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N.A. means not applicable.

*	This Cross Reference Table is not part of the Indenture.

 

TABLE OF CONTENTS

 

 

 

 

 

 

This THIRD SUPPLEMENTAL INDENTURE , dated as of October 16, 2017 (this “ Supplemental Indenture ”), is between Fly Leasing Limited (the " Company "), and Wells Fargo Bank, National Association, a national banking association, as trustee (the " Trustee ") under the Indenture dated December 11, 2013 between the Company and the Trustee (the “ Base Indenture ” and, as amended and supplemented by this Supplemental Indenture, and as further amended and supplemented from time to time, in each case, in respect of the Notes (as defined below), the “ Indenture ”).

 

RECITALS

 

WHEREAS , the Company has duly authorized, executed and delivered the Base Indenture to provide for the issuance from time to time of the Company’s unsecured debentures, notes or other evidences of indebtedness (the “ Securities ”), to be issued in one or more series, as the Base Indenture provides;

 

WHEREAS , Section 10.01 of the Base Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Base Indenture, without the consent of any Holders (as defined herein) of Securities, to establish the form or terms of Securities of any series as permitted by Section 2.01 of the Base Indenture;

 

WHEREAS , pursuant to Section 2.01 of the Base Indenture, the Company desires to execute this Supplemental Indenture to establish the form and terms, and to provide for the issuance, of a series of Securities designated as 5.250% Senior Notes due 2024 (the " Notes ") in an initial aggregate principal amount of $300,000,000 (the “ Initial Notes ”);

 

WHEREAS , from time to time subsequent to the Issue Date (as defined herein), the Company may, if permitted to do so pursuant to the terms of the Indenture, the Initial Notes and the terms of its other indebtedness existing on such future date, issue Additional Notes (as defined herein) of the same series as the Initial Notes pursuant to and in accordance with the Indenture without the consent of the Holders;

 

WHEREAS , this Supplemental Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, that are required to be a part of this Supplemental Indenture and shall, to the extent applicable, be governed by such provisions; and

 

WHEREAS , all things necessary have been done to make the Notes, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Supplemental Indenture a valid agreement of the Company in accordance with its terms.

 

NOW, THEREFORE , the Company and the Trustee agree as follows solely for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of the Notes:

 

ARTICLE 1

APPLICATION OF SUPPLEMENTAL INDENTURE

 

Section 1.01            Application of This Supplemental Indenture .  Notwithstanding any other provision of this Supplemental Indenture, the provisions of this Supplemental Indenture, including as provided in Section 2.02 below, are expressly and solely for the benefit of the Holders of the Notes and the Note Guarantees, if any, and shall not apply to any other series of Securities that may be issued hereafter under the Base Indenture. The Notes constitute a series of Securities as provided in the Base Indenture unless a supplemental indenture with respect to such series specifically incorporates such provisions. Unless otherwise expressly specified, references in this Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Supplemental Indenture, and not the Base Indenture or any other document.

 

Section 1.02            Effect of Supplemental Indenture .  With respect to the Notes (and any notation of Note Guarantee endorsed thereon) only, the Base Indenture shall be supplemented and amended pursuant to Section 11.01 thereof to establish the form and terms of the Notes (and any notation of Note Guarantee endorsed thereon) as set forth in this Supplemental Indenture, including as follows:

 

(a)             Definitions . The provisions of Article 1 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 2 of this Supplemental Indenture;

 

(b)             Description, Execution, Registration and Exchange of Securities . The provisions of Article 2 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 3 of this Supplemental Indenture;

 

(c)             Redemption of Securities; Sinking Funds . The provisions of Article 3 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 4 of this Supplemental Indenture;

 

(d)             Particular Covenants of the Company . The provisions of Article 4 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 5 of this Supplemental Indenture;

 

(e)             Remedies of the Trustee and Securityholders on Event of Default . The provisions of Article 6 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 7 of this Supplemental Indenture;

 

(f)              Concerning the Trustee . The provisions of Article 7 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 8 of this Supplemental Indenture;

 

(g)             Supplemental Indentures . The provisions of Article 10 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 10 of this Supplemental Indenture;

 

(h)             Consolidation, Merger, Sale Or Conveyance . The provisions of Article 11 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 6 of this Supplemental Indenture;

 

(i)              Satisfaction And Discharge Of Indenture . The provisions of Article 12 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 8 of this Supplemental Indenture;

 

(j)              Miscellaneous Provisions . The provisions of Article 14 of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 12 of this Supplemental Indenture;

 

(k)             Securityholder Lists and Reports by the Company and the Trustee . The provisions of Article 5 of the Base Indenture are deleted in their entirety;

 

(l)              Concerning the Securityholders . The provisions of Article 8 of the Base Indenture are deleted in their entirety;

 

(m)            Securityholders’ Meetings . The provisions of Article 9 of the Base Indenture are deleted in their entirety; and

 

(n)             Immunity Of Incorporators, Stockholders, Officers And Directors . The provisions of Article 13 of the Base Indenture are deleted in their entirety.

 

To the extent that the provisions of this Supplemental Indenture (including those referred to in clauses (a) through (n) above) conflict with any provision of the Base Indenture, the provisions of this Supplemental Indenture shall govern and be controlling, solely with respect to the Notes (and any notation of Note Guarantee endorsed thereon).

 

ARTICLE 2

 

DEFINITIONS AND INCORPORATION

BY REFERENCE

 

Section 2.01             Definitions .

 

" Acquired Indebtedness "   means, with respect to any specified Person,

 

(1)             Indebtedness of any other Person existing at the time such other Person is amalgamated or merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person, and

 

(2)             Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

" Additional Amounts " shall have the meaning set forth in Section 5.17 hereof.

 

" Additional Notes " means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 3.02 and 5.09 hereof, as part of the same series as the Initial Notes.

 

" Affiliate " of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

" Agent " means any Registrar or Paying Agent.

 

" Applicable Price " means, as determined by the Company with respect to any Note on any redemption date, the sum of the present value at such redemption date of all remaining scheduled payments of principal, premium and interest on such Note through October 15, 2020 (assuming the Notes had been called for redemption on such date pursuant to Section 4.07(b) but excluding accrued but unpaid interest to the redemption date), discounted to the date of redemption using a discount rate equal to the Treasury Rate plus 50 basis points.

