................................94
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(h) L/C Receivables..........................................................................94
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(i) Refinanced Aircraft......................................................................94
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(j) Purchase Report..........................................................................94
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(k) Additional Documents.....................................................................94
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(l) Additional Matters.......................................................................94
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5.3 Reallocation of Commitments; Addition of New Purchasers..........................................95
SECTION 6. AFFIRMATIVE COVENANTS..........................................................................96
6.1 Affirmative Covenants of the Seller..............................................................96
(a) Reporting Requirements...................................................................96
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(b) Compliance with Laws, Etc................................................................98
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(c) Conduct of Business and Maintenance of Existence.........................................98
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(d) Maintenance of Property; Insurance.......................................................98
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(e) Keeping of Records and Books of Account..................................................98
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(f) Location of Records......................................................................99
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(g) Access...................................................................................99
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(h) Marking of Records.......................................................................99
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(i) Credit and Collection Policy............................................................100
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(j) Performance and Compliance with Receivables and Contracts...............................100
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(k) [Intentionally omitted.]................................................................100
(l) Further Action Evidencing Interests of Administrative Agent and Purchasers..............100
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(m) Separate Corporate Existence............................................................101
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(n) Existing Receivables Perfection Matters.................................................101
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6.2 Affirmative Covenants of the Servicer...........................................................102
(a) Compliance with Laws, Etc...............................................................102
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(b) Conduct of Business and Maintenance of Existence........................................102
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(c) Maintenance of Property; Insurance......................................................102
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(d) Keeping of Records and Books of Account.................................................103
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(e) Location of Records.....................................................................103
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(f) Access..................................................................................103
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(g) Credit and Collection Policy............................................................104
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(h) Ownership of Affiliate Obligors.........................................................104
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SECTION 7. NEGATIVE COVENANTS............................................................................104
7.1 Negative Covenants of the Seller................................................................104
(a) Sales, Liens, Etc.......................................................................104
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(b) Extension or Amendment of Purchased Receivables.........................................104
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(c) Change in Business or Credit and Collection Policy......................................106
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(d) No Actions against Obligors.............................................................106
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(e) Security Interest to Remain in Force....................................................106
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(f) Limitations on Fundamental Changes......................................................107
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(g) Transactions with Affiliates............................................................107
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(h) Fiscal Year.............................................................................107
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(i) Assignment of Contracts.................................................................107
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(j) Substitution of Engines.................................................................107
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(k) Indebtedness............................................................................107
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(l) Guarantees..............................................................................108
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(m) Investments.............................................................................108
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(n) Distributions...........................................................................108
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(o) Agreements..............................................................................108
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(p) Intercompany Purchase Agreement.........................................................108
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7.2 Negative Covenants of the Servicer..............................................................109
(a) No Actions against Obligors.............................................................109
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(b) Security Interest to Remain in Force....................................................109
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(c) Limitations on Fundamental Changes......................................................109
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(d) Transactions with Affiliates............................................................109
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(e) Assignment of Contracts.................................................................109
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(f) Change in Credit and Collection Policy..................................................109
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SECTION 8. AMORTIZATION EVENTS...........................................................................110
8.1 Amortization Events.............................................................................110
8.2 Rights and Remedies.............................................................................113
8.3 Waivers.........................................................................................115
SECTION 9. INDEMNIFICATIONS..............................................................................115
9.1 Indemnities of the Seller.......................................................................115
9.2 Limitations of Seller's Liability...............................................................117
9.3 Proceedings against Indemnified Person..........................................................118
SECTION 10. THE MANAGING FACILITY AGENT AND ADMINISTRATIVE AGENT.........................................119
10.1 Appointment.....................................................................................119
10.2 Delegation of Duties............................................................................119
10.3 Exculpatory Provisions..........................................................................120
10.4 Reliance by Managing Facility Agent and Administrative Agent....................................120
10.5 Notice of Certain Events........................................................................121
10.6 Non-Reliance on Managing Facility Agent, the Administrative Agent, the Co-Administrative
Agents and the Purchasers.......................................................................121
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10.7 Indemnification.................................................................................122
10.8 Managing Facility Agent and Administrative Agent in Their Individual Capacities.................122
10.9 Successor Managing Facility Agent or Administrative Agent.......................................122
SECTION 11. MISCELLANEOUS................................................................................123
11.1 Amendments and Waivers..........................................................................123
11.2 Notices.........................................................................................124
11.3 No Waiver; Cumulative Remedies..................................................................125
11.4 Survival of Representations and Warranties......................................................126
11.5 Payment of Expenses and Taxes...................................................................126
11.6 Successors and Assigns; Participations; Purchasing Parties......................................126
11.7 Adjustments; Set-off............................................................................129
11.8 Responsibilities of the Seller..................................................................130
11.9 Optional Repurchase.............................................................................130
11.10 Reassignments..................................................................................131
11.11 Intention of the Parties; Lien on Intercompany Purchase Agreement.............................132
11.12 Leases; Grant of Security Interest.............................................................134
11.13 Power of Attorney..............................................................................136
11.14 Counterparts...................................................................................137
11.15 Severability; Headings.........................................................................138
11.16 Integration....................................................................................138
11.17 GOVERNING LAW..................................................................................138
11.18 Submission To Jurisdiction; Waivers............................................................138
11.19 Acknowledgements...............................................................................139
11.20 WAIVERS OF JURY TRIAL..........................................................................139
11.21 Bankruptcy Petition............................................................................139
11.22 Confidentiality................................................................................140
11.23 Claims Against SPCs............................................................................140
11.24 Resales........................................................................................141
11.25 Repurchase of Delinquent Receivables...........................................................142
11.26 Amendment to Repurchase Agreement..............................................................142
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SCHEDULES AND EXHIBITS
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Schedule I Commitments and Purchaser Information
Schedule II UCC Filing Locations
Schedule III Prohibited Foreign Jurisdictions
Schedule IV Specified Resales
Exhibit A-1 Form of Assignment
Exhibit A-2 Form of FAA Assignment (Used on the Closing Date - Loans)
Exhibit A-3 Form of FAA Assignment (To Be Used on Settlement Dates after the Effective Date -
Loans)
Exhibit A-4 Form of FAA Assignment (Used on Closing Date - Leases)
Exhibit A-5 Form of FAA Assignment (To Be Used on Settlement Dates after the Effective Date -
Leases)
Exhibit B-1 Form of Amended and Restated Guarantee
Exhibit B-2 Form of Guarantee Reaffirmation
Exhibit C Form of Settlement Statement
Exhibit D Form of Transfer Supplement
Exhibit E-1 Form of Legal Opinion of General Counsel to RAC
Exhibit E-2 Form of Legal Opinion of General Counsel to the Seller and Raytheon Credit
Exhibit E-3 Form of Legal Opinion of General Counsel of Raytheon
Exhibit E-4 Form of Legal Opinion of Special Counsel to the Seller and Raytheon Credit
Exhibit E-5 Form of Legal Opinion of Bingham Dana LLP, Special Counsel to
Raytheon Credit
Exhibit F-1 Form of Bailment Agreement
Exhibit F-2 Form of Bailment Agreement
Exhibit G Form of Second Amended and Restated Repurchase Agreement
Exhibit H Form of Special Settlement Date Notice
Exhibit I Form of Purchase Report
Exhibit J Form of Amendment to Intercompany Purchase Agreement
Exhibit K Form of Agreed Upon Procedures Relating to Settlement Statements and Receivables Files
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FOURTH AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, dated
as of March 8, 2002, among RAYTHEON AIRCRAFT RECEIVABLES CORPORATION, a Kansas
corporation (the "Seller"), RAYTHEON AIRCRAFT CREDIT CORPORATION ("Raytheon
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Credit"), as Servicer (as defined herein), the financial institutions and
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special purpose corporations from time to time parties to this Agreement (the
"Purchasers"), BANK OF AMERICA, N.A., as Managing Facility Agent for the
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Purchasers (in such capacity, the "Managing Facility Agent"), JPMORGAN CHASE
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BANK and BANK OF AMERICA, N.A., as Co-Administrative Agents for the Purchasers
(in such capacity, a "Co-Administrative Agent"), J.P. MORGAN SECURITIES INC. and
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BANC OF AMERICA SECURITIES LLC, as Co-Arrangers and Joint Bookrunners, J.P.
MORGAN SECURITIES INC., as Syndication Agent (in such capacity, the "Syndication
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Agent"), CITIBANK, N.A., CREDIT SUISSE FIRST BOSTON and FLEET SECURITIES, INC.,
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as Co-Documentation Agents (in such capacity, a "Co-Documentation Agent"), and
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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 Third Amended and Restated Purchase and
Sale Agreement, dated as of March 9, 2001 (as heretofore amended, supplemented
or otherwise modified, the "2001 Agreement") pursuant to which such Purchasers
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have agreed to purchase, and have purchased, certain Receivables from the
Seller;
WHEREAS, the parties hereto desire to amend the 2001 Agreement
to, among other things, permit certain resales of receivables as described
herein, modify the Commitment Fee, the Applicable Margin, the Aggregate
Repurchase Obligation and certain of the Concentration Limits provided in the
2001 Agreement and extend the Expiration Date;
WHEREAS, certain of the Purchasers under the 2001 Agreement
(the "Withdrawing Purchasers") desire to sell their undivided interests in the
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Receivables purchased thereunder and to terminate their respective Commitments
under the 2001 Agreement on the Amendment Effective Date;
WHEREAS, the Purchasers under the 2001 Agreement other than
the Withdrawing Purchasers (the "Extending Purchasers") desire to extend the
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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 2001 Agreement as
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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 2001
Agreement as so amended, modified and supplemented, in its entirety;
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NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
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terms shall have the following meanings:
"Acceptable L/C Issuer": a financial institution whose senior
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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
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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
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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,
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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
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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
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Contract (as described in clause (i) of the definition thereof) between
Raytheon Credit and an Affiliate Obligor located (within the meaning of
Section 9-307 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
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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.
"Aggregate Exposure":
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(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
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RARC Repurchase Obligation and the RAC Repurchase Obligation.
"Agreement": this Fourth Amended and Restated Purchase and Sale
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Agreement, as amended, supplemented or otherwise modified from time to
time.
"Aircraft": the collective reference to Commuter Aircraft and
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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)
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of the definition of Commuter Aircraft and General Aviation Aircraft,
as applicable.
"Amendment Effective Date": as defined in Section 5.1.
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"Amortization Adjustment": the adjustment set forth below for
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the number of days since (i) for each Purchaser that is not a
Dissenting Purchaser, the commencement of the Amortization Period or
(ii) for each Dissenting Purchaser, the commencement of amortization of
such Dissenting Purchaser's Outstanding Purchase Price pursuant to
Section 2.8(b):
Days Adjustment
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1 through 180 0.25% per annum
181 through 360 0.50% per annum
Thereafter 1.00% per annum
"Amortization Event": any of the events described in
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subsection 8.1, whether or not any of the actions referred to in
subsection 8.2 have been taken.
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"Amortization Period": the period beginning on the first day
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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,
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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 for any
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Settlement Period, the rate per annum set forth below for Raytheon's
applicable Debt Rating:
Debt Rating Applicable Margin
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BBB+ or the equivalent thereof or above 0.875%
BBB or the equivalent thereof 1.000%
BBB- or the equivalent thereof 1.250%
BB+ or the equivalent thereof 1.625%
below BB+ or the equivalent thereof 2.125%
(b) For purposes of this definition, changes to the Debt
Rating will be effective for all Settlement Periods commencing on the
Settlement Date next succeeding any such change.
"Applicable Settlement Date": as defined in the definition of
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"Ineligible Receivable."
"Assignment": an assignment, substantially in the form of
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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
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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).
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"Available Commitment Percentage": as to any Purchaser at any
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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,
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and all applicable rules and regulations thereunder.
"Bailee": any Person (other than the Administrative Agent and
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the Seller) which enters a Bailment Agreement.
"Bailment Agreement": each agreement, substantially in the
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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
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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, N.A. in Charlotte, North Carolina, as its "reference rate".
The "reference rate" is a rate set by Bank of America, N.A. based upon
various factors including Bank of America, N.A.'s costs and desired
return, general economic conditions 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, N.A. 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).
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"Business Day": a day other than a Saturday, Sunday or other
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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).
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"Cash Collateral Account": as defined in subsection 2.14(c)
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(i).
"Cash Equivalents": (a) securities issued or directly and
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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
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6
(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 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
<PAGE>
7
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 $1,400,000,000.
"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;
(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.
<PAGE>
8
"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, Mandatorily Redeemable Equity Securities 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 EBITDA": 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, (ii) income taxes,
depreciation and amortization of Raytheon and its consolidated
Subsidiaries for such period determined in accordance with GAAP and
(iii) write-offs of goodwill as required, or as would be required in
the next succeeding fiscal year of Raytheon, by Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets.
"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 April 1, 2001, such Consolidated Net Income shall be increased
by $325,000,000 representing one-time charges recorded in connection
with the discontinued operations of Raytheon Engineers and
Constructors, (ii) for the fiscal quarter of Raytheon and its
consolidated Subsidiaries ending July 1, 2001, such Consolidated Net
Income shall be increased by an aggregate amount not to exceed
$272,000,000 for such fiscal quarter, representing additional one-time
charges to the extent recorded in connection with the discontinued
operations of Raytheon Engineers and Constructors during such fiscal
quarter and (iii) for the fiscal quarter of Raytheon and its
consolidated Subsidiaries ending September 30, 2001, such Consolidated
Net Income shall be increased by an aggregate amount not to exceed
$750,000,000 representing one-
<PAGE>
9
time charges recorded in connection with the inventory write-down and
valuation reserve related to various aircraft.
"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 [sec] 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.
"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).
"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:
<PAGE>
10
(a) for purposes of determining a Debt Rating as used in
the definition of "Applicable Margin" and as used in
calculating the Commitment Fee pursuant to Section 2.17(d), if
on any date on which a Debt Rating is to be determined,
Moody's and S&P are providing long-term unsecured senior debt
ratings for Raytheon, the Debt Rating will be the lower of
such ratings; provided that (i) if Raytheon's long-term
--------
unsecured senior debt is rated at least BBB- or the equivalent
thereof by both Moody's and S&P and (ii) the differential
between the Moody's and S&P rating is more than one ratings
level (i.e. the difference between A and A+ being one ratings
level), then the Debt Rating will equal the lower of such
ratings plus one ratings level; and
(b) for all other purposes, if on any date on which a
Debt Rating is to be determined, either one or both of Moody's
and S&P are providing long-term unsecured senior debt ratings
for Raytheon, the Debt Rating will be the higher of the
ratings (or the rating, in the case of a rating by only one of
Moody's and S&P) so provided.
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 ratings. Notwithstanding the foregoing, the Seller and the
Purchasers may at any time and from time to time agree to utilize a
rating agency other than Moody's or S&P 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
<PAGE>
11
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 Amount": as of the date of the first occurrence of a
---------------
Discount Event (which is not also a Rating Event), the product of the
Outstanding Purchase Price (as of the Settlement Date preceding such
date of occurrence, or, if such date of occurrence is a Settlement
Date, then such Settlement Date) multiplied by the Purchase Discount
applicable on such date of occurrence.
"Discount Event": any time on or prior to the Expiration Date
--------------
when Raytheon's Debt Rating is lower than BBB- or the equivalent
thereof.
"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
9-307 of the New York UCC) in the United States.
"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;
<PAGE>
12
(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;
(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
<PAGE>
13
(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
(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
9-307 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
<PAGE>
14
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;
(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 (A) is a Nonstandard Receivable or
(B) has a maturity within six months from the date such
Receivable becomes a Purchased Receivable, provided that no
such Receivable will have a maturity later than six months
after the invoice date for such 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
<PAGE>
15
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;
(k) (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;
(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
<PAGE>
16
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;
(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
<PAGE>
17
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) (i) for Receivables other than those Receivables
referred to in clause (g)(ii)(B) of this definition, the
related Financed Aircraft has been delivered to the Obligor
(x) so long as Raytheon's Debt Rating is no lower than BBB- or
the equivalent thereof, 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 or (ii) for those Receivables referred to in clause
(g)(ii)(B) of this definition, the related Financed Aircraft
has been delivered to the Obligor no later than six months
after the invoice date for such Receivable;
(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) 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
<PAGE>
18
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) 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) which is not an Operating Lease Receivable;
(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;
(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
<PAGE>
19
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;
(ff) which is an "Eligible Receivable" under and as
defined in the Intercompany Purchase Agreement; and
(gg) with respect to a Receivable that has previously
been a Defaulted Receivable or Delinquent Receivable that was
repurchased or for which a substitution has been made, such
Receivable was repurchased at least 6 months prior to its
resale to the Purchasers and in respect of which the
applicable Obligor has been in full compliance with its
payment obligations thereunder for at least 3 consecutive
months;
(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
<PAGE>
20
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. Further, a Receivable (other than an Existing
Receivable) created pursuant to a Contract under which (at the time of
purchase or substitution thereof) the amount scheduled to be
outstanding on any annual anniversary of the execution date of such
Contract (assuming all scheduled payments have been made prior to such
date) is greater than the amount which would have been so outstanding
on such date if payments on such Contract prior to such anniversary had
been made on a thirteen year mortgage-type amortization method,
assuming a balloon payment of 30% of the original sales price scheduled
for repayment at the end of the thirteenth year, shall not be an
"Eligible Receivable."
"ERISA": the Employee Retirement Income Security Act of 1974,
-----
as amended from time to time.
"Excess Mesa Receivables": as of any date of determination,
-----------------------
the Principal Balances of all Purchased Receivables in respect of Mesa
and all of its 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.
<PAGE>
21
"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.
"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.
<PAGE>
22
"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 7, 2003 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.
"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
<PAGE>
23
set forth in such lease and such portion being calculated in accordance
with Credit and Collection Policy, (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 and (iii) Collections deemed by the Managing Facility
Agent to be Finance Charge Collections pursuant to Section 2.16(a).
"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.
"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 9-307 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
9-307 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.
<PAGE>
24
"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.
"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.
"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.
"Guarantee Reaffirmation": the Reaffirmation, executed by the
-----------------------
Guarantor and dated the Amendment Effective Date, consenting to the
execution of this Agreement by the Seller and the Servicer and
reaffirming the Guarantor's obligations under the Guarantee.
"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.
-----------------
<PAGE>
25
"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
(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
<PAGE>
26
(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, the sum of (i) 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) the Applicable Margin;
Where,
Eurodollar Reserve Percentage means for any day for any Special
Settlement Date 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, would be offered by Bank of
America, N.A.'s Grand Cayman Branch, Grand Cayman B.W.I. (or by Bank of
America, N.A.), 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.
"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 EBITDA 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).
----------------
<PAGE>
27
"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 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
<PAGE>
28
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.
"Managing Facility Agent": as defined in the preamble to this
-----------------------
Agreement.
"Mandatorily Redeemable Equity Securities" shall mean the
----------------------------------------
17,250,000 equity security units, including any remarketed securities,
issued by Raytheon in May 2001. Each equity security unit consists of a
contract to purchase shares of Raytheon's common stock on May 15, 2004,
and a mandatorily redeemable equity security, with a stated liquidation
amount of $50.00 due on May 15, 2004. The mandatorily redeemable equity
security represents an undivided interest in the assets of RC Trust I,
a Delaware business trust, formed for the purpose of issuing these
securities and whose assets consist solely of subordinated notes issued
by Raytheon.
"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.
<PAGE>
29
"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": the Purchase and Sale Agreement, dated as of
--------------
March 20, 1997, among the Seller, the Servicer, the financial
institutions from time to time parties thereto (the "1997 Purchasers"),
---------------
The First National Bank of Boston, Bank of Montreal, The First National
Bank of Chicago, Fleet National Bank, The Fuji Bank, Limited, New York
Branch, The Sanwa Bank Limited, New York Branch and Westdeustche
Landesbank Girozentrale, New York Branch, as co-agents for the 1997
Purchasers, Swiss Bank Corporation, New York Branch, Bank of America
National Trust and Savings Association, Canadian Imperial Bank of
Commerce, New York Agency, The Chase Manhattan Bank, Citibank, N.A.,
Credit Suisse First Boston, New York Branch, The Industrial Bank of
Japan, Limited, Morgan Guaranty Trust Company of New York, and Wachovia
Bank of Georgia, N.A., as agents for the 1997 Purchasers, and Swiss
Bank Corporation, New York Branch, as administrative agent for the 1997
Purchasers.
"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);
(e) Excess Mesa Receivables; and
(f) all other Receivables which are not 25% Repurchase
Receivables or 75% Repurchase Receivables.
<PAGE>
30
"Nonstandard Receivable": a Receivable (other than a Wholesale
----------------------
Receivable or a Receivable which has Mesa as the Obligor) created
pursuant to a Contract under which (at the time of purchase or
substitution thereof) the amount scheduled to be outstanding on any
annual anniversary of the execution date of such Contract (assuming all
scheduled payments have been made prior to such date) is greater than
the amount which would have been so outstanding on such date if
payments on such Contract prior to such anniversary had been made on a
thirteen year mortgage-type amortization method, assuming a balloon
payment of 20% (in the case of both a GA Receivable or a Commuter
Receivable) of the original sales price scheduled for repayment at the
end of the thirteenth year.
"Note Rate": with respect to any Accrual Period, a rate per
---------
annum equal to the LIBO Rate plus the Applicable Margin and the
Amortization Adjustment, if any, 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": Lease Receivables which are
---------------------------
carried on the books of Raytheon Credit or the Seller as operating
leases.
"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 and any reductions pursuant
to subsection 2.6A applied to such Receivable on and prior to such date
of determination.
"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,
-----
<PAGE>
31
of Excess Spread which has been paid to the Purchasers pursuant to
subsection 2.16(b)(vi)(2) minus the amount, if any, of reductions in
-----
the Outstanding Purchase Price pursuant to subsection 2.6A 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 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
<PAGE>
32
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 (i) 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 and (ii) the Principal Balance of any Purchased
Receivable on account of which a portion of the Discount Amount has
been distributed pursuant to subsection 2.6A shall be a reference only
to that portion of the actual unpaid principal balance of such
Purchased Receivable held by the Purchasers hereunder and not
constituting the Seller's Interest pursuant to subsection 2.6A 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, 2.10A,
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.
<PAGE>
33
"Purchase Discount": during the continuance of a Discount
-----------------
Event, with respect to all Receivables, 25%.
"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 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
Purchase Discount (and less amounts referred to in clause (x), if
applicable).
"Purchase Report": each purchase report, substantially in the
---------------
form of Exhibit I, to be delivered by the Seller on each Settlement
Date.
"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).
"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": as defined in the Repurchase
-------------------------
Agreement.
"RARC Repurchase Obligation": as defined in subsection
--------------------------
2.10(b).
"RARC Repurchase Percentage": means 10%.
--------------------------
<PAGE>
34
"Rating Event": any time when (a) Raytheon's Debt Rating is
------------
below BB+ or the equivalent thereof, 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), (b) an
Amortization Event described in subsection 8.1(o) shall have occurred
and be continuing or (c) a Discount Event (which is not otherwise also
a Rating Event) occurs and the Seller elects not to exercise its option
to pay the Discount Amount pursuant to subsection 2.6A.
"Raytheon": Raytheon Company, a Delaware corporation and
--------
indirect parent of the Seller, and its successors and assigns (as
permitted by the Guarantee).
"Raytheon Credit": as defined in the preamble of this
---------------
Agreement.
"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": JPMorgan Chase Bank and Bank of America,
---------------
N.A.
"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).
--------
<PAGE>
35
"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 Debt Rating is below
----------------
BBB- or the equivalent thereof, 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).
"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 5,
2002.
"Repurchase Agreement": that certain Second Amended and
--------------------
Restated Repurchase Agreement, substantially in the form of Exhibit G,
dated as of the Amendment Effective Date, between RAC and the Managing
Facility Agent on behalf of the Purchasers, as amended, supplemented or
otherwise modified from time to time.
"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 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
<PAGE>
36
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 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.
"Resale": as defined in subsection 11.24.
------
"Resale Purchase Price": as defined in subsection 11.24.
---------------------
"Resold Receivable": as defined in subsection 11.24.
-----------------
"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.
---
<PAGE>
37
"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
Discount Event, pursuant to subsection 2.6(b) and subject to the terms
of subsection 2.6(c), and/or upon the occurrence of a Discount Event
(which is not also a Rating Event) pursuant to subsection 2.6A and
subject to the terms thereof.
"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
(f) is otherwise in form and substance satisfactory to
the Managing Facility Agent and the Majority Purchasers.
<PAGE>
38
"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
March 8, 2002 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 9-307 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.
"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.
<PAGE>
39
"Special Settlement Date": each of March 29, 2002, June 28,
-----------------------
2002, September 27, 2002 and December 31, 2002.
"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.
"Specified Resales": as defined in subsection 11.24(a).
-----------------
"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 2002 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.
"Third Party Buyer": as defined in subsection 11.24.
-----------------
"Transferee": as defined in subsection 11.6(f).
----------
"Transfer Notice": as defined in subsection 11.6(c).
---------------
<PAGE>
40
"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 9-307 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.
"Unadjusted Outstanding Balance": with respect to any
------------------------------
Receivable at any date of determination, the Purchase Price of such
Receivable (without giving effect to any reduction of the Principal
Balance, and thus the Purchase Price, on account of the payment of any
Discount Amount with regard to such Receivable), plus any Purchase
Discount attributable to such Receivable if purchased or substituted
when a Discount Event shall exist, less all Principal Collections
applied to such Receivable on and prior to such date of determination.
"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.
<PAGE>
41
"Unsecured Foreign Receivable": a Receivable arising from the
----------------------------
purchase of an Aircraft by an Obligor not located (within the meaning
of Section 9-307 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).
"Unsecured Receivables": the collective reference to each
---------------------
Receivable which is (i) an Unsecured Foreign Receivable, (ii) an
Existing Certified Receivable with respect to which the requirements of
subsection 6.1(n)(i) have not been satisfied, (iii) an Existing
Receivable which is an "Uncertified Foreign Receivable" under and as
defined in the Existing Agreement pursuant to which such Receivable was
purchased, (iv) an Existing Receivable which is a "Registerable Lease
Receivable" under the Existing Agreement pursuant to which such
Receivable was purchased and with respect to which the requirements of
subsection 6.1(n)(ii) have not been satisfied and (v) an Uncertified
Lease Receivable.
"Wholesale Receivable": a Domestic Wholesale Receivable or a
--------------------
Foreign Wholesale Receivable.
"Working Day": any Business Day on which dealings in foreign
-----------
currencies and exchange between banks may be carried on in London,
England.
1.2 Other Definitional Provisions. (a) Unless otherwise
-----------------------------
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Seller and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) When used in this Agreement, "purchase" and its
correlative meanings shall refer to purchases of Eligible Receivables by the
Purchasers pursuant to and subject to the terms and conditions of, this
Agreement.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
<PAGE>
42
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Agreement to Purchase and Sell; Special Purpose
-----------------------------------------------
Purchasers; Initial Utilization and Pro Ration. (a) Subject to the terms and
----------------------------------------------
conditions hereof, the Seller agrees to sell to each Purchaser, and each
Purchaser severally agrees to purchase from the Seller from time to time during
the Revolving Period, undivided interests in Receivables with an Outstanding
Purchase Price at any one time as to such Purchaser not to exceed the amount of
such Purchaser's Commitment. The Outstanding Purchase Price of all Purchased
Receivables (exclusive of the interests of Dissenting Purchasers) at any one
time shall not exceed the aggregate Commitments then in effect. Each purchase
and sale of Receivables shall, subject to the terms and conditions hereof, take
place on the Closing Date or on any Settlement Date during the Revolving Period.
Each Purchaser's Available Commitment Percentage of the Purchase Price for the
Receivables being purchased on the Closing Date or such Settlement Date shall
not exceed such Purchaser's Available Commitment at such date (calculated before
giving effect to any such purchase). Upon the expiration of the Revolving
Period, the Commitments will be canceled, the Purchasers will have no further
commitment to purchase Receivables hereunder and Collections on the Purchased
Receivables will continue to be applied in respect of the Outstanding Purchase
Price in accordance with the terms of this Agreement.
(b) In consideration of the agreements set forth herein, upon
each purchase of Receivables hereunder, the Seller will sell, assign and
transfer to the Purchasers all of its right, title and interest in and to the
Receivables, the related Contracts (including any Applicable Leases) and
Financed Aircraft.
(c) Except for Three Rivers Funding Corporation, nothing
contained herein shall constitute a commitment by an SPC to make purchases. For
any Purchaser which is an SPC Bank, any purchase to be made by such Purchaser
may from time to time be made by the related SPC in its sole discretion and
nothing herein contained shall constitute a commitment to make purchases by such
SPC; provided that if any SPC elects not to make a purchase, its SPC Bank agrees
--------
it will make such purchase pursuant to the terms hereof. Any purchase by an SPC
shall constitute a utilization of the Commitment of the SPC Bank.
(d) It is expressly agreed that on the Closing Date,
immediately following the purchases and sales provided for above in subsection
2.1(d) of the 1997 Agreement, each Existing Agreement was deemed amended and
restated by the 1997 Agreement.
2.2 Procedures for Making Purchases. The Seller shall give the
-------------------------------
Managing Facility Agent irrevocable notice, which notice must be received by the
Managing Facility Agent prior to 10:00 a.m., New York City time, on the
Reporting Date prior to the Settlement Date (other than a Special Settlement
Date) on which the Seller wishes to sell Eligible Receivables hereunder (or, in
the case of the initial purchase, three Working Days prior to the Closing Date).
Each such notice of a proposed purchase shall specify the date of purchase
(which shall be the Closing Date or the Settlement Date next succeeding such
Reporting Date), the aggregate Outstanding Purchase Price of the Purchased
Receivables prior to such proposed purchase (after giving effect to the
application of Collections on the related Settlement Date), the Principal
Balance and the Purchase Price for each Receivable which the Seller proposes to
sell on the Closing Date or such Settlement Date and any other information which
the Managing Facility
<PAGE>
43
Agent, in its reasonable discretion, may require prior to the Closing Date or
such Settlement Date. Upon receipt of any such notice from the Seller, the
Managing Facility Agent shall promptly notify each Purchaser thereof. Prior to
11:00 a.m., New York City time, on each such Settlement Date on which a purchase
has been requested to be made, each Purchaser shall make available to the
Managing Facility Agent, in immediately available funds at the Managing Facility
Agent's office specified in subsection 11.2, the amount of such Purchaser's pro
---
rata share of such aggregate Purchase Price for all Receivables being purchased
----
on such Settlement Date. Subject to the terms and conditions hereof, the
proceeds of such purchase will then be made available (or deemed made available
if subsection 2.15 is applicable) to the Seller by the Managing Facility Agent
crediting the account of the Seller on the books of such office with the
aggregate of the amounts made available to the Managing Facility Agent by the
Purchasers and in like funds as received by the Managing Facility Agent.
