☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Title of each class
|
Name of each exchange on which registered
|
|||
American Depositary Shares
|
New York Stock Exchange
|
|||
Common Shares, par value of $0.001 per share
|
New York Stock Exchange*
|
* |
Not for trading, but only in connection with the registration of American Depositary Shares representing
these shares, pursuant to the requirements of the Securities and Exchange Commission.
|
Large accelerated filer
☐
|
Accelerated filer
☒
|
Non-accelerated filer
☐
|
Emerging growth company
☐
|
U.S. GAAP
☒
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐
|
Other
☐
|
Page
|
|
PART I
|
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3
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3
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3
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26
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35
|
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35
|
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54
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57
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67
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67
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67
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80
|
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81
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PART II
|
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82
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82
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82
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83
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83
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83
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84
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84
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84
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84
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84
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PART III
|
|
F - 1
|
|
F - 2
|
|
F - 42
|
(Dollars in thousands, except per share data)
Years ended
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
Statement of income data:
|
||||||||||||||||||||
Operating lease revenue
|
$
|
399,514
|
$
|
346,894
|
$
|
313,582
|
$
|
429,691
|
$
|
406,563
|
||||||||||
Gain on sale of aircraft
|
13,398
|
3,926
|
27,195
|
28,959
|
14,761
|
|||||||||||||||
Total revenues
|
418,299
|
353,251
|
345,039
|
462,397
|
425,548
|
|||||||||||||||
Total expenses
|
322,650
|
339,321
|
381,428
|
434,200
|
356,673
|
|||||||||||||||
Net income (loss)
|
85,723
|
2,598
|
(29,112
|
)
|
22,798
|
60,184
|
||||||||||||||
Earnings (loss) per share:
|
||||||||||||||||||||
Basic
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
$
|
1.42
|
|||||||||
Diluted
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
$
|
1.42
|
|||||||||
Dividends declared and paid per share
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
1.00
|
$
|
1.00
|
(Dollars in thousands, except share data)
As of December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
Balance sheet data:
|
||||||||||||||||||||
Total assets
|
$
|
4,226,472
|
$
|
3,595,615
|
$
|
3,447,009
|
$
|
3,424,480
|
$
|
4,218,408
|
||||||||||
Total liabilities
|
3,524,362
|
3,051,906
|
2,853,774
|
2,767,516
|
3,462,154
|
|||||||||||||||
Total shareholders’ equity
|
702,110
|
543,709
|
593,235
|
656,964
|
756,254
|
|||||||||||||||
Number of shares outstanding
|
32,650,019
|
27,983,352
|
32,256,440
|
35,671,400
|
41,432,998
|
|
· |
the particular maintenance, damage and operating history of the airframes and engines;
|
|
· |
the number of operators using a type of aircraft or engine;
|
|
· |
whether an aircraft or engine is subject to a lease and, if so, whether the lease terms are favorable to the lessor;
|
|
· |
the age of our aircraft and engines;
|
|
· |
airworthiness directives and service bulletins;
|
|
· |
aircraft noise and emission standards
;
|
|
· |
any tax, customs, regulatory and other legal requirements that must be satisfied when an aircraft or engine is purchased, sold or re-leased
;
|
|
· |
compatibility of our aircraft configurations or specifications with other aircraft owned by operators of that type
;
|
|
· |
the availability of spare parts; and
|
|
· |
decreases in the creditworthiness of our lessees.
|
|
· |
passenger air travel and air cargo demand;
|
|
· |
geopolitical and other events, including war, acts of terrorism, civil unrest, outbreaks of epidemic diseases and natural disasters;
|
|
· |
airline operating costs, including fuel costs, and general economic conditions affecting our lessees’ operations;
|
|
· |
governmental regulation, including new airworthiness directives, statutory limits on age of aircraft, and restrictions in certain jurisdictions on the age of aircraft for
import, climate change initiatives and environmental regulation, and other factors leading to obsolescence of aircraft models;
|
|
· |
tariffs and other restrictions on trade;
|
|
· |
interest and foreign exchange rates;
|
|
· |
airline restructurings and bankruptcies;
|
|
· |
increased supply due to the sale of aircraft portfolios;
|
|
· |
availability and cost of credit;
|
|
· |
changes in control of, or restructurings of, other aircraft leasing companies;
|
|
· |
manufacturer production levels and technological innovation;
|
|
· |
new-entrant manufacturers producing additional aircraft models, or existing manufacturers producing new aircraft models, in competition with existing aircraft models;
|
|
· |
retirement and obsolescence of aircraft models;
|
|
· |
manufacturers merging or exiting the industry or ceasing to produce aircraft or engine types;
|
|
· |
accuracy of estimates relating to future supply and demand made by manufacturers and lessees;
|
|
· |
reintroduction into service of aircraft or engines previously in storage; and
|
|
· |
airport and air traffic control infrastructure constraints.
|
|
· |
impair our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions and investments
;
|
|
· |
significantly increase our interest expense and financial leverage to the extent we incur additional debt to finance acquisitions and investments
;
|
|
· |
incur or assume unanticipated liabilities, losses or costs associated with the aircraft that we acquire, or investments we may make
; or
|
|
· |
incur other significant charges, including asset impairment or restructuring charges
.
|
|
· |
airlines;
|
|
· |
aircraft manufacturers;
|
|
· |
financial institutions (including those seeking to dispose of repossessed aircraft at distressed prices);
|
|
· |
aircraft brokers;
|
|
· |
special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft; and
|
|
· |
public and private partnerships, investors and funds, including private equity and hedge funds.
|
|
· |
competition;
|
|
· |
fare levels;
|
|
· |
air cargo rates;
|
|
· |
passenger air travel and air cargo demand;
|
|
· |
geopolitical and other events, including war, acts of terrorism, civil unrest, outbreaks of epidemic diseases and natural disasters
;
|
|
· |
increases in operating costs, including the availability and cost of jet fuel and labor cost
s;
|
|
· |
labor difficulties;
|
|
· |
economic and financial conditions and currency fluctuations in the countries and regions in which the lessee operates
; and
|
|
· |
governmental regulation of, or affecting, the air transportation business, including noise and emissions regulations, climate change initiatives and age limitations
.
|
|
· |
result in a grounding of the aircraft;
|
|
· |
cause us to incur costs in restoring the aircraft to an acceptable maintenance condition to re-lease the aircraft;
|
|
· |
adversely affect lease terms in the re-lease of the aircraft; and
|
|
· |
adversely affect the value of the aircraft.
|
|
· |
at least 75% of our independent directors and holders of 75% or more of all of our outstanding common shares (measured by vote) determine by resolution that there has
been unsatisfactory performance by our Manager that is materially detrimental to us
;
|
|
· |
our Manager materially breaches the management agreement and fails to remedy such breach within 90 days of receiving written notice from us requiring it to do so, or such
breach results in liability to us and is attributable to our Manager’s gross negligence, fraud or dishonesty, or willful misconduct in respect of the obligation to apply the standard of care
;
|
|
· |
any license, permit or authorization held by the Manager which is necessary for it to perform the services and duties under the management agreement is materially
breached, suspended or revoked, or otherwise made subject to conditions which, in the reasonable opinion of our board of directors, would prevent the Manager from performing the services and the situation is not remedied within 90
days
;
|
|
· |
BBAM Aviation Services Limited or one of its affiliates ceases to hold (directly or indirectly) more than 50% of the voting equity of, and economic interest in, the
Manager
;
|
|
· |
our Manager becomes subject to bankruptcy or insolvency proceedings that are not discharged within 75 days, unless our Manager is withdrawn and replaced within 90 days of
the initiation of such bankruptcy or insolvency proceedings with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the management agreement
;
|
|
· |
our Manager voluntarily commences any proceeding or files any petition seeking bankruptcy, insolvency, receivership or similar law, or makes a general assignment for the
benefit of its creditors, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the management agreement
; or
|
|
· |
an order is made for the winding up of our Manager, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to
make correctly the representations and warranties set out in the management agreement
.
|
|
· |
Bankruptcy or insolvency of BBAM LP;
|
|
· |
BBAM LP ceases to own, directly or indirectly, at least 50% of the Servicer
;
|
|
· |
Summit ceases to own, directly or indirectly, at least 33.33% of the partnership interests in BBAM LP; provided that a sale that results in such ownership being at a
level below 33.33% shall not constitute a servicer termination event if the sale is to a publicly listed entity or other person with a net worth of at least $100.0 million
;
and
|
|
· |
50% or more of the Servicer’s key finance and legal team or technical and marketing team cease to be employed by BBAM LP and are not replaced with employees with
reasonably comparable experience within 90 days
.
|
|
· |
most of the aircraft and related leases in our portfolio secure debt obligations, the terms of which restrict our ability to sell aircraft and require us to use proceeds
from sales of aircraft, in part, to repay outstanding debt;
|
|
· |
we are required to dedicate a significant portion of our cash flows from operations to debt service payments, thereby reducing the amount of our cash flows available to
fund working capital, make capital expenditures and satisfy other needs
;
|
|
· |
restrictions on our subsidiaries’ ability to distribute excess cash flows to us under certain circumstances
;
|
|
· |
lessee, geographical and other concentration requirements limit our flexibility in leasing our aircraft
;
|
|
· |
requirements to obtain the consent of third parties including lenders, the insurance policy provider and rating agency confirmations for certain actions
; and
|
|
· |
restrictions on our subsidiaries’ ability to incur additional debt, pay dividends or make other restricted payments, create liens on assets, sell assets, enter into
transactions with our affiliates, make freighter conversions and make certain investments or capital expenditures
.
|
|
· |
making it more difficult for us to satisfy our debt obligations with respect to the notes and our other debt
;
|
|
· |
limiting our ability to obtain additional financing to fund the acquisition of aircraft or other aviation assets or for other general corporate requirements
;
|
|
· |
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available
for acquisitions of aircraft and other aviation assets and for other general corporate purposes
;
|
|
· |
increasing our vulnerability to general adverse economic and industry conditions
;
|
|
· |
exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our various credit facilities, are at variable rates of
interest
;
|
|
· |
limiting our flexibility in planning for and reacting to changes in the aircraft industry;
|
|
· |
placing us at a disadvantage compared to other competitors
; and
|
|
· |
increasing our cost of borrowing
.
|
Facility
(1)
|
Principal Amount Outstanding
at December 31, 2018
(2)
|
Number of
Aircraft Financed
|
Maturity Date
|
|||||
Securitization Notes
(3)
|
$
|
85.6 million |
9
|
November 2033
|
||||
Nord LB Facility
|
$
|
108.9 million |
5
|
January 2020
|
||||
Fly Aladdin Acquisition Facility
|
$
|
467.2 million |
24
|
June 2020 – June 2023
|
(1) |
Excludes $330.4 million principal amount outstanding of non-recourse secured borrowings associated with six aircraft.
|
(2) |
Excludes unamortized debt discounts and loan costs.
|
(3) |
The Securitization Notes will be redeemed at par, plus accrued interest, on March 14, 2019.
|
|
· |
announcements concerning our competitors, the airline industry (including the creditworthiness of airlines) or the economy in general
;
|
|
· |
announcements concerning the availability of the type of aircraft we own
;
|
|
· |
general and industry-specific economic conditions
;
|
|
· |
changes in the price of aircraft fuel
;
|
|
· |
changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations
;
|
|
· |
any increased indebtedness we may incur in the future
;
|
|
· |
speculation or reports by the press or investment community with respect to us or our industry in general
;
|
|
· |
announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments
;
|
|
· |
changes or proposed changes in laws or regulations affecting the airline industry or enforcement of these laws and regulations, or announcements relating to these matters
; and
|
|
· |
general market, political and economic conditions, including any such conditions and local conditions in the markets in which our lessees are located
.
|
|
· |
provisions that permit us to require any competitor of BBAM LP that acquires beneficial ownership of more than 15% of our common shares either to tender for all of our
remaining common shares for no less than their fair market value, or sell such number of common shares to us or to third parties as to reduce its beneficial ownership to less than 15%, in either case within 90 days of our request to
so tender or sell
;
|
|
· |
provisions that reduce the vote of each common share held by a competitor of BBAM LP that beneficially owns 15% or more, but less than 50%, of our common shares to
three-tenths of one vote per share on all matters upon which shareholders may vote
;
|
|
· |
provisions that permit our board of directors to determine the powers, preferences and rights of any preference shares we may issue and to issue any such preference
shares without shareholder approval
;
|
|
· |
advance notice requirements by shareholders for director nominations and actions to be taken at annual meetings
; and
|
|
· |
no provision for cumulative voting in the election of directors, such that all the directors standing for election may be elected by our shareholders by a plurality of
votes cast at a duly convened annual general meeting, the quorum for which is two or more persons present in person or by proxy at the start of the meeting and representing in excess of 25% of all votes attaching to all shares in
issue entitling the holder to vote at the meeting
.
|
Lessee
|
Aircraft Type
|
Airframe Type
|
Date of
Manufacture
|
|
1.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2006
|
2.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2005
|
3.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2005
|
4.
|
Air China
|
B737-800
|
Narrow-body
|
2007
|
5.
|
Air Europa
|
B787-8
|
Wide-body
|
2017
|
6.
|
Air India
|
B787-8
|
Wide-body
|
2015
|
7.
|
Air India
|
B787-8
|
Wide-body
|
2014
|
8.
|
Air India
|
B787-8
|
Wide-body
|
2014
|
9.
|
Air Moldova
|
A319-100
|
Narrow-body
|
2006
|
10.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2014
|
11.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2013
|
12.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2013
|
13.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2012
|
14.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2012
|
15.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2012
|
16.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2011
|
17.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2011
|
18.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2010
|
19.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2010
|
20.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2010
|
21.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2010
|
22.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2009
|
23.
|
AirAsia India
|
A320-200
|
Narrow-body
|
2014
|
24.
|
AirAsia India
|
A320-200
|
Narrow-body
|
2014
|
25.
|
AirAsia India
|
A320-200
|
Narrow-body
|
2010
|
26.
|
AirAsia India
|
A320-200
|
Narrow-body
|
2005
|
27.
|
Alaska Airlines
|
A320-200
|
Narrow-body
|
2007
|
28.