 

" Applicable Procedures " means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

 

" Asset Sale " means:

 

(1)             the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related or substantially concurrent transactions, of property or assets (including by way of a sale and leaseback) of the Company or any Restricted Subsidiary (each referred to in this definition as a "disposition"), or

 

(2)             the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related or substantially concurrent transactions (other than preferred stock of Restricted Subsidiaries issued in compliance with Section 5.09 hereof)

 

in each case, other than:

 

(a)             a disposition of Cash Equivalents or dispositions of any surplus, obsolete, damaged or worn out assets in the ordinary course of business, or any disposition of inventory or goods held for sale in the ordinary course of business;

 

(b)             the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to Section 6.01 hereof or any disposition that constitutes a Change of Control;

 

(c)             the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 5.07 hereof;

 

(d)             any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate Fair Market Value of less than $10.0 million;

 

(e)             any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

 

(f)              to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, as amended, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

 

(g)             the lease, assignment, sub‑lease or license of any real or personal property, including any aircraft, in each case in the ordinary course of business;

 

(h)             the sale of aircraft, engines, spare parts or similar assets, or Capital Stock of any entity owning any of the foregoing, in the ordinary course of business;

 

(i)              any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary (with the exception of Investments in Unrestricted Subsidiaries acquired pursuant to clause (10) of the definition of Permitted Investments);

 

(j)              foreclosures on assets;

 

(k)             (i) sales of accounts receivable, or participations therein, in connection with the Credit Facilities, (ii) any disposition of Securitization Assets in connection with any Qualified Securitization Financing and (iii) the sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof or in bankruptcy or similar proceeding;

 

(l)              the surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claim of any kind, in each case, in the ordinary course of business;

 

(m)            the creation of a Lien;

 

(n)            sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; and

 

(o)            any financing transaction with respect to property built or acquired by the Company or any Restricted Subsidiary after the Closing Date, including, without limitation, sale leasebacks and asset securitizations permitted by this Indenture.

 

" Bankruptcy Law " means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

" BBAM LP " means BBAM Limited Partnership.

 

" Board of Directors " means:

 

(1)              with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2)              with respect to a partnership, the board of directors of the general partner of the partnership;

 

(3)              with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

 

(4)              with respect to any other Person, the board or committee of such Person serving a similar function.

 

" Business Day " means any day other than a Legal Holiday.

 

" Capital Markets Debt "   means any unsecured debt securities (other than (i) a Qualified Securitization Financing or (ii) a debt issuance guaranteed by an export credit agency (including the Export‑Import Bank of the United States)) issued in the capital markets by the Company or any of its Subsidiaries, whether issued in a public offering or private placement, including pursuant to Section 4(a)(2) of the Securities Act or Rule 144A, Regulation S or Regulation D under the Securities Act.

 

" Capital Stock " means:

 

(1)              in the case of a company or corporation, corporate stock or shares;

 

(2)              in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)              in the case of a partnership or limited liability company, partnership, membership interests (whether general or limited) or shares in the capital of the company; and

 

(4)              any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

" Capitalized Lease Obligation " means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

 

" Carryover Amount " means the cumulative amount equal to the sum of the amounts as of the end of each fiscal year of the Company (each, a “ Carryover Determination Date ”) beginning December 31, 2017 that the Company has available and otherwise unused during such fiscal year for the purpose of making a Restricted Payment pursuant to Section 5.07(b)(13); provided that (1) the Carryover Amount for any fiscal year shall not exceed the greater of $50.0 million and 1.25% of Total Assets minus the aggregate amount of Restricted Payments made pursuant to Section 5.07(b)(13) (but not less than zero) during such fiscal year if such fiscal year contains a fiscal quarter end for which the Company’s Debt to Equity Ratio exceeded 3.5:1.0, and (2) the Carryover Amount may not be applied in any fiscal year to the extent that the aggregate amount of Restricted Payments made pursuant to Section 5.07(b)(13) during such fiscal year exceeds the greater of $100 million and 2.5% of Total Assets.

 

" Cash Equivalents " means:

 

(1)              United States dollars;

 

(2)              pounds sterling,

 

(3)            ( a)             euro, or any national currency of any participating member state in the European Union,

 

(b)             Canadian dollars,

 

(c)             Australian dollars, or

 

(d)             in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by them from time to time in the ordinary course of business,

 

(4)             securities issued or directly and fully and unconditionally guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 24 months or less from the date of acquisition,

 

(5)             certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500.0 million,

 

(6)             repurchase obligations for underlying securities of the types described in clauses (4) and (5) above entered into with any financial institution meeting the qualifications specified in clause (5) above,

 

(7)             commercial paper rated at least P‑2 by Moody's or at least A‑2 by S&P and in each case maturing within 12 months after the date of creation thereof,

 

(8)             investment funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above,

 

(9)             readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof or any Province of Canada having one of the two highest rating categories obtainable from either Moody's or S&P with maturities of 24 months or less from the date of acquisition and

 

(10)            Indebtedness or preferred stock issued by Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's with maturities of 12 months or less from the date of acquisition.

 

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) through (3) above; provided that such amounts are converted into any currency listed in clauses (1) through (3) as promptly as practicable and in any event within 10 Business Days following the receipt of such amounts.

 

" Change of Control " means:

 

(1)              any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d‑3 and 13d‑5 under the Exchange Act), directly or indirectly, of shares representing more than 50% of the voting power of the Company's Voting Stock;

 

(2)             during any period of two consecutive years, individuals who at the beginning of such period were elected by the shareholders of the Company to the Board of Directors of the Company, as the case may be (together with any new directors whose election by the shareholders of the Company to such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of the majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved (who cannot include persons not elected by or recommended for election by the then incumbent Board of Directors unless such Board of Directors determines reasonably and in good faith that failure to approve any such persons as members of the Board of Directors could reasonably be expected to violate a fiduciary duty under applicable law)), cease for any reason to constitute a majority of the members of the Board of Directors of the Company who were elected by the shareholders of the Company;

 

(3)             (a) all or substantially all of the assets of the Company and the Restricted Subsidiaries, taken as a whole, are sold or otherwise transferred to any Person other than a Wholly‑Owned Restricted Subsidiary or one or more Permitted Holders or (b) the Company amalgamates, consolidates or merges with or into another Person or any Person consolidates, amalgamates or merges with or into the Company, in either case under this clause (3), in one transaction or a series of related transactions in which immediately after the consummation thereof Persons beneficially owning (as defined in Rules 13d‑3 and 13d‑5 under the Exchange Act) Voting Stock representing in the aggregate a majority of the total voting power of the Voting Stock of the Company, immediately prior to such consummation do not beneficially own (as defined in Rules 13d‑3 and 13d‑5 under the Exchange Act) Voting Stock representing a majority of the total voting power of the Voting Stock of the Company, or the applicable surviving or transferee Person; provided that this clause shall not apply (i) in the case where immediately after the consummation of the transactions Permitted Holders beneficially own Voting Stock representing in the aggregate a majority of the total voting power of the Company, or the applicable surviving or transferee Person or (ii) to an amalgamation or a merger of the Company with or into (x) a corporation, limited liability company or partnership or (y) a wholly‑owned subsidiary of a corporation, limited liability company or partnership that, in either case, immediately following the transaction or series of transactions, has no Person or group (other than Permitted Holders), which beneficially owns Voting Stock representing 50% or more of the voting power of the total outstanding Voting Stock of such entity and, in the case of clause (y), the parent of such wholly‑owned subsidiary guarantees the Company's obligations under the Notes and this Indenture; or

 

(4)              the Company shall adopt a plan of liquidation or dissolution or any such plan shall be approved by the shareholders of the Company.