2.3 Special Settlement Dates. On each Special Settlement Date,
------------------------
the Seller will be permitted to sell Eligible Receivables to the Purchasers. In
connection with any purchase of Eligible Receivables on any Special Settlement
Date, the Seller shall give the Managing Facility Agent irrevocable notice,
which notice must be received by the Managing Facility Agent prior to 10:00
a.m., New York City time on the day which is one Business Day prior to such
Special Settlement Date. Each such notice, which shall be in the form of Exhibit
H, shall specify (i) the aggregate Outstanding Purchase Price of the Purchased
Receivables prior to such proposed purchase, (ii) the Principal Balance and the
Purchase Price for each Receivable which the Seller proposes to sell on such
Special Settlement Date and (iii) the amount of 90% Repurchase Receivables, 75%
Repurchase Receivables and 25% Repurchase Receivables, respectively, included in
the Receivables which the Seller proposes to sell on such Special Settlement
Date. Upon receipt of any notice from the Seller, the Managing Facility Agent
shall promptly notify each Purchaser thereof. Prior to 11:00 a.m., New York City
time, on such Special Settlement Date, each Purchaser shall make available to
the Managing Facility Agent, in immediately available funds at the Managing
Facility Agent's office specified in Section 11.2, the amount of such
Purchaser's pro rata share of the aggregate Purchase Price for all Receivables
--- ----
being purchased on such Special Settlement Date. Subject to the terms and
conditions hereof, the proceeds of such purchase will then be made available to
the Seller by the Managing Facility Agent crediting the account of the Seller on
the books of such office with the aggregate of the amounts made available to the
Managing Facility Agent by the Purchasers and in like funds as received by
Managing Facility Agent.
2.4 Participated Receivables. (a) In the event that on any
------------------------
Settlement Date the aggregate Available Commitments are less than the aggregate
Purchase Price of Eligible Receivables the Seller proposes to sell on such
Settlement Date, and so long as no Rating Event has occurred and is continuing,
the Purchasers agree, subject to the terms and conditions in this Agreement, to
purchase an interest in each such Receivable, the Purchase Price of which would
otherwise exceed the amount of the Available Commitments, up to the aggregate
Available Commitments then in effect. The Purchase Price for each such
Receivable shall be deemed to be the Principal Balance able to be purchased
under the Available Commitments; provided that the Available Commitments shall
--------
first be applied to purchase Receivables other than Participated Receivables to
the fullest extent available and next to purchase Participated Receivables. The
portion of each such Receivable not available to be purchased by the Purchasers
shall be an
<PAGE>
44
interest of the Seller in such Receivable and shall represent the Seller's
Interest in such Participated Receivable. The Seller's Interest in each
Participated Receivable shall be subordinated and junior to the rights of the
Purchasers in accordance with the terms and conditions of subsection 2.4(b). The
portion of any Participated Receivable representing the Seller's Interest
therein shall be, subject to the terms and conditions of this Agreement,
available as a Receivable for purchase by the Purchasers on subsequent
Settlement Dates.
(b) The Seller's Interest in and to each Participated
Receivable shall be subordinate and junior in right of payment and all other
rights to the rights of the Purchasers with respect to such Participated
Receivable, including, but not limited to, the rights of the Purchasers to
receive all Principal Collections and Finance Charge Collections on such
Participated Receivable. Such subordination shall be in effect until the
Principal Balance purchased by the Purchasers of the Participated Receivable,
after application of Principal Collections received on account of such
Participated Receivable, has been reduced to zero and, accordingly, the Seller
shall not (except as provided in subsection 2.16(b)) be entitled to receive any
amounts with respect to a Participated Receivable on account of the Seller's
Interest therein until such time. If the Seller receives any payment on account
of the Seller's Interest in any Participated Receivable prior to the time at
which it is entitled to retain such payment pursuant to this subsection 2.4(b),
the Seller shall hold such payment in trust for the Managing Facility Agent and
the Purchasers and shall immediately deposit such payment into the Concentration
Account.
2.5 Extended Term Receivables. (a) The Purchasers agree,
-------------------------
subject to the terms and conditions of this Agreement, on the Closing Date and
any Settlement Date to purchase Extended Term Receivables, up to each
Purchaser's Available Commitment, for a Purchase Price equal to (a) the actual
unpaid Principal Balance of such Receivable on the last day of the Settlement
Period preceding the date of purchase less (b) the aggregate amount of principal
payments scheduled to be made thereon after the Cash Flow Cutoff Date for such
Extended Term Receivable. The portion of each such Receivable not available to
be purchased by the Purchasers shall be an interest of the Seller in such
Receivable and shall represent the Seller's Interest in such Extended Term
Receivable. The Seller's Interest in each Extended Term Receivable shall be
subordinated and junior to the rights of the Purchasers in accordance with the
terms and conditions of subsection 2.5(b). The portion of the actual unpaid
principal balance of any Extended Term Receivable representing the Seller's
Interest therein shall be, subject to the terms and conditions hereof
(including, without limitation, that principal payments scheduled to be made
after the applicable Cash Flow Cutoff Date at any date of determination are not
available for purchase under this Agreement), available for purchase by the
Purchasers on subsequent Settlement Dates.
(b) The Seller's Interest in and to each Extended Term
Receivable shall be subordinate and junior in right of payment and all other
rights to the rights of the Purchasers with respect to such Extended Term
Receivable, including, but not limited to, the rights of the Purchasers to
receive all Principal Collections and Finance Charge Collections on such
Extended Term Receivable. Such subordination shall be in effect until the
Principal Balance purchased by the Purchasers of the Extended Term Receivable,
after application of Principal Collections received on account of such Extended
Term Receivable, has been reduced to zero and, accordingly, the Seller shall not
be entitled to receive any amounts with respect to a Extended Term Receivable on
account of the Seller's Interest therein until such time. If the Seller receives
<PAGE>
45
any payment on account of the Seller's Interest in any Extended Term Receivable
prior to the time at which it is entitled to retain such payment pursuant to
this subsection 2.5(b), the Seller shall hold such payment in trust for the
Managing Facility Agent and the Purchasers and shall immediately deposit such
payment into the Concentration Account.
2.6 Certain Actions Following a Rating Event and a Discount
-------------------------------------------------------
Event. (a) If a Rating Event shall occur, then no later than the 20th Business
-----
Day following such occurrence (provided such Rating Event shall then be
continuing) the Seller shall deposit cash into the Cash Collateral Account in an
amount equal to the RARC Repurchase Obligation (as of the Settlement Date
preceding such date of deposit). As long as any Rating Event continues, (i) the
Seller shall deposit cash into the Cash Collateral Account in an amount equal to
any incremental increase in the RARC Repurchase Obligation resulting from
purchases of Receivables after the occurrence of such Rating Event immediately
after such incremental increase and (ii) any amounts deposited in the Cash
Collateral Account shall be applied from time to time in accordance with
subsection 2.14(c). If such Rating Event shall cease to continue, the Managing
Facility Agent shall, upon written request of the Seller, withdraw amounts so
deposited in the Cash Collateral Account and deliver such amounts to the Seller
(or upon its order).
(b) On each Settlement Date after the occurrence and during
the continuance of a Discount Event, each purchase of Eligible Receivables in
accordance with the terms and conditions specified in this Agreement shall be at
a discount as specified in the proviso contained in the definition of "Purchase
-------
Price" and the portion of such Receivable's Principal Balance equal to the sum
of the reductions and discounts required pursuant to such proviso clause shall
-------
be an interest of the Seller in such Receivable and shall constitute the
Seller's Interest; as necessary to evidence such interest, Assignments in
substantially the form attached hereto and reflecting applicable changes shall
be executed and delivered. The Seller's Interest in each Purchased Receivable
created pursuant to this clause (b) shall be subordinated and junior to the
rights of the Purchasers in accordance with the terms and conditions of
subsection 2.6(c). If a Discount Event is no longer continuing, the portion of
any Receivable representing the Seller's Interest created therein pursuant to
this clause (b) shall, subject to the terms and conditions of this Agreement, be
deemed to be available as a Receivable for purchase by the Purchasers on
subsequent Settlement Dates.
(c) The Seller's Interest in and to each Purchased Receivable
a portion of which is an interest of the Seller pursuant to subsection 2.6(b)
shall be subordinate and junior in right of payment and all other rights to the
rights of the Purchasers with respect to the Purchased Receivables, including,
but not limited to, the rights of the Purchasers to receive all Principal
Collections and Finance Charge Collections on the Purchased Receivables until
the Outstanding Purchase Price has been reduced to zero and all other amounts
owing to the Managing Facility Agent or any Purchaser under any Purchase
Document have been paid in full and, accordingly, the Seller shall not (except
as provided in subsection 2.16(b)) be entitled to receive any amounts on account
of the Seller's Interest in such Purchased Receivables until the Outstanding
Purchase Price has been reduced to zero and all other amounts owing to the
Managing Facility Agent or any Purchaser under any Purchase Document have been
paid in full, provided that during the Revolving Period, the Seller shall have a
--------
right to receive Principal Collections in respect of such Seller's Interest in
accordance with subsection 2.16(a).
<PAGE>
46
(d) If a Rating Event shall occur and be continuing, Lease
Receivables, 90% Repurchase Receivables, Unsecured Foreign Receivables,
Nonstandard Receivables, ExIm Bank Receivables, Affiliate Receivables and
Receivables (other than Wholesale Receivables) the payments of which are not
required to be made at least monthly and Receivables the Obligor of which is a
Governmental Authority (other than a United States Federal Governmental
Authority) will not be eligible for purchase or substitution hereunder
(including Lease Receivables under subsection 2.13(e)).
(e) If a Rating Event shall occur and be continuing and the
Servicer makes a drawing under any letter of credit related to a L/C Receivable
pursuant to subsection 3.2(a), the Servicer shall deposit the amount of such
drawing in the Collection Account on the date deposits are required to be made
hereunder pursuant to subsection 2.14(a).
(f) [Intentionally Omitted.]
(g) If a Rating Event shall occur or be continuing, the other
provisions of this Agreement regarding such event including, without limitation,
those specified in clause (k) of the definition of "Eligible Applicable Lease",
clauses (c), (x), (y), (aa), (dd) and (ee) of the definition of "Eligible
Receivable", the definition of "Purchase Price", and subsections 2.4, 2.5, 2.10,
2.11, 2.14, 2.15, 2.16, 11.1 and 11.7 hereof, shall apply.
2.6A. Certain Actions Following a Discount Event. (a) Upon the
------------------------------------------
first occurrence of a Discount Event (which is not also a Rating Event), the
Seller shall have the option to either (i) deem such Discount Event to be also a
Rating Event or (ii) determine and pay the Discount Amount in accordance with
paragraph (b) below.
(b) If, upon the first occurrence of a Discount Event (which
is not also a Rating Event), the Seller elects to exercise its option in clause
(ii) above to determine and pay the Discount Amount, then not later than the 5th
Business Day following such occurrence, the Seller shall pay or shall cause to
be paid to the Managing Facility Agent, for the ratable benefit of the
Purchasers in immediately available funds, the Discount Amount, determined as of
the date of such Discount Event. Upon such payment, the Managing Facility Agent
shall distribute the Discount Amount pro rata to the Purchasers in accordance
with each Purchaser's Outstanding Purchase Price, and, without duplication, the
then Outstanding Purchase Price shall be reduced by an amount equal to such
distribution and the Outstanding Balance and the Principal Balance of each
Purchased Receivable then existing shall be reduced by its pro rata share of
such distribution. The interest in the Purchased Receivables allocable to the
Discount Amount shall be an interest of the Seller in such Receivables and shall
constitute the Seller's Interest; as necessary to evidence such interest,
Assignments in substantially the form attached hereto and reflecting applicable
changes shall be executed and delivered by the Administrative Agent on behalf of
the Purchasers in favor of the Seller and each of the Purchasers hereby
authorizes the Administrative Agent to execute and deliver on behalf of such
Purchaser any such Assignments. The Seller's Interest in and to each Purchased
Receivable created pursuant to this subsection 2.6A(b) shall be subordinate and
junior in right of payment and all other rights to the rights of the Purchasers
with respect to the Purchased Receivables, including, but not limited to, the
rights of the Purchasers to receive all Principal Collections and Finance Charge
Collections on the Purchased Receivables until the Outstanding Purchase Price
has been reduced to zero and all
<PAGE>
47
other amounts owing to the Managing Facility Agent or any Purchaser under any
Purchase Document have been paid in full and, accordingly, the Seller shall not
be entitled to receive any amounts on account of the Seller's Interest in such
Purchased Receivables until the Outstanding Purchase Price has been reduced to
zero and all other amounts owing to the Managing Facility Agent or any Purchaser
under any Purchase Document have been paid in full, provided that during the
Revolving Period, the Seller shall have a right to receive Principal Collections
in respect of such Seller's Interest in accordance with subsection 2.16(a). If
such Discount Event is no longer continuing, the portion of any Receivable
representing the Seller's Interest created therein pursuant to this subsection
2.6A(b) shall, subject to the terms and conditions of this Agreement, be deemed
to be available as a Receivable for purchase by the Purchasers on subsequent
Settlement Dates.
2.7 Concentration Limits. (a) The Seller shall not sell or
--------------------
substitute Eligible Receivables on any Settlement Date if, and to the extent
that, after giving effect to such sales and substitutions on such date (unless
the Managing Facility Agent and all of the Purchasers otherwise agree with
respect to clauses (i) and (ii) below and unless the Managing Facility Agent and
the Required Purchasers otherwise agree with respect to clauses (iii) through
(xvi) below):
(i) the aggregate outstanding Principal Balances of
all Purchased Receivables in respect of a single Obligor and
all of its Affiliates or a single Unaffiliated Foreign Lessee
and all of its Affiliates would exceed an amount equal to 10%
of the Outstanding Purchase Price on such Settlement Date,
provided, that (x) if no Amortization Event has occurred and
--------
is continuing, the Servicer may request that the 10%
concentration limit with respect to any Obligor be waived and
such waiver may be granted with the unanimous written consent
of the Purchasers; and (y) the 10% concentration limit is
hereby waived with respect to Mesa, and a 13% concentration
limit shall be applicable to Mesa;
(ii) the aggregate outstanding Principal Balances of
Purchased Receivables of the five Obligors and all of their
Affiliates with the largest aggregate outstanding Principal
Balances would exceed an amount equal to 35% of the
Outstanding Purchase Price on such Settlement Date. For
purposes of this subsection 2.7(a)(ii), the Obligor under an
Affiliate Receivable shall be deemed to be the Unaffiliated
Foreign Lessee thereunder;
(iii) the aggregate outstanding Principal Balances of
Purchased Receivables created in connection with the financing
or refinancing of Refinanced Aircraft would constitute more
than 50% of the Outstanding Purchase Price paid for all
Receivables (other than Wholesale Receivables) on such
Settlement Date;
(iv) the aggregate outstanding Principal Balances of
all Nonstandard Receivables would exceed an amount equal to
35% of the Outstanding Purchase Price on such Settlement Date;
(v) the aggregate outstanding Principal Balances of
all Secured Lease Receivables would exceed an amount equal to
45% of the Outstanding Purchase Price on such Settlement Date;
<PAGE>
48
(vi) the aggregate outstanding Principal Balances of
all Uncertified Foreign Receivables (other than L/C
Receivables and Foreign Wholesale Receivables) would exceed an
amount equal to 40% of the Outstanding Purchase Price on such
Settlement Date;
(vii) the aggregate outstanding Principal Balances of
all Purchased Receivables which are not required to be paid in
consecutive monthly installments (including, without
limitation, Quarterly Receivables and Semi-Annual Receivables
but excluding those Receivables referred to in clause
(g)(ii)(B) of the definition of "Eligible Receivables") would
exceed 20% of the Outstanding Purchase Price on such
Settlement Date;
(viii) the aggregate outstanding Principal Balances of
all Purchased Receivables with respect to which the FAA
Assignment for the Financed Aircraft related thereto (if
required by subsection 5.2(e) hereof) is without a conveyance
number from the FAA on such Settlement Date would exceed 20%
of the Outstanding Purchase Price on such Settlement Date;
provided that if Raytheon's Debt Rating is below BBB- or the
--------
equivalent thereof, the concentration limit shall be 0%;
(ix) with respect to each foreign jurisdiction (other
than Brazil, Turkey and Venezuela) whose long-term foreign
currency debt rating is rated below BBB- or the equivalent
thereof, the aggregate outstanding Principal Balances of all
Purchased Receivables which are Foreign Receivables having a
Foreign Obligor located in such jurisdiction would exceed an
amount equal to 5% or, in the case of each of Brazil, Turkey
and Venezuela, 10% of the Outstanding Purchase Price on such
Settlement Date. For purposes of this clause (ix), the Obligor
under an Affiliate Receivable shall be deemed to be the
Unaffiliated Foreign Lessee thereunder;
(x) the aggregate outstanding Principal Balances of
all Unsecured Receivables on any Settlement Date would exceed
an amount equal to 30% of the Outstanding Purchase Price on
such Settlement Date;
(xi) the aggregate outstanding Principal Balances of
all Wholesale Receivables would exceed an amount equal to 20%
of the Outstanding Purchase Price on such Settlement Date;
(xii) the aggregate outstanding Principal Balances of
all Unsecured Foreign Receivables the Obligor of which is a
Governmental Authority would exceed an amount equal to 2% of
the Outstanding Purchase Price on such Settlement Date;
(xiii) the aggregate outstanding Principal Balances of
all Extended Term Receivables would exceed an amount equal to
50% of the Outstanding Purchase Price on such Settlement Date;
<PAGE>
49
(xiv) the aggregate outstanding Principal Balances of
all Purchased Receivables with respect to Aircraft
manufactured by any Person other than RAC would exceed an
amount equal to 5% of the Outstanding Purchase Price on such
Settlement Date;
(xv) [Intentionally omitted];
(xvi) [Intentionally omitted];
(xvii) the aggregate outstanding Principal Balances of
all Travel Air Receivables on any Settlement Date would exceed
an amount equal to 15% of the Outstanding Purchase Price on
such Settlement Date; or
(xviii) the aggregate outstanding Principal Balances of
Receivables referred to in clause (g)(ii)(B) of the definition
of "Eligible Receivable" that are not Wholesale Receivables
would exceed $75,000,000 on such Settlement Date.
(b) If any such sale or substitution on any Settlement Date
shall cause a breach of any of the limitations specified in subsections
2.7(a)(i) through 2.7(a)(xvii), the Seller shall, subject to subsection 2.13,
repurchase from the Purchasers, on the Settlement Date immediately following the
date the Managing Facility Agent notifies the Seller of such breach, the fewest
number of Receivables necessary such that after such repurchase such breach
shall have been remedied (each Receivable required to be so repurchased, a
"Concentration Receivable"). The Seller shall effect such repurchase by
------------------------
depositing into the Concentration Account on such Settlement Date cash in an
amount equal to the aggregate Outstanding Balances of the Concentration
Receivables plus, if a Trigger Amortization Event has occurred and is
continuing, accrued and unpaid interest thereon at the rate under the related
Contract except to the extent (without duplication) of any payment made pursuant
to subsection 2.18 for the Settlement Period during which such interest accrued
and was not paid by the related Obligor. The amount of any such deposit shall be
applied and distributed in accordance with subsections 2.15 and 2.16.
2.8 Term of Revolving Period. (a) So long as no Amortization
------------------------
Event has occurred and is continuing, no more than 60 and no less than 45 days
prior to the applicable Expiration Date, the Seller may request, through the
Managing Facility Agent, that each Purchaser extend the Revolving Period, which
decision will be made by each Purchaser in its sole discretion. Such request by
the Seller shall be accompanied by an amortization schedule of Purchased
Receivables in form and substance satisfactory to the Managing Facility Agent
and the Purchasers. Upon receipt of any such request, the Managing Facility
Agent shall promptly notify each Purchaser thereof. At least 30 but not more
than 45 days prior to the applicable Expiration Date, each Purchaser shall
notify the Managing Facility Agent of such Purchaser's willingness to extend the
Revolving Period, and the Managing Facility Agent shall notify the Seller of
such willingness by the Purchasers on such 30th day. The approval of the
Managing Facility Agent and at least the Majority Purchasers (calculated as to
Purchasers which are not Dissenting Purchasers prior to the applicable
Expiration Date) shall be required to extend such Expiration Date.
<PAGE>
50
(b) (i) Any Purchaser not wishing to extend the Revolving
Period (a "Dissenting Purchaser") may in its sole discretion elect to terminate
--------------------
its Commitment on the Expiration Date in effect prior to any such extension of
the Revolving Period. The Dissenting Purchaser shall give the Managing Facility
Agent notice of such election at least 30 days prior to the applicable
Expiration Date, provided that failure to expressly notify the Managing Facility
--------
Agent of a willingness to extend the Expiration Date in accordance with
subsection 2.8(a) shall be deemed an election by such Purchaser to terminate its
Commitment on the Expiration Date. Upon receipt of any notice the Managing
Facility Agent shall promptly notify each other Purchaser and the Seller
thereof. The Seller, by notice to the Managing Facility Agent, may (but shall
not be required to) request one or more other Purchasers, or seek another
financial institution acceptable to the Managing Facility Agent and the Seller,
in their reasonable discretion, to acquire the Commitment of the Dissenting
Purchaser and all amounts payable to it hereunder in accordance with subsection
11.6(c). Unless otherwise specified in connection with a transfer made pursuant
to subsection 11.6(c), a Purchaser shall become a Dissenting Purchaser pursuant
to this subsection 2.8(b) on the first day following the Expiration Date on
which its Commitment is terminated.
(ii) If any Dissenting Purchaser's Commitment is not acquired
pursuant to subsection 11.6(c), such Dissenting Purchaser shall, on each
Settlement Date after the Expiration Date on which its Commitment terminates,
(A) be paid such Dissenting Purchaser's pro rata share of Principal Collections
--- ----
received after such Expiration Date solely (except as provided in subsection
2.13(c)) on account of Eligible Receivables purchased or substituted on or
before such Expiration Date (based on such Dissenting Purchaser's Commitment
Percentage at the time its Commitment terminated) (as to such Dissenting
Purchaser, its "Frozen Pool"), (B) not purchase any additional Receivables after
-----------
such Expiration Date and (C) be paid interest in accordance with subsection 2.17
in respect of its Outstanding Purchase Price.
(iii) So long as the Revolving Period has not expired or
terminated, if on any Settlement Date after a Purchaser becomes a Dissenting
Purchaser its Outstanding Purchase Price is less than 10% (after giving effect
to the application of Collections on such Settlement Date) of such Dissenting
Purchaser's maximum Outstanding Purchase Price at any time prior to the date
such Purchaser became a Dissenting Purchaser, then the Seller may give the
Managing Facility Agent irrevocable notice, which must be received by the
Managing Facility Agent by 10:00 a.m., New York City time, on the Reporting Date
prior to the next succeeding Settlement Date, (A) requesting that each other
Purchaser purchase a pro rata share (based on such other Purchaser's Available
--- ----
Commitment Percentage as in effect on such next succeeding Settlement Date) of
such Dissenting Purchaser's Outstanding Purchase Price (the "Buyout Amount")
-------------
subject to the approval of the Managing Facility Agent and the Majority
Purchasers or (B) stating that the Seller or an Affiliate of the Seller will
repurchase all the Dissenting Purchaser's interests in and to the Receivables in
the Frozen Pool by payment of the Buyout Amount on such next succeeding
Settlement Date; provided that no such purchase by the Purchasers shall be made
--------
if the Buyout Amount to be paid by such Purchasers exceeds the aggregate
Available Commitments in effect on such next succeeding Settlement Date (after
giving effect to purchases from the Seller on such date). Any such purchase of
the Buyout Amount by the Purchasers shall be subject to, and shall be made upon
satisfaction of, the conditions set forth in subsection 5.2 and, in connection
therewith, the Seller shall be deemed to have made the representations and
<PAGE>
51
warranties set forth in subsection 4.2 with respect to the Receivables
constituting the Frozen Pool as if such Receivables were being sold to the
Purchasers on such Settlement Date. Payment for the purchase by the Purchasers
or the repurchase by the Seller of the Frozen Pool, as the case may be, shall be
made to the Managing Facility Agent for the account of such Dissenting Purchaser
on such Settlement Date by deposit into the Concentration Account on the
Settlement Date required by this subsection 2.8(b)(iii).
2.9 Termination or Reduction of Commitments. (a) On any
---------------------------------------
Settlement Date, the Seller shall have the right to terminate the Commitments or
reduce the amount thereof by notice to the Managing Facility Agent on the
preceding Reporting Date; provided that no such termination or reduction shall
--------
be permitted if, after giving effect thereto and to any distributions on account
of the Outstanding Purchase Price made on such Settlement Date, the then
Outstanding Purchase Price (exclusive of the interests of Dissenting Purchasers)
would exceed the Commitments then in effect. Any such reduction shall be in an
amount equal to $50,000,000 or a multiple of $1,000,000 in excess thereof and
shall permanently reduce the Commitments then in effect.
(b) On each Settlement Date the aggregate Commitment of the
Purchasers shall be reduced by increments of $25,000,000 to the extent such
reductions shall not exceed an amount equal to (i) the aggregate amount of
Specified Resales which occurred prior to or during the related Settlement
Period pursuant to clause (x) of subsection 11.24(a) less (ii) the aggregate
amount of any prior reduction of the aggregate Commitment of the Purchasers
pursuant to this subsection 2.9(b), provided that the first such reduction made
--------
after the Amendment Effective Date must be in an aggregate amount equal to
$50,000,000 or $25,000,000 increments in excess thereof.
(c) If on any date, the Debt Rating shall be equal to or less
than BB+, the Seller shall reduce the amount of the Commitments by an aggregate
amount of $200,000,000. Such reduction of the Commitments shall be accompanied
by prepayment of the Outstanding Purchase Price to the extent, if any, that the
Outstanding Purchase Price exceeds the amount of the Commitments as so reduced.
(d) Each Purchaser's Commitment shall terminate upon the
expiration of the Revolving Period as to such Purchaser.
2.10 Defaulted Receivables; Application of Lease Security
----------------------------------------------------
Deposits. (a) (i) On each Settlement Date (other than a Special Settlement Date)
--------
the Seller agrees to repurchase from the Purchasers, up to the RARC Repurchase
Obligation, all Receivables which became Defaulted Receivables during each
preceding Settlement Period with respect to which the Seller has not substituted
an Eligible Receivable pursuant to subsection 2.13, as indicated on the
Settlement Statement delivered on the related Reporting Date. Subject to
subsections 2.10(b), 2.13, 2.15(b) and clause sixth of subsection 2.16(b), the
-----
Seller shall repurchase such Defaulted Receivables by depositing into the
Concentration Account on such Settlement Date cash in an amount equal to the
aggregate Outstanding Balances of the Defaulted Receivables plus, if a Trigger
Amortization Event has occurred and is continuing, accrued and unpaid interest
thereon at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by
<PAGE>
52
the Obligor under such Contract. The amount of any such deposit shall be applied
and distributed in accordance with subsections 2.15 and 2.16. If on any
Settlement Date the Repurchase Price to be paid by the Seller for any Defaulted
Receivable would cause the RARC Repurchase Obligation then in effect (determined
on such Settlement Date) to be exceeded, the Seller shall be deemed to acquire
only a fractional interest in each Defaulted Receivable repurchased on such
Settlement Date. The numerator of such fraction shall be the RARC Repurchase
Obligation then in effect determined on such Settlement Date and the denominator
thereof shall be the aggregate Repurchase Price for all Defaulted Receivables on
such Settlement Date. Upon any repurchase of a Defaulted Receivable with respect
to which there exists a Seller's Interest pursuant to this subsection or the
Repurchase Agreement, the Seller's Interest shall be reduced by an amount equal
to the Purchase Discount times the Principal Balance of such Defaulted
Receivable on the last day of the Settlement Period preceding the Settlement
Date on which such repurchase is made. Any Purchased Receivable related to a
Remarketed Aircraft which is repurchased or substituted for in accordance with
subsection 2.11 or 2.13, respectively, shall not be deemed to be a Defaulted
Receivable.
(ii) In the event that a Rating Event occurs and is
continuing, any Net Recoveries received by the Seller on account of any
Defaulted Receivable which none of the Seller, RAC nor the Guarantor has
repurchased, shall be deposited into the Cash Collateral Account. In the event
that the Amortization Period ends pursuant to clause (ii) of the definition of
such term, any Net Recoveries received by the Seller after such time on account
of any Defaulted Receivable which none of the Seller, RAC nor the Guarantor has
repurchased, shall be deposited into the Cash Collateral Account. The Seller
shall make any deposit required to be made by this subsection 2.10(a)(ii) within
two Business Days after the Seller's receipt of such Net Recoveries and such
deposits shall be applied in accordance with subsections 2.15 and 2.16. The
obligation of the Seller to deposit such Net Recoveries shall survive the
termination of this Agreement.
(iii) The Seller agrees that, to the extent it has received a
security deposit in respect of any Lease Receivable, at the time the Seller
applies any or all of such security deposit or any or all of such security
deposit is applied (in each case pursuant to the related Contract or otherwise)
against the amounts owed in respect of a Receivable, on the next succeeding
Settlement Date the Seller shall be obligated to pay the Purchasers their pro
rata share of the amount of such application in the same manner as if such
applied funds actually were Collections. The Seller shall pay such obligation by
depositing into the Concentration Account on such Settlement Date cash in an
amount equal to such application. The amount of any such deposit shall be
applied and distributed in accordance with subsections 2.15 and 2.16.