|
American Airlines
|
B737-800
|
Narrow-body
|
2013
|
29.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
30.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
31.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
32.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
33.
|
Chang’An Airlines
|
B737-800
|
Narrow-body
|
2006
|
34.
|
Eastar Jet Co., Ltd.
|
B737-800
|
Narrow-body
|
2010
|
35.
|
easyJet
|
A319-100
|
Narrow-body
|
2007
|
36.
|
easyJet
|
A319-100
|
Narrow-body
|
2004
|
37.
|
easyJet
|
A319-100
|
Narrow-body
|
2004
|
38.
|
Ethiopian Airlines
|
B777-200LRF
(1)
|
Wide-body
|
2015
|
39.
|
Ethiopian Airlines
|
B777-200LRF
(1)
|
Wide-body
|
2015
|
40.
|
Finnair
|
A320-200
(2)
|
Narrow-body
|
2003
|
41.
|
Garuda Indonesia
|
B737-800
|
Narrow-body
|
2010
|
42.
|
Go2Sky
|
B737-800
|
Narrow-body
|
2007
|
43.
|
Go2Sky
|
B737-800
|
Narrow-body
|
1998
|
44.
|
Icelandair
|
B757-200SF
(1)
|
Narrow-body
|
1990
|
45.
|
Indigo
|
A320-200
|
Narrow-body
|
2005
|
46.
|
Indigo
|
A320-200
|
Narrow-body
|
2005
|
47.
|
Indonesia AirAsia
|
A320-200
|
Narrow-body
|
2013
|
48.
|
Indonesia AirAsia
|
A320-200
|
Narrow-body
|
2012
|
49.
|
Indonesia AirAsia
|
A320-200
|
Narrow-body
|
2012
|
50.
|
Israir Airlines
|
A320-200
|
Narrow-body
|
2016
|
51.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
52.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
53.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
54.
|
Lucky Air Airlines
|
B737-800
|
Narrow-body
|
2007
|
55.
|
Lucky Air Airlines
|
B737-800
|
Narrow-body
|
2007
|
56.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2012
|
Lessee
|
Aircraft Type
|
Airframe Type
|
Date of
Manufacture
|
|
57.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2011
|
58.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2011
|
59.
|
Nok Airlines
|
B737-800
|
Narrow-body
|
2015
|
60.
|
Oman Air S.A.O.C.
|
B737-800
|
Narrow-body
|
2009
|
61.
|
Oman Air S.A.O.C.
|
B737-800
|
Narrow-body
|
2009
|
62.
|
Pegasus Airlines
|
B737-800
|
Narrow-body
|
2007
|
63.
|
Philippine Airlines
|
A321-200
|
Narrow-body
|
2014
|
64.
|
Philippine Airlines
|
A321-200
|
Narrow-body
|
2014
|
65.
|
Philippine Airlines
|
A330-300
|
Wide-body
|
2013
|
66.
|
Philippine Airlines
|
A330-300
|
Wide-body
|
2013
|
67.
|
Philippines AirAsia
|
A320-200
|
Narrow-body
|
2007
|
68.
|
PT Batik Air
|
A320-200
|
Narrow-body
|
2018
|
69.
|
PT Batik Air
|
A320-200
|
Narrow-body
|
2017
|
70.
|
PT Lion Mentari
|
B737-MAX 8
|
Narrow-body
|
2017
|
71.
|
PT Lion Mentari
|
B737-MAX 8
|
Narrow-body
|
2017
|
72.
|
Shandong Airlines
|
B737-800
|
Narrow-body
|
2013
|
73.
|
Shandong Airlines
|
B737-800
|
Narrow-body
|
2013
|
74.
|
Smartwings
|
B737-800
|
Narrow-body
|
2010
|
75.
|
Spicejet Ltd
|
B737-800
|
Narrow-body
|
2010
|
76.
|
Spicejet Ltd
|
B737-800
|
Narrow-body
|
2010
|
77.
|
Spicejet Ltd
|
B737-800
|
Narrow-body
|
2007
|
78.
|
Spicejet Ltd
|
B737-800
|
Narrow-body
|
2007
|
79.
|
Spicejet Ltd
|
B737-900ER
|
Narrow-body
|
2007
|
80.
|
Sunwing Airlines
|
B737-800
|
Narrow-body
|
2006
|
81.
|
Sunwing Airlines
|
B737-800
|
Narrow-body
|
2006
|
82.
|
Swift Air
|
B737-800
|
Narrow-body
|
2006
|
83.
|
TAROM S.A.
|
B737-800
|
Narrow-body
|
2017
|
84.
|
Thai AirAsia
|
A320-200
|
Narrow-body
|
2013
|
85.
|
Thai AirAsia
|
A320-200
|
Narrow-body
|
2012
|
86.
|
Thai AirAsia
|
A320-200
|
Narrow-body
|
2010
|
87.
|
Thai AirAsia
|
A320-200
|
Narrow-body
|
2008
|
88.
|
Thomas Cook
|
A321-200
|
Narrow-body
|
2015
|
89.
|
Transavia France
|
B737-800
|
Narrow-body
|
2008
|
90.
|
Transavia France
|
B737-800
|
Narrow-body
|
2008
|
91.
|
Transavia France
|
B737-800
|
Narrow-body
|
2007
|
92.
|
Transavia France
|
B737-800
|
Narrow-body
|
2007
|
93.
|
TUI Travel Aviation Finance
|
B737-800
|
Narrow-body
|
2010
|
94.
|
TUI Travel Aviation Finance
|
B757-200
|
Narrow-body
|
1999
|
95.
|
TUI Travel Aviation Finance
|
B757-200
|
Narrow-body
|
1999
|
96.
|
Virgin Atlantic
|
A340-600
|
Wide-body
|
2006
|
97.
|
Virgin Atlantic
|
A340-600
|
Wide-body
|
2006
|
98.
|
Virgin Atlantic
|
A330-200
|
Wide-body
|
2001
|
99.
|
Vueling Airlines
|
A320-200
|
Narrow-body
|
2007
|
100.
|
Vueling Airlines
|
A320-200
|
Narrow-body
|
2007
|
101.
|
Yakutia
|
B737-800
|
Narrow-body
|
2002
|
(1) |
Freighter.
|
(2) |
Investment in finance lease.
|
Lessee
|
Aircraft Type
|
Airframe Type
|
Date of
Manufacture
|
|
1.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2012
|
2.
|
AirAsia Berhad
|
A320-200
|
Narrow-body
|
2011
|
3.
|
Garuda Indonesia
|
B737-800
|
Narrow-body
|
2010
|
4.
|
Indonesia AirAsia
(1)
|
A320-200
|
Narrow-body
|
2012
|
5.
|
Jetstar Pacific Airlines
(1)
|
A320-200
|
Narrow-body
|
2005
|
6.
|
Philippines AirAsia
(1)
|
A320-200
|
Narrow-body
|
2006
|
7.
|
Philippines AirAsia
(1)
|
A320-200
|
Narrow-body
|
2006
|
8.
|
Smartwings
(1)
|
B737-800
|
Narrow-body
|
2010
|
9.
|
Thai AirAsia
(1)
|
A320-200
|
Narrow-body
|
2010
|
10.
|
Thai AirAsia
(1)
|
A320-200
|
Narrow-body
|
2010
|
11.
|
Thai AirAsia
(1)
|
A320-200
|
Narrow-body
|
2008
|
12.
|
THY
(1)
|
A320-200
|
Narrow-body
|
2005
|
(1) |
Aircraft was sold subsequent to December 31, 2018
.
|
Lessee
|
Engine Type
|
Date of
Manufacture
|
|
1.
|
AirAsia Berhad
|
CFM56-5B4/3
|
2011
|
2.
|
AirAsia Berhad
|
CFM56-5B6/3
|
2011
|
3.
|
AirAsia Berhad
|
CFM56-5B4/3
|
2008
|
4.
|
AirAsia Berhad
|
CFM56-5B6/3
|
2008
|
5.
|
AirAsia Berhad
|
CFM56-5B6/P
|
2006
|
6.
|
AirAsia Japan
|
CFM56-5B6/3
|
2009
|
7.
|
Indonesia AirAsia
|
CFM56-5B6/3
|
2015
|
(1) |
Includes an investment in finance lease.
|
Airframe Type
|
Number of
Aircraft
|
|
Narrow-body
(1) (2)
|
90
|
|
Wide-body
(3)
|
11
|
|
Total
|
101
|
|
(1) |
Includes an investment in finance lease.
|
|
(2) |
Includes one freighter.
|
|
(3) |
Includes two freighters.
|
Years ended
|
||||||||||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||||||||||
Europe:
|
||||||||||||||||||||||||
United Kingdom
|
$
|
31,259
|
8
|
%
|
$
|
29,182
|
8
|
%
|
$
|
34,498
|
11
|
%
|
||||||||||||
Spain
|
17,267
|
4
|
%
|
11,199
|
3
|
%
|
5,361
|
2
|
%
|
|||||||||||||||
Turkey
|
12,114
|
3
|
%
|
17,103
|
5
|
%
|
24,593
|
8
|
%
|
|||||||||||||||
Germany
|
—
|
—
|
26,457
|
8
|
%
|
13,836
|
4
|
%
|
||||||||||||||||
Other
(1)
|
32,670
|
8
|
%
|
29,911
|
9
|
%
|
30,460
|
9
|
%
|
|||||||||||||||
Europe — Total
|
93,310
|
23
|
%
|
113,852
|
33
|
%
|
108,748
|
34
|
%
|
|||||||||||||||
Asia and South Pacific:
|
||||||||||||||||||||||||
India
|
87,492
|
22
|
%
|
64,381
|
18
|
%
|
39,640
|
13
|
%
|
|||||||||||||||
Philippines
|
35,009
|
9
|
%
|
29,825
|
9
|
%
|
29,129
|
9
|
%
|
|||||||||||||||
Indonesia
|
32,336
|
8
|
%
|
16,308
|
5
|
%
|
8,320
|
3
|
%
|
|||||||||||||||
Malaysia
|
26,748
|
7
|
%
|
8,767
|
3
|
%
|
2,647
|
1
|
%
|
|||||||||||||||
China
|
21,103
|
5
|
%
|
22,611
|
6
|
%
|
23,882
|
8
|
%
|
|||||||||||||||
Other
|
18,756
|
4
|
%
|
10,496
|
3
|
%
|
16,320
|
4
|
%
|
|||||||||||||||
Asia and South Pacific — Total
|
221,444
|
55
|
%
|
152,388
|
44
|
%
|
119,938
|
38
|
%
|
|||||||||||||||
Mexico, South and Central America — Total
|
11,415
|
3
|
%
|
17,565
|
5
|
%
|
17,707
|
6
|
%
|
|||||||||||||||
North America:
|
||||||||||||||||||||||||
United States
|
20,147
|
5
|
%
|
17,647
|
5
|
%
|
24,591
|
8
|
%
|
|||||||||||||||
Other
|
6,242
|
2
|
%
|
6,237
|
2
|
%
|
6,223
|
2
|
%
|
|||||||||||||||
North America — Total
|
26,389
|
7
|
%
|
23,884
|
7
|
%
|
30,814
|
10
|
%
|
|||||||||||||||
Middle East and Africa:
|
||||||||||||||||||||||||
Ethiopia
|
30,019
|
8
|
%
|
30,018
|
9
|
%
|
30,084
|
10
|
%
|
|||||||||||||||
Other
|
17,612
|
4
|
%
|
9,918
|
2
|
%
|
8,357
|
2
|
%
|
|||||||||||||||
Middle East and Africa — Total
|
47,631
|
12
|
%
|
39,936
|
11
|
%
|
38,441
|
12
|
%
|
|||||||||||||||
Total Lease Revenue
|
$
|
400,189
|
100
|
%
|
$
|
347,625
|
100
|
%
|
$
|
315,648
|
100
|
%
|
(1) |
Includes $0.7 million, $0.7 million and $2.1 million of finance lease revenue in 2018, 2017 and 2016, respectively.
|
Year of Scheduled Lease
Expiration
|
Narrow-body
|
Wide-body
|
Engines
|
Total
|
||||||
2019
|
7
|
2
|
—
|
9
|
||||||
2020
|
12
|
(1) |
—
|
—
|
12
|
|||||
2021
|
14
|
1
|
—
|
15
|
||||||
2022
|
19
|
—
|
6
|
25
|
||||||
2023
|
8
|
—
|
1
|
9
|
||||||
2024
|
9
|
—
|
—
|
9
|
||||||
2025
|
5
|
(2) |
2
|
—
|
7
|
|||||
2026
|
5
|
—
|
—
|
5
|
||||||
2027
|
3
|
2
|
(3)
|
—
|
5
|
|||||
2028
|
4
|
3
|
—
|
7
|
||||||
2029
|
3
|
1
|
—
|
4
|
||||||
2030
|
1
|
—
|
—
|
1
|
||||||
Total
|
90
|
11
|
7
|
108
|
(1) |
Includes one freighter.
|
(2) |
Includes an investment in finance lease.
|
(3) |
Includes two freighters.
|
Lessee
|
Sublessee
|
|
Transavia France
|
Air Transat
|
|
Smartwings
|
Air Transat
|
|
Smartwings
|
Sunwing Airlines
|
|
● |
F
light equipment where original manufacturer’s prices are not relevant due to plane modifications
and conversions
.
|
|
● |
Flight equipment that is out of production and may have a shorter useful life or lower residual value due to obsolescence
.
|
|
● |
The remaining life of a converted freighter is determined based on the date of conversion, in which case, the total useful life may extend beyond 25 years from the date
of manufacture
.
|
|
● |
F
light equipment which management believes will be disposed of prior to the end of its estimated
useful life
.
|
|
● |
Operating lease revenue.
We receive lease revenue from flight equipment under
operating leases. Rental income from aircraft and aircraft equipment is recognized on a straight-line basis over the initial term of the respective lease. The operating lease agreements generally do not provide for purchase options,
however, the leases may allow the lessee to exercise an option to extend the lease for an additional term. Contingent rents are recognized as revenue when the contingency is resolved. Revenue is not recognized when collection is not
reasonably assured
.
|
|
● |
End of lease income.