 

" Clearstream " means Clearstream Banking, S.A.

 

" Closing Date "   means October 16, 2017.

 

" Company " means the Person named as the "Company" in the first paragraph of this Indenture, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person.

 

" Consolidated Debt " means, with respect to any Person as of any determination date, an amount equal to the sum of (1) the aggregate amount of all outstanding Indebtedness for borrowed money and obligations in respect of Capitalized Lease Obligations of such Person and its Restricted Subsidiaries on a consolidated basis, plus (2) the aggregate liquidation preference of Disqualified Stock of the Company and its Restricted Subsidiaries issued to a Person other than the Company or any Restricted Subsidiary, in each case as reflected in the most recent annual or quarterly consolidated balance sheet of such Person and its Restricted Subsidiaries that is available.

 

" Consolidated Depreciation and Amortization Expense " means with respect to any Person for any period, the total amount of depreciation and amortization expense, including any amortization of deferred financing fees, amortization in relation to terminated Hedging Obligations and amortization of lease discounts and premiums and lease incentives, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

 

" Consolidated Interest Expense " means, with respect to any Person for any period, the sum, without duplication, of:

 

(1)             consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including (i) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (ii) non‑cash interest payments (but excluding any non‑cash interest expense attributable to the movement in the mark to market valuation of or hedge ineffectiveness expenses of Hedging Obligations or other derivative instruments pursuant to Accounting Standards Codification ("ASC") 815 – Derivatives and Hedging), and (iii) all commissions, discounts and other fees and charges owed with respect to letters of credit or relating to any Qualified Securitization Financing; and excluding (i) non‑cash interest expense attributable to the amortization of gains or losses resulting from the termination prior to the Closing Date of Hedging Obligations, (ii) the interest component of Capitalized Lease Obligations and net payments, if any, pursuant to interest rate Hedging Obligations, (iii) amortization of deferred financing fees and any expensing of other financing fees, and (iv) amortization of fair value debt discounts), plus

 

(2)              consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, less

 

(3)              interest income for such period.

 

" Consolidated Net Income " means, with respect to any Person for any period, the aggregate of the Net Income, of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided , however , that :

 

(1)             any net after‑tax extraordinary, non‑recurring or unusual gains or losses, including sales or other dispositions of assets under a Securitization Financing other than in the ordinary course of business, (less all fees and expenses relating thereto) or expenses (including, without limitation, relating to severance, relocation and new product introductions) shall be excluded,

 

(2)             the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period,

 

(3)             any net after‑tax income (loss) from disposed or discontinued operations and any net after‑tax gains or losses on disposal of disposed or discontinued operations shall be excluded,

 

(4)             any net after‑tax gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Board of Directors of the Company, shall be excluded,

 

(5)             the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Company shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

 

(6)             solely for the purpose of determining the amount available for Restricted Payments under clause (c)(I) under Section 5.07(a) hereof, the Net Income for such period of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its shareholders, unless such restriction with respect to the payment of dividends or in similar distributions has been legally waived; provided that Consolidated Net Income of the Company will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) to the Company or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

 

(7)             the effects of adjustments resulting from the application of purchase accounting in relation to any acquisition that is consummated after the Closing Date, net of taxes, shall be excluded,

 

(8)              any net after-tax loss from the early extinguishment of Indebtedness arising from the application of purchase accounting or Hedging Obligations or other derivative instruments shall be excluded,

 

(9)              any net after-tax impairment charge or asset write-off pursuant to ASC 350 – Intangibles – Goodwill and Other and ASC 360 – Property, Plant, and Equipment and the amortization of intangibles arising pursuant to ASC 805 – Business Combinations shall be excluded,

 

(10)            any net after-tax gain (loss) arising from changes in the fair value of derivatives shall be excluded,

 

(11)            any net after-tax valuation allowance against a deferred tax asset shall be excluded,

 

(12)            amortization of (i) fair value lease premiums and discounts, (ii) lease incentives, (iii) fair value debt discounts, and (iv) debt discounts in respect of Indebtedness issued prior to the Closing Date shall be excluded, and

 

(13)            any non‑cash compensation expense recorded from grants of stock appreciation or similar rights, stock options or other rights to officers, directors or employees shall be excluded.

 

Notwithstanding the foregoing, for the purpose of Section 5.07 hereof only (other than clause (c)(IV) under Section 5.07(a) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Company and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Company and the Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Company or any Restricted Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted pursuant to clause (c)(IV) under Section 5.07(a) hereof.

 

" Consolidated Tangible Equity " means, with respect to any Person as of any determination date, an amount equal to the difference between (1) the shareholders' equity, stockholders’ equity, members’ equity or partners’ capital, as applicable, minus (2) all goodwill, trade names, trademarks, patents and other like intangibles, in each case as reflected in the most recent annual or quarterly consolidated balance sheet of such Person and its Restricted Subsidiaries that is available.

 

" Contingent Obligations " means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,

 

(1)             to purchase any such primary obligation or any property constituting direct or indirect security therefor,

 

(2)             to advance or supply funds

 

(a)             for the purchase or payment of any such primary obligation or

 

(b)             to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or

 

(3)             to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

" Corporate Trust Office of the Trustee " means the address of the Trustee specified in Section 13.02 hereof or such other address as the Trustee may designate by notice to the Company. With respect to registration for transfer or exchange, presentation at maturity or for redemptions, such office shall also mean the office or agency of the Trustee located at the date hereof at Corporate Trust Operations, MAC N9300-070, 600 South Fourth Street, Minneapolis, MN 55415.

 

" Covenant Suspension Event " has the meaning set forth in Section 5.16(a) hereof.

 

" Credit Facilities " means one or more debt facilities, or commercial paper facilities with banks or other institutional lenders or investors or indentures providing for revolving credit loans, term loans, receivables financing, including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against receivables, letters of credit or other long‑term indebtedness, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof.

 

" Custodian " means Wells Fargo Bank, National Association, as custodian with respect to the Global Notes, or any successor entity thereto.