(b) The maximum repurchase obligation of the Seller with
respect to Defaulted Receivables (the "RARC Repurchase Obligation") shall be
--------------------------
equal to (a) at any time during the Revolving Period, an amount equal to the
RARC Repurchase Percentage of the excess of (A) the sum of (i) 25% of the
aggregate Unadjusted Outstanding Balances of the 25% Repurchase Receivables,
(ii) 75% of the aggregate Unadjusted Outstanding Balances of the 75% Repurchase
Receivables and (iii) 90% of the aggregate Unadjusted Outstanding Balances of
the 90% Repurchase Receivables over (B) the amount of any Discount Amount paid
----
and the amount of any Purchase Discount resulting from the purchase or
substitution of Receivables during the existence of a Discount Event, in each
case at the time the RARC Repurchase Obligation is calculated;
<PAGE>
53
provided that,
--------
(i) the RARC Repurchase Obligation shall not at any
time decrease below an amount equal to the RARC Repurchase
Percentage of (x) with respect to any Purchaser other than a
Dissenting Purchaser, an amount equal to the greater of such
Purchaser's share of (1) 15% of the maximum aggregate
Outstanding Balances of the Purchased Receivables which
existed at any time during the Revolving Period and (2) 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
such Purchaser's share of (1) 15% 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) 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, minus, in each such
case, to the extent not already deducted in calculating such
Outstanding Balances, such Purchaser's allocated share of the
amount of any Discount Amount paid and the amount of any
Purchase Discount resulting from the purchase or substitution
of Receivables during the existence of a Discount Event and
(ii) notwithstanding clause (i) immediately above, the
RARC Repurchase Obligation shall not at any time exceed an
amount equal to the RARC Repurchase Percentage of the
Outstanding Purchase Price
or (b) during the Amortization Period, (A) the RARC Repurchase
Obligation, as calculated in accordance with clause (a) above, in
effect on the last Settlement Date prior to the commencement of the
Amortization Period minus (B) the aggregate Repurchase Prices of
-----
Defaulted Receivables which were repurchased by the Seller pursuant to
subsection 2.10(a) since the beginning of the Amortization Period minus
-----
(C) amounts deposited by the Seller into the Cash Collateral Account
pursuant to subsection 2.14(c)(ii) plus (D) all Net Recoveries received
----
by the Seller with respect to such Defaulted Receivables (or portion
thereof) so repurchased by the Seller since the beginning of the
Amortization Period and not required to be deposited into the Cash
Collateral Account pursuant to subsection 2.10(a)(ii).
2.10A Delinquent Receivables. If on any Settlement Date the
----------------------
outstanding balance of Delinquent Receivables shall cause an Amortization Event
of the type described in subsection 8.1(p), below, the Seller may either
substitute Eligible Receivables for such Delinquent Receivables pursuant to
Section 2.13 or repurchase from the Purchasers sufficient Delinquent
Receivables, in each case, with the consent of the Managing Facility Agent,
beginning with those Delinquent Receivables with the oldest outstanding balance,
such that after such repurchase or substitution such Amortization Event shall
have been cured. Seller shall repurchase such Delinquent Receivables being
repurchased on such Settlement Date by depositing into the Concentration Account
on such Settlement Date cash in an amount equal to
<PAGE>
54
the Outstanding Balance of such Delinquent Receivables. Any amounts received by
the Administrative Agent, or deposited into the Concentration Account, in
respect of Delinquent Receivables sold pursuant to this Section 2.10A shall be
applied and distributed in accordance with subsections 2.15 and 2.16.
2.11 Ineligible Receivables. The Seller agrees to repurchase
----------------------
on each Settlement Date, and the Purchasers agree to sell to the Seller on such
date and in accordance with the terms hereof, any Purchased Receivable if such
Receivable is (i) an Ineligible Receivable, (ii) an Existing Certified
Receivable in respect of which the Old Administrative Agent shall not have
received on or prior to the Certified Opinion Delivery Date (x) an opinion of
foreign counsel satisfying the requirements of subsection 2.27(c) or (y)
evidence of the filings, if any, referred to in subsection 6.1(n)(i) or (iii) an
Existing Receivable in respect of which the Old Administrative Agent shall not
have received on or prior to the FAA Filing Date evidence of the filings, if
any, referred to in subsection 6.1(n)(ii) provided that, during the Amortization
--------
Period, the Purchasers, by unanimous consent, in their sole discretion may
choose not to sell any Receivable referred to in clauses (i), (ii) or (iii) to
the Seller. The Seller shall make such repurchase on the Settlement Date first
succeeding the earlier of (x) the date on which the Seller becomes aware of
facts and circumstances giving rise to such event of ineligibility or (y) the
date on which the Managing Facility Agent notifies the Seller that such event of
ineligibility has occurred and is continuing. Subject to subsections 2.13 and
2.15(b), the Seller shall make such repurchase by depositing in the
Concentration Account cash in an amount equal to the Repurchase Price for such
Ineligible Receivable at the date such deposit is made, except to the extent
(without duplication) of any payment made pursuant to subsection 2.18, for the
Settlement Period during which such interest accrued and was not paid by the
Obligor under such Contract. The amount of any such deposit shall be applied and
distributed in accordance with subsections 2.15 and 2.16. Except as provided in
subsection 9.1, the sole obligation of the Seller with respect to an Ineligible
Receivable of the type described in clause (i) of this subsection 2.11 shall be
the requirement to repurchase or substitute for such Receivable pursuant to this
subsection 2.11 or subsection 2.13, respectively.
2.12 Rebated Receivables. If on any date the Principal Balance
-------------------
of any Purchased Receivable is, or is deemed to be, reduced or adjusted or no
longer payable as a result of any rebate, discount, refund or other adjustment
of such Purchased Receivable, or any other reduction or adjustment of any
payment under any Purchased Receivable, other than any such rebate, discount
refund or adjustment permitted under subsection 7.1(b)(iv)(x), the Seller shall
be deemed to have received on such day a Collection in respect of such Purchased
Receivable in the amount of such reduction or adjustment or in the amount no
longer payable (as applicable) and shall, subject to subsection 2.15(b), deposit
cash into the Concentration Account on the next succeeding Settlement Date in an
amount equal to such reduction or adjustment or such amount no longer payable
(as applicable) plus if a Trigger Amortization Event has occurred and is
continuing, accrued and unpaid interest thereon at the rate under the related
Contract except to the extent (without duplication) of any payment made pursuant
to subsection 2.18 for the Settlement Period during which such interest accrued
and was not paid by the Obligor under such Contract. The amount of any such
deposit shall be applied and distributed in accordance with subsections 2.15 and
2.16.
<PAGE>
55
2.13 Substitution of Receivables. (a) Whenever the Seller is
---------------------------
required or permitted in accordance with the terms of this Agreement to
repurchase Concentration Receivables, Defaulted Receivables, Delinquent
Receivables or Ineligible Receivables pursuant to subsection 2.7(b), 2.10, 2.10A
or 2.11, respectively, the Seller may, subject to the terms hereof, in lieu of
making such repurchase, substitute one or more Eligible Receivables (each, a
"Substituted Receivable") therefor on the Settlement Date on which the
----------------------
repurchase is required to be made; provided that the Settlement Statement
--------
delivered on the Reporting Date prior to such Settlement Date shall contain the
information required thereby with respect to such proposed substitution. The
option of the Seller to substitute one or more Substituted Receivables for any
Receivables as aforesaid is subject to the following conditions precedent: (i)
no Trigger Amortization Event has occurred and is then continuing, (ii) if such
substitution occurs during the Amortization Period, and provided that no Trigger
Amortization Event has occurred and is then continuing, the Majority Purchasers
have approved such substitution, (iii) if the substitution is of a Delinquent
Receivable pursuant to Section 2.10A, the Managing Facility Agent has consented
to such substitution and (iv) either the Substituted Receivable has a Final
Payment Date which is not after the Final Payment Date of the replaced
Receivable (each, replaced Receivable, a "Removed Receivable"), or if the Final
------------------
Payment Date of the Substituted Receivable is after that of the Removed
Receivable, then only that portion of the Principal Balance of such proposed
Substituted Receivable which is scheduled to be paid on or prior to the Final
Payment Date of the Removed Receivable shall be included as a Substituted
Receivable. All Defaulted Receivables, then all Delinquent Receivables, shall be
replaced with Substituted Receivables prior to replacement of Ineligible
Receivables or Concentration Receivables with Substituted Receivables and, in
each case, shall be replaced with Substituted Receivables in the following order
of priority: (i) first, with Substituted Receivables which are 25% Repurchase
-----
Receivables, (ii) second, with Substituted Receivables which are 75% Repurchase
------
Receivables, and (iii) third, with Substituted Receivables which are 90%
-----
Repurchase Receivables. The making of such substitution shall be subject to the
satisfaction of the conditions set forth in paragraphs subsection 5.2,
including, without limitation, the delivery of an Assignment and, if applicable,
an FAA Assignment or Foreign Assignment.
(b) If the Repurchase Price of the Removed Receivable proposed
to be replaced by one or more Substituted Receivables is greater than the
aggregate Principal Balances of such Substituted Receivables, the Seller shall
deposit cash into the Concentration Account in an amount equal to such excess.
Alternatively, if the Repurchase Price of such Removed Receivable is less than
the aggregate Principal Balances of the corresponding Substituted Receivable or
Receivables, during the Revolving Period the Seller may, so long as no
Amortization Event has occurred and is continuing, request the Purchasers to
purchase such excess, to the extent of the Available Commitments, pursuant to
subsection 2.2. If such excess is not purchased for any reason set forth in this
Agreement, then each Substituted Receivable able to be substituted to the
fullest extent shall first be substituted and any remaining Substituted
Receivable shall be a Participated Receivable subject to the provisions of
subsection 2.4. During the Revolving Period, if any Substituted Receivable is an
Extended Term Receivable, then such Substituted Receivable shall be subject to
subsection 2.5 and the Cash Flow Cutoff Date for such Substituted Receivable
shall be deemed to be, initially, (i) so long as no Rating Event has occurred
and is continuing, thirteen years after the date of substitution of such
Substituted Receivable and (ii) during the continuance of a Rating Event, ten
years after the date of
<PAGE>
56
substitution of such Substituted Receivable. Substitution for a Defaulted
Receivable shall not reduce the Aggregate Repurchase Obligation.
(c) If a Dissenting Purchaser holds an undivided interest in
any Removed Receivable then:
(i) if such Removed Receivable is an Ineligible Receivable, a
Delinquent Receivable or a Concentration Receivable, the Seller shall pay to the
Managing Facility Agent for the account of such Dissenting Purchaser an amount
equal to the sum of (A) the product of such Dissenting Purchaser's Commitment
Percentage (determined at the time such Dissenting Purchaser's Commitment
terminated) times the Outstanding Balance for such Removed Receivable and (B) if
-----
a Trigger Amortization Event has occurred and is continuing, the Dissenting
Purchaser's pro rata share (determined at the time such Dissenting Purchaser's
--- ----
commitment terminated) of accrued and unpaid interest on such Removed Receivable
at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by the Obligor under
such Contract; and
(ii) if such Removed Receivable is a Defaulted Receivable, (A)
and if the aggregate Available Commitments in effect on the Settlement Date on
which such substitution is to be made exceed an amount equal to (x) the
Dissenting Purchaser's Commitment Percentage (determined at the time such
Dissenting Purchaser's Commitment terminated) times (y) the Outstanding Balance
-----
for such Removed Receivable (the "Dissenting Purchaser's Share"), each Purchaser
----------------------------
other than a Dissenting Purchaser shall be deemed to purchase its Commitment
Percentage of the Dissenting Purchaser's Share by making funds therefor
available to the Managing Facility Agent for the account of such Dissenting
Purchaser on the Settlement Date on which such substitution is proposed to be
made; provided that such purchases shall be subject to the satisfaction of the
--------
conditions set forth in subsection 5.2 and, in connection therewith, the Seller
shall be deemed to have made the representations and warranties set forth in
subsection 4.2 with respect to the Purchased Receivables constituting the
Dissenting Purchaser's Share as if the Seller were selling such Receivables to
the Purchasers on such Settlement Date; or (B) if for any reason a purchase
cannot be made pursuant to the foregoing clause (A), the Seller shall
repurchase, up to the amount of the RARC Repurchase Obligation on the date of
such purchase, such Dissenting Purchaser's Share on such Settlement Date up to
such Dissenting Purchaser's Commitment Percentage (determined at the time such
Dissenting Purchaser's Commitment terminated) of the Aggregate Repurchase
Obligation in effect on such Settlement Date (in each case after giving effect
to purchases, substitutions and repurchases on such Settlement Date) plus, if a
Trigger Amortization Event has occurred and is continuing, the Dissenting
Purchaser's pro rata share (determined at the time such Dissenting Purchaser's
--- ----
Commitment terminated) of accrued and unpaid interest on such Removed Receivable
at the rate under the related Contract except to the extent (without
duplication) of any payment made pursuant to subsection 2.18 for the Settlement
Period during which such interest accrued and was not paid by the Obligor under
such Contract. It is understood that determinations of the RARC Repurchase
Obligation with respect to a Dissenting Purchaser pursuant to this subsection
2.13(c)(ii) shall be, with respect to a L/C Receivable, made on the Settlement
Date on which such determination is made in accordance with the definitions of
the terms "90% Repurchase Receivable" and "25% Repurchase Receivable" and the
status of such L/C Receivable at such Settlement Date.
<PAGE>
57
(d) Any repurchases of Receivables made pursuant to subsection
2.13(c) shall be made on the Settlement Date on which the related substitution
of Receivables is to be made.
(e) On any Settlement Date (other than a Special Settlement
Date) the Seller may, with the consent of the Managing Facility Agent,
substitute a Lease Receivable which is an Eligible Receivable (a "Substituted
-----------
Lease Receivable") for a Lease Receivable (other than a Lease Receivable which
----------------
is a Defaulted Receivable, a Delinquent Receivable, a Concentration Receivable
or an Ineligible Receivable) which was previously sold or substituted hereunder
(a "Replaced Lease Receivable") if the Seller, in the ordinary course of
-------------------------
business and in accordance with the Credit and Collection Policy, is entering
into a new Contract with the same Person which is the Obligor under the Contract
related to such Replaced Lease Receivable (or an Affiliate of such Person);
provided that during the Amortization Period the prior consent of the Majority
--------
Purchasers shall be required to effect any such substitution; provided, further,
-------- -------
that if a Remittance Event has occurred and is continuing and if the Principal
Balance of a Substituted Lease Receivable is less than the Principal Balance of
the Replaced Lease Receivable such substitution shall occur only on a Settlement
Date and within two Business Days after such substitution is made, the Seller
shall deposit into the Concentration Account an amount equal to the difference
between the Outstanding Balance of the Replaced Lease Receivable and the
Purchase Price of the Substituted Lease Receivable. The Settlement Statement
with respect to the Settlement Period in which such substitution occurs (or the
Settlement Statement delivered with respect to the Settlement Date on which such
substitution occurs, in the case of substitutions made on a Settlement Date in
accordance with the final proviso of the preceding sentence) shall contain the
information required thereby with respect to such substitution. Upon such
substitution, the Principal Balance of the Replaced Lease Receivable shall be
deemed to be reduced to zero. The provisions of subsection 2.13(b) (except for
the first sentence thereof) shall apply as if a Replaced Lease Receivable and a
Substituted Lease Receivable are, respectively, a Removed Receivable and a
Substituted Receivable and the provisions of subsection 2.13(c)(i) (A) (without
regard to clause (B) of subsection 2.13(c)(i)) shall apply as if a Replaced
Lease Receivable is a Removed Receivable; provided that, in accordance with
--------
subsection 2.13(d) and notwithstanding the date of substitution of a Substituted
Lease Receivable in accordance with this subsection 2.13(e), payments shall be
made to the Dissenting Purchaser with respect to a Substituted Lease Receivable
on the Settlement Date related to the Settlement Statement which contains
information with respect to such substitution. The making of such substitution
shall be subject to the satisfaction of the conditions set forth in subsection
5.2, including in each case, without limitation, the delivery of an Assignment
and FAA Assignment or a Foreign Assignment, as applicable, with respect to each
such Substituted Lease Receivable on or before the Business Day such Substituted
Lease Receivable is substituted.
2.14 Accounts. (a) On or before the Closing Date the Seller
--------
shall establish in its name a segregated account with a commercial bank
satisfactory to the Managing Facility Agent (the "Collection Account"). Upon the
------------------
occurrence and during the continuance of a Remittance Event, and unless the
Servicer has provided a Servicer Letter of Credit in accordance with subsection
2.15(a), the Seller or the Servicer shall within two Business Days after its
receipt, (i) deposit all Collections received by it directly into the Collection
Account and (ii) transfer or cause to be transferred to the Concentration
Account any Collections so deposited. Any amounts received by the Seller and not
related to the Purchased Receivables or the related Contracts or
<PAGE>
58
Financed Aircraft shall not be deposited into the Collection Account. Any
amounts at any time on deposit in the Collection Account shall be transferred
only to the Concentration Account and to no other deposit or other account
(including, but not limited to, any account or sub-account maintained pursuant
to Raytheon's cash management system). The Seller hereby grants to the Managing
Facility Agent for the ratable benefit of the Purchasers a security interest in
the Collection Account and all amounts from time to time on deposit therein to
secure the Obligations. The Seller shall have no right to withdraw any amounts
on deposit in the Collection Account.
(b) On or before the Closing Date there shall be established
with and in the name of the Managing Facility Agent a segregated account (the
"Concentration Account") which shall be maintained as a cash collateral account
---------------------
subject to the exclusive dominion and control of the Managing Facility Agent for
the ratable benefit of the Purchasers. The Seller hereby grants to the Managing
Facility Agent for the ratable benefit of the Purchasers a security interest in
any of its right, title and interest in the Concentration Account and all
amounts from time to time on deposit therein and all income from the investment
of such amounts to secure, in each case, the Obligations. Funds on deposit from
time to time in the Concentration Account shall bear interest at the then
prevailing rate paid by the Managing Facility Agent for deposit accounts with
similar amounts on deposit from time to time. If at any time funds on deposit in
the Concentration Account are greater than $100,000, the Managing Facility Agent
may, but shall not be required to, unless it receives a request from the Seller
or Raytheon, invest such funds in Cash Equivalents with maturities not later
than the next succeeding Settlement Date, to the extent such requested Cash
Equivalents are available for investment. Any investment request by the Seller
or Raytheon shall be given to the Managing Facility Agent one Business Day prior
to the day the investment is to be made (which shall be a Business Day in New
York, New York and San Francisco, California) and shall specify the particular
Cash Equivalents and maturities thereof. Any interest or investment earnings on
amounts in the Concentration Account on related investments shall be retained in
the Concentration Account to be withdrawn in accordance with this subsection
2.14(b). The Managing Facility Agent shall have the right to withdraw amounts
from the Concentration Account to make the payments required to be made
hereunder from Collections. Neither the Managing Facility Agent nor any
Purchaser shall have any responsibility for any such investment and the Managing
Facility Agent shall be permitted to liquidate any such investment, without
liability for any loss occurring by reason of such liquidation, to the extent
necessary to make payments and distributions under this Agreement. The Seller
shall have no right to withdraw amounts on deposit from time to time in the
Concentration Account.
(c) (i) On or before the Closing Date there shall be
established with and in the name of the Managing Facility Agent a segregated
trust account comprised of two segregated sub-accounts, the Seller cash
collateral sub-account (the "Seller Cash Collateral Sub-Account") and the RAC
----------------------------------
cash collateral sub-account (the "RAC Cash Collateral Sub-Account," the Seller
-------------------------------
Cash Collateral Sub-Account and the RAC Cash Collateral Sub-Account being
referred to collectively as the "Cash Collateral Account") which shall be
-----------------------
maintained as a cash collateral account subject to the exclusive dominion and
control of the Managing Facility Agent for the ratable benefit of the
Purchasers. The Seller hereby grants to the Managing Facility Agent for the
ratable benefit of the Purchasers a first priority security interest in the Cash
Collateral
<PAGE>
59
Account and all amounts on deposit from time to time therein and all income from
the investment of such amounts to secure, in each case, the Obligations. Funds
on deposit from time to time in the Seller Cash Collateral Sub-Account shall
bear interest at the then prevailing rate paid by the Managing Facility Agent
for deposit accounts with similar amounts on deposit from time to time. If at
any time funds on deposit in the Seller Cash Collateral Sub-Account are greater
than $100,000, the Managing Facility Agent may, but shall not be required to,
unless it receives a request from the Seller, invest funds on deposit in the
Seller Cash Collateral Sub-Account in Cash Equivalents with maturities not later
than the next succeeding Settlement Date (or such other maturities as the Seller
shall request and the Managing Facility Agent shall approve), to the extent such
requested Cash Equivalents are available for investment. Any investment request
by the Seller shall be given to the Managing Facility Agent one Business Day
prior to the day the investment is to be made (which shall be a Business Day in
New York, New York and San Francisco, California) and shall specify the
particular Cash Equivalents and maturities thereof. Any interest or investment
earnings on amounts in the Seller Cash Collateral Sub-Account or related
investments shall be retained in the Seller Cash Collateral Sub-Account to be
withdrawn in accordance with paragraphs (ii), (iii) and (iv) of this subsection
2.14(c). Neither the Managing Facility Agent nor any Purchaser shall have any
responsibility for any such investment and the Managing Facility Agent shall be
permitted to liquidate any such investment, without liability for any loss
occurring by reason of such liquidation, to the extent necessary to make
payments and distributions under this Agreement. The Seller shall have no right
to withdraw amounts on deposit from time to time in the Cash Collateral Account.
(ii) If on any Settlement Date on which the Seller is required
to repurchase Defaulted Receivables pursuant to subsection 2.10 and fails for
any reason to repurchase such Defaulted Receivables or substitute for such
Defaulted Receivables pursuant to subsection 2.13, whether or not RAC fails to
repurchase such Defaulted Receivables under the Repurchase Agreement, the
Managing Facility Agent may withdraw from amounts on deposit in the Seller Cash
Collateral Sub-Account on account of such Defaulted Receivable an amount equal
to the lesser of (A) the Repurchase Price for such Defaulted Receivable plus any
accrued and unpaid interest thereon required to be paid by subsection 2.10 and
(B) the amount then on deposit in the Seller Cash Collateral Sub-Account. It is
specifically understood and agreed that amounts on deposit in the Seller Cash
Collateral Sub-Account, whether on account of 25% Repurchase Receivables, 75%
Repurchase Receivables or 90% Repurchase Receivables, may be withdrawn as
aforesaid on account of any Defaulted Receivable, regardless of the RARC
Repurchase Percentage associated therewith or whether the RAC Repurchase
Obligation shall be outstanding. Any amounts so withdrawn shall be deposited
into the Concentration Account and allocated and distributed pursuant to
subsections 2.15 and 2.16, respectively. The Seller agrees with the Managing
Facility Agent and the Purchasers to deposit into the Seller Cash Collateral
Sub-Account, without any requirement for notice or demand therefor, the lesser
of the amount withdrawn therefrom or the sum of the RARC Repurchase Obligation
then in effect on the date such withdrawal is made, plus interest thereon at a
rate per annum equal to the Default Rate for the period from such date of
withdrawal to such date of deposit. Deposit of amounts into the Seller Cash
Collateral Sub-Account pursuant to the preceding sentence shall, to the extent
of such deposit, satisfy the Seller's obligation to repurchase such Defaulted
Receivable pursuant to subsection 2.10.
<PAGE>
60
(iii) If the Seller or the Servicer (if then Raytheon Credit
or any Affiliate thereof) shall fail to make any deposit, payment or transfer of
funds required to be made by the Seller or the Servicer under this Agreement or
any other document executed and delivered in connection herewith, including,
without limitation, any payment, deposit or transfer of funds or payment of any
indemnity required to be made pursuant to subsection 2.7(b), 2.10, 2.10A, 2.11,
2.12, 2.18 or 9.1 (each such payment, deposit or transfer, a "Reimbursable
------------
Obligation"), then the Managing Facility Agent with the consent of the Majority
----------
Purchasers may, in addition to any similar rights in favor of the Managing
Facility Agent under the Repurchase Agreement, withdraw from the Seller Cash
Collateral Sub-Account on the date such Reimbursable Obligation is due hereunder
an amount equal to the lesser of (A) such Reimbursable Obligation and (B) the
amount then on deposit in the Seller Cash Collateral Sub-Account. The Seller
agrees with the Managing Facility Agent and the Purchasers to deposit in the
Seller Cash Collateral Sub-Account, without any requirement for notice or demand
therefor, the amount withdrawn on the date such withdrawal is made, plus
interest thereon at a rate per annum equal to the Default Rate for the period
from such date of withdrawal to such date of deposit.
(iv) No amounts on deposit in the Seller Cash Collateral Sub-
Account (including interest or investment earnings) shall be released to the
Seller until the Outstanding Purchase Price is reduced to zero and all other
amounts owing to the Managing Facility Agent or any Purchaser hereunder are paid
in full, provided, that,
-------- ----
(x) on each Settlement Date (other than a Special Settlement
Date) occurring during the continuance of a Rating Event, after giving
effect to all collections and distributions on such date, the amounts
on deposit in the Cash Collateral Account in excess of the Aggregate
Repurchase Obligation on such Settlement Date shall be released pro
---
rata based upon their respective repurchase obligations, to the Seller
----
and to RAC;
(y) on each Settlement Date occurring during the continuance
of a Rating Event following a Settlement Period during which Finance
Charges on Wholesale Receivables which are Quarterly Receivables have
been paid, the excess of (A) amounts which were on previous Settlement
Dates, pursuant to subsection 2.16(b)(vi), deposited into the Cash
Collateral Account as accrued Finance Charge Collections on such
Quarterly Receivables, over (B) any portion of such amounts so
previously deposited which are on such Settlement Date withdrawn from
the Cash Collateral Account by the Managing Facility Agent and applied
pursuant to subsection 2.14(c) shall be released to the Seller; and
(z) on the Business Day after the date on which the
Outstanding Purchase Price is reduced to zero and all other amounts
owing to the Managing Facility Agent and the Purchasers hereunder have
been paid in full, all amounts on deposit in the Seller Cash Collateral
Sub-Account shall be released to the Seller.
2.15 Remittance and Allocation of Collections. (a) The Seller
----------------------------------------
or the Servicer shall, subject to subsection 2.14(a), deposit into or transfer
to the Concentration Account all Collections within two Business Days following
receipt thereof; provided that so long as (i) a Remittance Event has not
--------
occurred and is continuing or (ii) following the occurrence and during the
continuance of a Remittance Event, the Servicer has provided a Servicer Letter
of Credit, the
<PAGE>
61
Seller or the Servicer shall make such deposit in or transfer to the
Concentration Account not later than the Settlement Date following the
Settlement Period during which such Collections were received; provided,
--------
further, that after the occurrence and during the continuance of a Rating Event,
-------
the Seller or the Servicer shall, at the times required by and otherwise in
accordance with this subsection 2.15(a), also deposit into or transfer to the
Concentration Account interest payments made by RAC on behalf of an Obligor
under a Wholesale Receivable. It is understood and agreed that until Collections
are required to be transferred to the Concentration Account in accordance with
the foregoing provisions, these funds may be commingled with other funds of
Raytheon and its Subsidiaries in connection with Raytheon's integrated cash
management program.
(b) On each Reporting Date the Servicer shall allocate all
Collections received on account of the Purchased Receivables during the
preceding Settlement Period between Principal Collections and Finance Charge
Collections. All Finance Charge Collections shall be deposited in the
Concentration Account in accordance with subsection 2.15(a) and distributed
pursuant to subsection 2.16(b). All Principal Collections shall be deposited in
the Concentration Account in accordance with subsection 2.15(a) and applied in
accordance with subsection 2.16(a); provided that (i) if on any Settlement Date
--------
during the Revolving Period the aggregate Purchase Price to be paid for
purchases to be made on such Settlement Date exceeds amounts deposited or to be
deposited into the Concentration Account by the Seller or the Servicer, as the
case may be, on or during the Settlement Period prior to such Settlement Date on
account of Principal Collections, the Seller may retain such Principal
Collections, or to the extent previously deposited into the Concentration
Account shall make payments therefrom, as application for such aggregate
Purchase Price to be paid to the Seller on such Settlement Date and amounts so
retained by or paid to the Seller shall be treated as a payment (in whole or in
part, as applicable) for such Purchase Price and (ii) to the extent the amount
of such Principal Collections exceeds the aggregate Purchase Price of Eligible
Receivables available to be purchased on such Settlement Date, the Seller or the
Servicer, as the case may be, shall deposit, to the extent not previously
deposited, such excess in the Concentration Account on or prior to such
Settlement Date for distribution in accordance with subsection 2.16. Any
purchases made pursuant to the foregoing clause (i) shall be subject to the
satisfaction of the conditions set forth in paragraphs (a) through (h) of
subsection 5.2. During the Amortization Period, all Principal Collections shall
be deposited into the Concentration Account in accordance with subsection
2.15(a) and, on the Settlement Date on or following such date of deposit, shall
be distributed in accordance with subsection 2.16. The portion of any deposit
to be made into the Concentration Account required to be made pursuant to
subsections 2.10, 2.10A, 2.11 or 2.12 or the first sentence of 2.13(b)
(including, without limitation, on account of a Substituted Lease Receivable)
representing the Repurchase Price for any Receivable shall be subject to the
provisions of this subsection 2.15(b).
(c) Any Principal Collections received on account of an
Extended Term Receivable during the Revolving Period shall, subject to the
satisfaction of the conditions set forth in paragraphs (a) through (h) of
subsection 5.2, be applied to purchase the next succeeding monthly payments of
such Receivable which have not been purchased and which are payable prior to the
Cash Flow Cutoff Date then applicable to such Receivable.
(d) All Net Recoveries required to be deposited in accordance
with subsection 2.10(a)(ii) shall be deposited into the Concentration Account as
Collections. On the Reporting
<PAGE>
62
Date following the Settlement Period in which such deposit is made, such Net
Recoveries shall be allocated by the Managing Facility Agent as Principal
Collections and Finance Charge Collections and the Managing Facility Agent shall
notify the Servicer of such allocation the Business Day following such Reporting
Date. Such allocation shall be conclusive in the absence of manifest error or
unless the Managing Facility Agent receives notice from the Servicer of any
error made in such allocation on or before the third Business Day after such
notice is given to the Servicer and, in the event of any dispute between the
Managing Facility Agent and the Servicer with respect to such allocation, the
allocation of such Net Recoveries shall be conclusively made by the Managing
Facility Agent's independent certified public accountants prior to the next
succeeding Reporting Date. Such Net Recoveries shall be distributed pursuant to
subsection 2.16.