The amount of end of lease income we recognize in any
reporting period is inherently volatile and depends upon a number of factors, including the timing of both scheduled and unscheduled lease expiries, and the timing of maintenance performed on the aircraft or aircraft equipment by the
lessee, among others
.
|
|
● |
Lease incentives.
Our leases may contain provisions which require us to
contribute a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. We account for these expected payments as lease incentives, which are amortized as a reduction of lease
revenue over the life of the lease
.
|
|
● |
Lease premium and discount.
Lease premiums and lease discounts are amortized into operating lease revenue over the lease term. Amortization of lease premiums decreases rental revenue and amortization of lease discounts increases rental revenue.
|
|
● |
Finance lease income.
Revenue from finance leases is recognized using the
interest method to produce a level yield over the life of the finance lease
.
|
|
• |
The timing and pattern of transfer for the non-lease component and the associated lease component are the same; and
|
|
• |
The stand-alone lease component would be classified as an operating lease if accounted for separately.
|
|
• |
The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;
|
|
• |
The policy for timing of transfers between levels; and
|
|
• |
The valuation processes for Level 3 fair value measurements.
|
|
• |
The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements at the end of the reporting
period; and
|
|
• |
The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
|
Years ended
|
Increase/
|
|||||||||||
2018
|
2017
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
399,514
|
$
|
346,894
|
$
|
52,620
|
||||||
Finance lease revenue
|
675
|
731
|
(56
|
)
|
||||||||
Equity
earnings (loss)
from unconsolidated subsidiary
|
(54
|
)
|
496
|
(550
|
)
|
|||||||
Gain on sale of aircraft
|
13,398
|
3,926
|
9,472
|
|||||||||
Interest and other income
|
4,766
|
1,204
|
3,562
|
|||||||||
Total revenues
|
418,299
|
353,251
|
65,048
|
|||||||||
Expenses
|
||||||||||||
Depreciation
|
144,084
|
133,227
|
10,857
|
|||||||||
Aircraft impairment
|
—
|
22,000
|
(22,000
|
)
|
||||||||
Interest expense
|
144,742
|
127,782
|
16,960
|
|||||||||
Selling, general and administrative
|
31,185
|
30,671
|
514
|
|||||||||
Gain on derivatives
|
(2,382
|
)
|
(192
|
)
|
(2,190
|
)
|
||||||
Loss on modification and extinguishment of debt
|
2,474
|
23,309
|
(20,835
|
)
|
||||||||
Maintenance and other costs
|
2,547
|
2,524
|
23
|
|||||||||
Total expenses
|
322,650
|
339,321
|
(16,671
|
)
|
||||||||
Net income before provision for income taxes
|
95,649
|
13,930
|
81,719
|
|||||||||
Provision for income taxes
|
9,926
|
11,332
|
(1,406
|
)
|
||||||||
Net income
|
$
|
85,723
|
$
|
2,598
|
$
|
83,125
|
Years ended
|
Increase/
|
|||||||||||
2018
|
2017
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Operating lease revenue:
|
||||||||||||
Operating lease rental revenue
|
$
|
389,350
|
$
|
337,137
|
$
|
52,213
|
||||||
End of lease income
|
20,333
|
17,837
|
2,496
|
|||||||||
Amortization of lease incentives
|
(9,738
|
)
|
(7,668
|
)
|
(2,070
|
)
|
||||||
Amortization of lease premiums, discounts & other
|
(431
|
)
|
(412
|
)
|
(19
|
)
|
||||||
Total operating lease revenue
|
$
|
399,514
|
$
|
346,894
|
$
|
52,620
|
Years ended
|
Increase/
|
|||||||||||
2017
|
2016
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
33,312
|
||||||
Finance lease revenue
|
731
|
2,066
|
(1,335
|
)
|
||||||||
Equity earnings from unconsolidated subsidiary
|
496
|
530
|
(34
|
)
|
||||||||
Gain on sale of aircraft
|
3,926
|
27,195
|
(23,269
|
)
|
||||||||
Interest and other income
|
1,204
|
1,666
|
(462
|
)
|
||||||||
Total revenues
|
353,251
|
345,039
|
8,212
|
|||||||||
Expenses
|
||||||||||||
Depreciation
|
133,227
|
120,452
|
12,775
|
|||||||||
Aircraft impairment
|
22,000
|
96,122
|
(74,122
|
)
|
||||||||
Interest expense
|
127,782
|
123,161
|
4,621
|
|||||||||
Selling, general and administrative
|
30,671
|
30,077
|
594
|
|||||||||
Loss (gain) on derivatives
|
(192
|
)
|
91
|
(283
|
)
|
|||||||
Loss on modification and extinguishment of debt
|
23,309
|
9,246
|
14,063
|
|||||||||
Maintenance and other costs
|
2,524
|
2,279
|
245
|
|||||||||
Total expenses
|
339,321
|
381,428
|
(42,107
|
)
|
||||||||
Net income (loss) before provision (benefit) for income taxes
|
13,930
|
(36,389
|
)
|
50,319
|
||||||||
Provision (benefit) for income taxes
|
11,332
|
(7,277
|
)
|
18,609
|
||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
31,710
|
Years ended
|
Increase/
|
|||||||||||
2017
|
2016
|
(Decrease)
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Operating lease revenue:
|
||||||||||||
Operating lease rental revenue
|
$
|
337,137
|
$
|
313,976
|
$
|
23,161
|
||||||
End of lease income
|
17,837
|
8,918
|
8,919
|
|||||||||
Amortization of lease incentives
|
(7,668
|
)
|
(8,898
|
)
|
1,230
|
|||||||
Amortization of lease premiums, discounts & other
|
(412
|
)
|
(414
|
)
|
2
|
|||||||
Total operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
33,312
|
If redeemed during the 12-month period commencing on October 15 of the years set forth below:
|
Redemption Price
|
|||
2018
|
103.188
|
%
|
||
2019
|
101.594
|
%
|
||
2020 and thereafter
|
100.000
|
%
|
If redeemed during the
12-month period commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2020
|
102.625
|
%
|
||
2021
|
101.313
|
%
|
||
2022 and thereafter
|
100.000
|
%
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
||||||||||||||||||||||
Principal payments:
|
||||||||||||||||||||||||||||
Principal payment under the 2021 Notes
|
$
|
—
|
$
|
—
|
$
|
325,000
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
325,000
|
||||||||||||||
Principal payment under the 2024 Notes
|
—
|
—
|
—
|
—
|
—
|
300,000
|
300,000
|
|||||||||||||||||||||
Principal payments under the Securitization Notes
(1)
|
60,378
|
3,980
|
8,525
|
12,701
|
—
|
—
|
85,584
|
|||||||||||||||||||||
Principal payments under the Nord LB Facility
|
45,268
|
63,614
|
—
|
—
|
—
|
—
|
108,882
|
|||||||||||||||||||||
Principal payments under the Term Loan
|
22,404
|
22,404
|
22,404
|
22,404
|
318,152
|
—
|
407,768
|
|||||||||||||||||||||
Principal payments under the Magellan Acquisition Limited Facility
|
26,542
|
26,542
|
26,542
|
26,542
|
26,542
|
172,516
|
305,226
|
|||||||||||||||||||||
Principal payments under the Fly Acquisition III Facility
|
33,752
|
13,157
|
23,966
|
119,582
|
—
|
—
|
190,457
|
|||||||||||||||||||||
Principal payments under the Aladdin Acquisition Facility
|
43,689
|
78,472
|
35,548
|
37,250
|
272,220
|
—
|
467,179
|
|||||||||||||||||||||
Principal payments under the Aladdin Engine Funding Facility
|
1,490
|
1,565
|
32,240
|
8,534
|
—
|
—
|
43,829
|
|||||||||||||||||||||
Principal payments under Other Aircraft Secured Borrowings
|
81,159
|
94,085
|
83,816
|
105,367
|
248,448
|
195,007
|
807,882
|
|||||||||||||||||||||
Total principal payments
|
314,682
|
303,819
|
558,041
|
332,380
|
865,362
|
667,523
|
3,041,807
|
|||||||||||||||||||||
Interest payments:
|
||||||||||||||||||||||||||||
Interest payments under the 2021 Notes and 2024 Notes
|
36,469
|
36,469
|
32,152
|
15,750
|
15,750
|
12,469
|
149,059
|
|||||||||||||||||||||
Interest payments under secured borrowings
(2)
|
90,253
|
77,300
|
68,519
|
53,472
|
30,884
|
26,596
|
347,024
|
|||||||||||||||||||||
Total interest payments
|
126,722
|
113,769
|
100,671
|
69,222
|
46,634
|
39,065
|
496,083
|
|||||||||||||||||||||
Purchase price of Portfolio B aircraft in the AirAsia Transactions
(3)
|
200,839
|
303,000
|
555,744
|
—
|
—
|
—
|
1,059,583
|
|||||||||||||||||||||
Acquisition fees related to Portfolio B in the AirAsia Transactions
(3)
|
3,013
|
4,545
|
8,336
|
—
|
—
|
—
|
15,894
|
|||||||||||||||||||||
Disposition fees on flight equipment held for sale
|
5,264
|
—
|
—
|
—
|
—
|
—
|
5,264
|
|||||||||||||||||||||
Payments to BBAM and its affiliates under our management agreement
(4)
|
9,561
|
9,561
|
9,561
|
9,561
|
9,561
|
62,146
|
109,951
|
|||||||||||||||||||||
Payments to BBAM and its affiliates under our administrative services and servicing agreements
(5)
|
16,106
|
14,887
|
12,976
|
10,889
|
8,810
|
24,641
|
88,309
|
|||||||||||||||||||||
Total
|
$
|
676,187
|
$
|
749,581
|
$
|
1,245,329
|
$
|
422,052
|
$
|
930,367
|
$
|
793,375
|
$
|
4,816,891
|
(1) |
Principal payments under the Securitization Notes are determined monthly based on revenues collected and costs and other liabilities incurred prior to the relevant
payment date. Future principal payment amounts are estimated based upon existing leases and current re-leasing assumptions. Assumes debt will be fully repaid on December 14, 2022. On February 12, 2019, B&B Air Funding issued a
notice of redemption to redeem the Securitization Notes in whole for an amount equal to the outstanding principal amount, with any accrued and unpaid interest, on March 14, 2019.
|
(2) |
For variable rate borrowings based on LIBOR plus the applicable margin, LIBOR is assumed to remain at the current rate in effect at year end through the term of the loan.
|
(3) |
Assumes aircraft are purchased in May, September, November and December 2019, July 2020 and July 2021.
|
(4) |
Assumes automatic extension for one additional term of five years to June 30, 2030. Also assumes the net book value of aircraft at December 31, 2018 remains constant in
future periods.
|
(4) |
Amounts in the table reflect the application of these servicing fees to our aircraft at December 31, 2018.
|
Name
|
Age
|
Position
|
||
Colm Barrington
|
73
|
Chief Executive Officer and Director
|
||
Julie Ruehl
|
53
|
Chief Financial Officer
|
||
Joseph M. Donovan
|
64
|
Director and Chairman
|
||
Erik G. Braathen
|
63
|
Director
|
||
Eugene McCague
|
60
|
Director
|
||
Robert S. Tomczak
|
57
|
Director
|
||
Susan M. Walton
|
58
|
Director
|
||
Steven Zissis
|
59
|
Director
|
|
● |
selecting independent auditors for approval by our shareholders
;
|
|
● |
reviewing the scope of the audit to be conducted by our independent auditors, as well as the results of their audit
;
|
|
● |
approving audit and non-audit services provided to us by the independent auditors
;
|
|
● |
reviewing the organization and scope of our internal system of audit, financial and disclosure controls
;
|
|
● |
overseeing internal controls and risk management
;
|
|
● |
overseeing our financial reporting activities, including our annual report, and the accounting standards and principles followed
;
|
|
● |
reviewing and approving related-party transactions and preparing reports for the board of directors on such related-party transactions
;
|
|
● |
conducting other reviews relating to compliance with applicable laws and our policies, including reviewing at least annually our decision to enter into swaps, and our
hedging policy; and
|
|
● |
overseeing our internal audit function.
|
Shares Beneficially Owned
|
||||||||
Name
|
Number
|
Percent
|
||||||
AirAsia Group Berhad
(1)
|
3,333,333
|
10.2
|
%
|
|||||
Onex Corporation
(2)
|
3,110,143
|
9.5
|
%
|
|||||
Donald Smith & Co., Inc.
(3)
|
2,670,572
|
8.2
|
%
|
|||||
Summit Aviation Partners LLC
(4)
|
2,195,864
|
6.7
|
%
|
|||||
Morgan Stanley
(5)
|
1,770,913
|
5.4
|
%
|
(1) |
The information above and in this footnote is based on information taken from the Schedule 13G filed by AirAsia Group Berhad with the SEC on September 4, 2018. AirAsia
Group Berhad has sole voting and dispositive power over 3,333,333 ADSs.
|
(2) |
The information above and in this footnote is based on information taken from the Schedule 13G/A filed by Onex Corporation, Onex Partners III GP LP, Onex Partners GP
Inc., Onex US Principals LP, Onex American Holdings GP LLC, Onex American Holdings II LLC, Onex Partners III PV LP, Onex Partners III Select LP, Onex Partners III LP, New PCo II Investments Ltd., Meridian Aviation Partners Limited,
Onex ATR S.a.r.l., ATR Aviation Holdings I Corporation, Onex Partners III International LP , Onex Partners III International GP LP, Onex Partners III International GP LLC, Onex Partners Canadian GP Inc., and Gerald W. Schwartz
(collectively, the “Onex Reporting Persons”) with the SEC on February 15, 2019. Onex Corporation has shared voting and dispositive power over 3,094,399 ADSs. Gerald W. Schwartz has shared voting and dispositive power over 3,110,143
ADSs.
|
(3) |
The information above and in this footnote is based on information taken from the Schedule 13G filed by
Donald Smith & Co., Inc., Donald Smith Long/Short Equities Fund, L.P., Jon Hartsel,
Kamal Shah
and
John D. Piermont
with the SEC on February 8, 2019. Donald Smith & Co., Inc. has sole voting power over 2,429,829 ADSs and sole dispositive power over 2,670,572 ADSs. Donald Smith Long/Short Equities Fund, L.P.
has sole voting power over 8,395 ADSs and sole dispositive power over 2,670,572 ADSs. Jon Hartsel has sole voting power over 4,000 ADSs and sole dispositive power over 2,670,572 ADSs.