 

" Debt to Equity Ratio " means, with respect to any Person on any determination date, the ratio of Consolidated Debt of such Person as of such determination date to the Consolidated Tangible Equity of such Person as of such determination date; provided that in the event that the Company or any Restricted Subsidiary (i) makes any Restricted Payment, (ii) incurs, assumes, guarantees, redeems, defeases, retires or extinguishes any Consolidated Debt; or (iii) issues or redeems Disqualified Stock to a Person other than the Company or a Restricted Subsidiary, in each case subsequent to the date of the most recent annual or quarterly consolidated balance sheet for which the Debt to Equity Ratio is being calculated but prior to or contemporaneously with the event for which the calculation of the Debt to Equity Ratio is made, then Consolidated Debt and Consolidated Tangible Equity shall be calculated giving pro forma effect to such Restricted Payment, incurrence, assumption, guarantee, redemption, defeasance, retirement or extinguishment of indebtedness, or such issuance or redemption of Disqualified Stock or preferred stock as if the same had occurred on such determination date.

 

" Default " means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

" Definitive Note " means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 3.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto.

 

" Depositary " means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 3.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

 

" Designated Noncash Consideration "   means the Fair Market Value of noncash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an Officers' Certificate, setting forth the basis of such valuation, executed by a senior vice president or the principal financial officer of the Company, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Noncash Consideration.

 

" Disqualified Stock " means with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable, other than as a result of a change of control or asset sale, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, other than as a result of a change of control or asset sale, in whole or in part, in each case prior to the date 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , however , that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

" EBITDA " means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus (without duplication):

 

(1)              provision for taxes based on income or profits, plus franchise or similar taxes, of such Person for such period deducted in computing Consolidated Net Income, plus

 

(2)             Consolidated Interest Expense (and other components of Fixed Charges to the extent changes in GAAP after the Closing Date result in such components reducing Consolidated Net Income) of such Person for such period to the extent the same was deducted in calculating such Consolidated Net Income, plus

 

(3)             Consolidated Depreciation and Amortization Expense of such Person for such period to the extent such depreciation and amortization were deducted in computing Consolidated Net Income, plus

 

(4)             any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or Indebtedness permitted to be incurred by this Indenture (whether or not successful), including such fees, expenses or charges related to the offering of the Notes and the Credit Facilities, and deducted in computing Consolidated Net Income, plus

 

(5)              the amount of any restructuring charge deducted in such period in computing Consolidated Net Income, including any one‑time costs incurred in connection with acquisitions after the Closing Date, plus

 

(6)             any other non‑cash charges reducing Consolidated Net Income for such period, excluding any such charge that represents an accrual or reserve for a cash expenditure for a future period, plus

 

(7)              the amount of any non‑controlling interest expense deducted in calculating Consolidated Net Income (less the amount of any cash dividends paid to the holders of such minority interests), plus

 

(8)              any net loss (or minus any gain) resulting from currency exchange risk Hedging Obligations, plus

 

(9)              foreign exchange loss (or minus any gain) on debt, plus

 

(10)            Securitization Fees and the amount of loss on sale of Securitization Assets and related assets to a Securitization Subsidiary in connection with a Qualified Securitization Financing, to the extent deducted in determining Consolidated Net Income, less

 

(11)            non‑cash items increasing Consolidated Net Income of such Person for such period, excluding any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period.

 

" employees " of the Company and its Subsidiaries shall include officers of the Company and its Subsidiaries and employees of BBAM LP or its Subsidiaries that are involved in the management of the Company and its Subsidiaries.

 

" EMU "   means economic and monetary union as contemplated in the Treaty on European Union.

 

" Equity Interests " means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

 

" Equity Offering " means any public or private sale of common shares or preferred shares of the Company (excluding Disqualified Stock), other than:

 

(1)              public offerings with respect to the Company's common shares registered on Form S‑8; and

 

(2)              any sales to the Company or any of its Subsidiaries.

 

" euro "   means the single currency of participating member states of the EMU.

 

" Euroclear " means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

 

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

" Existing Indebtedness " means Indebtedness of the Company or the Restricted Subsidiaries in existence on the Closing Date, plus interest accruing thereon.

 

" Fair Market Value "   means   the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the chief executive officer, chief financial officer, chief accounting officer or controller of the Company or the Restricted Subsidiary, which determination will be conclusive (unless otherwise provided herein).

 

" Fitch " means Fitch, Inc.

 

" Fixed Charge Coverage Ratio " means with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period.  In the event that the Company or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than reductions in amounts outstanding under revolving facilities unless accompanied by a corresponding termination of commitment) or issues or redeems Disqualified Stock or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the " Calculation Date "), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee or redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or preferred stock, as if the same had occurred at the beginning of the applicable four‑quarter period.

 

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, amalgamations, mergers, consolidations and disposed operations (as determined in accordance with GAAP) that have been made by the Company or any Restricted Subsidiary during the four‑quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, amalgamations, mergers, consolidations and disposed operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four‑quarter reference period.  If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was amalgamated or merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, amalgamation, merger, consolidation or disposed operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, amalgamation, merger, consolidation or disposed operation had occurred at the beginning of the applicable four‑quarter period.

 

For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions, regardless of whether these cost savings could then be reflected in pro forma financial statements in accordance with Regulation S‑X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto).  If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness).  Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.  For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period.  Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

 

" Fixed Charges " means with respect to any Person for any period, the sum of:

 

(1)              Consolidated Interest Expense,

 

(2)             all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or any Refunding Capital Stock of such Person, and

 

(3)             all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock.

 

" Foreign Subsidiary "   means any Subsidiary of the Company that is not incorporated in or organized under the laws of the United States or the Bermuda.

 

" GAAP " means generally accepted accounting principles in the United States which are in effect on the Closing Date.  At any time after the Closing Date, the Company may elect to apply IFRS accounting principles in lieu of GAAP for purposes of calculations hereunder and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided herein); provided that calculation or determination in this Indenture that requires the application of GAAP for periods that include fiscal quarters ended prior to the Company's election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.  The Company shall give notice of any such election made in accordance with this definition to the Trustee and the Holders of Notes.

 

" Global Note Legend " means the legend set forth in Section 3.06(e) hereof, which is required to be placed on all Global Notes issued under this Indenture.

 

" Global Notes " means, individually and collectively, each of the Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, issued in accordance with Section 3.01 or 3.06(b)(2) hereof.

 

" Government Securities " means securities that are:

 

(1)              direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

 

(2)              obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

 

which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

 

" guarantee " means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

 

" Guarantor " means any Person that executes a Note Guarantee in accordance with the provisions of this Indenture and its respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

 

" Hedging Obligations " means, with respect to any Person, the obligations of such Person under:

 

(1)              currency exchange, interest rate, inflation or commodity swap agreements, currency exchange, interest rate, inflation or commodity cap agreements and currency exchange, interest rate, inflation or commodity collar agreements; and

 

(2)             other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates, inflation or commodity prices.