2.16 Distribution and Application of Collections. (a)
-------------------------------------------
Principal Collections. Principal Collections on Purchased Receivables shall be
---------------------
payable to the Purchasers up to the amount of the Outstanding Purchase Price
from time to time as specified herein. On each Settlement Date during the
Revolving Period (i) Principal Collections received during the prior Settlement
Period that are allocable to Purchased Receivables in which a Seller's Interest
has been created pursuant to subsections 2.6 or 2.6A shall be paid 25% to the
Seller in respect of such Seller's Interest, with the remaining 75% of such
Principal Collections allocated together with all other Principal Collections in
accordance with clause (ii) hereof and (ii) Principal Collections received
during the prior Settlement Period and not allocated to the Seller pursuant to
clause (i) hereof shall be first, applied to the aggregate Purchase Price of
-----
Eligible Receivables purchased on such Settlement Date in accordance with the
terms and conditions of this Agreement and second, paid to the Purchasers on
------
such Settlement Date and applied in respect of the Outstanding Purchase Price.
On each Settlement Date during the Amortization Period, Principal Collections
received during the prior Settlement Period shall be paid to the Purchasers on
such Settlement Date and applied in respect of the Outstanding Purchase Price.
Following an Amortization Event, Principal Collections on account of the
Purchase Discount applied to the Purchase Price of Receivables purchased during
a Discount Event may, at the discretion of the Managing Facility Agent, be
deemed Finance Charge Collections available to be distributed pursuant to
subsections 2.16(b)(ii) and (b)(iii).
(b) Finance Charge Collections. On each Settlement Date (other
--------------------------
than a Special Settlement Date) funds on deposit in the Concentration Account
representing Finance Charge Collections in respect of the preceding Settlement
Period shall be distributed by the Managing Facility Agent as follows, to the
extent of funds available therefor:
(i) first, to the Servicer as payment of the
-----
Servicing Fee for the preceding Settlement Period;
(ii) second, to the Purchasers pro rata as payment of
------ --- ----
all interest due pursuant to subsection 2.17(a) and (c) for
the preceding Accrual Period;
(iii) third, to the Managing Facility Agent and each
-----
Purchaser which has made a demand prior to the Reporting Date
preceding such Settlement Date, to costs payable pursuant to
subsections 2.22, 2.23, 2.24 and 11.5;
<PAGE>
63
(iv) fourth, to the Purchasers pro rata as payment of
------
the Commitment Fees for the preceding Accrual Period pursuant
to subsection 2.17(d) and second, to the Managing Facility
------
Agent as payment of the fees referred to in subsection 2.17(e)
to the extent such fees have not been paid directly by the
Seller;
(v) fifth, if a Rating Event has occurred and is
-----
continuing, to the extent of funds available therefor, to the
Managing Facility Agent for deposit into the Cash Collateral
Account an amount equal to Finance Charges on those Wholesale
Receivables which are Quarterly Receivables which Finance
Charges have accrued during the preceding Settlement Period
and are payable under the related Contract on a subsequent
Settlement Date; and
(vi) sixth, any remaining Finance Charge Collections
-----
(such remainder, "Excess Spread") shall be distributed as
-------------
follows: (1) so long as no Trigger Amortization Event has
occurred and is continuing, to the Seller or its designees and
(2) in all other cases, 100% thereof shall be paid to the
Purchasers pro rata as payment in respect of the Outstanding
Purchase Price.
(c) All Collections received from an Obligor of any Purchased
Receivable shall be applied to Purchased Receivables of such Obligor in the
order of the age of such Purchased Receivables, starting with the oldest
outstanding amount of such Purchased Receivable (i.e., the most delinquent of
---
such Purchased Receivables), except if the payment is designated by such Obligor
for application to specific Receivables. All Principal Collections received on
account of any Extended Term Receivable and not used to purchase monthly
payments of such Receivable payable after its most recent Cash Flow Cutoff Date
shall be applied in the direct order of maturity thereof. Payments made by an
Obligor on account of a Receivable shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Managing Facility Agent and the Required Purchasers, be applied as a
Collection of any Purchased Receivable of such Obligor to the extent of any
amounts then due and payable thereunder before being applied to any other
indebtedness of such Obligor to the Seller or Raytheon Credit.
2.17 Interest and Fees. (a) Except as provided in paragraph
-----------------
(b) below, each Purchaser's Outstanding Purchase Price shall bear interest for
each day during an Accrual Period at a rate per annum equal to the Note Rate for
such Purchaser and shall be payable on each Settlement Date (other than a
Special Settlement Date) for the immediately preceding Accrual Period. To the
extent that the Outstanding Purchase Price has not been reduced to zero on the
date the Amortization Period ends pursuant to clause (ii) of the definition of
such term, interest shall accrue pursuant to this subsection 2.17(a) regardless
of whether the Seller shall be obligated to pay Expense Amounts under subsection
2.18.
(b) The Outstanding Purchase Price for Receivables purchased
on a Special Settlement Date shall bear interest (i) at a rate per annum equal
to the Base Rate for the first three Working Days following such Special
Settlement Date and (ii) thereafter at a rate per annum equal to the Interbank
Rate for each day of the Special Settlement Date Accrual Period; provided that,
if the Seller provides the Managing Facility Agent with the notice provided for
in Section 2.3 at least three Working Days prior to the applicable Special
Settlement Date, then
<PAGE>
64
interest shall be calculated in accordance with clause (ii) from such Special
Settlement Date until the end of the related Special Settlement Date Accrual
Period. Interest payable under this Section 2.17(b) shall be payable on the next
Settlement Date. Beginning with the first Settlement Date after any Special
Settlement Date, interest with respect to the Receivables purchased on such
Special Settlement Date shall be calculated in accordance with paragraph (a)
above.
(c) If all or any portion of any amount (including interest)
payable by the Seller hereunder shall not be paid when due, such overdue amount
shall bear interest at a rate per annum equal to the Note Rate plus 1% (the
----
"Default Rate") from the date of such non-payment until such amount is paid in
------------
full (after as well as before judgment). The Outstanding Purchase Price shall
bear interest pursuant to, and at the times specified in, subsection 8.2(a) for
each day during an Accrual Period at a rate per annum equal to the Default Rate
until the Outstanding Purchase Price is reduced to zero (after as well as before
judgment). Any amount payable pursuant to this subsection 2.17(c) shall be
payable on each Settlement Date (other than a Special Settlement Date), or on
demand after any judgment. To the extent that the Outstanding Purchase Price has
not been reduced to zero on the date the Amortization Period ends pursuant to
clause (ii) of the definition of such term, interest shall accrue pursuant to
this subsection 2.17(c) regardless of whether the Seller shall be obligated to
pay Expense Amounts under subsection 2.18. Interest accruing pursuant to this
subsection 2.17(c) shall be payable from time to time on demand.
(d) During the period from and including the Amendment
Effective Date to the date on which the Revolving Period ends, a commitment fee
(a "Commitment Fee") shall be payable to the Managing Facility Agent for the
--------------
account of each Purchaser, payable monthly in arrears on each Settlement Date
(other than a Special Settlement Date) and computed at the rate per annum based
on Raytheon's Debt Rating in effect on such day, as set forth under the relevant
column heading below, on the actual daily amount of the Available Commitment of
such Purchaser during each Accrual Period ending prior to the Settlement Date on
which the Commitment Fee is paid, commencing on the first such Settlement Date
to occur after the Amendment Effective Date:
Debt Rating Commitment Fee
----------- --------------
BBB+ or the equivalent thereof or above 0.125%
BBB or the equivalent thereof 0.150%
BBB- or the equivalent thereof 0.175%
BB+ or the equivalent thereof 0.225%
Below BB+ or the equivalent thereof 0.375%
(e) The Seller agrees to pay (i) to the Managing Facility
Agent for its account the fees set forth in the Fee Letter, dated March 8, 2002,
among the Managing Facility Agent, the Seller and the Guarantor in the amounts
and on the dates set forth therein and (ii) to the Syndication Agent for its
account the fees set forth in the Fee Letter, dated February 7, 2002, among the
Syndication Agent, the Seller and the Guarantor in the amounts and on the dates
set forth therein.
<PAGE>
65
(f) Interest and fees required to be paid under this
subsection 2.17 shall be payable regardless of whether sufficient Finance Charge
Collections therefore are on deposit in the Concentration Account on the date or
dates such interest or fees are required to be paid.
2.18 Yield Adjustment. If on any Settlement Date (other than a
----------------
Special Settlement Date) any Expense Amount is not paid in full on such
Settlement Date, then on such Settlement Date the Seller will pay to the
Managing Facility Agent for the account of each Purchaser the amounts required
to pay all such Expense Amounts in full provided, that the Seller's obligation
--------
under this subsection 2.18 in favor of any Purchaser in any calendar year shall
not exceed an amount equal to the product of the applicable Note Rate as of such
date times such Purchaser's Outstanding Purchase Price as of such date. The
Seller shall not be obligated to pay pursuant to this subsection 2.18 any
Expense Amounts which accrue after the date the Amortization Period ends;
provided that the Seller shall remain obligated to pay any Expense Amount which
--------
accrued prior to such date (whether or not claimed prior to such date) so long
as a claim for such Expense Amount is made prior to the times set forth in the
subsection hereof governing such Expense Amount.
2.19 Computations and Payments. (a) All amounts to be paid or
-------------------------
deposited by or on behalf of the Seller hereunder shall be paid or deposited in
accordance with the terms hereof no later than 11:00 a.m., New York City time,
on the day when due in lawful money of the United States of America and in
immediately available funds. All computations of Commitment Fees, interest and
other fees and amounts payable hereunder shall be made on the basis of a year of
360 days for the actual number of days elapsed (including the first but
excluding the last day). The Managing Facility Agent shall as soon as
practicable notify the Seller and the Purchasers of each determination of a LIBO
Rate or an Interbank Rate.
(b) Each determination of the Note Rate, the Interbank Rate or
the Default Rate by the Managing Facility Agent pursuant to any provision of
this Agreement shall be conclusive and binding on the Seller and the Purchasers
in the absence of manifest error. The Managing Facility Agent shall, at the
request of the Seller, deliver to the Seller a statement showing the quotations
used by the Managing Facility Agent in determining the Note Rate for any Accrual
Period.
(c) If any Reference Bank's Commitment shall terminate for any
reason whatsoever, such Reference Bank shall thereupon cease to be a Reference
Bank, and if, as a result of the foregoing, there shall only be one Reference
Bank remaining, the Managing Facility Agent (after consultation with the Seller
and the Purchasers) shall, by notice to the Seller and the Purchasers, designate
another Purchaser as a Reference Bank so that there shall at all times be at
least two Reference Banks.
(d) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Managing Facility Agent to the extent contemplated by
the definition of "LIBO Rate". If any Reference Bank shall be unable or shall
otherwise fail to supply such rates to the Managing Facility Agent upon its
request, the LIBO Rate shall be determined on the basis of the quotations of the
remaining Reference Banks or Reference Bank.
<PAGE>
66
2.20 Pro Rata Treatment. (a) Except with respect to payments
------------------
to a Dissenting Purchaser pursuant to subsection 2.8(b)(ii) or 2.13(c), (i) each
purchase by the Purchasers hereunder, each payment by the Seller in respect of
the Commitment Fees and any reduction of the Commitments shall be made pro rata
--- ----
according to the respective Available Commitment Percentages of the Purchasers
and (ii) each payment by the Seller in respect of the Outstanding Purchase Price
and interest thereon and any repurchase of Receivables shall be made pro rata
--- ----
according to the respective Commitment Percentages of the Purchasers. The
Managing Facility Agent shall distribute payments received by or on behalf of
the Seller to the Purchasers promptly upon receipt in like funds as received.
(b) Unless the Managing Facility Agent shall have been
notified in writing by any Purchaser prior to a Settlement Date that such
Purchaser will not make available to the Managing Facility Agent the amount that
would constitute its Available Commitment Percentage of the aggregate Purchase
Price to be paid on such date, the Managing Facility Agent may assume that such
Purchaser has made such amount available to the Managing Facility Agent on such
Settlement Date, and the Managing Facility Agent may, in reliance upon such
assumption, make available to the Seller a corresponding amount. If such amount
is made available to the Managing Facility Agent on a date after such Settlement
Date, such Purchaser shall pay to the Managing Facility Agent on demand an
amount equal to the product of (i) the daily average Federal funds rate during
such period as quoted by the Managing Facility Agent, times (ii) the amount of
such Purchaser's Available Commitment Percentage of such aggregate Purchase
Price, times (iii) a fraction the numerator of which is the number of days that
elapse from and including such Settlement Date to the date on which such
Purchaser's Available Commitment Percentage of such aggregate Purchase Price
shall have become immediately available to the Managing Facility Agent and the
denominator of which is 360. A certificate of the Managing Facility Agent
submitted to any Purchaser with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Purchaser's Available Commitment Percentage of such aggregate Purchase Price is
not in fact made available to the Managing Facility Agent by such Purchaser
within three Business Days after such Settlement Date, then on the fourth
Business Day after such Settlement Date the Seller shall be deemed to have
repurchased participating interests in the Receivables in an amount equal to
such Purchaser's Available Commitment Percentage of the aggregate Purchase Price
paid on such Settlement Date, together with interest on such amount at the rate
per annum equal to the LIBO Rate, such repurchase to be made by a cash payment
to the Managing Facility Agent for its own account; provided that such
--------
repurchase shall not limit the rights of the Seller against the Purchaser which
failed to make available its Available Commitment Percentage of such aggregate
Purchase Price.
2.21 Illegality. Notwithstanding any other provision herein,
----------
if any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Purchaser to make or maintain its
proportionate share of the Outstanding Purchase Price based on the LIBO Rate as
contemplated by this Agreement, (a) the Commitment of such Purchaser hereunder
to make purchases shall forthwith be canceled and (b) the Outstanding Purchase
Price of such Purchaser shall be paid on each Settlement Date thereafter as if
such Purchaser were a Dissenting Purchaser under subsection 2.8.
<PAGE>
67
2.22 Requirements of Law. (a) In the event that any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Purchaser with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority (each, a
"Change in Law") made subsequent to the date hereof (or with respect to a
-------------
Purchasing Party which becomes a party hereto pursuant to subsection 11.6(c),
made subsequent to the date such Purchasing Party became a party hereto) shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Purchaser (except any such reserve requirement reflected
in the LIBO Rate); or
(ii) impose on any Purchaser or the London interbank
market any other condition affecting this Agreement or the
making of purchases or the maintaining of a proportionate
share of the Outstanding Purchase Price by such Purchaser;
and the result of any of the foregoing shall be to increase the cost to such
Purchaser of making purchases or maintaining its proportionate share of the
Outstanding Purchase Price (or of maintaining its obligation to do any of the
foregoing) or to reduce the amount of any sum received or receivable by such
Purchaser hereunder (whether of principal, interest or otherwise), then the
Seller will pay to such Purchaser such additional amount or amounts as will
compensate such Purchaser for such additional costs incurred or reduction
suffered.
(b) If any Purchaser determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Purchaser's capital or on the capital of such Purchaser's
holding company, if any, as a consequence of this Agreement or such Purchaser's
obligations hereunder, to a level below that which such Purchaser or such
Purchaser's holding company could have achieved but for such Change in Law
(taking into consideration such Purchaser's policies and the policies of such
Purchaser's holding company with respect to capital adequacy), then from time to
time the Seller will pay to such Purchaser such additional amount or amounts as
will compensate such Purchaser or such Purchaser's holding company for any such
reduction suffered.
(c) A certificate of a Purchaser setting forth the amount or
amounts necessary to compensate such Purchaser or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this subsection shall be
delivered to the Seller and shall be conclusive absent manifest error. The
Seller shall pay such Purchaser the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Failure or delay on the part of any Purchaser to demand
compensation pursuant to this subsection shall not constitute a waiver of such
Purchaser's right to demand such compensation; provided that the Seller shall
--------
not be required to compensate a Purchaser pursuant to this subsection for any
increased costs or reductions incurred more than six months prior to the date
that such Purchaser notifies the Seller of the Change in Law giving rise to such
increased costs or reductions and of such Purchaser's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
-------- -------
to such increased costs or reductions is retroactive,
<PAGE>
68
then the six-month period referred to above shall be extended to include the
period of retroactive effect thereof.
2.23 Taxes. (a) Any and all payments by or an account of any
-----
obligation of the Seller hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Seller
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this subsection) the Managing Facility Agent,
Co-Administrative Agent or Purchaser (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Seller shall make such deductions and (iii) the Seller shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Seller shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Seller shall indemnify the Managing Facility Agent,
each Co-Administrative Agent and each Purchaser, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this subsection) paid by the Managing
Facility Agent, such Co-Administrative Agent or such Purchaser, as the case may
be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Seller by a Purchaser, or by the Managing Facility Agent on its own behalf or on
behalf of a Purchaser or a Co-Administrative Agent shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Seller to a Governmental Authority, the Seller shall
deliver to the Managing Facility Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Managing Facility Agent.
(e) Any Foreign Purchaser that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Seller is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Seller (with a
copy to the Managing Facility Agent), at the time or times prescribed by
applicable law or reasonably requested by the Seller, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
2.24 Reemployment Costs. The Seller agrees to indemnify each
------------------
Purchaser and to hold each Purchaser harmless from any loss or expense
(including, but not limited to, any such loss or expense arising from interest
or fees payable by a Purchaser to lenders of funds obtained by it or them to
purchase or maintain an interest in the Purchased Receivables with respect to
<PAGE>
69
which the Note Rate is determined by reference to the LIBO Rate) as a
consequence of (a) default by the Seller in the performance of its obligations
hereunder, (b) any reduction in the Outstanding Purchase Price prior to the last
day of any Settlement Period, (c) the failure of the Seller or the Servicer to
make any amounts available to the Managing Facility Agent when due hereunder or
(d) any expenses (excluding legal expenses) incurred by any Purchaser pursuant
to subsection 2.21. A certificate of such Purchaser submitted to the Seller
certifying, in reasonably specific detail, the basis for, calculation of and
amounts of such additional costs shall be conclusive in the absence of manifest
error. This covenant shall survive for a period of two years following the date
on which the Amortization Period ends.
2.25 Seller's Obligations Absolute and Unconditional. The
-----------------------------------------------
Seller's obligations under this Section 2 to make payments, deposits and
repurchases shall be absolute and unconditional and shall be performed without
regard to any set-off which the Seller at any time may have available to it.
2.26 Mitigation Obligations; Replacement of Purchaser. (a) If
------------------------------------------------
any Purchaser requests compensation under subsection 2.22, or if the Seller is
required to pay any additional amount to any Purchaser or any Governmental
Authority for the account of any Purchaser pursuant to subsection 2.23, then
such Purchaser shall use reasonable efforts to designate a different lending
office for funding or booking its purchases hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Purchaser, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to subsection 2.22 or 2.23, as the
case may be, in the future and (ii) would not subject such Purchaser to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Purchaser. The Seller hereby agrees to pay all reasonable costs and expenses
incurred by any Purchaser in connection with any such designation or assignment.
(b) If any Purchaser requests compensation under subsection
2.22, or if the Seller is required to pay any additional amount to any Purchaser
or any Governmental Authority for the account of any Purchaser pursuant to
subsection 2.23, or if any Purchaser defaults in its obligation hereunder to
make purchases or maintain its proportionate share of the Outstanding Purchase
Price or if at any time after the Effective Date any Purchaser shall cause the
Managing Facility Agent to notify the Seller and the Servicer of a Prohibited
Jurisdiction, then the Seller may, at its sole expense and effort, upon notice
to such Purchaser and the Managing Facility Agent, require such Purchaser to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Purchaser, if a Purchaser accepts
such assignment); provided that (i) the Seller shall have received the prior
--------
written consent of the Managing Facility Agent, which consent shall not
unreasonably be withheld, (ii) such Purchaser shall have received payment of an
amount equal to such Purchaser's Outstanding Purchase Price, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Seller (in the case of all other amounts), (iii) in the case of any
such assignment resulting from a claim for compensation under subsection 2.22 or
payments required to be made pursuant to subsection 2.23, such assignment will
result in a reduction in such compensation or payments and (iv) in the case of
any such assignment resulting from a request to add an additional Prohibited
Jurisdiction, such assignee will not request that such
<PAGE>
70
jurisdiction be so categorized. A Purchaser shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Purchaser or otherwise, the circumstances entitling the Seller to require
such assignment and delegation cease to apply.
2.27 Designation of Affiliate Receivables and Foreign
------------------------------------------------
Receivables. (a) Each Affiliate Receivable and each Foreign Receivable (other
-----------
than L/C Receivables, Unsecured Foreign Receivables and Existing Receivables)
shall be designated as a Certified Foreign Receivable or an Uncertified Foreign
Receivable in accordance with this subsection 2.27.
Except as provided in subsections 2.27(c) and (d) below, no
less than 45 days prior to the Settlement Date on which the Seller proposes to
sell or substitute an Affiliate Receivable or Foreign Receivable (other than a
L/C Receivable), the Seller shall deliver to the Servicer the following:
(i) with respect to each such Foreign Receivable
other than a Lease Receivable with a Foreign Obligor,
(A) the form(s) of Foreign Assignment(s) with respect
to the Financed Aircraft related to such Receivable, which
Foreign Assignment(s) shall be effective to perfect (A) the
Lien granted by the Obligor thereon in favor of Raytheon
Credit, (B) the assignment thereof by Raytheon Credit in favor
of the Seller and (C) the assignment of such Lien by the
Seller in favor of the Administrative Agent, in each case, in
all respects reasonably satisfactory in form and substance to
the Managing Facility Agent and its counsel,
(B) the forms of all other filings and recordings
(including, without limitation, any UCC filings with filing
offices in the jurisdictions listed on Schedule II) necessary
or advisable, in the opinion of the Managing Facility Agent
after consultation with its counsel or the Servicer, to
perfect the Purchasers' first priority ownership or security
interests in and to such Foreign Receivable and the related
Contracts and Financed Aircraft and the Collections with
respect thereto, and
(C) (x) a form of legal opinion of counsel (a copy of
which shall be delivered to the Managing Facility Agent)
admitted to practice in the foreign jurisdiction in which the
related Foreign Obligor is located (within the meaning of
Section 9-307 of the New York UCC), addressed to the Managing
Facility Agent, the Co-Administrative Agents and the
Purchasers (1) to the effect that (x) the Lien granted by the
Obligor in favor of Raytheon Credit in the related Financed
Aircraft constitutes a duly perfected, first priority Lien
thereon, (y) each of the assignment of such Lien by Raytheon
Credit to the Seller and by the Seller in favor of the
Administrative Agent (for the ratable benefit of the
Purchasers) in the related Financed Aircraft constitutes (as
of its effectiveness) a duly perfected, first priority Lien
thereon (except as set forth in paragraph (l) of the
definition of "Eligible Receivables") and (z) the assignment
of such Foreign Receivable by Raytheon Credit to the Seller
and by the Seller in favor of the Administrative Agent (for
the ratable benefit of the Purchasers) constitutes (as of its
<PAGE>
71
effectiveness) a duly perfected, first priority Lien thereon
(except for Permitted Receivables Liens) and (2) covering such
other matters as the Managing Facility Agent shall reasonably
request, and in all respects satisfactory in form and
substance to the Managing Facility Agent and its counsel, or
(y) if the Obligor of such Receivable is located (within the
meaning of Section 9-307 of the New York UCC) in a
jurisdiction covered by a previously delivered and accepted
(by the Managing Facility Agent on behalf of the Purchasers)
legal opinion, a form of certificate of a Responsible Officer
of the Seller which represents and warrants to the Managing
Facility Agent, for the benefit of the Purchasers, that the
Seller has taken all actions specified in such previously
delivered opinion and all other actions known to the Seller to
ensure that the Liens referenced in clause (A) of this
paragraph (i) are enforceable and have been duly perfected to
the same extent as set forth in such previously delivered and
accepted legal opinion;
(ii) with respect to each such Foreign Receivable
which is a Registerable Lease Receivable with a Foreign
Obligor,
(A) the form of FAA Assignment with respect to the
Financed Aircraft related to such Receivable, which FAA
Assignment shall be effective to perfect the Lien granted by
the Seller thereon in favor of the Administrative Agent, in
each case, in all respects reasonably satisfactory in form and
substance to the Managing Facility Agent and its counsel,
(B) the forms of all other filings and recordings
(including, without limitation, any UCC filings with filing
offices in the jurisdictions listed on Schedule II) necessary
or advisable, in the opinion of the Managing Facility Agent
after consultation with its counsel or the Servicer, to
perfect the Purchasers' first priority ownership or security
interests in and to such Foreign Receivable and the related
Contracts and Financed Aircraft and the Collections with
respect thereto, and
(C) (x)(1) a form of legal opinion of special FAA
counsel to the Seller to the effect that (A) the Lien granted
by the Seller in favor of the Administrative Agent (for the
ratable benefit of the Purchasers) in the related Financed
Aircraft constitutes a duly perfected, first priority Lien
thereon (except as set forth in paragraph (l) of the
definition of "Eligible Receivables") and (B) the assignment
of such Foreign Receivable by the Seller in favor of the
Administrative Agent (for the ratable benefit of the
Purchasers) constitutes a duly perfected, first priority Lien
thereon (except for Permitted Receivables Liens) and (2) a
form of legal opinion of counsel (a copy of which shall be
delivered to the Managing Facility Agent) admitted to practice
in the foreign jurisdiction in which the related Foreign
Obligor is located (within the meaning of Section 9-307 of the
New York UCC), addressed to the Managing Facility Agent, the
Co-Administrative Agents and the Purchasers to the effect that
the assignment of such Foreign Receivable by the Seller in
favor of the Administrative Agent (for the ratable benefit of
the
<PAGE>
72
Purchasers) constitutes a duly perfected, first priority Lien
thereon (except for Permitted Receivables Liens); each such
opinion shall also cover such other matters as the Managing
Facility Agent shall reasonably request, and shall be in all
respects satisfactory in form and substance to the Managing
Facility Agent and its counsel, or
(y) if the Foreign Obligor of such Foreign Receivable is so
located in a jurisdiction covered by a previously delivered
and accepted (by the Managing Facility Agent on behalf of the
Purchasers) legal opinion of foreign counsel (as described in
clause (C)(x) above), a form of certificate of a Responsible
Officer of the Seller which represents and warrants to the
Managing Facility Agent, for the benefit of the Purchasers,
that the Seller has taken all actions specified in such
previously delivered opinion and all other actions known to
the Seller to ensure that the assignment of the Foreign
Receivable is enforceable and has been duly perfected to the
same extent as set forth in such previously delivered and
accepted legal opinion;
(iii) with respect to each such Foreign Receivable
which is a Lease Receivable with a Foreign Obligor, but is not
a Registerable Lease Receivable,
(A) the form of Foreign Assignment with respect to
the Financed Aircraft related to such Receivable, which
Foreign Assignment shall be effective to perfect the Lien
granted thereon by the Seller in favor of the Administrative
Agent for the ratable benefit of the Purchasers, in each case,
in all respects reasonably satisfactory in form and substance
to the Managing Facility Agent and its counsel,
(B) the forms of all other filings and recordings
(including, without limitation, any UCC filings with filing
offices in the jurisdictions listed on Schedule II) necessary
or advisable, in the opinion of the Managing Facility Agent
after consultation with its counsel or the Servicer, to
perfect the Purchasers' first priority ownership or security
interests in and to such Foreign Receivable and the related
Contracts and Financed Aircraft and the Collections with
respect thereto, and
(C) (x) a form of legal opinion of counsel (a copy of
which shall be delivered to the Managing Facility Agent)
admitted to practice in the foreign jurisdiction in which the
related Foreign Obligor is located (within the meaning of
Section 9-307 of the New York UCC), addressed to the Managing
Facility Agent, the Co-Administrative Agents and the
Purchasers (1) to the effect that (A) the Lien granted by the
Seller in favor of the Administrative Agent (for the ratable
benefit of the Purchasers) in the related Financed Aircraft
constitutes a duly perfected, first priority Lien thereon
(except as set forth in paragraph (l) of the definition of
"Eligible Receivables"), (B) the assignment by the Seller in
favor of the Administrative Agent (for the ratable benefit of
the Purchasers) of such Receivable constitutes a duly
perfected, first priority Lien thereon (except for Permitted
Receivables Liens) and (2) covering such other matters as the
<PAGE>
73
Managing Facility Agent shall reasonably request, and in all
respects satisfactory in form and substance to the Managing
Facility Agent and its counsel, or
(y) if the Foreign Obligor of such Foreign Receivable is so
located in a jurisdiction covered by a previously delivered
and accepted (by the Managing Facility Agent on behalf of the
Purchasers) legal opinion, a form of certificate of a
Responsible Officer of the Seller which represents and
warrants to the Managing Facility Agent, for the benefit of
the Purchasers, that the Seller has taken all actions
specified in such previously delivered opinion and all other
actions known to the Seller to ensure that the Liens
referenced in clause (C)(x)(1)(A) and (B) of this paragraph
(iii) are enforceable and have been duly perfected to the same
extent as set forth in such previously delivered and accepted
legal opinion;
provided, however, that notwithstanding the provisions of this subsection
--------
2.27(a)(iii), the Seller may, at its option, decline to perform any of the
requirements of this subsection 2.27(a)(iii) with respect to any Uncertified
Lease Receivable; and
(iv) with respect to each Affiliate Receivable,
(A) the form(s) of Foreign Assignment(s) with
respect to the Financed Aircraft related to such Receivable,
which Foreign Assignment(s) shall be effective to perfect (A)
the Lien granted thereon by the Affiliate Obligor in favor of
Raytheon Credit, (B) an assignment of such Lien by Raytheon
Credit in favor of the Seller and (B) an assignment of such
Lien by the Seller in favor of the Administrative Agent for
the ratable benefit of the Purchasers, in each case, in all
respects reasonably satisfactory in form and substance to the
Managing Facility Agent and its counsel,
(B) the forms of all other filings and recordings
(including, without limitation, any UCC filings with filing
offices in the jurisdictions listed on Schedule II) necessary
or advisable, in the opinion of the Managing Facility Agent
after consultation with its counsel or the Servicer, to
perfect (A) Raytheon Credit's first priority perfected
interest in the Applicable Lease related thereto, the Financed
Aircraft and the Collections with respect thereto, (B) the
assignment by Raytheon Credit of such Affiliate Receivable and
Raytheon Credit's interest in the Applicable Lease related
thereto, the Financed Aircraft and the Collections with
respect thereto to the Seller and (C) the Purchasers' first
priority ownership or security interests in and to such
Affiliate Receivable and the related Contracts and Financed
Aircraft and the Collections with respect thereto, and
(C) (x) a form of legal opinion of counsel (a copy of
which shall be delivered to the Managing Facility Agent)
admitted to practice in the foreign jurisdiction in which the
related Unaffiliated Foreign Lessee is located (within the
meaning of Section 9-307 of the New York UCC), addressed to
the Managing Facility Agent, the Co-Administrative Agents and
the Purchasers (1) to the effect that (A) the Lien in favor of
Raytheon Credit in the related Financed Aircraft constitutes a
duly perfected, first priority Lien thereon (except as set
forth in
<PAGE>
74
paragraph (l) of the definition of "Eligible Receivables"),
(B) the assignment by Raytheon Credit in favor of the Seller
of such Affiliate Receivable and Raytheon Credit's interest in
the Applicable Lease related thereto, the Financed Aircraft
and the Collections with respect thereto constitutes a duly
perfected assignment thereof and (C) the assignment thereof by
the Seller in favor of the Administrative Agent, for the
ratable benefit of the Purchasers of such Affiliate
Receivable, constitutes a duly perfected, first priority Lien
thereon (except for Permitted Receivables Liens and except as
set forth in paragraph (l) of the definition of "Eligible
Receivables") and (2) covering such other matters as the
Managing Facility Agent shall reasonably request, and in all
respects satisfactory in form and substance to the Managing
Facility Agent and its counsel, or
(y) if the Unaffiliated Foreign Lessee of such Affiliate
Receivable is so located in a jurisdiction covered by a
previously delivered and accepted (by the Managing Facility
Agent on behalf of the Purchasers) legal opinion, a form of
certificate of a Responsible Officer of the Seller which
represents and warrants to the Managing Facility Agent, for
the benefit of the Purchasers, that the Seller has taken all
actions specified in such previously delivered opinion and all
other actions known to the Seller to ensure that the Liens
referenced in clause (C)(x)(1)(A), (B) and (C) of this
paragraph (iv) are enforceable and have been duly perfected to
the same extent as set forth in such previously delivered and
accepted legal opinion.