Kamal Shah
has sole voting power over 2,500 ADSs and sole dispositive power over
2,670,572
ADSs.
John D. Piermont
has sole voting power over 2,000 ADSs and sole dispositive power over
2,670,572
ADSs.
|
(4) |
The information above and in this footnote is based on information taken from the Schedule 13D/A filed by
Steven Zissis, Zissis Family Trust, Summit Aviation Partners LLC and
SZ Services Puerto Rico LLC
with the SEC on July 20, 2018, and from information
independently provided to us by Mr. Zissis. Steven Zissis and Zissis Family Trust have shared voting and dispositive power over 2,195,864 ADSs. Summit Aviation Partners LLC has shared voting and dispositive power over 1,610,717
ADSs.
SZ Services Puerto Rico LLC
has shared voting and dispositive power over
487,708 ADSs.
|
(5) |
The information above and in this footnote is based on information taken from the Schedule 13G/A filed by Morgan Stanley with the SEC on February 12, 2019. Morgan Stanley
has shared voting power over 1,599,624 ADSs and shared dispositive power over 1,770,913 ADSs.
|
|
● |
managing our portfolio of aircraft and other aviation assets and the administration of our cash balances;
|
|
● |
if requested by our board, making available a member of the core management team of our Manager as our nominee on the board of directors of any of our subsidiaries
(provided that each such member must be agreed between us and our Manager);
|
|
● |
assisting with the implementation of our board’s decisions;
|
|
● |
providing us suitably qualified and experienced persons to perform the management and administrative services for us and our subsidiaries, including persons to be
appointed by our board to serve as our dedicated chief executive and chief financial officers (who shall remain employees of, and be remunerated by, our Manager or an affiliate of our Manager while serving in such capacities);
|
|
● |
performing or procuring the performance of all reasonable accounting, tax, corporate secretarial, information technology, reporting and compliance services for us and our
subsidiaries, including the preparation and maintenance of our accounts and such financial statements and other reports and filings as we are required to make with any governmental agency (including the SEC) or stock exchange;
|
|
● |
supervising financial audits of us by an external auditor as required;
|
|
● |
managing our relations with our investors and the public, including:
|
|
● |
preparing our annual reports and any notices of meeting, papers, reports and agendas relating to meetings of our shareholders; and
|
|
● |
assisting in the resolution of any complaints by or disputes with our investors and any litigation involving us (other than litigation in which our interests are adverse
to those of our Manager or BBAM); and
|
|
● |
using commercially reasonable efforts to cause us to comply with all applicable laws.
|
|
● |
sourcing opportunities relating to aircraft and other aviation assets, including using its commercially reasonable efforts to notify us of potential aviation asset
investment opportunities that come to the attention of our Manager and which our Manager acting reasonably believes may be of interest to us as investments;
|
|
● |
in relation to identified potential opportunities to purchase or sell aircraft and other aviation assets, investigating, researching, evaluating, advising and making
recommendations on or facilitating such opportunities;
|
|
● |
with respect to prospective purchases and sales of aircraft and other aviation assets, conducting negotiations with sellers and purchasers and their agents,
representatives and financial advisors; and
|
|
● |
with respect to prospective purchases and sales of aircraft and other aviation assets, conducting negotiations with sellers and purchasers and their agents,
representatives and financial advisors; and
|
|
● |
otherwise providing advice and assistance to us in relation to the evaluation or pursuit of aviation asset investment or disposition opportunities as we may reasonably
request from time to time.
|
|
● |
the expansion of our Manager’s core management team with additional personnel as may be required by developments or changes in the commercial aircraft leasing industry
(whether regulatory, economic or otherwise) or the compliance or reporting environment for publicly listed companies in the United States (whether as a result of changes to securities laws or regulations, listing requirements or
accounting principles or otherwise); and
|
|
● |
making available individuals (other than members of our Manager’s core management team) as our nominees on the boards of directors of any of our subsidiaries.
|
|
● |
that matter has been the subject of a recommendation by our Manager; or
|
|
● |
the failure to make that decision, take that action or omit to take that action would breach the fiduciary duties of our directors or any law.
|
|
● |
that matter has been the subject of a recommendation by our Manager; or
|
|
● |
the failure to make that decision, take that action or omit to take that action would breach the fiduciary duties of our directors or any law.
|
(1) |
carry out any transaction with an affiliate of our Manager on our behalf, it being understood that BBAM has been appointed as the exclusive Servicer for our portfolio of
aircraft, and that our Manager may delegate the provision of all or any part of the services under the Management Agreement to any person affiliated or associated with BBAM;
|
(2) |
carry out any aviation asset investment or disposition transaction, or sequence of related aviation asset investment or disposition transactions with the same person or
group of persons under common control, for us if the aggregate purchase price to be paid or the gross proceeds to be received by us in connection therewith would exceed $200 million;
|
(3) |
carry out any aviation asset investment or disposition transaction if the sum of all the purchase prices to be paid or of all the gross proceeds to be received by us in
connection with all such transactions during any quarter would exceed $500 million;
|
(4) |
appoint or retain any third-party service provider to assist our Manager in providing management and administrative services if:
|
|
● |
the amount to be paid by our Manager and reimbursed by us or paid by us to the third party with respect to any particular matter, or series of related matters, is
reasonably likely to exceed $1 million; or
|
|
● |
as a result of the appointment or retention, the amount to be paid by our Manager and reimbursed by us or paid by us to all such third-party service providers appointed
or retained in any rolling 12-month period is reasonably likely to exceed $5 million;
|
(5) |
appoint or retain any third-party service provider to assist our Manager in providing ancillary management and administrative or the origination and disposition services
if:
|
|
● |
the amount to be paid by our Manager and reimbursed by us or paid by us to the third party with respect to any particular matter, or series of related matters, is
reasonably likely to exceed $1 million; or
|
|
● |
as a result of the appointment or retention, the amount to be paid by our Manager and reimbursed by us or paid by us to all such third-party service providers appointed
or retained in any rolling 12-month period is reasonably likely to exceed $7.5 million; or
|
(6) |
hold any cash or other assets of ours, provided that our Manager may cause our cash and other assets to be held in our name or any custodian for us nominated or approved
by us.
|
|
● |
for all our costs paid for us by our Manager (other than remuneration and certain expenses in relation to our Manager’s core management team and our Manager’s corporate
overhead), including the following items which are not covered by the management expense amount:
|
|
● |
directors’ fees for the independent directors on our board of directors and our subsidiaries,
|
|
● |
directors’ and officers’ insurance for our and our subsidiaries’ directors and officers,
|
|
● |
travel expenses of the directors (including flights, accommodation, taxis, entertainment and meals while traveling) to attend any meeting of the board of our Company,
|
|
● |
registration and listing fees in connection with the listing of our shares on the NYSE and registering the shares under the Securities Act,
|
|
● |
fees and expenses relating to any equity or debt financings we enter into in the future,
|
|
● |
fees and expenses of the depositary for our ADSs,
|
|
● |
costs and expenses related to insuring our aircraft and other aviation assets, including all fees and expenses of insurance advisors and brokers,
|
|
● |
costs incurred in connection with organizing and hosting our annual meetings or other general meetings of our Company,
|
|
● |
costs of production and distribution of any of our security holder communications, including notices of meetings, annual and other reports, press releases, and any
prospectus, disclosure statement, offering memorandum or other form of offering document,
|
|
● |
website development and maintenance,
|
|
● |
travel expenses of the core management team and other personnel of BBAM and its affiliates (including flights, accommodation, taxis, entertainment and meals while
traveling) related to sourcing, negotiating and conducting transactions on our behalf and attending any meeting of the board or our Company,
|
|
● |
external legal counsel,
|
|
● |
fees of third party consultants, accounting firms and other professionals,
|
|
● |
external auditor’s fees, and
|
|
● |
internal auditor’s fees.
|
|
● |
for all taxes, costs, charges and expenses properly incurred by our Manager in connection with:
|
|
● |
the provision of ancillary management and administrative services, and
|
|
● |
the engagement of professional advisors, attorneys, appraisers, specialist consultants and other experts as requested by us from time to time; or which our Manager
considers reasonably necessary in providing the services and discharging its duties and other functions under the Management Agreement, including, without limitation, the fees and expenses of professional advisors relating to the
purchase and sale of aircraft and other aviation assets.
|
|
● |
BBAM LP ceases to hold (directly or indirectly) more than 50% of the voting equity of, and economic interest in our Manager
;
|
|
● |
our Manager becomes subject to bankruptcy or insolvency proceedings that are not discharged within 75 days, unless our Manager is withdrawn and replaced within 90 days of
the initiation of such bankruptcy or insolvency proceedings with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the Management Agreement
;
|
|
● |
at least 75% of our independent directors and holders of 75% or more of all of our outstanding common shares (measured by vote) determine by resolution that there has
been unsatisfactory performance by our Manager that is materially detrimental to us
;
|
|
● |
our Manager materially breaches the Management Agreement and fails to remedy such breach within 90 days of receiving written notice from us requiring it to do so, or such
breach results in liability to us and is attributable to our Manager’s gross negligence, fraud or dishonesty, or willful misconduct in respect of the obligation to apply the standard of care;
|
|
● |
any license, permit or authorization held by our Manager which is necessary for it to perform the services and duties under the Management Agreement is materially
breached, suspended or revoked, or otherwise made subject to conditions which, in the reasonable opinion of our board of directors, would prevent our Manager from performing the services and the situation is not remedied within 90
days;
|
|
● |
our Manager voluntarily commences or files any petition seeking bankruptcy, insolvency or receivership relief; consents to the institution of, or fails to contest the
filing of any bankruptcy or insolvency filing; files an answer admitting the material allegations filed against it in any such proceeding; or makes a general assignment for the benefit of its creditors, unless our Manager is withdrawn
and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the Management Agreement; or
|
|
● |
an order is made for the winding up of our Manager, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to
make correctly the representations and warranties set out in the Management Agreement.
|
|
● |
we fail to make any payment due under the Management Agreement to our Manager within 15 days after the same becomes due;
|
|
● |
we otherwise materially breach the Management Agreement and fail to remedy the breach within 90 days of receiving written notice from our Manager requiring us to do so;
or
|
|
● |
if the directors in office on December 28, 2012 and any successor to any such director who was nominated or selected by a majority of the current directors and our
Manager appointed directors, cease to constitute at least a majority of the board (excluding directors appointed by our Manager). (See “Board Appointees”.)
|
|
● |
dealing or conducting business with us, our Manager, any affiliate or associate of BBAM or any shareholder of ours;
|
|
● |
being interested in any contract or transaction with us, our Manager, any affiliate or associate of BBAM or any shareholder of ours;
|
|
● |
acting in the same or similar capacity in relation to any other corporation or enterprise;
|
|
● |
holding or dealing in any of our shares or other securities or interests therein; or
|
|
● |
co-investing with us.
|
|
● |
lease marketing and remarketing, including lease negotiation;
|
|
● |
collecting rental payments and other amounts due under leases, collecting maintenance payments where applicable, lease compliance and enforcement and delivery and
accepting redelivery of aircraft and engines under lease;
|
|
● |
implementing aircraft and engine dispositions;
|
|
● |
monitoring the performance of maintenance obligations of lessees under the leases;
|
|
● |
procuring legal and other professional services with respect to the lease, sale or financing of the aircraft or engines, any amendment or modification of any lease, the
enforcement of our rights under any lease, disputes that arise as to any aircraft or engines or for any other purpose that BBAM reasonably determines is necessary in connection with the performance of its services;
|
|
● |
periodic reporting of operational information relating to the aircraft and engines, including providing certain reports to lenders and other third parties; and
|
|
● |
certain aviation insurance related services.
|
|
● |
Bankruptcy or insolvency of BBAM LP
;
|
|
● |
BBAM LP ceasing to own, directly or indirectly, at least 50% of the Servicer
;
|
|
● |
Summit ceasing to own, directly or indirectly, at least 33.33% of the partnership interests in BBAM LP; provided that a sale that results in such ownership being at a
level below 33.33% shall not constitute a servicer termination event if the sale is to a publicly listed entity or other person with a net worth of at least $100 million; and
|
|
● |
during any one year period commencing each April 29, 50% or more of the Servicer’s key finance and legal team or technical and marketing team ceasing to be employed by
BBAM LP and are not replaced with employees with reasonably comparable experience within 90 days
.
|
1) |
Deposit Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Limited. See Item 5 “Liquidity and Capital Resources—Financing— Term Loan.”
|
2) |
Servicing Agreement, dated as of October 2, 2007, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock
& Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
3) |
Administrative Services Agreement, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, AMBAC Assurance Corporation, Babcock & Brown Air
Management Co. Limited and Babcock & Brown Air Funding I Limited. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
4) |
Trust Indenture, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, BNP Paribas, AMBAC Assurance Corporation and Babcock & Brown Air Funding I
Limited. See Item 5 “Liquidity and Capital Resources — Financing — Securitization.”
|
5) |
Security Trust Agreement, dated as of October 2, 2007, between Deutsche Bank Trust Company Americas, and Babcock & Brown Air Funding I Limited. See Item 5 “Liquidity
and Capital Resources—Financing— Securitization Notes.”
|
6) |
Cash Management Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Funding I Limited. See Item 5 “Liquidity and Capital
Resources—Financing— Securitization Notes.”
|
7) |
Form of Director Service Agreement between Babcock & Brown Air Limited and each director thereof. See Item 6. “Directors, Senior Management and Employees.”
|
8) |
Amendment No. 1 to Servicing Agreement, dated as of April 29, 2010, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe)
Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
9) |
Fly Leasing Limited Omnibus Incentive Plan.
|
10) |
Form of Stock Appreciation Right Award Agreement.
|
11) |
Form of Restricted Stock Unit Award Agreement.
|
12) |
Form of Loan Agreement among Hobart Aviation Holdings Limited, Norddeutsche Landesbank Girozentrale and each borrower thereof. See Item 5 “Liquidity and Capital Resources
– Financing – Nord LB Facility.”