 

" Holder " means a Person in whose name a Note is registered in the register.

 

" Indebtedness " means with respect to any Person:

 

(1)              any indebtedness (including principal and premium) of such Person, whether or not contingent,

 

(a)             in respect of borrowed money,

 

(b)             evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without double counting, reimbursement agreements in respect thereof),

 

(c)             representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn‑out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, or

 

(d)             representing any Hedging Obligations,

 

if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP,

 

(2)             to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person, other than by endorsement of negotiable instruments for collection in the ordinary course of business, and

 

(3)              to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person, whether or not such Indebtedness is assumed by such Person;

 

provided , however , that Contingent Obligations shall be deemed not to constitute Indebtedness; and obligations under or in respect of a Qualified Securitization Financing shall not be deemed to constitute Indebtedness.

 

" Indenture " has the meaning set forth in the first paragraph of this Indenture.

 

" Independent Financial Advisor "   means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

 

" Indirect Participant " means a Person who holds a beneficial interest in a Global Note through a Participant.

 

" Initial Notes " means the first $300,000,000 in aggregate principal amount of Notes issued under this Indenture on the Closing Date.

 

" Investment Grade Rating " means a rating equal to or higher than BBB (or the equivalent) by Fitch, Baa3 (or the equivalent) by Moody's and BBB‑ (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

 

" Investments " means with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers, commission, travel, moving and similar advances to officers, directors and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property.  For purposes of the definition of "Unrestricted Subsidiary" and Section 5.07 hereof:

 

(1)             "Investments" shall include the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to:

 

(x)             the Company's "Investment" in such Subsidiary at the time of such redesignation less

 

(y)             the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

 

(2)             any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Company.

 

" Legal Holiday " means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized or required by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

 

" Lien " means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

 

" Management Group " means at any time, the Chairman of the Board, any President, any Executive Vice President or Vice President, any Managing Director, any Treasurer and any Secretary or other executive officer of the Company or any Subsidiary of the Company or BBAM LP or any Subsidiary of BBAM LP at such time.

 

" Moody's " means Moody's Investors Service, Inc.

 

" Net Income " means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.

 

" Net Payment " means the amount that any Holder receives from any Payor or Paying Agent after deduction or withholding of any amount for or on account of any Taxes imposed with respect to that payment (including any withholding or deduction attributable to Additional Amounts) by the applicable withholding agent of an amount for or on account of any present or future Taxes imposed with respect to that payment by a taxing authority (including any withholding or deduction attributable to additional amounts payable hereunder).

 

" Net Proceeds " means the aggregate cash proceeds received by the Company or any Restricted Subsidiary in respect of any Asset Sale, including, without limitation, any cash received upon the sale or other disposition of any Designated Noncash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Noncash Consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness secured by a Lien permitted under this Indenture required (other than required by Section 5.10(b)(1) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Company as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company after such sale or other disposition thereof, including, without limitation, pension and other post‑employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

 

" Note Guarantee " means the Guarantee by each Guarantor of the Company's obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.

 

" Notes " has the meaning assigned to it in the preamble to this Indenture.  The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.

 

" Obligations " means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and banker's acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

 

" Officer " means the Chairman of the board of directors, the Chief Executive Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any Assistant Secretary of the Company.

 

" Officers' Certificate " means a certificate signed on behalf of the Company by two Officers of the Company one of whom must be the principal executive officer, the principal financial officer, the treasurer, the principal accounting officer or the secretary of the Company that meets the requirements of Section 13.05 hereof; provided that the Officers' Certificate delivered to the Trustee on the Closing Date with respect to conditions precedent to the authentication of the Initial Notes may be signed by two attorneys‑in‑fact of the Company.

 

" Opinion of Counsel " means a written opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.  The counsel may be an employee of or counsel to the Company or any Subsidiary of the Company.

 

" Organizational Documents " mean, with respect to (a) the Company, the memorandum and articles of association and (b)  any other person, (i) in the case of any corporation, the certificate of incorporation and by‑laws (or similar documents) of such person, (ii) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such person, (iii) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such person, (iv) in the case of any general partnership, the partnership agreement (or similar document) of such person, (v) in the case of any trust, the declaration of trust and trust agreement (or similar document) of such person and (vi) in any other case, the functional equivalent of the foregoing.

 

" Participant " means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

 

" Payor " means the Company, any Guarantor or any successor to any of them.

 

" Permitted Asset Swap "   means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided that any cash or Cash Equivalents received must be applied in accordance with Section 5.10 hereof.

 

" Permitted Holders " means the collective reference to Summit Aviation Partners LLC, Onex Corporation, GIC Private Limited, each of their respective Affiliates, the executive officers of Summit Aviation Partners LLC and the Management Group.  Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

 

" Permitted Investments " means:

 

(1)             any Investment in the Company or any Restricted Subsidiary;

 

(2)             any Investment in cash and Cash Equivalents;

 

(3)             any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment:

 

(a)             such Person becomes a Restricted Subsidiary; or

 

(b)          such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary;

 

(4)             any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 5.10 hereof or any other disposition of assets not constituting an Asset Sale;

 

(5)             any Investment existing on the Closing Date;

 

(6)             advances to employees not in excess of $5.0 million outstanding at any one time, in the aggregate;

 

(7)             any Investment acquired by the Company or any Restricted Subsidiary:

 

(a)           in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the Company of such other Investment or accounts receivable; or

 

(b)             as a result of a foreclosure by the Company or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(8)             any Investments in Hedging Obligations entered into in the ordinary course of business;

 

(9)              loans to officers, directors and employees for business‑related travel expenses, moving expenses and other similar expenses, in each case incurred in the ordinary course of business;

 

(10)           any Investment having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of cash and/or marketable securities), not to exceed the greater of (x) $50.0 million and (y) 1.25% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

 

(11)            Investments the payment for which consists of Equity Interests of the Company (exclusive of Disqualified Stock); provided , however , that such Equity Interests will not increase the amount available for Restricted Payments under clause (c) of Section 5.07(a) hereof;

 

(12)            guarantees of Indebtedness permitted by Section 5.09 hereof;

 

(13)            any transaction to the extent it constitutes an investment that is permitted and made in accordance with Section 5.11(b) hereof;

 

(14)            Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

(15)            repurchases of the Notes;

 

(16)            any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;

 

(17)            any Investment in a Person (other than the Company or a Restricted Subsidiary) pursuant to the terms of any agreements in effect on the Closing Date and any Investment that replaces, refinances or refunds an existing Investment; provided that the new Investment is in an amount that does not exceed the amount replaced, refinanced or refunded (after giving effect to write‑downs or write‑offs with respect to such Investment), and is made in the same Person as the Investment replaced, refinanced or refunded;

 

(18)            endorsements for collection or deposit in the ordinary course of business;

 

(19)            Investments relating to any Securitization Subsidiary that, in the good faith determination of the Board of Directors of the Company, are necessary or advisable to effect any Qualified Securitization Financing;

 

(20)            Investments in property and other assets which after such Investments are owned by the Company or any Restricted Subsidiary;

 

(21)            Investments in Permitted Joint Ventures in an aggregate amount that taken together with all other Investments made pursuant to this clause (21) that are at that time outstanding, does not exceed the greater of (x) $50.0 million and (y) 1.25% of Total Assets, and as of the date of making such Investment and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; and

 

(22)           debt Investments secured by commercial jet aircraft or related property and Permitted Securitization Investments, in each case to the extent reflected as a liability on the balance sheet of the borrower or issuer thereof.