(b) Except as provided in subsection 2.27(c) below, within 30
days of receipt of such forms of assignment, legal opinions and other specified
documents, the Servicer shall notify the Seller whether or not the related
Affiliate Receivables and Foreign Receivables will, subject to the satisfaction
of the conditions specified in subsection 5.2(e), constitute Certified Foreign
Receivables, Uncertified Foreign Receivables or Ineligible Receivables. Subject
to the satisfaction of the conditions specified in subsection 5.2(e), such
designation will be applied from and after the date of such notification. In the
absence of such notification, such Receivable shall constitute an Uncertified
Foreign Receivable, provided, however, that at any time thereafter, the Seller
-------- -------
may request that the Servicer determine whether any Uncertified Foreign
Receivable due to a change of circumstance is eligible to qualify as a Certified
Foreign Receivable. Within 45 days of receipt of such request (or such shorter
period as shall be reasonably practicable) the Servicer shall determine the
eligibility of the Uncertified Foreign Receivable referred to above to qualify
as a Certified Foreign Receivable in accordance with the provisions of this
subsection 2.27 and notify the Seller.
(c) Notwithstanding the foregoing, but subject to the further
provisions of this subsection 2.27(c) and the provisions of subsection 2.27(d),
on the Closing Date Existing Certified Receivables shall be designated Certified
Foreign Receivables hereunder. Within 180 days of the Closing Date (such date,
the "Certified Opinion Delivery Date"), the Seller shall deliver to the Old
--------------------------------
Administrative Agent, with respect to each Existing Certified Receivable, a form
of legal opinion of counsel (satisfactory to the Old Administrative Agent)
admitted to practice in the foreign jurisdiction in which the related
Unaffiliated Foreign Lessee is located (within the meaning of Section 9-103 of
the New York UCC as in effect at such time), addressed to the Old Administrative
Agent and the Purchasers (x) to the effect that no further action need be taken
in order to (1) perfect the transfer by Raytheon Credit to the Seller of such
Existing
<PAGE>
75
Certified Receivable, the related Financed Aircraft and Applicable Lease (if
applicable) and Collections thereon in accordance with the Intercompany Purchase
Agreement and (2) continue the Lien in favor of the Administrative Agent of such
Existing Certified Receivable, the related Financed Aircraft and Applicable
Lease (if applicable) and Collections thereon as a duly perfected Lien having
the same priority as in effect immediately prior to the Effective Date and (y)
if any actions had been required in order to render the opinions set forth in
clause (x), setting forth such actions and (z) covering such other matters as
the Old Administrative Agent shall reasonably request, which opinion shall be in
all respects satisfactory in form and substance to the Old Administrative Agent
and its counsel.
(d) On the first Settlement Date (other than a Special
Settlement Date) following the Certified Opinion Delivery Date, the Seller shall
repurchase from the Purchasers and the Purchasers agree to sell to the Seller on
such date in accordance with the terms hereof, each Existing Certified
Receivable and each Existing GA Receivable (the Foreign Obligor of which is
located in Canada, France or Australia) as to which the Purchasers shall not
have received a legal opinion to the effect set forth in subsection 2.27(c)
hereof. Subject to subsections 2.13 and 2.15(b), the Seller shall make such
repurchase by depositing in the Concentration Account cash an amount for each
such Receivable equal to the amount set forth in clause (a) of the definition of
"Repurchase Price", calculated at the date such deposit is made, except to the
extent (without duplication) of any payment made pursuant to subsection 2.18,
for the Settlement Period during which such interest accrued and was not paid by
the Foreign Obligor under the related Contract. The amount of any such deposit
shall be applied and distributed in accordance with subsections 2.15 and 2.16.
Except as provided in subsection 9.1, the sole obligation of the Seller with
respect to a Receivable of the type described in this subsection 2.27(d) shall
be the requirement to repurchase or substitute for such Receivable pursuant to
this subsection 2.27(d).
SECTION 3. THE SERVICER AND SERVICING OF PURCHASED RECEIVABLES
3.1 Designation of Servicer; Removal. (a) The servicing,
---------------------------------
administering and collection of Purchased Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
--------
subsection 3.1. Until the Required Purchasers give notice to the Seller of the
designation of a new Servicer pursuant to subsection 3.1(b), Raytheon Credit is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer for the Purchased Receivables sold hereunder. The Servicer may,
with the prior consent of the Required Purchasers, subcontract with any other
Person to perform, in accordance with applicable laws, the servicing,
administering or collecting of Purchased Receivables, provided that the Servicer
--------
shall remain liable for the performance of the duties and obligations of the
Servicer pursuant to the terms hereof. With respect to the Existing Receivables,
the capacity of the Servicer shall be a continuation by Raytheon Credit of its
capacity as Servicer under and as defined in each of the Existing Agreements.
(b) At any time after the occurrence and during the
continuance of a Specified Amortization Event, the Required Purchasers may
remove Raytheon Credit (or any successor Servicer) as the Servicer and appoint
as a successor Servicer any Person to succeed Raytheon Credit (or any successor
Servicer) as Servicer, on the condition that such successor Servicer agrees to
perform the duties and obligations of the Servicer pursuant to the terms hereof.
Any such removal of Raytheon Credit (or any successor Servicer) as the Servicer
shall not become
<PAGE>
76
effective until such successor Servicer accepts its appointment and agrees to be
bound by the terms and conditions of this Agreement with respect to the Servicer
in a writing satisfactory in form and substance to the Managing Facility Agent
and the Required Purchasers. The Servicer agrees to cooperate with the Managing
Facility Agent, the Purchasers and any successor Servicer if the Servicer is
terminated under this Agreement, including transferring to the successor
Servicer all cash amounts or documents or instruments relating to the Purchased
Receivables held by the Servicer at the time of its removal.
(c) The authorization of the Servicer under this Agreement
shall terminate when all the obligations under this Agreement have been paid in
full.
3.2 Duties of Servicer. (a) The Servicer shall take or cause
------------------
to be taken all such actions as may be necessary or advisable to administer,
service and collect each Purchased Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and solely in accordance with the Credit and Collection Policy. The
Seller, the Managing Facility Agent and each Purchaser each agrees that the
Servicer may enforce its rights and interests in and under the Purchased
Receivables and the Contracts and with respect to the Financed Aircraft. The
Servicer shall remit Collections in accordance with subsections 2.14 and 2.15(a)
and until such remittances are made, in the circumstance described in Section
2.15(a), without regard to the proviso, shall hold such Collections in trust for
the account of the Purchasers. The Servicer may not extend, amend or otherwise
modify the terms of any Purchased Receivable, or amend, modify or waive any term
or condition of any Contract related thereto, or extend, amend or otherwise
modify the rights of the Seller except (i) in accordance with subsection 7.1(b)
and (ii) if the Servicer is not then Raytheon Credit, with the Seller's prior
consent. No Servicer (if not Raytheon Credit) may commence or settle any legal
action to enforce collection of any Purchased Receivable without the prior
consent of the Required Purchasers. The Seller shall deliver to the Servicer (if
not the Seller) all computer tapes or disks and, upon the Managing Facility
Agent's request, all documents, instruments or other records which evidence or
relate to Purchased Receivables (the foregoing, the "Contract Files").
(b) The Servicer (if not Raytheon Credit) shall as soon as
practicable following receipt turn over to the Seller or any other party
entitled thereto the Collections on any Receivable which is not a Purchased
Receivable less all reasonable and appropriate out-of-pocket costs and expenses
of the Servicer of servicing, collecting and administering such Receivable to
the extent not covered by the Servicing Fee received by it. The Servicer, if
other than the Seller, shall as soon as practicable upon demand deliver to the
Seller all documents, instruments and records in its possession which evidence
or relate to Receivables other than Purchased Receivables, and copies of
documents, instruments and records in its possession which evidence or relate to
Receivables other than Purchased Receivables. The Servicer unconditionally and
absolutely agrees to take any and all action requested by the Managing Facility
Agent in connection with the exercise by the Managing Facility Agent and the
Purchasers of their rights under subsection 8.2, 11.11, 11.12 or 11.13.
(c) With respect to any L/C Receivable the related letter of
credit of which expires on the last date of the Contract related thereto, the
Servicer shall prepare any drawing request required under such letter of credit
and, if the payment due under such Contract is not
<PAGE>
77
made by the drawing deadline under such letter of credit, the Servicer shall
make a drawing thereunder. Further, if the expiration date of any letter of
credit related to any L/C Receivable is not extended when a Principal Balance of
such Receivable remains outstanding, the Servicer shall, or shall cause the
Seller or Raytheon Credit to, draw the aggregate available amount under such
letter of credit prior to the expiration thereof.
3.3 Servicer Reports. The Servicer shall deliver to the
----------------
Managing Facility Agent, with sufficient copies for each Purchaser:
(a) Within 45 days after the end of each of the first three
fiscal quarters of the Servicer, beginning with the first such quarter to end
after the Closing Date, a report with respect to such fiscal quarter, certified
by a Responsible Officer (if the Seller is then the Servicer) or by the
president or officer responsible for financial affairs of the Servicer, to the
effect that the Servicer has reviewed its servicing, administration and
collection of Purchased Receivables, Collections with respect thereto and the
related Contracts and Financed Aircraft, that no errors and irregularities were
detected with respect to such servicing, administration and collection and that
such servicing, collection and administration was conducted in compliance with
the applicable provisions of this Agreement; and
(b) Within 90 days after the last day of each fiscal year of
the Servicer, a report of a firm of nationally recognized independent public
accountants (which may also render other services to the Servicer, the Seller or
Raytheon or any Affiliate thereof) to the effect that (i) such firm has made an
examination, in accordance with attestation standards established by the
American Institute of Certified Public Accountants, of management's assertion
that the Servicer's Receivables Administration Department maintained effective
internal control over financial reporting as of the most recent fiscal year
based on criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
and (ii) such firm has performed the procedures set out in Exhibit K (agreed
upon procedures relating to Settlement Statements and receivables files).
3.4 Servicing Fee. As compensation for its servicing
-------------
activities hereunder and reimbursement for its reasonable fees, disbursements
and expenses incurred in connection with its activities hereunder, the Servicer
shall be entitled to receive a per annum servicing fee of .85% of the
Outstanding Purchase Price, payable monthly in arrears on each Settlement Date
(other than a Special Settlement Date) in respect of the Outstanding Purchase
Price at the end of the Accrual Period preceding the Settlement Date on which
the Servicing Fee is paid. The Servicing Fee shall be calculated on the basis
of a 360-day year for the actual number of days elapsed during such Accrual
Period.
3.5 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
----------------------------
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the
Servicer substantially as an entirety shall be, if the
Servicer is not the surviving entity, organized and existing
under the laws of the United States of
<PAGE>
78
America or any State or the District of Columbia and shall
expressly assume, by an agreement in form reasonably
satisfactory to the Managing Facility Agent and the Required
Purchasers, the performance of every covenant and obligation
of the Servicer hereunder, and shall benefit from all the
rights granted to the Servicer, as applicable hereunder;
(ii) the Servicer has delivered to the Managing
Facility Agent a certificate of the Chief Financial Officer or
President thereof and an opinion of counsel (which counsel
shall be reasonably satisfactory to the Managing Facility
Agent) each stating that such consolidation, merger,
conveyance or transfer and such agreement comply with this
Section 3.5 and that all conditions precedent herein provided
for relating to such transaction have been complied with and,
in the case of the opinion of counsel, that such agreement is
legal, valid and binding with respect to the Servicer; and
(iii) after giving effect thereto, no Amortization Event
shall have occurred and be continuing.
3.6 Limitation on Liability of the Servicer and Others.
---------------------------------------------------
Neither the Servicer (except as otherwise provided herein) nor any of the
directors or officers or employees or agents of the Servicer shall be under any
liability to the Managing Facility Agent, the Co-Administrative Agents or the
Purchasers or any other Person for any action taken or for refraining from the
taking of any action pursuant to this Agreement whether arising from express or
implied duties under this Agreement; provided, however, that this provision
-------- -------
shall not protect the Servicer against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of its willful misconduct hereunder or by
reason of Section 3.7. The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
3.7 Indemnification of the Seller, the Managing Facility
----------------------------------------------------
Agent, the Administrative Agent, the Co-Administrative Agents and each
----------------------------------------------------------------------
Purchaser. The Servicer shall indemnify and hold harmless the Seller, the
---------
Managing Facility Agent, the Administrative Agent and each Purchaser from and
against any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts, omissions or alleged acts or omissions of the Servicer with
respect to activities of the Seller or the Purchasers for which the Servicer is
responsible pursuant to this Agreement, including those arising from acts or
omissions of the Servicer pursuant to this Agreement, including, but not limited
to any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim. Notwithstanding the foregoing, (i) the Servicer
shall not indemnify the Seller, the Managing Facility Agent, the Administrative
Agent, any Co-Administrative Agent or any Purchaser if such acts, omissions or
alleged acts constitute fraud, gross negligence or breach of fiduciary duty by
such Person; (ii) the Servicer shall not indemnify the Seller, the Managing
Facility Agent, the Administrative Agent, the Co-Administrative Agents or any
Purchaser for any liabilities, costs or expenses with respect to any action
taken by or at the request of any Purchasers, the Managing Facility Agent, the
Administrative Agent, any Co-Administrative Agent, any Co-Agent or any Agent;
(iii) the Servicer shall not indemnify the
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79
Seller, the Managing Facility Agent, the Administrative Agent, the
Co-Administrative Agents or any Purchaser as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Receivables which are
written off as uncollectible; and (iv) the Servicer shall not indemnify the
Seller, the Managing Facility Agent, the Administrative Agent, the
Co-Administrative Agents or any Purchaser for any liabilities, costs or expenses
of any such Person arising under any tax law, including without limitation any
federal, state or local income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by any such Person in
connection herewith to any taxing authority. The provisions of this indemnity
shall run directly to and be enforceable by an injured party subject to the
limitations hereof.
The obligations of the Servicer under this subsection 3.7
shall survive the payment in full of the obligations hereunder.
3.8 The Servicer Not to Resign. The Servicer shall not resign
--------------------------
from the obligations and duties hereby imposed on it except upon determination
that (i) the performance of its duties hereunder is or becomes impermissible
under applicable law and (ii) there is no reasonable action which the Servicer
could take to make the performance of its duties hereunder permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) above by an opinion of counsel
(satisfactory to the Managing Facility Agent and its counsel) to such effect
delivered to the Managing Facility Agent. No such resignation shall become
effective until a successor Servicer shall have assumed the responsibilities and
obligations of the Servicer hereunder. Any delegation of duties permitted under
subsection 3.1 shall not relieve the Servicer of its liability and
responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of this subsection 3.8.
3.9 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Contracts. The Servicer shall provide to the Managing Facility Agent access
-------------
to the documentation regarding the Purchased Receivables (including the
Contracts) and the related Financed Aircraft, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and confidentiality procedures
and (iv) at offices designated by the Servicer.
3.10 Marking of Records. The Servicer shall mark the Contract
------------------
files with a legend (or, in the case of computer tapes and disks, other
appropriate electronic mark or tag) that such Purchased Receivables have been
sold to the Managing Facility Agent and each Purchaser.
3.11 Additional Covenants of the Servicer. The Servicer hereby
------------------------------------
covenants that:
(a) Contract Files. The Servicer will, at its own cost
--------------
and expense, maintain all Contract files in its possession in trust for
the Seller, the Managing Facility Agent and the Purchasers and in
accordance with the Credit and Collection Policy and customary
standards in the aircraft finance industry. Without limiting the
generality of the preceding sentence, the Servicer will not dispose of
any such items in any manner which is inconsistent with the performance
of its obligations as the Servicer pursuant to this
<PAGE>
80
Agreement and will not dispose of any Contract except as contemplated
by this Agreement.
(b) Compliance with Law. The Servicer will comply, in all
-------------------
material respects, with all laws and regulations of any Governmental
Authority applicable to the Servicer, the Contracts related to the
Purchased Receivables, the related Financed Aircraft and the Contract
Files or any part thereof; provided that the Servicer may contest any
--------
such law or regulation in any reasonable manner which will not
materially and adversely affect the value of (or the rights of the
Managing Facility Agent or the Purchasers, with respect to) the
Purchased Receivables and related Financed Aircraft.
(c) Preservation of Security Interest. The Servicer will
---------------------------------
execute and file such financing and continuation statements and any
other documents reasonably requested by the Managing Facility Agent to
be filed or which may be required by any law or regulation of any
Governmental Authority to preserve and protect fully the interest of
the Managing Facility Agent and the Purchasers in, to and under the
Purchased Receivables and related Financed Aircraft (in each case as
contemplated by the other provisions of this Agreement).
(d) Obligations with Respect to Contracts; Modifications. The
----------------------------------------------------
Servicer will duly fulfill and comply with, in all material respects,
all obligations on the part of the Seller to be fulfilled or complied
with under or in connection with each Contract related to Purchased
Receivables and will do nothing to impair the rights of the
Administrative Agent or the Purchasers in, to and under the Purchased
Receivables and the related Financed Aircraft. The Servicer will
perform such obligations under the Contracts and will not change or
modify the Contracts, except as otherwise provided in subsection
7.1(b)(iv) of this Agreement.
(e) No Bankruptcy Petition. Prior to the date that is one year
----------------------
and one day after the payment in full of all amounts owing hereunder,
the Servicer will not institute against the Seller, or join any other
Person in instituting against the Seller, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or
other similar proceedings under the laws of the United States or any
state of the United States. This Section 3.11(e) will survive the
termination of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties Relating to the Seller. To
-----------------------------------------------------
induce the Purchasers to enter into this Agreement and to purchase the
Receivables the Seller hereby represents and warrants to the Managing Facility
Agent and each Purchaser on the date hereof, on the Amendment Effective Date and
(except as provided in subsection 4.1(j)) on each Settlement Date (including
each Special Settlement Date) on which a purchase or substitution is made that:
(a) Corporate Existence; Compliance with Law. The Seller
----------------------------------------
(i) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate
power and authority, and the legal right, to own and
<PAGE>
81
operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (iii) is duly
qualified and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of
its business requires such qualification except to the extent that
failure so to qualify could not reasonably be expected to have a
Material Adverse Effect and (iv) is in compliance with all Requirements
of Law (whether or not the determination of any arbitrator, court or
other Governmental Authority has been appealed and is final) except to
the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Corporate Power; Authorization; Enforceable
-------------------------------------------
Obligations. The Seller has the corporate power and authority, and the
-----------
legal right, to execute and deliver, and to perform its obligations
under, this Agreement, each Assignment, each FAA Assignment and each
Foreign Assignment and to sell or substitute the Receivables hereunder,
to grant and assign the Liens as contemplated herein and has taken all
necessary corporate action to authorize the sales, purchases and
substitutions and the granting and assigning of Liens in connection
therewith on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement and
each other Purchase Document to which it is a party. No consent or
authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person is required in connection
with the sales, purchases and substitutions to be made hereunder, the
granting and assignment of Liens in connection therewith or with the
execution, delivery, performance, validity or enforceability of this
Agreement or any other Purchase Document to which it is a party. This
Agreement has been, and each Assignment, FAA Assignment and Foreign
Assignment will be, duly executed and delivered on behalf of the
Seller. This Agreement constitutes, and each Assignment, FAA Assignment
and Foreign Assignment when executed and delivered will constitute, a
legal, valid and binding obligation of the Seller enforceable against
the Seller 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).
(c) No Legal Bar. Each sale and purchase and each
------------
substitution to be made hereunder, the use of the proceeds of any such
purchase and sale, each granting or assigning of the Liens in
connection with any such purchase and sale or substitution and the
execution, delivery and performance of this Agreement and each other
Purchase Document to which it is a party will not violate the Seller's
certificate of incorporation or by-laws or any Requirement of Law
(including, but not limited to, bulk transfer or similar statutory
provisions in effect in any applicable jurisdiction) or Contractual
Obligation of the Seller and will not result in, or require, the
creation or imposition of any Lien on any of its properties or revenues
pursuant to the Seller's certificate of incorporation or by-laws or any
such Requirement of Law or Contractual Obligation, other than the Liens
in favor of the Administrative Agent and the Purchasers created hereby.
(d) No Material Litigation. No litigation, investigation
----------------------
or proceeding of or before any arbitrator or Governmental Authority is
pending by or against the Seller or, to the
<PAGE>
82
Seller's knowledge, pending against RAC, or threatened by or against
the Seller or RAC, or against any of their respective properties or
revenues (i) with respect to this Agreement or any other Purchase
Document to which the Seller is a party or any of the transactions
contemplated hereby or thereby or (ii) which could reasonably be
expected to have a Material Adverse Effect.
(e) No Default. Neither the Seller nor, to the Seller's
----------
knowledge, RAC is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect.
(f) Federal Regulations. No part of the proceeds of any
-------------------
purchase will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect or for any purpose which
violates the provisions of the Regulations of such Board of Governors.
If requested by any Purchaser or the Managing Facility Agent, the
Seller will furnish to the Managing Facility Agent and each Purchaser a
statement to the foregoing effect in conformity with the requirements
of FR Form U-1 referred to in said Regulation U.
(g) ERISA. During the five-year period prior to the date
-----
on which this representation is made or deemed made with respect to any
Plan, each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code and neither the Seller nor
any Commonly Controlled Entity has incurred any liability with respect
to any Plan (other than contributions and payments required to be made
in a timely fashion under the terms of such Plan which were so made),
where a failure to comply or such liability could reasonably be
expected to have a Material Adverse Effect. Neither the Seller nor any
Commonly Controlled Entity would become subject to any liability under
ERISA if the Seller or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is
made or deemed made which could reasonably be expected to have a
Material Adverse Effect.
(h) Investment Company Act; Other Regulations. The Seller
-----------------------------------------
is not an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended. The Seller is not subject to regulation under any
Federal or State statute or regulation which limits its ability to
incur indebtedness.
(i) Place of Business. The Seller is organized under the
-----------------
laws of the State of Kansas. The chief place of business and chief
executive office of the Seller and the offices where the Seller keeps
all its books, records and documents evidencing the Purchased
Receivables and the related Contracts are located at the address of the
Seller referred to in subsection 11.2 (or, in the case of books,
records and documents evidencing the Purchased Receivables, at such
other locations, notified to the Managing Facility Agent in accordance
with subsection 11.2, in jurisdictions where all action required by
subsection 6.1(l) has been taken and completed).
<PAGE>
83
(j) Information. All information set forth in the
-----------
Syndication Materials is accurate in all material respects on and as of
the Amendment Effective Date and does not contain any untrue statement
of a material fact or omit to state any material fact of which the
Seller knows or should have known which is necessary to make the
statements herein or therein, in light of the circumstances in which
they were made, not misleading.
4.2 Representations and Warranties Relating to the
----------------------------------------------
Receivables. To induce the Purchasers to purchase the Receivables the Seller
-----------
hereby represents and warrants to the Managing Facility Agent and each Purchaser
with respect to Receivables being purchased or substituted on each Settlement
Date (including each Special Settlement Date) or the Closing Date that:
(a) Eligible Receivables. Each Purchased Receivable is on
--------------------
its date of purchase or substitution hereunder an Eligible Receivable.
(b) Ownership or Perfected First Security Interest. Upon
----------------------------------------------
each purchase or substitution, the Purchasers will acquire a valid and
perfected first priority ownership or security interest in each
Purchased Receivable, the Collections with respect thereto and each
related Contract and, except with respect to any Unsecured Receivable
described in clause (i), (iii) or (v) of the definition of "Unsecured
Receivable", the related Financed Aircraft, free and clear of any Lien
other than (i) with respect to such Purchased Receivable and the
related Contracts, the Lien in favor of the Administrative Agent for
the ratable benefit of the Purchasers and any Permitted Receivable Lien
on such Purchased Receivable and related Contracts, (ii) solely with
respect to a Financed Aircraft, (u) the Lien created by the Obligor
(including an Affiliate Obligor) in favor of Raytheon Credit and
assigned to the Seller, (v) with respect to Existing Certified
Receivables, prior to the Certified Opinion Delivery Date, the Lien
created by the Obligor in favor of Raytheon Credit (but solely to the
extent a filing is required in a foreign jurisdiction to transfer such
Lien to the Seller and such filing has not been made), (w) with respect
to all Existing Receivables, prior to the FAA Filing Date, the Lien
created by the Obligor in favor of Raytheon Credit (but solely to the
extent a filing is required with the FAA to transfer such Lien to the
Seller and such filing has not been made), (x) the assignment of each
such Lien by the Seller in favor of the Administrative Agent for the
ratable benefit of the Purchasers or (y) solely with respect to a Lease
Receivable, the Lien created by the Seller in favor of the
Administrative Agent for the ratable benefit of the Purchasers, and
(iii) any Permitted Aircraft Lien on such Financed Aircraft; and no
effective document or instrument covering any Purchased Receivable or
Collections with respect thereto or the related Contract(s) or Financed
Aircraft is on file or of record in any recording office (including,
but not limited to, the FAA Registry or the comparable registry with
respect to any Foreign Receivable (excluding any L/C Receivable))
except (1) the filings with the appropriate foreign registry with
respect to Affiliate Receivables in order to perfect the Lien in favor
of the Seller in the Applicable Leases and Financed Aircraft related to
such Affiliate Receivables and (2) the filing with the FAA Registry or
the comparable registry with respect to any Foreign Receivable or any
Affiliate Receivable (excluding any L/C Receivable) in order to perfect
the Lien encumbering a Financed Aircraft and any related Applicable
Leases which was granted by the related Obligor in favor of the Seller
and (3) as may be filed in favor of the
<PAGE>
84
Administrative Agent for the ratable benefit of the Purchasers in
accordance with this Agreement.
(c) Assignment. The information set forth on Annex I to an
----------
Assignment, with respect to Eligible Receivables to be purchased or
substituted on a Settlement Date or purchased on the Closing Date, is
true and correct on and as of such Settlement Date or the Closing Date.
(d) No Material Adverse Change. Since the date of the last
--------------------------
Settlement Statement, there has been no material adverse change in the
collectibility of the Purchased Receivables taken as a whole.
(e) Substituted Receivables. If on any Settlement Date the
-----------------------
Seller sells or substitutes less than substantially all the Eligible
Receivables available for purchase or substitution on such Settlement
Date, the Seller or the Servicer has not utilized any selection
procedure intended to result in a selection of Purchased Receivables to
be purchased or substituted on such Settlement Date which could be
materially adverse to the rights of the Managing Facility Agent and
the Purchasers as of such Settlement Date.
(f) No Violation. Immediately following each purchase or
------------
substitution, the Seller will not have violated the limitations
contained in subsection 2.7.
(g) Entitlement to Section 1110 Benefits. With respect to
------------------------------------
each Purchased Receivable which is a Commuter Receivable (other than a
Foreign Receivable and an Affiliate Receivable), Raytheon Credit or the
Seller shall be entitled to the benefits of Section 1110 of the
Bankruptcy Code (11 USC [sec]. 1110) with respect to each Contract and
repossession of the related Financed Aircraft under which each such
Purchased Receivable arises, and the Administrative Agent, for the
ratable benefit of the Purchasers, pursuant to subsection 11.13, shall
be entitled to such Section 1110 benefits of Raytheon Credit and the
Seller after the occurrence and during the continuance of a Specified
Amortization Event or in connection with any action taken pursuant to
subsection 11.11(c) or subsection 11.12(b).
(h) Stipulated Aircraft Value. The Stipulated Aircraft
-------------------------
Value with respect to any Financed Aircraft as set forth in any lease
Contract related to a Receivable at any time is equal to or greater
than the Outstanding Balance of such Receivable at such time assuming
all current payments are made.
(i) Finance Charge Collections. The Finance Charge
--------------------------
Collections have been calculated in compliance with the Credit and
Collection Policy.