|
13) |
Form of Servicing Agreement among BBAM US LP, BBAM Aviation Services Limited and each company thereof. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
14) |
Securities Purchase Agreement dated November 30, 2012, by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein. See Item 7,
“Major Shareholders and Related Party Transactions.”
|
15) |
Purchase Agreement dated November 30, 2012 by and among BBAM Limited Partnership, Summit Aviation Partners LLC, Fly-BBAM Holdings Ltd., Summit Aviation Management Co.,
Ltd. and such persons identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
16) |
First Amendment to Purchase
Agreement
dated December 28, 2012 by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
17) |
Amended and Restated Fly Leasing Limited Management Agreement dated as of December 28, 2012, between Fly Leasing Limited and Fly Leasing Management Co. Limited. See Item
7 “Related Party Transactions — Management Agreement.”
|
18) |
Registration Rights Agreement dated as of December 28, 2012, by and among Fly Leasing Limited and each shareholder identified therein. See Item 7, “Major Shareholders and
Related Party Transactions.”
|
19) |
Amended and Restated Servicing Agreement, dated as of January 24, 2013, by and among BBAM US LP, BBAM Aviation Services Limited and Fly Leasing Limited. See Item 7
“Related Party Transactions — Servicing Agreement.”
|
20) |
Amended and Restated Term Loan Credit Agreement, dated as of November 21, 2013, among Fly Funding II S.à r.l., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock
& Brown Air Acquisition I Limited, each other Guarantor Party referred to therein, the Lenders identified therein, Citibank, N.A., and Wells Fargo Bank Northwest, National Association. See Item 5 “Liquidity and Capital Resources –
Financing – Term Loan.”
|
21) |
Indenture dated December 11, 2013, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Unsecured
Borrowing.”
|
22) |
First Supplemental Indenture, dated December 11, 2013, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital
Resources—Financing—Unsecured Borrowing.”
|
23) |
Second Supplemental Indenture, dated as of October 3, 2014, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital
Resources—Financing—Unsecured Borrowing.”
|
24) |
Amendment No. 1 to Trust Indenture, dated as of October 24, 2014, by and among Babcock & Brown Air Funding I Limited, Deutsche Bank Trust Company Americas, BNP
Paribas and AMBAC Assurance Corporation. See Item 5 “Liquidity and Capital Resources—Financing— Securitization Notes.”
|
25) |
Amendment No. 2 to Servicing Agreement, dated as of October 24, 2014, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock &
Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
26) |
Amendment to Credit Agreement, dated as of April 22, 2015, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement
Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
27) |
First Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated June 19, 2015, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
See Item 7 “Related Party Transactions — Management Agreement.”
|
28) |
Servicing Agreement dated as of February 26, 2016, among BBAM US LP, BBAM Aviation Services Limited and Fly Acquisition III Limited. See Item 7 “Related Party
Transactions — Servicing Agreement.”
|
29) |
Facility Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Subsidiary Guarantors party thereto, the Lenders party
thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
30) |
Note Purchase Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Purchasers party thereto, Commonwealth Bank of
Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
31) |
Credit Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Banks party thereto, Commonwealth Bank of Australia, New York
Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
32) |
Guaranty [Fly 2016A Warehouse] dated February 26, 2016 by Fly Leasing Limited. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
33) |
Security Agreement [Fly 2016A Warehouse] dated February 26, 2016 among Fly Acquisition III Limited, the Grantors party thereto, and Well Fargo Bank, National Association
as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.
|
34) |
Aircraft Mortgage and Security Agreement dated as of August 9, 2012, among Fly Funding II S.a.r.l.., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock &
Brown Air Acquisition I Limited, The Initial Intermediate Lessees, The Initial Lessor Subsidiaries, The Additional Grantors Referred to Therein and Wells Fargo Bank Northwest, National Association. See Item 5 “Liquidity and Capital
Resources—Financing—Term Loan.”
|
35) |
Second Amendment to Credit Agreement, dated as of October 19, 2016, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the
Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
36) |
Second Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated July 27, 2016, between Fly Leasing Limited and Fly Leasing Management Co.
Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
37) |
Amendment No. 3 to Servicing Agreement, dated as of February 1, 2017, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock &
Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
38) |
Third Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated as of February 1, 2017, between Fly Leasing Limited and Fly Leasing Management Co.
Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
39) |
Fee Rebate Side Letter, dated as of February 1, 2017, by and among Babcock & Brown Air Funding I Limited, Fly Leasing Management Co. Limited, and AMBAC Assurance
Corporation. See Item 7 “Related Party Transactions — Management Agreement.”
|
40) |
Third Supplemental Indenture dated as of October 16, 2017, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital
Resources—Financing—Unsecured Borrowing.”
|
41) |
Servicing Agreement dated as of December 8, 2017, among BBAM US LP, BBAM Aviation Services Limited and Magellan Acquisition Limited. See Item 7 “Related Party
Transactions — Management Agreement.”
|
42) |
Third Amendment to Credit Agreement, dated as of April 28, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the
Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
43) |
Fourth Amendment to Credit Agreement, dated as of November 1, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the
Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
44) |
Facility Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Subsidiary Guarantors party thereto, the Lenders party
thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
45) |
Note Purchase Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Purchasers party thereto, The Bank of Tokyo-Mitsubishi
UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
46) |
Credit Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Banks party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
47) |
Security Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Grantors party thereto, and Wells Fargo Bank, National
Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
48) |
Guaranty [Fly 2017A Term Loan] dated December 8, 2017 by Fly Leasing Limited. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
49) |
Share Purchase Agreement, dated February 28, 2018, between Asia Aviation Capital Limited, Fly Aladdin Holdings Limited, Fly Leasing Limited and AirAsia Berhad. See Item
5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
50) |
Aircraft Sale and Purchase Agreement, dated February 28, 2018, between Asia Aviation Capital Limited, Fly Aladdin Holdings Limited and AirAsia Berhad. See Item 5,
“Operating and Financial Review and Prospects—AirAsia Transactions.”
|
51) |
Aircraft Sale and Purchase Option Agreement, dated April 26, 2018, but having effect between the parties as of February 28, 2018, between Asia Aviation Capital Limited,
Fly Aladdin Holdings Limited and AirAsia Berhad. See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
52) |
Amended and Restated Commitment Letter, dated May 1, 2018, between BNP Paribas, Citibank, N.A., Commonwealth Bank of Australia, Singapore Branch, Deutsche Bank AG,
Singapore Branch and Fly Leasing Limited. See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
53) |
Equity Commitment Letter, dated February 28, 2018, between Meridian Aviation Partners Limited and Fly Leasing Limited. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
54) |
Equity Commitment Letter, dated February 28, 2018, between Summit Aviation Holdings LLC and Fly Leasing Limited. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
55) |
Amended and Restated Purchase Commitment Letter (Portfolio C Aircraft and Portfolio D Aircraft), dated May 3, 2018, but having effect between the parties as of February
28, 2018, between Fly Leasing Limited and Nomura Babcock & Brown Co., Ltd. See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
56) |
Amended and Restated Delivery Side Letter (Portfolio C and Portfolio D), dated May 3, 2018, but having effect between the parties as of February 28, 2018, between Fly
Leasing Limited and Incline B Aviation Limited Partnership. See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
57) |
Securities Purchase Agreement, dated July 11, 2018, between Fly Leasing Limited and Meridian Aviation Partners Limited. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
58) |
Securities Purchase Agreement, dated July 11, 2018, between Fly Leasing Limited and Summit Aviation Holdings LLC. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
59) |
Registration Rights Agreement, dated July 18, 2018, among Fly Leasing Limited and shareholders named therein. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
60) |
Subscription Agreement, dated July 18, 2018, among Fly Leasing Limited, AirAsia Group Berhad and AirAsia Berhad. See Item 7, “Major Shareholders and Related Party
Transactions.”
|
61) |
Registration Rights Agreement, dated July 18, 2018, between Fly Leasing Limited and AirAsia Group Berhad. See Item 7, “Major Shareholders and Related Party Transactions.”
|
62) |
Fly SPA Amendment Agreement (No. 1) dated July 11, 2018, among Fly Aladdin Holdings Limited, Fly Leasing Limited, Asia Aviation Capital Limited and AirAsia Group Berhad.
See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
63) |
Fly SPA Amendment Agreement (No. 2) dated July 18, 2018, among Fly Aladdin Holdings Limited, Fly Leasing Limited, Asia Aviation Capital Limited and AirAsia Group Berhad.
See Item 5, “Operating and Financial Review and Prospects—AirAsia Transactions.”
|
64) |
Servicing Agreement dated June 15, 2018, among BBAM Aviation Services Limited, BBAM US LP, Fly Aladdin Funding Limited, Fly Aladdin MaltaCo Limited and each Borrower
Group Company that becomes a party thereto. See Item 7 “Related Party Transactions —Servicing Agreement.”
|
65) |
Senior Secured Credit Agreement dated June 15, 2018, among Fly Aladdin Funding Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta, the lenders party thereto,
Wilmington Trust (London) Limited, as Security Trustee and BNP Paribas, as Administrative Agent. See Item 5 “Liquidity and Capital Resources – Financing – Fly Aladdin Acquisition Facility.” See Item 5 “Liquidity and Capital
Resources—Financing—Fly Aladdin Engine Funding Facility.”
|
66) |
Borrower Parent Security Agreement dated June 15, 2018, between Fly Aladdin Holdings Limited, as Grantor and Wilmington Trust (London) Limited, as Security Trustee. See
Item 5 “Liquidity and Capital Resources – Financing – Fly Aladdin Acquisition Facility.”
|
67) |
Co-Borrower Security Agreement dated June 15, 2018, between Fly Aladdin Funding Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta and Wilmington Trust
(London) Limited, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Aladdin Acquisition Facility.”
|
68) |
Deed of Limited Guaranty dated June 15, 2018, by Fly Leasing Limited. See Item 5 “Liquidity and Capital Resources—Financing—Fly Aladdin Engine Funding Facility.”
|
69) |
Amendment to Senior Secured Credit Agreement dated July 19, 2018, among Fly Aladdin Funding Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta, the lenders,
Wilmington Trust (London) Limited, as Security Trustee and BNP Paribas, as Administrative Agent. See Item 5 “Liquidity and Capital Resources – Financing – Fly Aladdin Acquisition Facility.” See Item 5 “Liquidity and Capital
Resources—Financing—Fly Aladdin Acquisition Facility.”
|
70) |
Omnibus Agreement No. 1 [Fly 2016A Warehouse] dated as of December 15, 2017 among Fly Acquisition III Limited, the Lenders party thereto, Commonwealth Bank of Australia,
New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III Facility.”
|
71) |
Amendment No. 2 [Fly 2016A Warehouse] dated as of September 6, 2018 among Fly Acquisition III Limited, the Lenders party thereto, Commonwealth Bank of Australia, New York
Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III Facility.”
|
72) |
Purchase Agreement dated November 30, 2018 among the sellers identified therein, Horizon Aircraft Finance I Limited, Horizon Aircraft Finance I LLC and the
other purchasers identified therein. See Item 5, “Operating and Financial Review and Prospects.”
|
73) |
Form of Loan Amendment Letter Agreement among Hobart Aviation Holdings Limited, Norddeutsche Landesbank Girozentrale and each borrower thereof. See Item 5,
“Liquidity and Capital Resources
—
Financing
—
Nord LB Facility.”
|
|
● |
An “Irish Holder” is a holder of our shares that (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant American Depositary
Receipt or ADR; (2) in the case of individual holders, is resident or ordinarily resident in Ireland under Irish taxation laws; and (3) in the case of a holder that is a company, is resident in Ireland under Irish taxation laws and is
not also a resident of any other country under any double taxation agreement entered into by Ireland.
|
|
● |
A “Non-Irish Holder” is a holder of our shares that is not an Irish Holder and has never been an Irish Holder.
|
|
● |
A “US Holder” is a holder of our shares that (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant ADR; (2) is a resident of
the United States for the purposes of the Ireland/United States Double Taxation Convention; (3) in the case of an individual holder, is not also resident or ordinarily resident in Ireland for Irish tax purposes; (4) in the case of a
corporate holder, is not resident in Ireland for Irish tax purposes and is not ultimately controlled by persons resident in Ireland; and (5) is not engaged in any trade or business and does not perform independent personal services
through a permanent establishment or fixed base in Ireland.
|
|
● |
“Relevant Territory” is defined as a country with which Ireland has a double tax treaty (which includes the United States), a country with which Ireland has signed a
double taxation treaty which will come into force once all ratification procedures have been completed, or a member state of the European Union other than Ireland.
|
|
● |
who are ultimately controlled, whether directly or indirectly, by persons resident in a Relevant Territory and who are not ultimately controlled, whether directly or
indirectly, by persons not resident in a Relevant Territory; or
|
|
● |
who are resident in a Relevant Territory and not controlled directly or indirectly by Irish residents; or
|
|
● |
whose principal class of shares or the principal class of shares of whose 75% or greater parents are substantially and regularly traded on a recognized stock exchange in
a Relevant Territory; or which are wholly owned by two or more companies, each of whose principal class of shares are substantially and regularly traded on a recognized stock exchange in a Relevant Territory or on such other stock
exchange as may be approved by the Minister for Finance.
|
|
· |
0.5% on the first €12,012;
|
|
· |
2% on the next €7,360;
|
|
· |
4.7
5% on the next €50,672 and
|
|
· |
8% on the aggregate income in excess of €70,044.
|
|
● |
an individual resident in a Relevant Territory and who are not resident or ordinarily resident in Ireland; or
|
|
● |
a corporation that is resident in a Relevant Territory and not controlled directly or indirectly by Irish residents; or
|
|
● |
a corporation that is ultimately controlled, whether directly or indirectly, by persons resident in a Relevant Territory and who are not ultimately controlled, whether
directly or indirectly, by persons not resident in a Relevant Territory; or
|
|
● |
a corporation whose principal class of shares (or whose 75% or greater parent’s principal class of shares) are substantially and regularly traded on a recognized stock
exchange in a Relevant Territory or on such other stock exchange as may be approved by the Minister for Finance; or
|
|
● |
a corporation that is wholly owned by two or more corporations each of whose principal class of shares are substantially and regularly traded on a recognized stock
exchange in a Relevant Territory or on such other stock exchange as may be approved by the Minister for Finance; or
|
|
● |
otherwise entitled to an exemption from DWT.
|
|
● |
Excess distributions by us to a U.S. Holder would be taxed in a special way. “Excess distributions” are amounts received by a U.S. Holder with respect to our shares in
any taxable year that exceed 125% of the average distributions received by such U.S. Holder from us in the shorter of either the three previous years or such U.S. Holder’s holding period for shares before the present taxable year.