 

" Permitted Joint Venture "   means any agreement, contract or other arrangement between the Company or any Restricted Subsidiary and any person that permits one party to share risks or costs, comply with regulatory requirements or satisfy other business objectives customarily achieved through the conduct of a Similar Business jointly with third parties.

 

" Permitted Jurisdiction "   means any of the United States, any state thereof, the District of Columbia, or any territory thereof, any member state of the Pre-Expansion European Union, Canada, Australia, Ireland, Switzerland, Bermuda, the Cayman Islands or Singapore.

 

" Permitted Liens " means, with respect to any Person:

 

(1)             pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety, customs or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, or premiums to insurance carriers, in each case incurred in the ordinary course of business;

 

(2)             Liens imposed by law, such as carriers', warehousemen's, materialmen's, landlords', workmen's, suppliers', repairmen's and mechanics' Liens and other similar Liens arising in the ordinary course of business, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;

 

(3)             Liens for taxes, assessments or other governmental charges or levies not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings;

 

(4)              Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

(5)             minor survey exceptions, minor encumbrances, minor title deficiencies, easements or reservations of, or rights of others for, licenses, rights‑of‑way, covenants, encroachments, protrusions, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(6)              Liens existing on the Closing Date;

 

(7)              Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a subsidiary; provided , further , however , that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

(8)              Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of an amalgamation or a merger or consolidation with or into the Company or any Restricted Subsidiary; provided , however , that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

(9)              Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary permitted to be incurred in accordance with Section 5.09 hereof;

 

(10)            Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien;

 

(11)            Liens on specific items of inventory of other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(12)            leases and subleases of real property granted to others in the ordinary course of business and which do not materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries;

 

(13)            Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

 

(14)            Liens in favor of the Company;

 

(15)            Liens on equipment of the Company or any Restricted Subsidiary granted in the ordinary course of business to the Company's client at which such equipment is located;

 

(16)            Liens on Securitization Assets and related assets incurred in connection with a Qualified Securitization Financing;

 

(17)            Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (14), (26) and (28); provided , however , that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (14), (26) and (28) at the time the original Lien became a Permitted Lien hereunder, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement and (z) the new Lien has no greater priority and the holders of the Indebtedness secured by such Lien have no greater intercreditor rights relative to the Notes and Holders thereof than the original Liens and the related Indebtedness;

 

(18)            other Liens securing obligations incurred in the ordinary course of business which obligations do not exceed $25.0 million;

 

(19)            Licenses or sublicenses in the ordinary course of business;

 

(20)            Liens securing judgments, attachments or awards for the payment of money not constituting an Event of Default under Section 7.01(5) hereof so long as (a) such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired or (b) such Liens are supported by an indemnity by a third party with an Investment Grade Rating;

 

(21)            Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;

 

(22)            Liens (i) of a collection bank arising under Section 4‑210 of the Uniform Commercial Code, or any comparable or successor provision, on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set‑off) and which are within the general parameters customary in the banking industry;

 

(23)            Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(24)            Liens that are contractual rights of set‑off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;

 

(25)            Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

 

(26)            Liens securing Indebtedness permitted to be incurred pursuant to Section 5.09(b)(4) hereof; provided that Liens extend only to the assets so financed, purchased, constructed or improved;

 

(27)            Liens placed on the Capital Stock of any non‑Wholly‑Owned Subsidiary or joint venture in the form of a transfer restriction, purchase option, call or similar right of a third party joint venture partner;

 

(28)            Liens securing Indebtedness permitted to be incurred pursuant to Section 5.09(b)(17) hereof; provided that Liens extend only to the assets so financed and any assets or Capital Stock of any Restricted Subsidiary incurring such Indebtedness;

 

(29)           (i) Leases of aircraft, engines, spare parts or similar assets of the Company or its Restricted Subsidiaries granted by such person, in each case entered into in the ordinary course of the Company or its Restricted Subsidiaries' operating leasing business, (ii) "Permitted Liens" or similar terms under any lease or (iii) any Lien which the lessee under any lease is required to remove;

 

(30)            Bankers' Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Company or its Restricted Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that , unless such Liens are non‑consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; and

 

For purposes of determining compliance with this definition, (A) Permitted Liens need not be incurred solely by reference to one category of Permitted Liens described above but are permitted to be incurred in part under any combination thereof and (B) in the event that a Lien (or any portion thereof) meets the criteria of one or more of the categories of Permitted Liens described above, the Company may, in its sole discretion, classify or reclassify such item of Permitted Liens (or any portion thereof) in any manner that complies with this definition and the Company may divide and classify a Lien in more than one of the types of Permitted Liens in one of the above clauses.

 

" Permitted Securitization Investment " means, notes, bonds or other debt instruments or beneficial interests in a trust initially issued for cash consideration to banks, investors or other financing sources (other than the Company and its Subsidiaries), the proceeds of which are used to finance, in whole or in part, the acquisition of commercial jet aircraft or engines (or related assets) and related Securitization Assets by a Person that is not a Subsidiary of the Company but would otherwise be a Securitization Subsidiary if such Person were a Subsidiary of the Company; provided   that the residual right (which may be represented by an equity interest or a subordinated debt obligation of such entity) to receive cash flows from such Person's assets in excess of amounts needed to pay principal of, interest on, and other amounts in respect of Indebtedness of such Person, servicing expenses of such Person, costs in respect of Hedging Obligations of such Person (if any) and other fees and obligations in respect of the Indebtedness of such Person shall not be a Permitted Securitization Investment.

 

" Person " means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

" Pre‑Expansion European Union "   means the European Union as of January 1, 2004, including the countries of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, but not including any country which became or becomes a member of the European Union after January 1, 2004; provided that “Pre-Expansion European Union” shall not include any country whose long-term debt does not have a long-term rating of at least “A” by S&P or at least “A2” by Moody's or the equivalent rating category of another Rating Agency.