4.3 Representations and Warranties Relating to the Servicer.
--------------------------------------------------------
To induce the Purchasers to enter into this Agreement and to purchase the
Receivables the Servicer hereby represents and warrants to the Managing Facility
Agent and each Purchaser on the date hereof, on the Amendment Effective Date and
(except as provided in subsection 4.3(i)) on each Settlement Date (including
each Special Settlement Date) on which a purchase or substitution is made that:
<PAGE>
85
(a) Corporate Existence; Compliance with Law. The
----------------------------------------
Servicer (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has the
corporate power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (iii) is duly
qualified and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of
its business requires such qualification except to the extent that
failure so to qualify could not reasonably be expected to have a
Material Adverse Effect and (iv) is in compliance with all Requirements
of Law (whether or not the determination of any arbitrator, court or
other Governmental Authority has been appealed and is final) except to
the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Corporate Power; Authorization; Enforceable
-------------------------------------------
Obligations. The Servicer has the corporate power and authority, and
------------
the legal right, to execute and deliver, and to perform its obligations
under, this Agreement and each other Purchase Document to which it is a
party and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and each other
Purchase Document to which it is a party. No consent or authorization
of, filing with or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement or any other Purchase Document to which it is a party. This
Agreement has been duly executed and delivered on behalf of the
Servicer. This Agreement constitutes, and each other Purchase Document
to which it is a party, when executed and delivered by it, will
constitute, a legal, valid and binding obligation of the Servicer
enforceable against the Servicer 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).
(c) No Legal Bar. The execution, delivery and performance
------------
of this Agreement and each other Purchase Document to which it is a
party will not violate the Servicer's certificate of incorporation or
by-laws or any Requirement of Law (including, but not limited to, bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction) or Contractual Obligation of the Servicer and will not
result in, or require, the creation or imposition of any Lien on any of
its properties or revenues pursuant to the Servicer's certificate of
incorporation or by-laws or any such Requirement of Law or Contractual
Obligation.
(d) No Material Litigation. No litigation, investigation
----------------------
or proceeding of or before any arbitrator or Governmental Authority is
pending by or against the Servicer or, to the Servicer's knowledge,
pending against RAC, or threatened by or against the Servicer or RAC,
or against any of their respective properties or revenues (i) with
respect to this Agreement or any other Purchase Document to which the
Servicer is a party or any of the transactions contemplated hereby or
thereby or (ii) which could reasonably be expected to have a Material
Adverse Effect.
<PAGE>
86
(e) No Default. Neither the Servicer nor, to the
----------
Servicer's knowledge, RAC is in default under or with respect to any of
its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect.
(f) ERISA. During the five-year period prior to the date
-----
on which this representation is made or deemed made with respect to any
Plan, each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code and neither the Servicer
nor any Commonly Controlled Entity has incurred any liability with
respect to any Plan (other than contributions and payments required to
be made in a timely fashion under the terms of such Plan which were so
made), where a failure to comply or such liability could reasonably be
expected to have a Material Adverse Effect. Neither the Servicer nor
any Commonly Controlled Entity would become subject to any liability
under ERISA if the Servicer or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is
made or deemed made which could reasonably be expected to have a
Material Adverse Effect.
(g) Investment Company Act; Other Regulations. The
-----------------------------------------
Servicer is not an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company
Act of 1940, as amended. The Servicer is not subject to regulation
under any Federal or State statute or regulation which limits its
ability to incur indebtedness.
(h) Place of Business. The "location" (as such term is
-----------------
defined in Section 9-307 of the New York UCC), chief place of business
and chief executive office of the Servicer and the offices where the
Servicer keeps all its books, records and documents evidencing the
Purchased Receivables and the related Contracts are located at the
address of the Servicer referred to in subsection 11.2 (or, in the case
of books, records and documents evidencing the Purchased Receivables,
at such other locations, notified to the Managing Facility Agent in
accordance with subsection 11.2, in jurisdictions where all action
required by subsection 6.1(l) has been taken and completed).
(i) Information. All information set forth in the
-----------
Syndication Materials is accurate in all material respects on and as of
the Amendment Effective Date and does not contain any untrue statement
of a material fact or omit to state any material fact of which the
Servicer knows or should have known which is necessary to make the
statements herein or therein, in light of the circumstances in which
they were made, not misleading.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. The effectiveness of this
---------------------------
Agreement is subject to the satisfaction, of the following conditions precedent
(the first date on which such conditions are satisfied, which shall be a
Business Day, being herein called the "Amendment Effective Date"):
------------------------
(a) Purchase and Other Documents. The Managing Facility
----------------------------
Agent shall have received, with a copy for each Purchaser, (i) this
Agreement executed and delivered by a
<PAGE>
87
duly authorized officer of each party hereto and (ii) the Repurchase
Agreement executed and delivered by a duly authorized officer of RAC
and (iii) the Guarantee Reaffirmation executed and delivered by a duly
authorized officer of Raytheon.
(b) Corporate Proceedings and Contracts. The Managing
-----------------------------------
Facility Agent shall have received, with a counterpart for each
Purchaser, a copy of the resolutions, in form and substance
satisfactory to the Managing Facility Agent, of the Boards of Directors
of the Seller, Raytheon Credit, RAC and Raytheon authorizing, (i) in
the case of the Seller, the execution, delivery and performance of this
Agreement, (ii) in the case of Raytheon Credit, authorizing the
execution and delivery of this Agreement, (iii) in the case of RAC,
authorizing the execution and delivery of the Repurchase Agreement and
(iv), in the case of Raytheon, acknowledging the execution and delivery
of this Agreement and authorizing the execution and delivery of the
Guarantee Reaffirmation, certified by the Secretary or an Assistant
Secretary of the Seller, Raytheon Credit, RAC or Raytheon, as the case
may be, as of the Amendment Effective Date, which certificate shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and shall be in form and substance
satisfactory to the Managing Facility Agent.
(c) Corporate Documents; Good Standing Certificates. The
-----------------------------------------------
Managing Facility Agent shall have received, with a copy for each
Purchaser, (i) true and complete copies of the certificate of
incorporation and by-laws of each of the Seller, Raytheon Credit, RAC
and Raytheon, certified by the Secretary or Assistant Secretary thereof
as of the Amendment Effective Date as complete and correct copies
thereof and (ii) good standing certificates with respect to Raytheon
from the Secretary of State of the State of Delaware, with respect to
Raytheon Credit from the Secretary of State of the State of Kansas,
with respect to RAC from the Secretary of State of the State of Kansas
and with respect to the Seller from the Secretary of State of the State
of Kansas.
(d) Evidence of Incumbency. The Managing Facility Agent
----------------------
shall have received, with a counterpart for each Purchaser, a
certificate, in form and substance satisfactory to the Managing
Facility Agent, of the Secretary or Assistant Secretary of each of the
Seller, Raytheon Credit, RAC and Raytheon certifying as to the names
and true signatures of the officers authorized on such Person's behalf
to sign any of this Agreement, the Repurchase Agreement and the
Guarantee Reaffirmation to which it is a party.
(e) Officer's Certificates. The Managing Facility Agent
----------------------
shall have received, with a counterpart for each Purchaser, (i)
certificates, in form and substance satisfactory to the Managing
Facility Agent, of a vice president of each of the Seller, Raytheon,
RAC and Raytheon Credit that the representations and warranties made by
such Person in the Purchase Documents to which it is a party are true
and correct on and as of the Amendment Effective Date as though made on
and as of the Amendment Effective Date and (ii) a certificate of the
Vice President and Treasurer of Raytheon setting forth in the
certificate delivered on behalf of Raytheon the Debt Ratio on the last
day of its fiscal quarter ending December 31, 2001, the Interest
Coverage Ratio for the period of four consecutive fiscal quarters
ending December 31, 2001 and calculations thereof in reasonable
detail.
<PAGE>
88
(f) Legal Opinions. The Managing Facility Agent shall have
--------------
received, with a counterpart for each Purchaser, the following executed
legal opinions, each dated the Amendment Effective Date and each
addressed to the Managing Facility Agent and the Purchasers:
(i) the executed legal opinion of Wayne Wallace,
General Counsel to RAC, substantially in the form of Exhibit
E-1;
(ii) the executed legal opinion of David A. Williams,
General Counsel to Raytheon Credit and the Seller,
substantially in the form of Exhibit E-2;
(iii) the executed legal opinion of an in-house
attorney of Raytheon who is satisfactory to the Managing
Facility Agent, substantially in the form of Exhibit E-3
(iv) the executed legal opinion of special counsel to
the Seller and Raytheon Credit regarding UCC matters and such
other matters as the Managing Facility Agent may reasonably
request, substantially in the form of Exhibit E-4; and
(v) the executed legal opinion of Bingham Dana LLP,
special counsel to Raytheon Credit, regarding bankruptcy
matters, substantially in the form of Exhibit E-4.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by the Purchase Documents as the Managing
Facility Agent may reasonably require. Furthermore, not later than 30
days after the Amendment Effective Date the Managing Facility Agent
shall have received an executed legal opinion of special Kansas counsel
to the Seller and Raytheon Credit regarding priority of perfection
under the Kansas UCC, in form and substance acceptable to the Managing
Facility Agent; non-delivery of such opinion within such time shall
constitute an Amortization Event.
(g) Fees. (i) The Seller shall have paid to the
----
Syndication Agent and the Managing Facility Agent for their respective
accounts the fees set forth in their respective fee letters with the
Seller required to be paid on or prior to the Amendment Effective Date.
(ii) The Seller shall have paid to the Managing
Facility Agent, for the account of each Purchaser, an upfront
fee in an amount agreed to by such Purchaser.
(h) Amendment to the Intercompany Purchase Agreement. The
------------------------------------------------
Managing Facility Agent shall have received counterparts of the
Amendment to the Intercompany Purchase Agreement duly executed by the
Servicer and the Seller, substantially in the form of Exhibit J hereto.
<PAGE>
89
5.2 Conditions to Each Purchase or Substitution. The agreement
-------------------------------------------
of each Purchaser to make any purchase requested to be made by it on the Closing
Date or any Settlement Date (including, without limitation, its initial purchase
and any other purchase the Purchase Price for which is netted from Collections
pursuant to subsections 2.15 and 2.16(a) but excluding the purchases among the
Purchasers contemplated by subsection 2.1(d)) and the right of the Seller to
substitute Receivables pursuant to subsection 2.13 are each subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. The representations
------------------------------
and warranties made by each of the Seller, Raytheon Credit, RAC and
Raytheon in or pursuant to the Purchase Documents to which it is a
party shall be true and correct in all material respects on and as of
such date as if made on and as of such date and the Seller, if
applicable, shall have made the representations and warranties required
by subsection 5.2(f).
(b) Amortization Event. No Amortization Event shall have
------------------
occurred and be continuing on such date or after giving effect to the
purchases or substitutions to be made on such date.
(c) Settlement Statement. The Managing Facility Agent
--------------------
shall have received the Settlement Statement most recently due.
(d) Assignments. On or prior to such date, the Managing
-----------
Facility Agent shall have received an Assignment with respect to
Receivables to be purchased or substituted on such date, dated such
date and executed and delivered by a duly authorized Responsible
Officer.
(e) Perfection Matters. The Servicer shall have received
------------------
the following:
(i) with respect to Eligible Receivables other than
Affiliate Receivables, Foreign Receivables and Registerable
Lease Receivables, evidence that each FAA Assignment (in the
appropriate form for filing on the Closing Date or such
Settlement Date) with respect to the Financed Aircraft related
to such Eligible Receivables to be purchased on the Closing
Date or purchased or substituted on such Settlement Date,
shall have been filed with the FAA Registry,
(ii) with respect to Eligible Receivables which are
Foreign Receivables (other than Foreign Receivables which are
Lease Receivables with a Foreign Obligor), evidence that each
Foreign Assignment (in the appropriate form for filing on the
Closing Date or such Settlement Date) with respect to the
Financed Aircraft related to such Eligible Receivables to be
purchased on the Closing Date or purchased or substituted on
such Settlement Date, shall have been filed in each office in
each jurisdiction necessary to perfect (A) the Lien granted by
the Obligor thereon in favor of Raytheon Credit, (B) the
transfer of such Lien by Raytheon Credit to the Seller and (C)
the assignment of such Lien by the Seller in favor of the
Administrative Agent for the ratable benefit of the
Purchasers,
<PAGE>
90
(iii) with respect to Eligible Receivables which are
Foreign Receivables which are Lease Receivables with a Foreign
Obligor (other than any such Receivable which is a
Registerable Lease Receivable with a Foreign Obligor or an
Uncertified Lease Receivable), evidence that each Foreign
Assignment (in the appropriate form for filing on the Closing
Date or such Settlement Date) with respect to the Financed
Aircraft related to such Eligible Receivables to be purchased
on the Closing Date or purchased or substituted on such
Settlement Date, shall have been filed in each office in each
jurisdiction necessary to perfect (x) the transfer by Raytheon
Credit of its ownership interest therein to the Seller and (y)
the Lien granted thereon by the Seller in favor of the
Administrative Agent for the ratable benefit of the
Purchasers,
(iv) with respect to Eligible Receivables which are
Registerable Lease Receivables, evidence that each FAA
Assignment (in the appropriate form for filing on the Closing
Date or such Settlement Date) with respect to the Financed
Aircraft related to such Eligible Receivables to be purchased
on the Closing Date or purchased or substituted on such
Settlement Date, shall have been filed with the FAA Registry
in a manner satisfactory to perfect (x) the transfer by
Raytheon Credit of its ownership interest therein to the
Seller and (y) the Lien granted thereon by the Seller in favor
of the Administrative Agent for the ratable benefit of the
Purchasers,
(v) with respect to each L/C Receivable, an
acknowledgement, substantially in the form of Schedule I to
the Bailment Agreement, by the Bailee of its receipt of the
related letters of credit,
(vi) with respect to Eligible Receivables which are
Affiliate Receivables, evidence that each Foreign Assignment
(in the appropriate form for filing on such Settlement Date)
with respect to the Financed Aircraft related to such Eligible
Receivables to be purchased or substituted on such Settlement
Date, shall have been filed in each office in each
jurisdiction necessary to perfect (x) the Lien thereon granted
by the Affiliate Obligor in favor of Raytheon Credit, (y) the
transfer of such Lien by Raytheon Credit to the Seller and (z)
the Lien granted thereon by the Seller in favor of the
Administrative Agent for the ratable benefit of the
Purchasers, and
(vii) with respect to each of the foregoing Eligible
Receivables, evidence that all other filings and recordings
(including, without limitation, any UCC filings with filing
offices in the jurisdictions listed on Schedule II, filings
with the FAA Registry and filings in other jurisdictions as
applicable) and all other actions necessary or advisable to
perfect (x) the Purchasers' first priority ownership or
security interests in and to such Eligible Receivables to be
sold or substituted on such date and (y) the Purchasers' first
priority security interest and, in the case of an Affiliate
Receivable, the Affiliate Obligor's first priority ownership
interest or the Seller's ownership or security interest, as
applicable, in and to the related Contracts and, with respect
to any Travel Air Receivables, the
<PAGE>
91
Travel Air Contracts and, if required pursuant to the
foregoing, Financed Aircraft and the Collections with respect
thereto shall have been duly taken or made.
From and after the Amendment Effective Date, all filings, assignments
and other similar documents required to perfect a Lien hereunder with
respect to Receivables (and related Aircraft) purchased after such
date, which names the Administrative Agent shall be made in the name of
Bank of America, N.A., as Administrative Agent.
(f) Certificates. With respect to each Certified Foreign
------------
Receivable, the Servicer shall have received an executed certificate
from a Responsible Officer of the Seller to the Managing Facility
Agent, dated the date of such proposed sale and in the form approved by
the Managing Facility Agent pursuant to subsection 2.27.
(g) Marking Records. The Seller shall have, or shall have
---------------
caused the Servicer to have, marked its books and records with respect
to the Purchased Receivables to be sold or substituted on such date in
accordance with subsection 6.1(h).
(h) L/C Receivables. On or prior to the related Reporting
---------------
Date, a letter of credit shall have been issued in connection with each
L/C Receivable to be purchased or substituted on such Settlement Date
and each such letter of credit shall meet the eligibility criteria set
forth herein.
(i) Refinanced Aircraft. If the Receivable proposed to be
-------------------
purchased (including, without limitation, a purchase the Purchase Price
for which is netted from Collections pursuant to subsections 2.15 and
2.16(a)) or substituted has been or will be created in connection with
the financing or refinancing of a Refinanced Aircraft, the Seller shall
have caused a Lien search to be made with the FAA Registry with respect
to such Refinanced Aircraft and at the date of such purchase or
substitution, no Lien shall have been recorded at the FAA Registry with
respect to such Refinanced Aircraft other than any Permitted Aircraft
Lien or the Lien created in favor of Raytheon Credit and transferred to
the Seller and assigned to the Administrative Agent for the ratable
benefit of the Purchasers.
(j) Purchase Report. The Managing Facility Agent, with
---------------
sufficient copies for each Purchaser, shall have received from the
Seller a Purchase Report in the form of Exhibit I.
(k) Additional Documents. The Managing Facility Agent, with
--------------------
sufficient copies for each Purchaser, shall have received each
additional document, instrument, legal opinion or item of information
reasonably requested by it.
(l) Additional Matters. All corporate and other proceedings,
------------------
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Managing Facility
Agent, and the Managing Facility Agent shall have received such other
documents and legal opinions in respect of any aspect or consequence
of the transactions contemplated hereby or thereby as it shall
reasonably request.
<PAGE>
92
Each purchase (including, without limitation, a purchase the Purchase Price for
which is netted from the Collections pursuant to subsections 2.15 and 2.16(a))
and each substitution of Receivables hereunder shall constitute a representation
and warranty by the Seller as of the Closing Date or the Settlement Date
(including a Special Settlement Date, if applicable) on which such purchase or
substitution is made that the conditions contained in paragraphs (a) through (i)
of this subsection 5.2 have been satisfied.
5.3 Reallocation of Commitments; Addition of New Purchasers.
-------------------------------------------------------
On the Amendment Effective Date, any SPC may assign to its SPC Bank all or any
portion of such SPC's undivided interest in the Purchased Receivables, and any
SPC Bank may assign to its SPC all or any portion of such SPC Bank's undivided
interest in the Purchased Receivables. Such assignments may be evidenced by such
documents as shall be agreeable between the SPC and its SPC Bank. Each SPC Bank
participating in any such assignments shall advise the Managing Facility Agent
of such assignment, the amount thereof and certain administrative information
requested by the Managing Facility Agent. The following allocations and payments
shall be made following the foregoing assignments.
On the Amendment Effective Date each entity identified on the
signature pages hereto as a "New Purchaser" shall be and become a Purchaser
hereunder having a Commitment equal to the amount set forth opposite such New
Purchaser's name on Schedule I hereto and each entity identified on the
signature pages hereto as a "Withdrawing Purchaser" shall cease to be a
Purchaser except to the extent expressly provided otherwise herein.
On the Amendment Effective Date, immediately following the
addition referred to in the immediately preceding paragraph, but subject to the
terms and conditions hereof, each Purchaser shall sell and assign to each other
Purchaser, and each Purchaser shall purchase from each other Purchaser,
undivided interests in each then outstanding Purchased Receivable to the extent
necessary so that, after giving effect to such purchases and sales, each
Purchaser's undivided interest in each Purchased Receivable will equal its
Commitment Percentage (as defined in clause (a) of the definition thereof and
utilizing the Commitments set forth on Schedule I hereto) thereof. Other than
the representation and warranty that each of them is the legal and beneficial
owner of the respective interest being assigned hereby free and clear of any
adverse claim, the selling Purchasers make no representation or warranty to the
purchasing Purchasers and assume no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any instrument or document furnished
pursuant thereto. The amounts payable to each Purchaser whose undivided
interests are being reduced (each, a "Reducing Purchaser") in accordance with
------------------
the foregoing (such amount for each such Purchaser, its "Pro Rata Credit"); the
---------------
amounts payable by each Purchaser whose undivided interests are being increased
or created (each, an "Increasing Purchaser") in accordance with the foregoing
--------------------
(such amount for each such Purchaser, its "Pro Rata Debit"), in each case as a
--------------
result of the foregoing sales and purchases; and the amount of each Purchaser's
Outstanding Purchase Price immediately after giving effect to the foregoing
sales and purchases shall be set forth in a letter from the Managing Facility
Agent dated the Amendment Effective Date and satisfactory to each Purchaser.
Prior to 11:00 a.m., New York City time, on the Amendment Effective Date each
Increasing Purchaser shall make available to the Managing Facility Agent, in
immediately available funds at the Managing Facility Agent's
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93
office specified in subsection 11.2 hereto, the amount of such Purchaser's Pro
Rata Debit. Promptly after receipt of the aggregate amount of Pro Rata Debits,
the Managing Facility Agent will transfer to each Reducing Purchaser the amount
of such Purchaser's Pro Rata Credit. Such sales and purchases shall be effective
on the Amendment Effective Date without further act of assignment.
Notwithstanding any contrary provision of this Agreement, on
the Amendment Effective Date, the Managing Facility Agent shall pay to each
Purchaser, including each Withdrawing Purchaser, from funds received from the
Seller pursuant to subsection 2.17, interest on such Purchaser's Outstanding
Purchase Price for the Accrual Period ending on the Amendment Effective Date.
SECTION 6. AFFIRMATIVE COVENANTS
6.1 Affirmative Covenants of the Seller. The Seller hereby
-----------------------------------
agrees that, so long as the Commitments remain in effect, the Outstanding
Purchase Price has not been reduced to zero or any other amount is owing to any
Purchaser or the Managing Facility Agent hereunder, the Seller shall:
(a) Reporting Requirements. (i) Settlement Statements. On or
---------------------- ---------------------
before each Reporting Date, furnish or cause the Servicer to furnish to the
Managing Facility Agent, with sufficient copies for each Purchaser, a Settlement
Statement in the form of Exhibit C for the preceding Settlement Period, setting
forth:
(x) information and calculations with respect to (A) the
Purchased Receivables, Collections thereon, the related Contracts and
Financed Aircraft and any Remarketed Aircraft, (B) the Outstanding
Purchase Price (separately identifying the portion thereof representing
the Purchase Price, if any, of Receivables purchased on the most recent
Special Settlement Date), the Note Rate, the Default Rate (if any), the
Interbank Rate (if applicable) and Commitment Fees for the related
Accrual Period, (C) purchases of specified Eligible Receivables
requested to be made on the succeeding Settlement Date (including a
specific reference to any new Foreign Obligors), (D) Defaulted
Receivables, Ineligible Receivables, Substituted Receivables and
adjustments of Receivables made under subsection 2.12, (E) any
Permitted Receivable Liens and Permitted Aircraft Liens, (F) the
concentration limits as described in subsection 2.7, (G) any
Receivables of which the scheduled principal payments are being
deferred pursuant to subsection 7.1(b)(iv)(x), (H) the total amount of
the Participated Receivables, (I) the total amount of the Extended Term
Receivables and (J) Net Recoveries; and
(y) such other information with respect to the Receivables
from the Seller and the Servicer as the Managing Facility Agent or any
other Purchaser may from time to time request;
each Settlement Statement shall be certified by a Responsible Officer of the
Servicer as being true and correct;
<PAGE>
94
(ii) Officer's Certificate. Within 45 days after the end of
---------------------
each fiscal quarter of the Seller, deliver to the Managing Facility Agent, with
sufficient copies for each Purchaser, a certificate of a Responsible Officer of
the Seller stating that, to the best of such officer's knowledge, after due and
diligent inquiry, the Seller during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in
this Agreement and that such officer, after due and diligent inquiry, has
obtained no knowledge of any Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event or any errors in any amounts or other
information set forth in any Settlement Statement or any Assignment, FAA
Assignment or Foreign Assignment delivered with respect to any Settlement Period
occurring during such fiscal quarter except as specified in such certificate;
(iii) Servicer Reports. Cause the Servicer to deliver the
----------------
reports required by subsection 3.3 in accordance with the terms thereof;
(iv) Credit and Collection Policy. Deliver to the Managing
----------------------------
Facility Agent, with sufficient copies for each Purchaser, promptly after
adoption thereof, any change in the Credit and Collection Policy;
(v) Financing Programs. Concurrently with the distribution or
------------------
publication to any of Raytheon Credit's Affiliates or Dealers, deliver to the
Managing Facility Agent, with sufficient copies for each Purchaser, a copy of
each report setting forth Raytheon Credit's retail financing programs;
(vi) Additional Information. Furnish to the Managing Facility
----------------------
Agent and each Purchaser, promptly, such additional financial and other
information, documents, records or reports with respect to the Seller, the
Servicer (if Raytheon Credit or an Affiliate of Raytheon Credit is then the
Servicer) or RAC, any Purchased Receivable or the Contract, Obligor,
Unaffiliated Foreign Lessee or Financed Aircraft with respect thereto, or the
business, operations, property or condition (financial or otherwise) of the
Seller, as the Managing Facility Agent or any Purchaser may from time to time
reasonably request; and
(vii) Notices. Promptly give notice to the Managing Facility
-------
Agent and each Purchaser, after the Seller knows or should have known, of: (1)
the occurrence of any Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event; (2) any Lien (other than the security
interest created hereunder in favor of the Administrative Agent and the
Purchasers) on or claim asserted against any Purchased Receivable, the
Collections with respect thereto or the related Contract or material claim
asserted with respect to the related Financed Aircraft; (3) a development or
event which has had a Material Adverse Effect; (4) any loss of a Financed
Aircraft or of the use thereof due to theft, destruction, damage beyond repair
or damage to an extent which makes repair uneconomical, or the confiscation or
seizure of any material portion thereof, or requisition of title to or for the
use thereof by any Governmental Authority; and (5) any litigation, investigation
or proceeding which may exist at any time between the Seller, Raytheon Credit,
RAC or any Person which, in either case, could reasonably be expected to have a
Material Adverse Effect. Each notice pursuant to this subsection shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Seller proposes to
take with respect thereto.
<PAGE>
95
(viii) Fiscal Months. No later than December 15 of each
-------------
calendar year the Seller shall send the Managing Facility Agent written
notification of each of the Seller's fiscal monthly periods for the immediately
following calendar year.
(b) Compliance with Laws, Etc. Comply, and cause each
-------------------------
Affiliate Obligor to comply, in all respects with all applicable Requirements of
Law and all Contractual Obligations with respect to it, its business and
properties and all Purchased Receivables and the related Contracts and Financed
Aircraft except to the extent that failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
(c) Conduct of Business and Maintenance of Existence. Continue
------------------------------------------------
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable actions to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except where the
failure to preserve and maintain such existence, rights, franchises, privileges
and qualification could not reasonably be expected to have a Material Adverse
Effect.
(d) Maintenance of Property; Insurance. Keep all property
----------------------------------
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
considered reasonable and prudent by the Seller; cause each Financed Aircraft
(including, without limitation, any Financed Aircraft repossessed by the Seller
or the Servicer) related to a Purchased Receivable to be covered by insurance
meeting the requirements of paragraph (w) of the definition of "Eligible
Receivable"; and furnish to each Purchaser, upon request, full information as to
the insurance carried.
(e) Keeping of Records and Books of Account. Maintain and
---------------------------------------
implement administrative and operating procedures (including, without
limitation, maintaining the ability to recreate records evidencing Purchased
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books (with true and correct entries in conformity
with generally accepted accounting principles as in effect from time to time and
all material Requirements of Law), records and other information reasonably
necessary or advisable for the administration, servicing and collection of all
Purchased Receivables and the monitoring of the Contracts, the related Obligors
and Unaffiliated Foreign Lessees and Financed Aircraft (including, without
limitation, records adequate to permit the daily identification of all
Collections of and adjustments to each Purchased Receivable).
(f) Location of Records. Keep its "location" (as such term is
-------------------
defined in Section 9-307 of the New York UCC), chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Purchased Receivables and all Contracts related thereto (and all original
documents relating thereto), at its address referred to in subsection 11.2 or,
upon 30 days' prior written notice to the Managing Facility Agent, at such other
locations in jurisdictions where all actions required by subsection 6.1(l) shall
have been taken and completed.
(g) Access. From time to time during regular business hours
------
upon reasonable prior notice, permit the Managing Facility Agent or any
Purchaser, or their respective agents or representatives (a) to examine and make
copies of and abstracts from all books, records and
<PAGE>
96
documents (including, without limitation, computer tapes and disks) in the
possession or under the control of the Seller or its Affiliates relating to
Purchased Receivables, including, without limitation, the related Contracts and
Financed Aircraft and (b) to visit the offices and properties of the Seller, its
Affiliates or its independent certified public accountants for the purpose of
examining such materials described in clause (a) above, and to discuss matters
relating to Purchased Receivables, the Contracts and the Financed Aircraft or
the Seller's or Servicer's (if Raytheon Credit or an Affiliate of Raytheon
Credit is then the Servicer) performance hereunder with any of the officers or
employees of the Seller or its Affiliates having knowledge of such matters and
to discuss the business, operations, properties and financial and other
condition of the Seller with such officers and with its independent certified
public accountants; provided that any information, records and materials
--------
obtained by the Managing Facility Agent or any Purchaser pursuant to this
subsection 6.1(g) shall be used by the Managing Facility Agent or such Purchaser
solely in connection with its participation in the transactions contemplated by
the Purchase Documents (including pursuant to subsections 11.6(b) and (c)) and
shall be treated as confidential by the Managing Facility Agent or such
Purchaser in accordance with subsection 11.22.
(h) Marking of Records. At its expense, mark (or cause the
------------------
Servicer to mark) the computer files evidencing the Purchased Receivables and
related Contracts with a legend evidencing that such Purchased Receivables and
related Contracts have been sold in accordance with this Agreement and deliver
evidence satisfactory thereto in form and substance to the Managing Facility
Agent in accordance with subsection 5.2(g).
(i) Credit and Collection Policy. Comply in all material
----------------------------
respects with the Credit and Collection Policy with respect to each Purchased
Receivable (including but not limited to the calculation of the Finance Charge
Collections) and the related Contract and Financed Aircraft.
(j) Performance and Compliance with Receivables and Contracts.
---------------------------------------------------------
At its own expense, timely and fully perform and comply with, and enforce and
defend, or, with respect to Affiliate Receivables, cause the related Affiliate
Obligor to perform and comply with and enforce and defend, all material
provisions, covenants and other promises (which promises are required to be
observed by it) under the Contracts (other than the payment by such Affiliate
Obligor of the principal of and interest on the promissory note included in such
Contract) and any policy of insurance issued in connection with an ExIm Bank
Receivable and with respect to the Financed Aircraft related to the Purchased
Receivables in accordance with the Credit and Collection Policy; and defend the
right, title and interest of the Administrative Agent and each Purchaser in and
to such Purchased Receivable, the Collections with respect thereto and the
related Contract and Financed Aircraft against the claims and demands of any
Persons whomsoever (other than of the Administrative Agent or any Purchaser).