Excess distributions must be allocated ratably to each day that a U.S. Holder has held our shares. A U.S. Holder must include amounts allocated to the current taxable year in its gross income as ordinary income for that year. A U.S.
Holder must pay tax on amounts allocated to each prior taxable year in which we were a PFIC at the highest rate in effect for that year on ordinary income and the tax is subject to an interest charge at the rate applicable to
deficiencies for income tax. The preferential U.S. federal income tax rates for dividends and long-term capital gain of individual U.S. Holders (as well as certain trusts and estates) would not apply, and special rates would apply for
calculating the amount of the foreign tax credit with respect to excess distributions.
|
|
● |
The entire amount of gain realized by a U.S. Holder upon the sale or other disposition of shares will also be treated as an excess distribution and will be subject to tax
as described above.
|
|
● |
The tax basis in shares that were acquired from a decedent who was a U.S. Holder would not receive a step-up to fair market value as of the date of the decedent’s death
but would instead be equal to the decedent’s basis, if lower than fair market value.
|
Years ended
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Audit fees
|
$
|
2,187
|
91
|
%
|
$
|
1,803
|
73
|
%
|
||||||||
Tax fees
|
228
|
9
|
%
|
304
|
11
|
%
|
||||||||||
All other fees
|
3
|
—
|
269
|
16
|
%
|
|||||||||||
Total
|
$
|
2,418
|
100
|
%
|
$
|
2,376
|
100
|
%
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated Balance Sheets of Fly Leasing Limited as of December 31, 2018 and 2017
|
F-4
|
Consolidated Statements of Income (Loss) of Fly Leasing Limited for the years ended December 31, 2018, 2017 and
2016
|
F-5
|
Consolidated Statements of Comprehensive Income (Loss) of Fly Leasing Limited for the years ended December 31,
2018, 2017 and 2016
|
F-6
|
Consolidated Statements of Shareholders’ Equity of Fly Leasing Limited for the years ended December 31, 2016,
2017 and 2018
|
F-7
|
Consolidated Statements of Cash Flows of Fly Leasing Limited for the years ended December 31, 2018, 2017 and
2016
|
F-8
|
Notes to Consolidated Financial Statements
|
F-10
|
Schedule I — Condensed Financial Information of Parent
|
F-39
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
180,211
|
$
|
329,105
|
||||
Restricted cash and cash equivalents
|
100,869
|
127,710
|
||||||
Rent receivables
|
9,307
|
2,059
|
||||||
Investment in finance lease, net
|
12,822
|
13,946
|
||||||
Flight equipment held for sale, net
|
259,644
|
—
|
||||||
Flight equipment held for operating lease, net
|
3,228,018
|
2,961,744
|
||||||
Maintenance rights, net
|
298,207
|
131,299
|
||||||
Deferred tax asset, net
|
6,505
|
9,943
|
||||||
Fair value of derivative assets
|
5,929
|
2,643
|
||||||
Other assets, net
|
124,960
|
17,166
|
||||||
Total assets
|
$
|
4,226,472
|
$
|
3,595,615
|
||||
Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
23,146
|
$
|
18,305
|
||||
Rentals received in advance
|
21,322
|
14,968
|
||||||
Payable to related parties
|
4,462
|
2,084
|
||||||
Security deposits
|
60,097
|
49,689
|
||||||
Maintenance payment liability, net
|
292,586
|
244,151
|
||||||
Unsecured borrowings, net
|
617,664
|
615,922
|
||||||
Secured borrowings, net
|
2,379,869
|
2,029,675
|
||||||
Deferred tax liability, net
|
36,256
|
30,112
|
||||||
Fair value of derivative liabilities
|
8,558
|
7,344
|
||||||
Other liabilities
|
80,402
|
39,656
|
||||||
Total liabilities
|
3,524,362
|
3,051,906
|
||||||
Shareholders’ equity
|
||||||||
Common shares, $0.001 par value; 499,999,900 shares authorized; 32,650,019 and 27,983,352 shares issued
and outstanding at December 31, 2018 and 2017, respectively
|
33
|
28
|
||||||
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
|
—
|
—
|
||||||
Additional paid-in capital
|
549,123
|
479,637
|
||||||
Retained earnings
|
154,347
|
68,624
|
||||||
Accumulated other comprehensive loss, net
|
(1,393
|
)
|
(4,580
|
)
|
||||
Total shareholders’ equity
|
702,110
|
543,709
|
||||||
Total liabilities and shareholders’ equity
|
$
|
4,226,472
|
$
|
3,595,615
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
399,514
|
$
|
346,894
|
$
|
313,582
|
||||||
Finance lease revenue
|
675
|
731
|
2,066
|
|||||||||
Equity earnings (loss) from unconsolidated subsidiary
|
(54
|
)
|
496
|
530
|
||||||||
Gain on sale of aircraft
|
13,398
|
3,926
|
27,195
|
|||||||||
Interest and other income
|
4,766
|
1,204
|
1,666
|
|||||||||
Total revenues
|
418,299
|
353,251
|
345,039
|
|||||||||
Expenses
|
||||||||||||
Depreciation
|
144,084
|
133,227
|
120,452
|
|||||||||
Aircraft impairment
|
—
|
22,000
|
96,122
|
|||||||||
Interest expense
|
144,742
|
127,782
|
123,161
|
|||||||||
Selling, general and administrative
|
31,185
|
30,671
|
30,077
|
|||||||||
Loss (gain) on derivatives
|
(2,382
|
)
|
(192
|
)
|
91
|
|||||||
Loss on modification and extinguishment of debt
|
2,474
|
23,309
|
9,246
|
|||||||||
Maintenance and other costs
|
2,547
|
2,524
|
2,279
|
|||||||||
Total expenses
|
322,650
|
339,321
|
381,428
|
|||||||||
Net income (loss) before provision (benefit) for income taxes
|
95,649
|
13,930
|
(36,389
|
)
|
||||||||
Provision (benefit) for income taxes
|
9,926
|
11,332
|
(7,277
|
)
|
||||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Weighted average number of shares:
|
||||||||||||
Basic
|
29,744,083
|
30,307,357
|
33,239,001
|
|||||||||
Diluted
|
29,783,904
|
30,353,425
|
33,239,001
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
|||||
Diluted
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Other components of comprehensive income (loss), net of tax:
|
||||||||||||
Change in fair value of derivatives, net of deferred tax
(1)
|
(530
|
)
|
3,926
|
5,036
|
||||||||
Reclassification from other comprehensive loss into earnings due to termination of derivative liabilities,
net of deferred tax
(2)
|
—
|
—
|
(10
|
)
|
||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified
for hedge accounting treatment, net of deferred tax
(3)
|
3,717
|
1,239
|
729
|
|||||||||
Comprehensive income (loss)
|
$
|
88,910
|
$
|
7,763
|
$
|
(23,357
|
)
|
(1) |
The associated deferred tax benefit for the year ended December 31, 2018 was
$
0.7
million.
The associated deferred tax expense
was
$0.6 million and $0.7 million
for the
years ended December 31, 2017 and 2016, respectively.
|
(2) |
The associated deferred tax benefit was $1,000 for the year ended December 31, 2016.
|
(3) |
The associated deferred tax expense was $0.3 million, $0.2 million and $0.1 million for the years ended
December 31, 2018, 2017 and 2016, respectively.
|
Manager
Shares
|
Common Shares
|
Additional
|
Accumulated
Other
|
Total | ||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Loss, net
|
Shareholders’
Equity
|
|||||||||||||||||||||||||
Balance December 31, 2015
|
100
|
$
|
—
|
35,671,400
|
$
|
36
|
$
|
577,290
|
$
|
95,138
|
$
|
(15,500
|
)
|
$
|
656,964
|
|||||||||||||||||
Shares repurchased
|
—
|
—
|
(3,414,960
|
)
|
(4
|
)
|
(40,368
|
)
|
—
|
—
|
(40,372
|
)
|
||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
(29,112
|
)
|
—
|
(29,112
|
)
|
||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $
0.7
million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
5,036
|
5,036
|
||||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to termination of derivative liabilities,
net of deferred tax of $1,000
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(10
|
)
|
(10
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified
for hedge accounting treatment, net of deferred tax of $0.1 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
729
|
729
|
||||||||||||||||||||||||
Balance December 31, 2016
|
100
|
$
|
—
|
32,256,440
|
$
|
32
|
$
|
536,922
|
$
|
66,026
|
$
|
(9,745
|
)
|
$
|
593,235
|
|||||||||||||||||
Shares issued in connection with SARs exercised
|
—
|
—
|
1,481
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Shares repurchased
|
—
|
—
|
(4,274,569
|
)
|
(4
|
)
|
(57,285
|
)
|
—
|
—
|
(57,289
|
)
|
||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
2,598
|
—
|
2,598
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $0.6 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
3,926
|
3,926
|
||||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified
for hedge accounting treatment, net of deferred tax of $0.2 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
1,239
|
1,239
|
||||||||||||||||||||||||
Balance December 31, 2017
|
100
|
$
|
—
|
27,983,352
|
$
|
28
|
$
|
479,637
|
$
|
68,624
|
$
|
(4,580
|
)
|
$
|
543,709
|
|||||||||||||||||
Shares issued in connection with AirAsia
Transactions
(2)
|
—
|
—
|
4,666,667
|
5
|
69,486
|
—
|
—
|
69,491
|
||||||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
85,723
|
—
|
85,723
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $0.7 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(530
|
)
|
(530
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified
for hedge accounting treatment, net of deferred tax of $0.3 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
3,717
|
3,717
|
||||||||||||||||||||||||
Balance December 31, 2018
|
100
|
$
|
—
|
32,650,019
|
$
|
33
|
$
|
549,123
|
$
|
154,347
|
$
|
(1,393
|
)
|
$
|
702,110
|
(1) |
See Note 11 to Notes to Consolidated Financial Statements.
|
(2) |
See Note 14 to Notes to Consolidated Financial Statements.
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
|
||||||||||||
Finance lease revenue
|
(675
|
)
|
(731
|
)
|
(2,066
|
)
|
||||||
Equity in (earnings) loss from unconsolidated subsidiary
|
54
|
(496
|
)
|
(530
|
)
|
|||||||
Gain on sale of aircraft
|
(13,398
|
)
|
(3,926
|
)
|
(27,195
|
)
|
||||||
Depreciation
|
144,084
|
133,227
|
120,452
|
|||||||||
Aircraft impairment
|
—
|
22,000
|
96,122
|
|||||||||
Amortization of debt discounts and debt issuance costs
|
9,455
|
7,955
|
9,375
|
|||||||||
Amortization of lease incentives
|
9,738
|
7,668
|
8,898
|
|||||||||
Amortization of lease premiums, discounts and other items
|
432
|
412
|
388
|
|||||||||
Amortization of acquisition fair value adjustments
|
1,239
|
1,223
|
1,621
|
|||||||||
Loss on modification and extinguishment of debt
|
2,474
|
23,309
|
9,246
|
|||||||||
Unrealized foreign exchange (gain) loss
|
(563
|
)
|
2,305
|
(437
|
)
|
|||||||
Provision (benefit) for deferred income taxes
|
9,864
|
5,178
|
(9,158
|
)
|
||||||||
(Gain) loss on derivative instruments
|
(1,269
|
)
|
(478
|
)
|
76
|
|||||||
Security deposits and maintenance payment liability recognized into earnings
|
(15,597
|
)
|
(16,268
|
)
|
(3,450
|
)
|
||||||
Security deposits and maintenance payment claims applied towards operating lease revenue
|
—
|
—
|
(684
|
)
|
||||||||
Distributions from unconsolidated subsidiary
|
2,131
|
—
|
—
|
|||||||||
Cash receipts from maintenance rights
|
3,013
|
—
|
9,513
|
|||||||||
Maintenance rights recognized into earnings
|
—
|
465
|
—
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Rent receivables
|
(12,866
|
)
|
(4,251
|
)
|
(1,034
|
)
|
||||||
Other assets
|
(4,119
|
)
|
(2,599
|
)
|
(1,134
|
)
|
||||||
Payable to related parties
|
2,378
|
(10,126
|
)
|
(17,163
|
)
|
|||||||
Accounts payable, accrued liabilities and other liabilities
|
18,982
|
11,588
|
(10,964
|
)
|
||||||||
Net cash flows provided by operating activities
|
241,080
|
179,053
|
152,764
|
|||||||||
Cash Flows from Investing Activities
|
||||||||||||
Distributions from unconsolidated subsidiary
|
3,103
|
—
|
—
|
|||||||||
Rent received from finance lease
|
1,800
|
1,880
|
2,970
|
|||||||||
Investment in Horizon I Limited equity certificates
|
(5,747
|
)
|
—
|
—
|
||||||||
Purchase of flight equipment
|
(934,481
|
)
|
(434,122
|
)
|
(552,166
|
)
|
||||||
Proceeds from sale of aircraft, net
|
177,702
|
21,750
|
430,867
|
|||||||||
Purchase price allocated to Portfolio B orderbook value
|
(80,450
|
)
|
—
|
—
|
||||||||
Payments for aircraft improvement
|
(6,779
|
)
|
(7,357
|
)
|
(2,230
|
)
|
||||||
Payments for lessor maintenance obligations
|
(8,601
|
)
|
(12,564
|
)
|
(2,712
|
)
|
||||||
Net cash flows used in investing activities
|
(853,453
|
)
|
(430,413
|
)
|
(123,271
|
)
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Cash Flows from Financing Activities
|
||||||||||||
Security deposits received
|
15,042
|
7,196
|
920
|
|||||||||
Security deposits returned
|
(8,716
|
)
|
(3,554
|
)
|
(7,438
|
)
|
||||||
Maintenance payment liability receipts
|
84,102
|
75,765
|
71,514
|
|||||||||
Maintenance payment liability disbursements
|
(15,495
|
)
|
(14,303
|
)
|
(10,951
|
)
|
||||||
Net swap termination payments
|
1,801
|
—
|
(709
|
)
|
||||||||
Debt modification and extinguishment costs
|
301
|
(17,396
|
)
|
(3,153
|
)
|
|||||||
Debt issuance costs
|
(3,619
|
)
|
(1,464
|
)
|
(2,552
|
)
|
||||||
Proceeds from unsecured borrowings
|
—
|
295,150
|
—
|
|||||||||
Repayment of unsecured borrowings
|
—
|
(375,000
|
)
|
—
|
||||||||
Proceeds from secured borrowings
|
826,396
|
513,459
|
572,719
|
|||||||||
Repayment of secured borrowings
|
(482,703
|
)
|
(326,909
|
)
|
(448,346
|
)
|
||||||
Net proceeds from issuance of shares
|
19,624
|
—
|
—
|
|||||||||
Shares repurchased
|
—
|
(57,286
|
)
|
(40,257
|
)
|
|||||||
Net cash flows provided by financing activities
|
436,733
|
95,658
|
131,747
|
|||||||||
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
|
(95
|
)
|
430
|
(84
|
)
|
|||||||
Net increase (decrease) in unrestricted and restricted cash and cash equivalents
|
(175,735
|
)
|
(155,272
|
)
|
161,156
|
|||||||
Unrestricted and restricted cash and cash equivalents at beginning of period
|
456,815
|
612,087
|
450,931
|
|||||||||
Unrestricted and restricted cash and cash equivalents at end of period
|
$
|
281,080
|
$
|
456,815
|
$
|
612,087
|
||||||
Reconciliation to Consolidated Balance Sheets:
|
||||||||||||
Cash and cash equivalents
|
$
|
180,211
|
$
|
329,105
|
$
|
517,964
|
||||||
Restricted cash and cash equivalents
|
100,869
|
127,710
|
94,123
|
|||||||||
Unrestricted and restricted cash and cash equivalents
|
$
|
281,080
|
$
|
456,815
|
$
|
612,087
|
1. |
ORGANIZATION
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
● |
Flight equipment where original manufacturer’s prices are not relevant due to plane modifications and conversions.