 

" preferred stock "   means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.

 

" Qualified Proceeds "   means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Board of Directors of the Company in good faith.

 

" Qualified Securitization Financing "   means any Securitization Financing of a Securitization Subsidiary, the financing terms, covenants, termination events and other provisions of which, including any Standard Securitization Undertakings, shall be market terms .

 

" Rating Agencies " means Fitch, Moody's and S&P or if any of Fitch, Moody's or S&P or all three shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company which shall be substituted for any of Fitch, Moody's or S&P or all three, as the case may be.

 

" Related Business Assets " means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

 

" Relevant Tax Jurisdiction " means the Bermuda, Ireland or any jurisdiction where any Payor is incorporated, resident or engaged in business for tax purposes or from or through which any payment in respect of the Notes or any Note Guarantee is made, or any political subdivision or taxing authority thereof or therein.

 

" Responsible Officer ," when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers or to whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject, and who shall have direct responsibility for the administration of this Indenture.

 

" Restricted Investment " means an Investment other than a Permitted Investment.

 

" Restricted Subsidiary " means, at any time, any direct or indirect Subsidiary of the Company (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided , however , that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of "Restricted Subsidiary."

 

" Reversion Date " shall have the meaning set forth in Section 5.16(b) hereof.

 

" S&P " means Standard & Poor's Ratings Service, a division of The McGraw‑Hill Companies, Inc. and its successors.

 

" SEC " means the Securities and Exchange Commission.

 

" Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

" Securitization Assets " means the accounts receivable, lease, royalty or other revenue streams and other rights to payment and all related assets (including contract rights, books and records, all collateral securing any and all of the foregoing, all contracts and all guarantees or other obligations in respect of any and all of the foregoing and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving any and all of the foregoing) and the proceeds thereof in each case pursuant to a Securitization Financing.

 

" Securitization Fees " means distributions or payments made directly or by means of discounts with respect to any Securitization Asset or participation interest therein issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Qualified Securitization Financing.

 

" Securitization Financing " means one or more transactions or series of transactions that may be entered into by the Company and/or any Restricted Subsidiary pursuant to which the Company or any Restricted Subsidiary may sell, convey or otherwise transfer Securitization Assets to (a) a Securitization Subsidiary (in the case of a transfer by the Company or any of the Restricted Subsidiaries that are not Securitization Subsidiaries) or (b) any other Person (in the case of a transfer by a Securitization Subsidiary), or may grant a security interest in, any Securitization Assets of the Company or any Restricted Subsidiary.

 

" Securitization Subsidiary " means a Restricted Subsidiary (or another Person formed for the purposes of engaging in a Qualified Securitization Financing in which the Company or any Restricted Subsidiary makes an Investment and to which the Company or any Restricted Subsidiary transfers Securitization Assets and related assets) that engages in no activities other than in connection with the financing of Securitization Assets of the Company or a Restricted Subsidiary, all proceeds thereof and all rights (contingent and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Company or such other Person (as provided below) as a Securitization Subsidiary and (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any Restricted Subsidiary, other than another Securitization Subsidiary (excluding guarantees of obligations pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Company or any Restricted Subsidiary, other than another Securitization Subsidiary, in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the Company or any Restricted Subsidiary, other than another Securitization Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and (b) to which none of the Company or any other Restricted Subsidiary, other than another Securitization Subsidiary, has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results.  Any such designation by the Board of Directors of the Company or such other Person shall be evidenced by a resolution of the Board of Directors of the Company or such other Person giving effect to such designation.

 

" Significant Subsidiary " means any Restricted Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1‑02 of Regulation S‑X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Closing Date.

 

" Similar Business " means any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the date hereof or any business that is similar, reasonably related, incidental or ancillary thereto.

 

" Standard Securitization Undertakings " means representations, warranties, covenants and indemnities entered into by the Company or any Restricted Subsidiary that are customary for a seller or servicer of assets in a Securitization Financing.

 

" Subordinated Indebtedness " means (a) with respect to the Company, any Indebtedness of the Company which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to the Note Guarantee of such Guarantor.

 

" Subsidiary " means, with respect to any Person:

 

(1)             any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which 50% or more of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

 

(2)             any partnership, joint venture, limited liability company or similar entity of which:

 

(x)             50% or more of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and

 

(y)            such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

 

" Successor Company " shall have the meaning set forth in Section 6.01(a)(1)(B) hereof.

 

" Suspended Covenants " shall have the meaning set forth in Section 5.16(a) hereof.

 

" Suspension Period " shall have the meaning set forth in Section 5.16(c) hereof.

 

" Taxes " means any taxes, duties, levies, imposts, assessments or other governmental charges and any interest, penalties or other liabilities with respect thereto.

 

" TIA " means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa‑77bbbb).

 

" Total Assets " means the total assets of the Company and the Restricted Subsidiaries, as shown on the most recent balance sheet of the Company for which internal financial statements are available immediately preceding the date on which any calculation of Total Assets is being made, with such pro forma adjustments for transactions consummated on or prior to or simultaneously with the date of the calculation as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

 

" Treasury Rate "   means, as of any redemption date, the rate per annum equal to the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to October 15, 2020; provided , however , that if the period from the redemption date to October 15, 2020 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

" Trustee " means the Person named as the "Trustee" in the first paragraph of this Indenture, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

" Unrestricted Subsidiary " means:

 

(1)             any Subsidiary of the Company which at the time of determination is an Unrestricted Subsidiary (as designated by the Board of Directors of the Company as provided in Section 5.18 hereof) and

 

(2)             any Subsidiary of an Unrestricted Subsidiary.

 

" Voting Stock " of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

" Weighted Average Life to Maturity " means, when applied to any Indebtedness, Disqualified Stock or preferred stock, as the case may be, at any date, the quotient obtained by dividing:

 

(1)              the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or preferred stock multiplied by the amount of such payment; by

 

(2)              the sum of all such payments.

 

" Wholly‑Owned Restricted Subsidiary " means any Wholly‑Owned Subsidiary that is a Restricted Subsidiary.

 

" Wholly‑Owned Subsidiary " of any Person means a Subsidiary of such Person, 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly‑Owned Subsidiaries of such Person.

 

 

Section 2.03            Incorporation by Reference of Trust Indenture Act .  Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

The following TIA terms used in this Indenture have the following meanings:

 

" indenture securities " means the Notes;

 

" indenture security Holder " means a Holder of a Note;

 

" indenture to be qualified " means this Indenture;

 

" indenture trustee " or " institutional trustee " means the Trustee; and

 

" obligor " on the Notes and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

All other terms used in this Indenture that are defined by the TIA, defined by the TIA by reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 2.04            Rules of Construction .  Unless the context otherwise requires:

 

(1)            a term has the meaning assigned to it;

 

(2)            an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)            "or" is not exclusive;

 

(4)            "including" is not limiting;

 

(5)            words in the singular include the plural, and in the plural include the singular;

 

(6)            "will" shall be interpreted to express a command;

 

(7)            provisions apply to successive events and transactions; and

 

(8)            references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

 

ARTICLE 3

 

THE NOTES

 

Section 3.01            Form and Dating .