(k) [Intentionally omitted.]
(l) Further Action Evidencing Interests of Administrative
-----------------------------------------------------
Agent and Purchasers. At any time and from time to time, upon the request of
--------------------
the Managing Facility Agent or the request of the Managing Facility Agent as
directed by the Majority Purchasers and at the sole expense of the Seller,
promptly execute and deliver and cause each Affiliate Obligor to execute and
deliver all further instruments and documents and take all further actions and
cause each
<PAGE>
97
Affiliate Obligor to take all further actions that the Managing Facility Agent
or the Managing Facility Agent as directed by the Majority Purchasers may
request in order to perfect, protect or more fully evidence the ownership or
security interests of the Administrative Agent and the Purchasers in the
Purchased Receivables, the Collections with respect thereto and the related
Contracts and Financed Aircraft, or to enable any of them or the Administrative
Agent to exercise or enforce any of their respective rights with respect
thereto, including, but not limited to: (a) execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; and (b) mark
conspicuously each invoice evidencing each Purchased Receivable and the related
Contract with a legend, in a form acceptable to the Managing Facility Agent,
evidencing that such Contract has been assigned to the Administrative Agent for
the ratable benefit of the Purchasers and, in connection therewith, the Seller
hereby (x) authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Purchased Receivables now existing or hereafter
arising without the signature of the Seller or any of its Affiliates where
permitted by law and (y) agrees that if the Seller fails to perform any of its
agreements or obligations under this Agreement, the Managing Facility Agent may
(but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Managing Facility Agent
incurred in connection therewith shall be payable by the Seller as provided in
subsection 11.5.
(m) Separate Corporate Existence. (i) Maintain its own deposit
----------------------------
account or accounts, separate from those of any Affiliate, with commercial
banking institutions. The funds of the Seller will not be diverted to any other
Person or for other than corporate uses of the Seller.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its stockholders or Affiliates, the
salaries of and the expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated with
all such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts
with any of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each such entity shall bear
its fair share of such costs. To the extent that the Seller contracts or does
business with vendors or service providers when the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such entities for whose benefit the
goods and services are provided, and each such entity shall bear its fair share
of such costs. All material transactions between Seller and any of its
Affiliates shall be only on an arm's length basis.
(iv) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its Affiliates.
To the extent that Seller and any of its stockholders or Affiliates have offices
in the same location, there shall be a fair and appropriate allocation of
overhead costs among them, and each such entity shall bear its fair share of
such expenses.
<PAGE>
98
(v) Conduct its affairs strictly in accordance with its
Certificate of Incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited to, holding all
regular and special stockholders' and directors' meetings appropriate to
authorize all corporate action, keeping separate and accurate minutes of its
meetings, passing all resolutions or consents necessary to authorize actions
taken or to be taken, and maintaining accurate and separate books, records and
accounts, including, but not limited to, payroll and intercompany transaction
accounts.
(vi) Take or refrain from taking, as applicable, each of the
activities specified in the "non-substantive consolidation" opinions of each of
Sullivan & Worcester LLP, delivered on the Effective Date, and Bingham Dana LLP,
delivered on the Amendment Effective Date, upon which the conclusions expressed
therein are based.
(n) Existing Receivables Perfection Matters. Deliver to the
---------------------------------------
Managing Facility Agent the following:
(i) with respect to Existing Certified Receivables,
no later than the Certified Opinion Delivery Date, a
certificate of a Responsible Officer certifying that all
actions set forth in the legal opinions described in
subsection 2.27(c) and necessary in order to perfect the Liens
and assignments of such Receivables, the related Financed
Aircraft and Applicable Leases (if applicable) and Collections
thereon, to the extent set forth in such subsection, shall
have been taken; and
(ii) with respect to all Existing Receivables, no
later than 90 days after the Effective Date (the "FAA Filing
----------
Date"), a certificate of a Responsible Officer certifying that
----
all filings, if any, to be made with the FAA as described in
the opinion of special FAA counsel delivered pursuant to
subsection 5.1(g)(iv) of the 1997 Agreement and necessary to
(x) continue the Lien of the Old Administrative Agent, on
behalf of the Purchasers, in the Existing Receivables, the
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
and (y) perfect the transfer by Raytheon Credit of the
Existing Receivables, the related Financed Aircraft and
Applicable Leases (if applicable) and Collections thereon to
the Seller pursuant to the Intercompany Purchase Agreement
shall have been taken.
6.2 Affirmative Covenants of the Servicer. The Servicer (so
-------------------------------------
long as it is Raytheon Credit) hereby agrees that, so long as the Commitments
remain in effect, the Outstanding Purchase Price has not been reduced to zero or
any other amount is owing to any Purchaser or the Managing Facility Agent
hereunder, the Servicer shall:
(a) Compliance with Laws, Etc. Comply in all respects with all
-------------------------
applicable Requirements of Law and all Contractual Obligations with
respect to it, its business and properties and all Purchased
Receivables and the related Contracts and Financed Aircraft except to
the extent that failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect.
<PAGE>
99
(b) Conduct of Business and Maintenance of Existence. Continue
------------------------------------------------
to engage in business of the same general type as now conducted by it
and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable actions to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct
of its business except where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification could not
reasonably be expected to have a Material Adverse Effect.
(c) Maintenance of Property; Insurance. Keep all property
----------------------------------
useful and necessary in its business in good working order and
condition; maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and
against at least such risks as are considered reasonable and prudent
by the Servicer; cause each Financed Aircraft (including, without
limitation, any Financed Aircraft repossessed by the Servicer) related
to a Purchased Receivable to be covered by insurance meeting the
requirements of paragraph (w) of the definition of "Eligible
Receivable"; and furnish to each Purchaser, upon request, full
information as to the insurance carried.
(d) Keeping of Records and Books of Account. Maintain and
---------------------------------------
implement administrative and operating procedures (including, without
limitation, maintaining the ability to recreate records evidencing
Purchased Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books (with true and
correct entries in conformity with generally accepted accounting
principles as in effect from time to time and all material
Requirements of Law), records and other information reasonably
necessary or advisable for the administration, servicing and
collection of all Purchased Receivables and the monitoring of the
Contracts, the related Obligors and Unaffiliated Foreign Lessees and
Financed Aircraft (including, without limitation, records adequate to
permit the daily identification of all Collections of and adjustments
to each Purchased Receivable).
(e) Location of Records. Keep its "location" (as such term is
-------------------
defined in Section 9-307 of the New York UCC), chief place of business
and chief executive office, and the offices where it keeps its records
concerning the Purchased Receivables and all Contracts related thereto
(and all original documents relating thereto), at its address referred
to in subsection 11.2 or, upon 30 days' prior written notice to the
Managing Facility Agent, at such other locations in jurisdictions
where all actions required by subsection 6.1(l) shall have been taken
and completed.
(f) Access. From time to time during regular business hours
------
upon reasonable prior notice, permit the Managing Facility Agent or
any Purchaser, or their respective agents or representatives (i) to
examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
the possession or under the control of the Servicer or its Affiliates
relating to Purchased Receivables, including, without limitation, the
related Contracts and Financed Aircraft and (ii) to visit the offices
and properties of the Servicer, its Affiliates or its independent
certified public accountants for the purpose of examining such
materials described in clause (i) above, and to discuss matters
relating to Purchased Receivables, the Contracts and the Financed
Aircraft or the Servicer's performance hereunder with any of the
<PAGE>
100
officers or employees of the Servicer or its Affiliates having
knowledge of such matters and to discuss the business, operations,
properties and financial and other condition of the Servicer with such
officers and with its independent certified public accountants;
provided that any information, records and materials obtained by the
--------
Managing Facility Agent or any Purchaser pursuant to this
subsection 6.2(f) shall be used by the Managing Facility Agent or such
Purchaser solely in connection with its participation in the
transactions contemplated by the Purchase Documents (including
pursuant to subsections 11.6(b) and (c)) and shall be treated as
confidential by the Managing Facility Agent or such Purchaser in
accordance with subsection 11.22. The Servicer hereby consents to the
disclosure of any non-public information with respect to it as related
to this transaction and the assets sold hereunder by any SPC to any
rating agency, commercial paper dealer, or provider of a surety,
guaranty or credit or liquidity enhancement to that SPC.
(g) Credit and Collection Policy. Comply in all material
----------------------------
respects with the Credit and Collection Policy with respect
to each Purchased Receivable (including but not limited to the
calculation of the Finance Charge Collections) and the related
Contract and Financed Aircraft.
(h) Ownership of Affiliate Obligors. The Servicer shall at
-------------------------------
all times beneficially own, directly or indirectly, 100% of each
Affiliate Obligor.
SECTION 7. NEGATIVE COVENANTS
7.1 Negative Covenants of the Seller. The Seller hereby agrees
--------------------------------
that, so long as the Commitments remain in effect, the Outstanding Purchase
Price has not been reduced to zero or any other amount is owing to any Purchaser
or the Managing Facility Agent hereunder, the Seller shall not:
(a) Sales, Liens, Etc. Sell, assign (by operation of law or
-----------------
otherwise) or otherwise dispose of, or create or suffer to
exist any Lien (other than Permitted Receivable Liens and other than,
but solely with respect to a Financed Aircraft, Permitted Aircraft
Liens), upon or with respect to, the Purchased Receivables, the
related Contracts and Financed Aircraft or the Collections with
respect thereto, or assign any right to receive payments in respect
thereof other than to the Managing Facility Agent and the Purchasers
pursuant to this Agreement.
(b) Extension or Amendment of Purchased Receivables. Extend,
-----------------------------------------------
amend or otherwise modify the terms of any Purchased
Receivable, or amend, modify or waive any term or condition of any
Contract related thereto or permit the Servicer (if the Seller or an
Affiliate of the Seller is then the Servicer) to do any of the
foregoing except in the normal course of the Seller's business and in
accordance with the Credit and Collection Policy or pursuant to
subsection 7.1(b)(iv)(x) (each, a "Modification"); provided that:
------------ --------
(i) any Modification made pursuant to this
subsection 7.1(b) shall be subject to the provisions of
subsection 2.12;
<PAGE>
101
(ii) if an Amortization Event shall have occurred
and be continuing, no Modification shall be made without the
prior consent of the Required Purchasers if the effect thereof
would be to extend the then average life of the Purchased
Receivables taken as a whole, to reduce or increase the
Principal Balance of any Purchased Receivable or to reduce the
amount or rate of interest thereon or to cause the Stipulated
Aircraft Value under a Contract to be less than the
Outstanding Balance of the Receivable with respect to such
Contract;
(iii) if an Amortization Event shall have occurred
and be continuing, no Modification shall be made without the
prior consent of each Purchaser if the effect thereof would be
to extend the Final Payment Date of a Receivable beyond the
then latest Final Payment Date of all Purchased Receivables;
(iv) the Seller shall not modify the payment terms
of any Purchased Receivable except (x) in accordance with the
Credit and Collection Policy, except that, (A) with respect to
any GA Receivable, the Seller shall not modify the payment
terms of any such Purchased Receivable more than once after
the Closing Date or Settlement Date on which such Receivable
is sold or substituted pursuant to this Agreement or an
Existing Agreement, and (B) with respect to a Commuter
Receivable, (1) no more than an aggregate of 12 monthly
principal payments may be deferred during the term of any
Contract and (2) subject to the immediately following
sentence, the Final Payment Date may not be extended by more
than three years and, (y) so long as no Amortization Event has
occurred and is continuing, the Servicer may when necessary to
prevent a possible default by the Obligor under any Contract
or in order to enhance the collectibility of any Receivable,
defer any scheduled payment of principal, in part or in whole,
to a later scheduled payment date under such Contract. If,
after giving effect to the extension of the Final Payment Date
of a Purchased Receivable pursuant to clause (iv)(x)(B)(2) of
the foregoing proviso, such extended Final Payment Date
exceeds, (I) so long as no Rating Event has occurred and is
continuing, 13 years from the date of such extension and, (II)
during the continuance of a Rating Event, 10 years from the
date of such extension, then on the immediately following
Settlement Date (or if such date is a Settlement Date, then on
such date) the Seller shall deposit in the Concentration
Account an amount equal to the aggregate Principal Collections
then scheduled to be paid after such 13th year or 10th year,
as the case may be, plus, if a Trigger Amortization Event has
occurred and is continuing, accrued and unpaid interest on the
amount so deposited at the rate under the related Contract
except to the extent (without duplication) of any payment made
pursuant to subsection 2.18 for the Settlement Period during
which such interest accrued and was not paid by the Obligor
under such Contract. The amount of any such deposit shall be
applied and distributed in accordance with subsections 2.15
and 2.16 provided, however, that any Purchased Receivable so
-------- -------
modified shall be deemed an Extended Term Receivable for
purposes of subsection 2.15;
<PAGE>
102
(v) any Modification made in accordance with this
subsection 7.1(b) shall not cause the Principal Balance of the
applicable Purchased Receivable to exceed 50% of the Low
Wholesale Value of the related Financed Aircraft; and
(vi) the Seller shall not make any Modification
which permits the transfer of registered ownership in any
Financed Aircraft without the consent of the Required
Purchasers, unless after giving effect to such transfer (and
any payments made under the Contract at the time of transfer)
the related Receivable would satisfy on the date of transfer
the criteria contained in the definition of Eligible
Receivable; provided that the provisions of this subsection
--------
7.1(b)(vi) shall not apply to a transfer by an Obligor to a
wholly-owned Affiliate of such Obligor.
(c) Change in Business or Credit and Collection Policy. Make
--------------------------------------------------
any material change in the character of its business or,
without the prior written consent of the Required Purchasers, notify
any Obligor to remit payments to a location other than that to which
such payment would be remitted on the Closing Date; make any change in
the Credit and Collection Policy without prior notice to the Managing
Facility Agent and each Purchaser; provided that, without the prior
--------
consent of the Required Purchasers, the Seller shall not make or
permit to be made any such change to the Credit and Collection Policy
if such change could reasonably be expected to materially adversely
affect the collectibility or maturity of any Purchased Receivable or
the interests of the Administrative Agent and the Purchasers in any
Purchased Receivable, the related Contract and Financed Aircraft or
the Collections with respect thereto.
(d) No Actions against Obligors. Except in accordance with
---------------------------
the Credit and Collection Policy, commence or settle any legal action
to enforce collection of any Purchased Receivable.
(e) Security Interest to Remain in Force. Release, in whole
------------------------------------
or in part, any Financed Aircraft, or any other collateral securing or
guarantee of the related Contract (including, but not limited to, any
letter of credit related thereto issued in favor of the Seller), from
the security interest granted by such Contract except, that, the
------ ----
Seller may or may permit the Servicer to, at its or the Servicer's own
expense, (x) substitute engines in accordance with subsection 7.1(j)
and (y) substitute other parts (other than airframes) for any of the
parts on any Financed Aircraft as Seller or Servicer may deem
desirable in the proper conduct of its business; provided, however,
-------- -------
that for purposes of this clause (y), (i) no such substitution(s),
individually or in the aggregate, shall diminish the utility or
remaining useful life of such Financed Aircraft, or materially
diminish the value, or impair the condition or airworthiness, thereof,
below the utility, remaining useful life, condition, airworthiness, or
value thereof immediately prior to such substitution, (ii) no such
substitution shall affect adversely the Lien on such Financed Aircraft
(other than the removed avionics) in favor of the Administrative Agent
for the benefit of the Purchasers (as such Lien was in effect
immediately prior to such substitution), (iii) the Administrative
Agent shall have a Lien on the substitute parts with a priority no
less than the priority of the Lien in favor of the Administrative
Agent on the removed parts and (iv) the new part shall not be subject
to any Liens other than Permitted Aircraft Liens.
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103
Upon substitution of any engine or other parts on any Financed
Aircraft, the Lien thereon of the Administrative Agent on behalf of
the Purchasers shall, without the requirement for any further act, be
automatically released.
(f) Limitations on Fundamental Changes. Enter into any merger,
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially
all of its property, business or assets (except for sales and
substitutions of Purchased Receivables pursuant to this Agreement).
(g) Transactions with Affiliates. Enter into any transaction,
----------------------------
including, without limitation, any purchase, sale, lease or exchange
of property or the rendering of any service, relating to the
administration, servicing and collection of the Purchased Receivables,
the Collections with respect thereto and the related Contracts and
Financed Aircraft, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of
the Seller's business and is upon fair and reasonable terms no less
favorable to the Seller than it would obtain in a comparable arm's
length transaction with a Person not an Affiliate.
(h) Fiscal Year. Permit the fiscal year of the Seller to end
-----------
on a day other than December 31 without 60 days' prior notice thereof
to the Managing Facility Agent.
(i) Assignment of Contracts. Permit any assignment of any
-----------------------
Contract by either the Seller or Obligor (except for an assignment to
the Guarantor) without the prior written consent of the Required
Purchasers, provided that such consent shall not be unreasonably
withheld to the extent the Contract so provides.
(j) Substitution of Engines. Permit any engine to be
-----------------------
substituted for an engine originally annexed to any Financed Aircraft
related to a Purchased Receivable unless such engine is of the same
model number and of the same or improved utility, performance and
efficiency, of equivalent age and equivalent or greater value as the
replaced engine.
(k) Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness or other liability whatsoever, except (i) Indebtedness
owing from time to time to Raytheon Credit and incurred to finance a
portion of the Purchase Price (as defined in the Intercompany Purchase
Agreement) of Receivables, the payment of which Indebtedness is
subordinated to the prior payment in full of all amounts owing to the
Purchasers, (ii) obligations incurred under this Agreement and (iii)
other liabilities incurred in the ordinary course of business.
(l) Guarantees. Become or remain liable, directly or
----------
contingently, in connection with any Indebtedness or other liability
of any other Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in
the ordinary course of business), agreement to purchase or repurchase,
agreement to supply or advance funds, or otherwise.
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104
(m) Investments. Make or suffer to exist any loans or advances
-----------
to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business
or assets, or otherwise) in, any Person except (i) for purchases of
Receivables pursuant to the Intercompany Purchase Agreement, (ii) for
investments in Cash Equivalents in accordance with the terms of this
Agreement and (iii) the holding of the demand note made by RAC or
Raytheon Credit in favor of the Seller.
(n) Distributions. Declare or pay, directly or indirectly, any
-------------
dividend or make any other distribution (whether in cash or other
property) with respect to the profits, assets or capital of the Seller
or any Person's interest therein, or purchase, redeem or otherwise
acquire for value any of its capital stock now or hereafter
outstanding, except that so long as the Seller would continue to be
Solvent as a result thereof and after giving effect thereto and no
Amortization Event is continuing or would result therefrom, the Seller
may declare and pay dividends on its capital stock.
(o) Agreements. Become a party to, or permit any of its
----------
properties to be bound by, any indenture, mortgage, instrument,
contract, agreement, lease or other undertaking, except the Contracts,
this Agreement and the Intercompany Purchase Agreement or amend or
modify the provisions of its Certificate of Incorporation or issue any
power of attorney except to the Managing Facility Agent or the
Servicer.
(p) Intercompany Purchase Agreement. Give any material
-------------------------------
consent or fail to exercise in any material respect any right or
privilege under the Intercompany Purchase Agreement.
7.2 Negative Covenants of the Servicer. The Servicer (so long
----------------------------------
as it is Raytheon Credit) hereby agrees that, so long as the Commitments remain
in effect, the Outstanding Purchase Price has not been reduced to zero or any
other amount is owing to any Purchaser or the Managing Facility Agent hereunder,
the Servicer shall not:
(a) No Actions against Obligors. Except in accordance with
---------------------------
the Credit and Collection Policy, commence or settle any legal action
to enforce collection of any Purchased Receivable.
(b) Security Interest to Remain in Force. Except to the extent
------------------------------------
permitted in subsection 7.1(e), release, in whole or in part, any
Financed Aircraft, or any other collateral securing or guaranteeing
the related Contract (including, but not limited to, any letter of
credit related thereto issued in favor of the Seller), from the
security interest granted by such Contract.
(c) Limitations on Fundamental Changes. Enter into any merger,
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially
all of its property, business or assets (except for sales and
substitutions of Receivables pursuant to the Intercompany Purchase
Agreement), except that any
<PAGE>
105
Subsidiary of the Servicer may be merged or consolidated with or into
the Servicer (so long as the Servicer is the surviving or continuing
corporation).
(d) Transactions with Affiliates. Enter into any transaction,
----------------------------
including, without limitation, any purchase, sale, lease or exchange
of property or the rendering of any service, relating to the
administration, servicing and collection of the Purchased Receivables,
the Collections with respect thereto and the related Contracts and
Financed Aircraft, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of
the Servicer's business and is upon fair and reasonable terms no less
favorable to the Servicer than it would obtain in a comparable arm's
length transaction with a Person not an Affiliate.
(e) Assignment of Contracts. Permit any assignment of any
-----------------------
Contract by either the Seller or Obligor (except for an assignment to
the Guarantor or RAC) without the prior written consent of the
Required Purchasers, provided that such consent shall not be
unreasonably withheld to the extent the Contract so provides.
(f) Change in Credit and Collection Policy. Without the prior
--------------------------------------
written consent of the Required Purchasers, notify any Obligor to
remit payments to a location other than that to which such payment
would be remitted on the Closing Date; make any change in the Credit
and Collection Policy without prior notice to the Managing Facility
Agent and each Purchaser; provided that, without the prior consent of
--------
the Required Purchasers, the Servicer shall not make or permit to be
made any such change to the Credit and Collection Policy if such
change could reasonably be expected to materially adversely affect the
collectibility or maturity of any Purchased Receivable or the
interests of the Administrative Agent and the Purchasers in any
Purchased Receivable, the related Contract and Financed Aircraft or
the Collections with respect thereto.
SECTION 8. AMORTIZATION EVENTS
8.1 Amortization Events. Any of the following shall
-------------------
constitute an Amortization Event (whether it occurs before or during the
Amortization Period) hereunder:
(a) The Seller or the Servicer shall fail to make any deposit
or payment (including any payment of interest) required to be made by the Seller
or the Servicer, as the case may be, under this Agreement or any other document
executed and delivered in connection herewith, including, without limitation,
any payment or deposit required to be made pursuant to subsection 2.6(a),
2.7(b), 2.10, 2.10A, 2.11, 2.12, 2.14(c)(iii), 2.18 or 7.1(b), or the Seller or
the Servicer (if an Affiliate of the Seller is then the Servicer) shall fail to
deliver the Settlement Statement, or the Seller or the Servicer (if an Affiliate
of the Seller is then the Servicer) shall fail to take any action required or
requested to be taken pursuant to this Agreement after an Amortization Event has
occurred and is continuing, in each case within five days after any such
deposit, payment or delivery is required to be made or any such action is
requested to be taken hereunder; or
<PAGE>
106
(b) Raytheon shall fail to make any payment required under the
Guarantee or RAC shall fail to make any payment required under the Repurchase
Agreement within, in each case, five days after any such payment is required to
be made; or
(c) [Intentionally Omitted]; or
(d) Any representation or warranty made or deemed made by the
Seller, the Servicer (if an Affiliate of the Seller is then the Servicer) or
Raytheon in any Purchase Document to which it is a party or which is contained
in any certificate, document or financial or other statement furnished at any
time under or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made by
the Seller, the Servicer (if an Affiliate of the Seller is then the Servicer) or
Raytheon, and shall have continued to be incorrect in such material respect for
a period of 30 days after such representation or warranty was initially made
(other than any representation and warranty with respect to a Receivable which
has been repurchased or substituted pursuant to subsection 2.7(b), 2.10, 2.10A,
2.11 or 2.13); or
(e) (i) The Seller shall default in the observance or
performance of, or Raytheon shall default under the Guarantee in causing the
Seller to observe or perform, any agreement contained in Section 7.1 or (ii) the
Servicer shall default in the observance or performance of, or Raytheon shall
default under the Guarantee in causing the Servicer to observe or perform, any
agreement contained in subsection 7.2; or
(f) Either of the Seller or the Servicer (if an Affiliate of
the Seller is then the Servicer) shall default in the observance or performance
of any other agreement (other than subsection 6.1(n), the remedy for which is
contained in subsection 2.11) contained in this Agreement in any material
respect or Raytheon shall default in the observance or performance of any
agreement contained in the Guarantee in any material respect or RAC shall
default in the observance or performance of any agreement contained in the
Repurchase Agreement in any material respect (other than as provided in
paragraphs (a) through (e) of this subsection 8.1), and such default shall
continue unremedied for a period of 30 days after the earlier of (i) notice of
such default from the Managing Facility Agent or the Majority Purchasers or (ii)
knowledge by the Seller, the Servicer (if an Affiliate of the Seller is then the
Servicer) or Raytheon of any such default, or
(g) The Debt Ratio of Raytheon shall be greater than 0.55 to
1.0 on the last day of any fiscal quarter of Raytheon;
(h) The Interest Coverage Ratio for any period of four
consecutive fiscal quarters shall be less than 2.5 to 1.0; or
(i) Raytheon, RAC, Raytheon Credit or the Seller shall default
in any payment of principal of or interest of any indebtedness for borrowed
money (or any guarantee thereof) (other than under the Guarantee or the
Repurchase Agreement) with a principal amount in excess of $50,000,000 when due
(whether by acceleration, upon maturity or otherwise), beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or agreement
under which such indebtedness (or guarantee) was created; or
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107
(j) (i) Raytheon, RAC, Raytheon Credit or the Seller shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets; or
(ii) there shall be commenced against Raytheon, RAC, Raytheon Credit or the
Seller any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days from the entry thereof; or (iii) there shall be
commenced against Raytheon, RAC, Raytheon Credit or the Seller any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) Raytheon, RAC, Raytheon Credit or
the Seller shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) Raytheon, RAC, Raytheon Credit or the Seller shall
make a general assignment for the benefit of its creditors or shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(k) Any event or condition shall occur or exist with respect
to a Plan that, together with all other such events or conditions, if any, could
reasonably be expected to subject Raytheon or any Commonly Controlled Entity to
any tax, penalty or other liabilities which in the aggregate could reasonably be
expected to have a Material Adverse Effect or a material adverse effect on the
business, assets, property or condition (financial or other) of Raytheon and its
Subsidiaries taken as a whole; or
(l) One or more judgments or decrees shall be entered against
Raytheon, RAC, Raytheon Credit or the Seller involving in the aggregate a
liability (not paid or fully covered by insurance) of $25,000,000 or more and
all such judgments or decrees shall not have been vacated, discharged,
satisfied, stayed or bonded pending appeal within 60 days from the entry
thereof; provided that no Amortization Event shall be deemed to occur if any
--------
such judgment or decree is being contested in good faith by appropriate
proceedings and with respect to which no enforcement proceedings to collect any
such judgment or enforce any such decree have been commenced which could
reasonably be expected to have a Material Adverse Effect; or
(m) The Guarantee shall cease to be in full force and effect
or Raytheon shall so assert in writing or the Repurchase Agreement shall cease
to be in full force and effect or RAC shall so assert in writing or;
(n) The ownership or security interests created under this
Agreement or any Assignment (including to the extent applicable, each Foreign
Assignment) shall cease to be in full force and effect or the Seller or any of
its Affiliates shall so assert in writing, or this Agreement or any Assignment
(including to the extent applicable, each Foreign Assignment) shall cease, for
any reason other than acts or omissions of the Managing Facility Agent or any
<PAGE>
108
Purchaser, to be effective to grant a perfected first-priority ownership or
security interest in the Purchased Receivables, the related Contracts and
Financed Aircraft free and clear of any Lien except (i) to the extent any of the
foregoing are violated prior to the dates set forth in subsection 6.1(n) as a
result of the failure to make the filings referred to therein and required to be
made by such dates, (ii) to the extent a Lien of the first priority on the
related Financed Aircraft is not perfected with respect to L/C Receivables,
Unsecured Foreign Receivables and Existing Uncertified Foreign Receivables,
(iii) solely with respect to a Purchased Receivable, to the extent the Lien
thereon is subject to a Permitted Receivable Lien, (iv) solely with respect to a
Financed Aircraft, to the extent the Lien thereon is subject to Permitted
Aircraft Liens or (v) to the extent provided in subsection 4.2(b); or
(o) (i) Raytheon shall cease to own, directly or indirectly,
100% of the issued and outstanding voting stock of RAC, the Seller or Raytheon
Credit or (ii) Raytheon Credit shall cease to own 100% of the issued and
outstanding voting stock of the Seller; or
(p) On any Settlement Date on which Raytheon's Debt Rating is
less than A-/A3, after giving effect to any sales pursuant to subsection 11.25,
the ratio, expressed as a percentage, of the aggregate Outstanding Purchase
Price of all Delinquent Receivables to the Outstanding Purchase Price of all
Receivables shall be greater than 7.5%; or
(q) Raytheon's Debt Rating shall be less than BB+ or the
equivalent thereof or Raytheon's long-term unsecured senior debt shall not be
rated by both S&P and Moody's or, if the Seller and the Required Purchasers
shall have agreed to use a rating agency other than Moody's or S&P to determine
the Debt Rating, such Debt Rating shall be less than such level as the Seller
and the Purchasers, by unanimous consent, shall have agreed.