|
|
● |
Flight equipment that is out of production and may have a shorter useful life or lower residual value due to obsolescence.
|
|
● |
The remaining life of a converted freighter is determined based on the date of conversion, in which case, the total useful life may extend beyond 25 years from the date
of manufacture.
|
|
● |
Flight equipment that management believes will be disposed of prior to the end of its estimated useful life.
|
|
● |
Operating lease revenue.
The Company receives lease revenue from flight
equipment under operating leases. Rental income from aircraft and aircraft equipment is recognized on a straight-line basis over the initial term of the respective lease. The operating lease agreements generally do not provide for
purchase options, however, the leases may allow the lessee to exercise an option to extend the lease for an additional term. Contingent rents are recognized as revenue when the contingency is resolved. Revenue is not recognized when
collection is not reasonably assured.
|
|
● |
End of lease income.
The amount of end of lease income the Company recognizes
in any reporting period is inherently volatile and depends upon a number of factors, including the timing of both scheduled and unscheduled lease expiries and the timing of maintenance performed on the aircraft or aircraft equipment
by the lessee, among others.
|
|
● |
Lease incentives.
The Company’s leases may contain provisions which require it
to contribute a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. The Company accounts for these expected payments as lease incentives, which are amortized as a reduction of
lease revenue over the life of the lease.
|
|
● |
Lease premiums and lease discounts.
Lease premiums and lease discounts are
amortized into operating lease revenue over the lease term. Amortization of lease premiums decreases rental revenue and amortization of lease discounts increases rental revenue.
|
|
● |
Finance lease income.
Revenue from finance lease is recognized using the
interest method to produce a level yield over the life of the finance lease.
|
|
· |
The timing and pattern of transfer for the non-lease component and the associated lease component are the same; and
|
|
· |
The stand-alone lease component would be classified as an operating lease if accounted for separately.
|
|
· |
The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;
|
|
· |
The policy for timing of transfers between levels; and
|
|
· |
The valuation processes for Level 3 fair value measurements.
|
|
· |
The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements at the end of the reporting
period; and
|
|
· |
The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.
|
3. |
SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
126,648
|
$
|
113,710
|
$
|
110,351
|
||||||
Taxes
|
4,163
|
2,155
|
460
|
|||||||||
Noncash Activities:
|
||||||||||||
Security deposits applied to rent receivables, other assets, maintenance payment liability and
rentals received in advance
|
1
|
2,045
|
—
|
|||||||||
Maintenance payment liability applied to rent receivables, maintenance rights, rentals received in
advance and other liabilities
|
25,837
|
68
|
—
|
|||||||||
Other liabilities applied to maintenance payment liability, security deposits and rent receivables
|
5,520
|
676
|
2,550
|
|||||||||
Noncash investing activities:
|
||||||||||||
Aircraft improvement
|
10,870
|
192
|
5,245
|
|||||||||
Noncash activities in connection with purchase of flight equipment:
|
||||||||||||
Security deposits and maintenance payment liabilities assumed
|
29,860
|
—
|
—
|
|||||||||
Shares issued
|
49,867
|
—
|
—
|
|||||||||
Other
|
—
|
3,979
|
6,388
|
|||||||||
Noncash activities in connection with sale of flight equipment
|
2,648
|
—
|
78,722
|
4. |
INVESTMENT IN FINANCE LEASE
|
December 31, 2018
|
December 31, 2017
|
|||||||
Total minimum lease payments receivable
|
$
|
11,400
|
$
|
13,200
|
||||
Estimated unguaranteed residual value of leased asset
|
4,227
|
4,227
|
||||||
Unearned finance income
|
(2,805
|
)
|
(3,481
|
)
|
||||
Net Investment in Finance Lease
|
$
|
12,822
|
$
|
13,946
|
Year ending December 31,
|
(Dollars in thousands)
|
|||
2019
|
$
|
1,800
|
||
2020
|
1,800
|
|||
2021
|
1,800
|
|||
2022
|
1,800
|
|||
2023
|
1,800
|
|||
Thereafter
|
2,400
|
|||
Future minimum rental payments under finance lease
|
$
|
11,400
|
5. |
FLIGHT EQUIPMENT HELD FOR SALE
|
6. |
FLIGHT EQUIPMENT HELD FOR OPERATING LEASE
|
December 31, 2018
|
||||
Flight equipment held for sale, net
|
$
|
163,236
|
||
Flight equipment held for operating lease, net
|
605,058
|
|||
Maintenance rights
|
189,864
|
|||
Other assets, net (Portfolio B orderbook value)
|
103,951
|
|||
Security deposits
|
14,477
|
|||
Maintenance payment liability, net
|
22,743
|
|||
Other liabilities (lease discounts)
|
25,539
|
December 31, 2018
|
December 31, 2017
|
|||||||
Cost
|
$
|
3,900,938
|
$
|
3,574,202
|
||||
Accumulated depreciation
|
(672,920
|
)
|
(612,458
|
)
|
||||
Flight equipment held for operating lease, net
|
$
|
3,228,018
|
$
|
2,961,744
|
December 31, 2018
|
December 31, 2017
|
|||||||||||||||
Europe:
|
||||||||||||||||
United Kingdom
|
$
|
169,763
|
5
|
%
|
$
|
128,116
|
4
|
%
|
||||||||
Spain
|
168,534
|
5
|
%
|
175,593
|
6
|
%
|
||||||||||
Turkey
|
22,843
|
1
|
%
|
135,764
|
5
|
%
|
||||||||||
Other
|
242,711
|
8
|
%
|
251,345
|
8
|
%
|
||||||||||
Europe — Total
|
603,851
|
19
|
%
|
690,818
|
23
|
%
|
||||||||||
Asia and South Pacific:
|
||||||||||||||||
India
|
690,193
|
21
|
%
|
601,072
|
20
|
%
|
||||||||||
Philippines
|
276,237
|
9
|
%
|
268,504
|
9
|
%
|
||||||||||
Indonesia
|
296,390
|
9
|
%
|
204,840
|
7
|
%
|
||||||||||
Malaysia
|
394,441
|
12
|
%
|
76,706
|
3
|
%
|
||||||||||
China
|
177,393
|
5
|
%
|
186,083
|
6
|
%
|
||||||||||
Other
|
161,330
|
6
|
%
|
75,665
|
2
|
%
|
||||||||||
Asia and South Pacific — Total
|
1,995,984
|
62
|
%
|
1,412,870
|
47
|
%
|
||||||||||
Mexico, South and Central America — Total
|
58,202
|
2
|
%
|
162,274
|
6
|
%
|
||||||||||
North America:
|
||||||||||||||||
United States
|
126,498
|
4
|
%
|
147,580
|
5
|
%
|
||||||||||
Other
|
49,320
|
1
|
%
|
52,182
|
2
|
%
|
||||||||||
North America — Total
|
175,818
|
5
|
%
|
199,762
|
7
|
%
|
||||||||||
Middle East and Africa:
|
||||||||||||||||
Ethiopia
|
312,977
|
10
|
%
|
322,896
|
11
|
%
|
||||||||||
Other
|
81,186
|
2
|
%
|
116,273
|
4
|
%
|
||||||||||
Middle East and Africa — Total
|
394,163
|
12
|
%
|
439,169
|
15
|
%
|
||||||||||
Off-Lease — Total
|
—
|
—
|
56,851
|
2
|
%
|
|||||||||||
Total flight equipment held for operating lease, net
|
$
|
3,228,018
|
100
|
%
|
$
|
2,961,744
|
100
|
%
|
Years ended
|
||||||||||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||||||||||
Europe:
|
||||||||||||||||||||||||
United Kingdom
|
$
|
31,259
|
8
|
%
|
$
|
29,182
|
8
|
%
|
$
|
34,498
|
11
|
%
|
||||||||||||
Spain
|
17,267
|
4
|
%
|
11,199
|
3
|
%
|
5,361
|
2
|
%
|
|||||||||||||||
Turkey
|
12,114
|
3
|
%
|
17,103
|
5
|
%
|
24,593
|
8
|
%
|
|||||||||||||||
Germany
|
—
|
—
|
26,457
|
8
|
%
|
13,836
|
4
|
%
|
||||||||||||||||
Other
|
31,995
|
8
|
%
|
29,180
|
9
|
%
|
28,394
|
9
|
%
|
|||||||||||||||
Europe — Total
|
92,635
|
23
|
%
|
113,121
|
33
|
%
|
106,682
|
34
|
%
|
|||||||||||||||
Asia and South Pacific:
|
||||||||||||||||||||||||
India
|
87,492
|
22
|
%
|
64,381
|
18
|
%
|
39,640
|
13
|
%
|
|||||||||||||||
Philippines
|
35,009
|
9
|
%
|
29,825
|
9
|
%
|
29,129
|
9
|
%
|
|||||||||||||||
Indonesia
|
32,336
|
8
|
%
|
16,308
|
5
|
%
|
8,320
|
3
|
%
|
|||||||||||||||
Malaysia
|
26,748
|
7
|
%
|
8,767
|
3
|
%
|
2,647
|
1
|
%
|
|||||||||||||||
China
|
21,103
|
5
|
%
|
22,611
|
6
|
%
|
23,882
|
8
|
%
|
|||||||||||||||
Other
|
18,756
|
4
|
%
|
10,496
|
3
|
%
|
16,320
|
4
|
%
|
|||||||||||||||
Asia and South Pacific — Total
|
221,444
|
55
|
%
|
152,388
|
44
|
%
|
119,938
|
38
|
%
|
|||||||||||||||
Mexico, South and Central America — Total
|
11,415
|
3
|
%
|
17,565
|
5
|
%
|
17,707
|
6
|
%
|
|||||||||||||||
North America:
|
||||||||||||||||||||||||
United States
|
20,147
|
5
|
%
|
17,647
|
5
|
%
|
24,591
|
8
|
%
|
|||||||||||||||
Other
|
6,242
|
2
|
%
|
6,237
|
2
|
%
|
6,223
|
2
|
%
|
|||||||||||||||
North America — Total
|
26,389
|
7
|
%
|
23,884
|
7
|
%
|
30,814
|
10
|
%
|
|||||||||||||||
Middle East and Africa:
|
||||||||||||||||||||||||
Ethiopia
|
30,019
|
8
|
%
|
30,018
|
9
|
%
|
30,084
|
10
|
%
|
|||||||||||||||
Other
|
17,612
|
4
|
%
|
9,918
|
2
|
%
|
8,357
|
2
|
%
|
|||||||||||||||
Middle East and Africa — Total
|
47,631
|
12
|
%
|
39,936
|
11
|
%
|
38,441
|
12
|
%
|
|||||||||||||||
Total Operating Lease Revenue
|
$
|
399,514
|
100
|
%
|
$
|
346,894
|
100
|
%
|
$
|
313,582
|
100
|
%
|
Year ending December 31,
|
(Dollars in thousands)
|
|||
2019
|
$
|
403,535
|
||
2020
|
372,432
|
|||
2021
|
323,232
|
|||
2022
|
272,427
|
|||
2023
|
227,535
|
|||
Thereafter
|
661,006
|
|||
Future minimum rental payments under operating leases
|
$
|
2,260,167
|
Year ending December 31,
|
||||
2019
|
$
|
7,432
|
||
2020
|
4,652
|
|||
2021
|
3,243
|
|||
2022
|
2,744
|
|||
2023
|
1,543
|
|||
Thereafter
|
939
|
|||
Future amortization of lease incentives
|
$
|
20,553
|
7. |
MAINTENANCE RIGHTS
|
December 31, 2018
|
December 31, 2017
|
|||||||
Maintenance rights, net
beginning balance
|
$
|
131,299
|
$
|
101,969
|
||||
Acquisitions
|
189,864
|
25,033
|
||||||
Capitalized to aircraft improvements
|
(9,240
|
)
|
(192
|
)
|
||||
Maintenance rights
settled
with retained maintenance payments
|
(2,369
|
)
|
(465
|
)
|
||||
Cash receipts from maintenance rights
|
(3,013
|
)
|
—
|
|||||
Maintenance rights associated with aircraft
sold
|
(8,334
|
)
|
4,954
|
|||||
Maintenance rights, net
ending balance
|
$
|
298,207
|
$
|
131,299
|
8.