 

(a)             General .  The Notes and the Trustee's certificate of authentication will be substantially in the form of Exhibit A hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage; provided that such notations, legends or endorsements shall not affect the rights, duties, privileges or liabilities of the Trustee.  Each Note will be dated the date of its authentication.  The Notes shall be in denominations of $200,000 and integral multiples of $1,000 in excess thereof.

 

The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(b)            Global Notes .  Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto).  Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto).  Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 3.06 hereof.

 

Section 3.02            Execution and Authentication .  At least one Officer must sign the Notes for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

 

A Note will not be valid until authenticated substantially in the form of Exhibit A hereto by the manual signature of the Trustee.  The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee will, upon receipt of a written order of the Company signed by an Officer (an " Authentication Order "), authenticate Notes for original issue under this Indenture, including any Additional Notes.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes requested by the Company to be authenticated pursuant to one or more Authentication Orders, except as provided in Section 3.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.

 

Section 3.03            Registrar and Paying Agent .  The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (" Registrar ") and one or more offices or agencies where Notes may be presented for payment (" Paying Agent ").  The Registrar will keep a register of the Notes and of their transfer and exchange.  The Company may appoint one or more additional paying agents.  The term " Paying Agent " includes any additional paying agent.  The Company may change any Paying Agent or Registrar without notice to any Holder.  The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture.  If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such.  The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

 

The Company initially appoints The Depository Trust Company (" DTC ") to act as Depositary with respect to the Global Notes.

 

The Company initially appoints the Trustee to act as the Registrar and Paying Agent and Wells Fargo Bank, National Association to act as Custodian with respect to the Global Notes.

 

The Company may change Registrar or Paying Agent without prior notice to the Holders.

 

Section 3.04            Paying Agent to Hold Money in Trust .  The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium on, if any, or interest, if any, on, the Notes, and will notify the Trustee of any default by the Company in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money.  If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.

 

Section 3.05            Holder Lists .  The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA §312(a).  If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA §312(a).

 

Section 3.06            Transfer and Exchange .

 

(a)             Transfer and Exchange of Global Notes .  A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the Company for Definitive Notes if:

 

(1)            the Company delivers to the Trustee a notice from the Depositary that it is unwilling or unable to continue to act as Depositary for the Global Notes or that it has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary;

 

(2)            the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or

 

(3)            there has occurred and is continuing an Event of Default with respect to the Notes and Holders of a majority in aggregate principal amount of the Notes have requested that the Company issue Definitive Notes.

 

Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary (in accordance with its customary procedures) shall instruct the Trustee.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 3.07 and 3.10 hereof.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 3.06 or Section 3.07 or 3.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events set forth in the preceding paragraph.  A Global Note may not be exchanged for another Note other than as provided in this Section 3.06(a), provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 3.06(b) hereof.

 

(b)            Transfer and Exchange of Beneficial Interests in the Global Notes .  The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures.  Transfers of beneficial interests in the Global Notes also will require compliance with subparagraph (1) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(1)            In connection with all transfers and exchanges of beneficial interests, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)             both:

 

(i)             a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(ii)            instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

(B)             both:

 

(i)             a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(ii)            instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (i) above.

 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 3.06(f) hereof.

 

(c)             Transfer and Exchange of Beneficial Interests in Global Notes to Definitive Notes .  If any holder of a beneficial interest in an Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 3.06(b)(1) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.06(f) hereof, and the Company will execute and the Trustee, upon receipt of an Authentication Order, will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 3.06(b)(2) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant.  The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

 

In connection with any proposed exchange of Global Notes for Notes in definitive registered form, the Company or DTC shall use commercially reasonable efforts to provide or cause to be provided to the Trustee information reasonably within the control of the Company or DTC, as applicable, that is necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045.  The Trustee may rely on any such information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

 

(d)             Transfer and Exchange of Definitive Notes to Beneficial Interests in Global Notes .  A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes.

 

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to paragraph (d) above at a time when a Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 3.02 hereof, the Trustee will authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

(e)             Transfer and Exchange of Definitive Notes for Definitive Notes .  Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 3.06(d), the Registrar will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing.

 

(f)              Legends .  The following legend will appear on the face of all Global Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.   Each Global Note will bear a legend in substantially the following form:

 

"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (" DTC "), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

 

(g)            Cancellation and/or Adjustment of Global Notes .  At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 3.11 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)            General Provisions Relating to Transfers and Exchanges .

 

(1)            To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 3.02 hereof.

 

(2)            No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.10, 4.06, 4.09, 5.10, 5.14 and 10.05 hereof).

 

(3)            Neither the Registrar nor the Company will be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(4)            All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(5)            Neither the Registrar nor the Company will be required:

 

(A)             to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 4.02 hereof and ending at the close of business on the day of selection;

 

Dated as of October 16, 2017
	FLY LEASING LIMITED
	By:	/s/ Colm Barrington
		Name:  Colm Barrington
		Title:  Chief Executive Officer
	WELLS FARGO BANK, NATIONAL ASSOCIATION ,
	as Trustee
	By:	/s/ Maddy Hughes
		Name: Maddy Hughes
		Title: Vice President

Dated:  October 16, 2017
	FLY LEASING LIMITED
	By:
		Name:
		Title:

By:
	Authorized Signatory

Period		Redemption Price
2020			102.625	%
2021			101.313	%
2022 and thereafter			100.000	%

(I) or (we) assign and transfer this Note to:
	(Insert assignee's legal name)

Date:
	Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee * :

☐ Section 5.10

☐ Section 5.14

	Your Signature:
	(Sign exactly as your name appears on the face of this Note)
	Tax Identification No.:

Signature Guarantee * :

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Exh. A-11

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange		Amount of decrease in Principal Amount of this Global Note		Amount of increase in Principal Amount of this Global Note		Principal Amount of this Global Note following such decrease (or increase)		Signature of authorized officer of Trustee or Custodian

	[GUARANTEEING SUBSIDIARY]
	By:
		Name:
		Title:
	FLY LEASING LIMITED
	By:
		Name:
		Title:
	[OTHER EXISTING GUARANTORS]
	By:
		Name:
		Title:
	WELLS FARGO BANK, NATIONAL ASSOCIATION
	as Trustee
	By:
		Name:
		Title:

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