8.2 Rights and Remedies. If an Amortization Event should occur
-------------------
and be continuing, the Managing Facility Agent and the Purchasers shall have
available the following rights and remedies (unless such Amortization Event is
waived pursuant to subsection 11.1) in addition to any other rights and remedies
available under applicable law, such rights and remedies being cumulative and
not exclusive:
(a) each Purchaser's Outstanding Purchase Price shall bear
interest for the Accrual Period in which such Amortization Event occurs, payable
on demand, at the Default Rate for such Purchaser (i) if such event is an
Amortization Event specified in subsection 8.1(a), commencing on the date such
Amortization Event occurs and (ii) if such Amortization Event is a Note Rate
Amortization Event, commencing on the date the Revolving Period and the
Commitments are terminated pursuant to subsection 8.2(b) or, if later, on the
date such Note Rate Amortization Event occurs; or
(b) with the consent of the Majority Purchasers, the Managing
Facility Agent may, or upon the request of the Majority Purchasers, the Managing
Facility Agent shall, by notice to the Seller declare the Revolving Period and
the Commitments to be terminated forthwith, whereupon the Revolving Period and
the Commitments shall immediately terminate; provided that if such event is an
--------
Amortization Event specified in clause (i) or (ii) of subsection 8.1(j),
automatically the Revolving Period and the Commitments shall immediately
terminate; or
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109
(c) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), the Majority Purchasers may in their sole discretion terminate the
appointment of Raytheon Credit as the Servicer in accordance with subsection
3.1; or
(d) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), upon five Business Days' notice to the Seller and the Servicer and at
the Seller's expense, the Managing Facility Agent may, or upon the request of
the Majority Purchasers the Managing Facility Agent shall, notify, or direct the
Seller or the Servicer, as the case may be, to notify, the Obligors of Purchased
Receivables, or any of them, of the ownership of the Purchased Receivables by
the Purchasers; or
(e) if such event is a Specified Amortization Event and the
Revolving Period and the Commitments have been terminated pursuant to subsection
8.2(b), the Managing Facility Agent may, or upon the request of the Majority
Purchasers the Managing Facility Agent shall, direct or request the Seller or
the Servicer, as the case may be, to direct the Obligors of Purchased
Receivables, or any of them, that payment of all amounts payable under any such
Purchased Receivable be made directly to the Managing Facility Agent or its
designee for the account of the Purchasers; or
(f) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer, as the case may be, to segregate all cash,
checks and other instruments received by it from time to time constituting
Collections on account of any Purchased Receivable in a manner acceptable to the
Managing Facility Agent and to remit promptly upon receipt all such cash, checks
and instruments, duly endorsed or with duly executed instruments of transfer, to
the Managing Facility Agent or its designee for the account of the Purchasers;
or
(g) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer, as the case may be, to assemble the
documents, instruments and other records (including, without limitation,
computer tapes and disks) which evidence the Purchased Receivables, the related
Contracts and the related Financed Aircraft, or which are otherwise necessary or
desirable to collect the Purchased Receivables, and to make the same available
to the Managing Facility Agent at a place selected by the Managing Facility
Agent or its designee; or
(h) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer to convert the Collection Account to a lockbox
account into which payments on account of the Purchased Receivables are remitted
or deposited directly and, in connection therewith, the Seller or the Servicer
shall execute and file such documents and take such actions to transfer to the
Managing Facility Agent or its agent all post office boxes, deposit and other
accounts into which
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110
Collections are remitted or deposited and to grant to the Managing
Facility Agent and the Purchasers perfected first-priority security and/or
ownership interests therein; or
(i) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
direct the Seller or the Servicer to take any and all steps in the name of the
Seller or the Servicer and on behalf of the Managing Facility Agent and the
Purchasers which may be necessary or desirable, in the determination of the
Managing Facility Agent (or the Managing Facility Agent and the Majority
Purchasers, if the Managing Facility Agent is acting at the request of the
Majority Purchasers), to collect all amounts due under any and all Purchased
Receivables and the related Contracts and Financed Aircraft, including, without
limitation, endorsing the name of the Seller on checks and other instruments
representing Collections in respect of such Purchased Receivables and enforcing
such Purchased Receivables and the related Contracts and Financed Aircraft; or
(j) if the Revolving Period and the Commitments have been
terminated pursuant to subsection 8.2(b), the Managing Facility Agent may, or
upon the request of the Majority Purchasers the Managing Facility Agent shall,
take or direct the Seller to take any and all steps in the name of the Seller
and on behalf of the Managing Facility Agent and the Purchasers which may be
necessary or desirable, in the determination of the Managing Facility Agent (or
the Managing Facility Agent and the Majority Purchasers, if the Managing
Facility Agent is acting at the request of the Majority Purchasers), to enforce
and protect the rights and remedies of the Managing Facility Agent and the
Purchasers in, to and under the Intercompany Purchase Agreement.
8.3 Waivers. Except as expressly provided herein,
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presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Seller and the Servicer.
SECTION 9. INDEMNIFICATIONS
9.1 Indemnities of the Seller. (a) Without limiting any
--------------------------
other rights which the Managing Facility Agent, any Purchaser or any Affiliate
thereof may have hereunder or under applicable law, the Seller hereby agrees,
subject to the limitations set forth in this Section 9, to indemnify the
Managing Facility Agent, each Administrative Agent, each Co-Administrative
Agent, each Purchaser and each Affiliate thereof (each, an "Indemnified
-----------
Person") from and against any and all damages, losses, claims, liabilities and
------
related costs and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing, collectively, "Indemnified Amounts")
-------------------
awarded against or incurred by any Indemnified Person which arise directly or
indirectly from:
(i) any Purchased Receivable which is not an
Eligible Receivable at the date of its purchase or
substitution (which date shall be, for each Existing
Receivable, the date such Receivable was purchased or
substituted under the Existing Agreement applicable to such
Existing Receivable) or which is an Ineligible Receivable as
defined in clause (b)(z) of the definition of "Ineligible
Receivable";
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111
(ii) reliance on any representation or warranty made
by the Seller (or any of their respective officers) under or
in connection with this Agreement or any Settlement
Statement which shall have been false or incorrect in any
material respect when made or deemed made;
(iii) the failure by the Seller, any Affiliate
Obligor or the Servicer to comply with any applicable
Requirement of Law in all material respects with respect to
any Purchased Receivable, the related Contract or Financed
Aircraft, or the nonconformity in any material respect of
any Purchased Receivable or the related Contract or Financed
Aircraft with any such applicable Requirement of Law;
(iv) the failure (A) of the Administrative Agent to
have a valid, perfected and first priority security interest
in the Financed Aircraft (including the Aircraft
Accessories) other than with respect to a Registerable Lease
Receivable, Unsecured Foreign Receivable, Existing
Uncertified Foreign Receivable or L/C Receivable, (B) with
respect to a Registerable Lease Receivable, of the
Administrative Agent to have a valid, perfected and first
priority security interest in the Financed Aircraft
(including the Aircraft Accessories related thereto) or (C)
either (1) to vest and maintain in any Purchaser a
perfected, valid and enforceable first priority ownership
interest in any Purchased Receivable or (2) to create and
maintain in favor of the Administrative Agent for the
ratable benefit of the Purchasers a valid, perfected and
first priority security interest in such Receivable;
(v) the failure to file or record any document or
instrument (including, without limitation, any FAA Assignment
or any Foreign Assignment) with respect to any Receivables
constituting, or purporting to constitute, Purchased
Receivables, the Contracts or the Financed Aircraft related
thereto (other than the Financed Aircraft related to the L/C
Receivables and the Unsecured Foreign Receivables), whether
at the time of any purchase or at any time thereafter;
(vi) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor
to the payment of any Purchased Receivable or of the
Unaffiliated Foreign Lessee to the payment of any amount
under its Applicable Lease (including, without limitation, a
defense based on such Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor
or Unaffiliated Foreign Lessee enforceable against it in
accordance with its terms or any claims based on the related
Financed Aircraft not conforming to any express or implied
warranty);
(vii) any failure of the Seller or the Servicer to
perform its duties or obligations in any capacity in
accordance with the provisions of this Agreement, including,
without limitation, the turnover of amounts pursuant to
subsection 2.14 or 2.15;
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112
(viii) any Lien against or with respect to Purchased
Receivables, the Collections with respect thereto or the
related Contract or Financed Aircraft, or any sale, pledge,
or assignment (by operation of law or otherwise) or other
disposition of Collections of Purchased Receivables by the
Seller or the Servicer;
(ix) any failure by the Seller, any Affiliate Obligor
or the Servicer to comply (1) in any material respect with
any provision, covenant or other promise required to be
observed by any such Person under any Contract related to any
Purchased Receivable or (2), except as otherwise permitted by
this Agreement, with all provisions of the Credit and
Collection Policy in all material respects, which failure
reduces or impairs the rights of the Administrative Agent or
any Purchaser with respect to any Purchased Receivable or the
value of any Purchased Receivable including, but not limited
to, failure to comply with those provisions of the Credit and
Collection Policy relating to the cancellation, extension,
amendment, modification, compromise or settlement of any
Purchased Receivable or any term thereof, the extension,
amendment, modification or waiver of any term or condition of
any Contract related thereto, the sale, pledge or assignment
of, or grant of security interest in, any Purchased
Receivable or the Contract or Financed Aircraft related
thereto, any change in the character of its business or in
the Credit and Collection Policy or the commencement or
settlement of any legal action to enforce collection of any
Purchased Receivable;
(x) any investigation, litigation, or proceeding
related to any use of the proceeds of any purchase;
(xi) any casualty loss, property loss or product
liability related to (i) the Purchasers' ownership of the
Purchased Receivables or (ii) the Purchasers' security
interest in the related Financed Aircraft;
(xii) the failure of any Purchased Receivable at any
time after its sale or substitution hereunder or, with
respect to the Existing Receivables, under the applicable
Existing Agreement to satisfy the criteria under clause (k)
or (l) (including, without limitation, the failure of a
Permitted Receivable Lien or a Permitted Aircraft Lien to be
released or bonded in accordance with the definition of each
such term) of the definition of "Eligible Receivable"
(notwithstanding that such criteria are required to be
satisfied pursuant to such definition on the date a Purchased
Receivable is sold or substituted); or
(xiii) the execution, delivery, performance,
administration and enforcement of any of the Purchase
Documents.
(b) Notwithstanding anything to the contrary contained in
subsection 9.1(a), and with respect to any event of the type described in clause
(vi) or (xii) of subsection 9.1(a), the Managing Facility Agent, the
Administrative Agent, the Co-Administrative Agents and the Purchasers shall be
deemed to have incurred Indemnified Amounts with respect to a Purchased
Receivable as a result of events described in such clause (vi) or (xii) on the
earlier of (1) the date on which the Seller becomes aware of the event or events
of the type described in either of such
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113
clauses or (2) the date on which the Managing Facility Agent notifies the Seller
that the event described in either of such clauses has occurred.
(c) Indemnification payments required to be made hereunder
shall be payable at any time on demand by the Managing Facility Agent at the
request of the applicable Indemnified Persons and shall be promptly deposited in
the Concentration Account and paid out to such Indemnified Persons pro rata with
--- ----
respect to the Indemnified Amounts incurred and requested by such Indemnified
Persons.
(d) The agreements in this Section 9 shall survive the
completion of the Amortization Period.
9.2 Limitations of Seller's Liability. (a) The Seller
----------------------------------
shall not be required to indemnify an Person pursuant to subsection 9.1 for:
(i) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of
such Indemnified Person; or
(ii) recourse for non-payment by an Obligor
(except as otherwise provided in this Agreement) for Defaulted
Receivables; or
(iii) any income, franchise or other similar
taxes imposed on any Indemnified Person as a result of any of
the indemnities provided in subsection 9.1(a) arising out of
or as a result of this Agreement or in respect of any
Receivables or any Contract; or
(iv) Indemnified Amounts resulting from actions
taken or failed to be taken by a successor Servicer that is
not an Affiliate of the Seller appointed pursuant to
subsection 3.1(b).
(b) Each of the Managing Facility Agent, each
Administrative Agent, each Co-Administrative Agent and each Purchaser hereby
waives, to the maximum extent not prohibited by law, any right it may have to
claim or recover as Indemnified Amounts under this Section 9 any special,
exemplary, punitive or consequential damages; provided that the waiver contained
--------
in this subsection 9.2(b) shall not extend to, and the Managing Facility Agent,
each Administrative Agent, each Co-Administrative Agent and each Purchaser does
not waive, any right to claim or recover from the Seller any special, exemplary,
punitive or consequential damages for which an Indemnified Person is liable to
any Person (other than an Affiliate of such Indemnified Person).
9.3 Proceedings against Indemnified Person. (a) If any
--------------------------------------
action, suit or proceeding shall be brought against one or more of the
Indemnified Persons in respect of which indemnity may be sought against the
Seller, such Indemnified Person shall, promptly after receipt of notice of
commencement of such action, suit or proceeding, notify the Seller in writing,
enclosing a copy of all papers served upon such Indemnified Person; provided
--------
that the failure so to notify the Seller shall not relieve it from any liability
which it may have under subsection 9.1 except to the extent that the Seller is
prejudiced by such failure. The Seller may, and upon such Indemnified Person's
request shall, at the Seller's expense, resist and defend such action, suit or
proceeding,
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114
or cause the same to be resisted or defended by counsel selected by the Seller.
In the event of any failure by the Seller to resist and defend such suit, action
or proceeding or cause the same to be resisted or defended by counsel reasonably
satisfactory to such Indemnified Person, the Seller shall pay all reasonable
costs and expenses (including, without limitation, attorney's fees and
disbursements) incurred by such Indemnified Person in connection with such suit,
action or proceeding. In the event that the Seller does assume the defense of
such suit, action or proceeding, the Seller shall have the sole authority to
negotiate, compromise and settle such claim; provided that such Indemnified
--------
Person shall have the right to employ counsel to represent it in connection with
any claim in respect of which indemnity may be sought by such Indemnified Person
against the Seller under such subsection 9.1 if, in the reasonable judgment of
such Indemnified Person, such Indemnified Person may have a conflict with the
Seller, such Indemnified Person shall be entitled to be represented by separate
counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Seller. In any event, the Indemnified Person shall retain the
right to employ its own counsel, but the Indemnified Person shall, except as
otherwise provided in this subsection 9.3, bear and shall be solely responsible
for its own costs and expenses.
(b) The Seller shall be subrogated to an Indemnified
Person's rights in any matter with respect to which the Seller has actually
reimbursed such Indemnified Person for any amounts for which the Indemnified
Person claims indemnification hereunder after the Amortization Period ends.
SECTION 10. THE MANAGING FACILITY AGENT AND ADMINISTRATIVE AGENT
10.1 Appointment. Each Purchaser hereby irrevocably
-----------
designates and appoints Bank of America, N.A., as the Managing Facility Agent of
such Purchaser under this Agreement and the other Purchase Documents and each
such Purchaser irrevocably authorizes Bank of America, N.A., as the Managing
Facility Agent for such Purchaser, to take such action on its behalf under the
provisions of this Agreement and the other Purchase Documents and to exercise
such powers and perform such duties as are expressly delegated to the Managing
Facility Agent by the terms of this Agreement and the other Purchase Documents,
together with such other powers as are reasonably incidental thereto. Each
Purchaser hereby irrevocably designates and appoints each of Bank of America,
N.A. and UBS AG, Stamford Branch (as successor to Swiss Bank Corporation,
Stamford Branch, as successor to Swiss Bank Corporation, New York Branch) as
Administrative Agent under this Agreement and the other Purchase Documents and
to be, or continue to be, jointly or individually, the named party or the
secured party for the benefit of the Purchasers with respect to the Receivables
and the related Aircraft and in and on all presently existing or hereafter
executed financing statements, assignments and continuation statements, FAA
Assignments and other FAA filings and similar filings in foreign jurisdictions
and security interests granted under this Agreement or any predecessor agreement
(including pursuant to Sections 11.11 and 11.12) relating to the Receivables and
the related Aircraft. Each Administrative Agent shall act solely in accordance
with the instructions of the Managing Facility Agent (including pursuant to
Sections 11.10, 11.11 and 11.12) which in the case of the Old Administrative
Agent shall be deemed to include any action taken by the Managing Facility Agent
pursuant to a power of attorney granted by the Old Administrative Agent in favor
of the Managing Facility Agent. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Managing Facility Agent and each Administrative
Agent shall not have any
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115
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Purchase Document or otherwise exist against the Managing
Facility Agent or either Administrative Agent.
10.2 Delegation of Duties. The Managing Facility Agent and
--------------------
each Administrative Agent may execute any of its duties under this Agreement and
the other Purchase Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Managing Facility Agent and each Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Managing Facility
-----------------------
Agent, each Administrative Agent, nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Purchase Document
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Purchasers for any recitals,
statements, representations or warranties made by the Seller, the Servicer or
Raytheon or any officer thereof contained in this Agreement or any other
Purchase Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Managing Facility Agent or
either Administrative Agent under or in connection with, this Agreement or any
other Purchase Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Purchase Document
or for any failure of the Seller, the Servicer or Raytheon to perform their
respective obligations hereunder or thereunder. The Managing Facility Agent and
each Administrative Agent shall not be under any obligation to any Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of (except delivery to it of items
required by Section 5 hereof to be delivered to it), this Agreement or any other
Purchase Document, or to inspect the properties, books or records of the Seller,
the Servicer or Raytheon. Without limiting the foregoing, the Old Administrative
Agent shall not have any liability for (i) any action, or omission to act, which
is made in accordance with the instructions of the Managing Facility Agent or
(ii) the failure to act if it has not received any instructions from the
Managing Facility Agent.
10.4 Reliance by Managing Facility Agent and
---------------------------------------
Administrative Agent. The Managing Facility Agent and each Administrative Agent
--------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Seller, the Servicer or Raytheon), independent accountants and other experts
selected by the Managing Facility Agent or such Administrative Agent. The
Managing Facility Agent and each Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other
Purchase Document unless it shall first receive such advice or concurrence of
the Majority Purchasers as it deems appropriate or it shall first be indemnified
to its satisfaction by the Purchasers against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
<PAGE>
116
such action. The Managing Facility Agent and each Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Purchase Documents in accordance with a request of the
Required Purchasers or the Majority Purchasers, as appropriate, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
each Purchaser.
10.5 Notice of Certain Events. Neither the Managing
------------------------
Facility Agent nor any Administrative Agent shall be deemed to have knowledge or
notice of the occurrence of an Amortization Event, Discount Event, Rating Event,
Remittance Event or Ineligibility Event (each, an "Occurrence") hereunder unless
----------
the Managing Facility Agent has received notice from a Purchaser, the Seller,
the Servicer, RAC or Raytheon referring to this Agreement, describing such
Occurrence and stating that such notice is a notice thereof. In the event that
the Managing Facility Agent receives such a notice, the Managing Facility Agent
shall promptly give notice thereof to the Purchasers. The Managing Facility
Agent shall take such action with respect to any Amortization Event as shall be
reasonably directed by the Majority Purchasers; provided that unless and until
--------
the Managing Facility Agent shall have received such directions, the Managing
Facility Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to any such Amortization Event as it shall
deem advisable in the best interests of the Purchasers.
10.6 Non-Reliance on Managing Facility Agent, the
--------------------------------------------
Administrative Agent, the Co-Administrative Agents and the Purchasers. Each
---------------------------------------------------------------------
Purchaser expressly acknowledges that neither the Managing Facility Agent,
either Administrative Agent, the Co-Administrative Agents nor any of their
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Managing Facility
Agent, either Administrative Agent or the Co-Administrative Agents hereafter
taken, including any review of the affairs of the Seller, the Servicer or
Raytheon, shall be deemed to constitute any representation or warranty by the
Managing Facility Agent, either Administrative Agent or the Co-Administrative
Agents to any Purchaser. Each Purchaser represents to the Managing Facility
Agent, each Administrative Agent and the Co-Administrative Agents that it has,
independently and without reliance upon the Managing Facility Agent, either
Administrative Agent, the Co-Administrative Agents or any other Purchaser, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Seller, the Servicer
and Raytheon and made its own decision to make its purchases hereunder and enter
into this Agreement. Each Purchaser also represents that it will, independently
and without reliance upon the Managing Facility Agent, either Administrative
Agent or the Co-Administrative Agents or any Purchaser, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Purchase Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Seller, the Servicer and Raytheon. Except for notices, reports and other
documents expressly required to be furnished to the Purchasers by the Managing
Facility Agent hereunder, neither the Managing Facility Agent, either
Administrative Agent nor the Co-Administrative Agents shall have any duty or
responsibility to provide any Purchaser with any credit or other information
concerning the
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117
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Seller or Raytheon which may come into the possession of
the Managing Facility Agent, either Administrative Agent or the
Co-Administrative Agents or any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 Indemnification. The Purchasers agree to indemnify
---------------
the Managing Facility Agent and each Administrative Agent in its capacity as
such (to the extent not reimbursed by the Seller or Raytheon and without
limiting the obligation of the Seller or Raytheon to do so), ratably according
to the respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time after the Outstanding Purchase Price
is reduced to zero) be imposed on, incurred by or asserted against the Managing
Facility Agent or either Administrative Agent in any way relating to or arising
out of this Agreement, any other Purchase Document or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Managing Facility Agent or either
Administrative Agent under or in connection with any of the foregoing; provided
--------
that no Purchaser shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Managing Facility
Agent's or either Administrative Agent's gross negligence or willful misconduct.
The agreements in this subsection shall survive the reduction of the Outstanding
Purchase Price to zero and payment of all other amounts payable hereunder.
10.8 Managing Facility Agent and Administrative Agent in
---------------------------------------------------
Their Individual Capacities. The Managing Facility Agent and each Administrative
---------------------------
Agent and their respective Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Seller, the Servicer, RAC
and Raytheon and their Affiliates as though the Managing Facility Agent were not
the Managing Facility Agent, or such Administrative Agent was not an
Administrative Agent, hereunder and under the other Purchase Documents. With
respect to purchases made by it, the Managing Facility Agent and each
Administrative Agent shall have the same rights and powers under this Agreement
and the other Purchase Documents as any Purchaser and may exercise the same as
though it were not the Managing Facility Agent or an Administrative Agent, as
the case may be, and the terms "Purchaser" and "Purchasers" shall include the
Managing Facility Agent and each Administrative Agent, each in its individual
capacity.
10.9 Successor Managing Facility Agent or Administrative
---------------------------------------------------
Agent. The Managing Facility Agent may resign as Managing Facility Agent upon 30
-----
days' notice to the Purchasers and such resignation shall be effective upon the
earlier of (i) the expiration of such 30 day notice period and (ii) the
appointment of a successor Managing Facility Agent pursuant to the provisions of
this Section 10.9.; provided that, if a successor Managing Facility Agent shall
-------- ----
not have been appointed prior to the end of such 30 day notice period, the
Managing Facility Agent shall remain the Administrative Agent until a successor
Managing Facility Agent is appointed in accordance with this Section 10.9. If
the Managing Facility Agent shall resign as Managing Facility Agent under this
Agreement and the other Purchase Documents, then the Required Purchasers shall
appoint from among the Purchasers a successor agent for the Purchasers, which
successor agent shall, subject to the consent of the Seller and Raytheon (which
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118
consent shall not be unreasonably withheld), succeed to the rights, powers and
duties of the Managing Facility Agent including its rights powers and duties as
Administrative Agent hereunder, and the term "Managing Facility Agent" shall
mean such successor agent effective upon its appointment, and the former
Managing Facility Agent's rights, powers and duties as Managing Facility Agent
and as an Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Managing Facility Agent or any of the
parties to this Agreement or any holder of an Assignment. After any retiring
Managing Facility Agent's resignation as Managing Facility Agent, the provisions
of this subsection shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Managing Facility Agent under this Agreement and
the other Purchase Documents. The rights, obligations and duties of the Old
Administrative Agent shall be governed by the terms and provisions of the
letters, dated as of March 9, 2001 and March 8, 2002, among the Old
Administrative Agent, Raytheon, Raytheon Credit and the Managing Facility Agent.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor
----------------------
any other Purchase Document nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. Unless otherwise specifically provided herein, with the written
consent of the Majority Purchasers, the Managing Facility Agent, the Seller, the
Servicer, RAC and Raytheon may, from time to time, enter into written
amendments, supplements or modifications hereto and to the other Purchase
Documents for the purpose of adding or deleting any provisions to this Agreement
or the other Purchase Documents or changing in any manner the rights of the
Purchasers, the Seller, the Servicer, RAC, or Raytheon hereunder or thereunder
or waiving, on such terms and conditions as the Managing Facility Agent may
specify in such instrument, any of the requirements of this Agreement or the
other Purchase Documents; provided, however, that no such waiver and no such
-------- -------
amendment, supplement or modification shall (a) increase the Commitment of any
Purchaser or extend the Expiration Date or reduce the rate or amount of interest
or any fee payable to any Purchaser hereunder or extend (beyond the applicable
period of grace) the scheduled date for any payment or deposit by the Seller or
the Servicer (if not then the Seller) hereunder, in each case without the
consent of the Purchaser affected thereby, or (b) (i) amend, modify or waive any
provision of this subsection or reduce the percentage specified in or amend the
definitions of "Required Purchasers", or "Majority Purchasers", (ii) consent to
the assignment or transfer by the Seller of any rights and obligations under
this Agreement and the other Purchase Documents, (iii) take action with respect
to any Purchased Receivable pursuant to subsection 7.1(b)(iii), (iv) amend the
criteria set forth in the definition of "Eligible Receivable" or "Ineligible
Receivable" or any definition contained in either such definition if the effect
thereof is to decrease the Seller's or RAC's repurchase obligation, (v) after
the occurrence of a Rating Event release or reassign any material interest of
the Purchasers in the Financed Aircraft (except as provided in subsections
11.10, 11.24 or 11.25), (vi) release Raytheon as Guarantor under the Guarantee
or make any material modification or amendment to the Guarantee or release RAC
from its obligations under the Repurchase Agreement or make any material
modification or amendment to the Repurchase Agreement, (vii) release the
interest of the Purchasers in the Intercompany Purchase Agreement, (viii) amend
the definition of "Aggregate Repurchase Obligation" or amend subsection 2.10(b)
or any definition contained therein if the effect thereof is to decrease the
RARC Repurchase Obligation, (ix) amend, modify or waive any provision of
subsection 2.6, 2.18, 2.20(a) or
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119
11.7(a), or (x) amend the definition of "Purchase Price", without, in each case
specified in this clause (b), the written consent of all the Purchasers, or (c)
amend, modify or waive any provision of Section 10 without the written consent
of the then Managing Facility Agent or (d) waive any Amortization Event
(including, any Trigger Amortization Event, any Specified Amortization Event or
any Note Rate Amortization Event) or its consequences without the written
consent of the Required Purchasers. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Purchasers and
shall be binding upon the Seller, the Servicer, the Purchasers and the Managing
Facility Agent. In the case of any waiver, the Seller, the Servicer, RAC,
Raytheon, the Purchasers and the Managing Facility Agent shall be restored to
their former position and rights hereunder and under any other Purchase
Documents, and any Amortization Event (including, any Trigger Amortization
Event, any Specified Amortization Event or any Note Rate Amortization Event)
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Amortization Event, Trigger Amortization
Event, Specified Amortization Event or Note Rate Amortization Event, or impair
any right consequent thereon.
Notwithstanding any of the provisions of this Section 11.1 no
provision of the Agreement which affects the rights or obligations of the Old
Administrative Agent shall be amended without the written consent of the Old
Administrative Agent.
11.2 Notices. (a) All notices, requests, demands and
-------
consents to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy or telex), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of the Seller and the Managing Facility Agent, and as set forth in Schedule I in
the case of the Co-Administrative Agents and any Purchaser, or to such other
address as may be hereafter notified by the respective parties hereto:
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120
The Seller: Raytheon Aircraft Receivables Corporation
9709 East Central
Wichita, Kansas 67206
Attention: Andrew A. Mathews
Telephone: (316) 676-7166
Telecopy: (316) 676-6975
The Servicer: Raytheon Aircraft Credit Corporation
9709 East Central Avenue
Wichita, Kansas 67206
Attention: Andrew A. Mathews
Telephone: (316) 676-7673
Telecopy: (316) 676-6975
The Managing
Facility Agent: Bank of America, N.A.
Agency Management 10831
Mail Code: CA5-701-05-19
1455 Market Street, 5th Floor
San Francisco, California 94103
Attention: Kathleen Carry
Telephone: (415) 436-4001
Telecopy: (415) 503-5001
With a copy to: Bank of America, N.A.
Credit Services - West
Mail Code: CA4-706-05-09
1850 Gateway Boulevard
Concord, California 94520
Attention: Pamela Greer-Tillman
Telephone: (925) 675-8453
Telecopy: (925) 969-2815
Account No.: 12335-16573;
provided that any notice, request or demand to or upon the Managing Facility
--------
Agent or the Purchasers pursuant to subsection 2.2, 2.3, 2.8 or 2.20 shall not
be effective until received.
(b) The Managing Facility Agent agrees to promptly notify
the Purchasers of (i) each address of the Seller or the Servicer forwarded to
the Managing Facility Agent under subsection 6.1(f) or 6.2(e), respectively, and
(ii) any change in the fiscal year of the Seller under subsection 7.1(h).
11.3 No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Managing Facility Agent,
either Administrative Agent or any Purchaser, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or
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121
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
11.5 Payment of Expenses and Taxes. The Seller agrees (a)
-----------------------------
to pay or reimburse the Managing Facility Agent and each Administrative Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the other Purchase Documents, any Commitment
Transfer Supplement executed and delivered pursuant to subsection 11.6 and any
other document prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Managing Facility Agent and such Administrative Agent, (b) to pay
or reimburse each Purchaser, the Managing Facility Agent and each Administrative
Agent for all its respective costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other
Purchase Documents and any such other documents, including, without limitation,
reasonable fees and disbursements of counsel to the Managing Facility Agent,
such Administrative Agent and to the several Purchasers (including, but not
limited to, allocated costs of in-house counsel and costs incurred by counsel
with respect to the Foreign Receivables and the Affiliate Receivables), and (c)
to pay, indemnify, and hold each Purchaser, the Managing Facility Agent, each
Administrative Agent and each Co-Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Purchase Documents
and any such other documents (all the foregoing, collectively, the "indemnified
-----------
liabilities"), provided, that the Seller shall have no obligation hereunder to
----------- --------
the Managing Facility Agent, either Administrative Agent or any Purchaser (each,
an "Indemnitee") with respect to indemnified liabilities arising from (i) the
----------
gross negligence or willful misconduct of such Indemnitee, (ii) legal
proceedings commenced against such Indemnitee by any security holder or creditor
thereof arising out of and based upon rights afforded any such security holder
or creditor solely in its capacity as such, or (iii) legal proceedings commenced
against such Indemnitee by any other Purchaser or by any Transferee. The
agreements in this subsection shall survive the completion of the Amortization
Period.
11.6 Successors and Assigns; Participations; Purchasing
--------------------------------------------------
Parties.
-------
(a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Purchasers, the Co-Administrative Agents, the
Managing Facility Agent, the Administrative Agent and their respective
successors and assigns, except that (i) the Seller may not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of the Managing Facility Agent, the Administrative Agent and each
Purchaser and (ii) certain governmental authorities in foreign jurisdictions may
require the completion of certain
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procedures