|
OTHER ASSETS
|
December 31, 2018
|
December 31, 2017
|
|||||||
Value added tax receivables, net
|
$
|
6,016
|
$
|
2,915
|
||||
Investment in unconsolidated subsidiary
|
2,908
|
8,196
|
||||||
Portfolio B orderbook value (see Note 6)
|
103,951
|
—
|
||||||
Horizon I Limited equity certificates
|
5,747
|
—
|
||||||
Other assets
|
6,338
|
6,055
|
||||||
Total other assets
|
$
|
124,960
|
$
|
17,166
|
9. |
UNSECURED BORROWINGS
|
Balance as of
|
||||||||
December 31, 2018
|
December 31, 2017
|
|||||||
(Dollars in thousands)
|
||||||||
Outstanding principal balance:
|
||||||||
2021 Notes
|
$
|
325,000
|
$
|
325,000
|
||||
2024 Notes
|
300,000
|
300,000
|
||||||
Total outstanding principal balance
|
625,000
|
625,000
|
||||||
Unamortized debt discounts and loan costs
|
(7,336
|
)
|
(9,078
|
)
|
||||
Unsecured borrowings, net
|
$
|
617,664
|
$
|
615,922
|
If redeemed during the 12-month period
commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2018
|
103.188
|
%
|
||
2019
|
101.594
|
%
|
||
2020 and thereafter
|
100.000
|
%
|
If redeemed during the 12-month period
commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2020
|
102.625
|
%
|
||
2021
|
101.313
|
%
|
||
2022 and thereafter
|
100.000
|
%
|
10.
|
SECURED BORROWINGS
|
Outstanding principal
balance as of
December 31,
|
Weighted average
interest rate
(1)
as of
December 31,
|
|||||||||||||||||
2018
(2)
|
2017
(2)
|
2018
|
2017
|
Maturity date
|
||||||||||||||
Securitization Notes
|
$
|
85,584
|
$
|
101,551
|
3.08
|
%
|
3.06
|
%
|
November 2033
|
|||||||||
Nord LB Facility
|
108,882
|
153,176
|
4.29
|
%
|
4.47
|
%
|
January 2020
|
|||||||||||
CBA Facility
|
—
|
49,080
|
—
|
5.53
|
%
|
N/A
|
||||||||||||
Term Loan
|
407,768
|
431,271
|
5.17
|
%
|
4.25
|
%
|
February 2023
|
|||||||||||
Magellan Acquisition Limited Facility
|
305,226
|
331,768
|
4.18
|
%
|
3.15
|
%
|
December 2025
|
|||||||||||
Fly Acquisition III Facility
|
190,457
|
86,520
|
4.10
|
%
|
3.41
|
%
|
February 2022
|
|||||||||||
Fly Aladdin Acquisition Facility
|
467,179
|
—
|
4.59
|
%
|
—
|
June 2020 – June 2023
|
||||||||||||
Fly Aladdin Engine Funding Facility
|
43,829
|
—
|
4.95
|
%
|
—
|
December 2021 – April 2022
|
||||||||||||
Other Aircraft Secured Borrowings
|
807,882
|
905,525
|
4.44
|
%
|
3.83
|
%
|
December 2020 – June 2028
|
|||||||||||
Total outstanding principal balance
|
2,416,807
|
2,058,891
|
||||||||||||||||
Unamortized debt discounts and loan costs
|
(36,938
|
)
|
(29,216
|
)
|
||||||||||||||
Total secured borrowings, net
|
$
|
2,379,869
|
$
|
2,029,675
|
(1) |
Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.
|
(2) |
As of December 31, 2018 and 2017, accrued interest on secured borrowings totaled $10.9 million and $6.6 million, respectively.
|
Year ending December 31,
|
||||
2019
|
$
|
314,682
|
||
2020
|
303,819
|
|||
2021
|
233,041
|
|||
2022
|
332,380
|
|||
2023
|
865,362
|
|||
Thereafter
|
367,523
|
|||
Future minimum principal payments due
|
$
|
2,416,807
|
11. |
DERIVATIVES
|
Type
|
Quantity
|
Maturity
Date
|
Hedge
Interest
Rate
|
Swap
Contract
Notional
Amount
|
Credit Risk
Adjusted
Fair Value
|
Gain Recognized in
Accumulated
Comprehensive
Loss
|
Loss Recognized
into Earnings
|
||||||||||||||||||
Interest rate swap contracts
|
8
|
11/9/21
-6/11/23
|
0.99%
-4.30
|
%
|
$
|
205,540
|
$
|
3,013
|
$
|
2,529
|
$
|
(87
|
)
|
||||||||||||
Accrued interest
|
—
|
46
|
—
|
—
|
|||||||||||||||||||||
Sub-total
|
8
|
$
|
205,540
|
$
|
3,059
|
$
|
2,529
|
$
|
(87
|
)
|
Type
|
Quantity
|
Maturity
Date
|
Contracted
Fixed
Conversion
Rate to U.S.
Dollar
|
Total
Contracted
USD to be
Received
|
Credit Risk
Adjusted
Fair Value
|
Gain Recognized in
Accumulated
Comprehensive
Loss
|
Loss Recognized
into Earnings
|
||||||||||||||||
Cross currency swap contract
|
1
|
11/26/25
|
1 EURO to $1.3068
|
$
|
68,494
|
$
|
2,704
|
$
|
2,366
|
$
|
—
|
||||||||||||
Accrued rent
|
—
|
17
|
—
|
—
|
|||||||||||||||||||
Sub-total
|
1
|
$
|
68,494
|
$
|
2,721
|
$
|
2,366
|
$
|
—
|
||||||||||||||
Total – designated derivative assets
|
9
|
5,780
|
4,895
|
(87
|
)
|
Type
|
Quantity
|
Maturity
Date
|
Hedge
Interest
Rate
|
Swap Contract Notional Amount
|
Credit Risk
Adjusted Fair
Value
|
Loss Recognized
in Accumulated
Comprehensive
Loss
|
Loss
Recognized
into
Earnings
|
||||||||||||||||||
Interest rate swap contracts
|
26
|
2/15/22-
12/8/25
|
2.50%-
3.13
|
%
|
$
|
615,570
|
$
|
(7,621
|
)
|
$
|
(5,906
|
)
|
$
|
(366
|
)
|
||||||||||
Accrued interest
|
—
|
(347
|
)
|
—
|
—
|
||||||||||||||||||||
Total – designated derivative liabilities
|
26
|
$
|
615,570
|
$
|
(7,968
|
)
|
$
|
(5,906
|
)
|
$
|
(366
|
)
|
Type
|
Quantity
|
Maturity
Date
|
Hedge Interest
Rate
|
Swap
Contract
Notional
Amount
|
Credit Risk
Adjusted Fair
Value
|
Gain Recognized
into Earnings
|
|||||||||||||||
Interest rate swap contracts
|
1
|
12/14/20
|
2.25
|
%
|
$
|
55,439
|
$
|
144
|
$
|
132
|
|||||||||||
Accrued interest
|
—
|
5
|
—
|
||||||||||||||||||
Total – dedesignated derivative assets
|
1
|
$
|
55,439
|
$
|
149
|
$
|
132
|
Type
|
Quantity
|
Maturity
Date
|
Hedge Interest
Rate
|
Swap
Contract
Notional
Amount
|
Credit Risk
Adjusted Fair
Value
|
Gain Recognized
into Earnings
|
|||||||||||||||
Interest rate swap contract
|
1
|
2/9/19
|
3.47
|
%
|
$
|
262,734
|
$
|
(256
|
)
|
$
|
906
|
||||||||||
Accrued interest
|
—
|
(334
|
)
|
—
|
|||||||||||||||||
Total – dedesignated derivative liability
|
1
|
$
|
262,734
|
$
|
(590
|
)
|
$
|
906
|
12. |
INCOME TAXES
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Current tax expense (benefit):
|
||||||||||||
Ireland
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Luxembourg
|
44
|
195
|
145
|
|||||||||
Australia
|
(138
|
)
|
4,062
|
1,742
|
||||||||
Other
|
50
|
43
|
33
|
|||||||||
Current tax expense (benefit) — total
|
(44
|
)
|
4,300
|
1,920
|
||||||||
Deferred tax expense (benefit):
|
||||||||||||
Ireland
|
9,865
|
8,710
|
(10,812
|
)
|
||||||||
Australia
|
105
|
(1,743
|
)
|
1,615
|
||||||||
Other
|
—
|
65
|
—
|
|||||||||
Deferred tax expense (benefit) — total
|
9,970
|
7,032
|
(9,197
|
)
|
||||||||
Total income tax expense (benefit)
|
$
|
9,926
|
$
|
11,332
|
$
|
(7,277
|
)
|
December 31,
2018
|
December 31,
2017
|
|||||||
Deferred tax asset:
|
||||||||
Net operating loss carry forwards
|
$
|
177,663
|
$
|
170,960
|
||||
Net unrealized losses on derivative instruments
|
773
|
390
|
||||||
Basis difference on acquisition of GAAM Australian assets
|
6,619
|
7,314
|
||||||
Other
|
168
|
55
|
||||||
Valuation allowance
|
(37,429
|
)
|
(39,484
|
)
|
||||
Total deferred tax asset
|
147,794
|
139,235
|
||||||
Deferred tax liability:
|
||||||||
Excess of tax depreciation over book depreciation
|
(171,725
|
)
|
(153,447
|
)
|
||||
Book/tax differences identified in connection with GAAM Portfolio acquisition
|
(112
|
)
|
(412
|
)
|
||||
Net earnings of non-European Union member subsidiaries
|
(3,654
|
)
|
(3,745
|
)
|
||||
Withholding tax on Australian unrepatriated earnings
|
(2,054
|
)
|
(1,800
|
)
|
||||
Total deferred tax liability
|
(177,545
|
)
|
(159,404
|
)
|
||||
Deferred tax liability, net
|
$
|
(29,751
|
)
|
$
|
(20,169
|
)
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Irish statutory corporate tax rate on trading income
|
12.5
|
%
|
12.5
|
%
|
12.5
|
%
|
||||||
Valuation allowances
|
(1.4
|
)%
|
59.9
|
%
|
(19.8
|
)%
|
||||||
Tax impact of repurchased and resold Notes
|
0.1
|
%
|
(0.8
|
)%
|
1.3
|
%
|
||||||
Foreign tax rate differentials
|
(2.8
|
)%
|
(18.4
|
)%
|
7.8
|
%
|
||||||
True-up of prior year tax provision
|
—
|
2.2
|
%
|
—
|
||||||||
Non-taxable gain on debt extinguishment
|
—
|
—
|
0.3
|
%
|
||||||||
Non-deductible interest expense, transaction fees and expenses
|
1.8
|
%
|
12.2
|
%
|
(4.8
|
)%
|
||||||
Deductible intra-group interest
|
—
|
—
|
30.9
|
%
|
||||||||
Unrealized foreign exchange loss on re-valuation of deferred tax balances
|
0.1
|
%
|
0.5
|
%
|
(8.6
|
)%
|
||||||
Withholding tax
|
—
|
13.3
|
%
|
—
|
||||||||
Other
|
0.1
|
%
|
(0.1
|
)%
|
0.4
|
%
|
||||||
Effective tax rate
|
10.4
|
%
|
81.3
|
%
|
20.0
|
%
|
13. |
OTHER LIABILITIES
|
December 31,
2018
|
December 31,
2017
|
|||||||
Current tax payable
|
$
|
50
|
$
|
4,226
|
||||
Lease discount
|
25,539
|
—
|
||||||
Lease incentive obligation
|
14,020
|
20,306
|
||||||
Deferred rent
|
15,067
|
8,444
|
||||||
Refundable deposits
|
3,420
|
805
|
||||||
Other
|
22,306
|
5,875
|
||||||
Total other liabilities
|
$
|
80,402
|
$
|
39,656
|
14. |
SHAREHOLDERS’ EQUITY
|
15. |
SHARE-BASED COMPENSATION
|
16.
|
EARNINGS PER SHARE
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Numerator
|
||||||||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Less:
|
||||||||||||
Dividends declared and paid to shareholders
|
—
|
—
|
—
|
|||||||||
Dividend equivalents paid to vested RSUs and SARs
|
—
|
—
|
—
|
|||||||||
Net income (loss) attributable to common shareholders
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Denominator
|
||||||||||||
Weighted average shares outstanding-Basic
|
29,744,083
|
30,307,357
|
33,239,001
|
|||||||||
Dilutive common equivalent shares:
|
||||||||||||
RSUs
|
—
|
—
|
—
|
|||||||||
SARs
|
39,821
|
46,068
|
—
|
|||||||||
Weighted average shares outstanding-Diluted
|
29,783,904
|
30,353,425
|
33,239,001
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Undistributed income (excess distribution)
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
|||||
Basic earnings (loss) per share
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
|||||
Diluted
|
||||||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Undistributed income (excess distribution)
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
|||||
Diluted earnings (loss) per share
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
17. |
COMMITMENTS AND CONTINGENCIES
|
18.
|
RELATED PARTY TRANSACTIONS
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
||||||||||||||||||||||
Fixed base fee payments
(1)
|
$
|
250
|
$
|
250
|
$
|
250
|
$
|
238
|
$
|
—
|
$
|
—
|
$
|
988
|
||||||||||||||
Fixed administrative agency fee payments due by B&B Air Funding
(1)
|
76
|
37
|
24
|
21
|
12
|
1
|
171
|
|||||||||||||||||||||
Fixed administrative services fee due under the Term Loan
(2)
|
441
|
385
|
300
|
212
|
61
|
62
|
1,461
|
|||||||||||||||||||||
Fixed administrative services fee due under the Magellan Acquisition Limited Facility
(2)
|
228
|
228
|
226
|
215
|
204
|
601
|
1,702
|
|||||||||||||||||||||
Fixed administrative services fee due under Fly Acquisition III
Facility
(2)
|
228
|
228
|
213
|
91
|
67
|
213
|
1,040
|
|||||||||||||||||||||
Fixed administrative services fee due under Fly Aladdin Acquisition Facility
(2)
|
372
|
370
|
349
|
306
|
176
|
255
|
1,828
|
|||||||||||||||||||||
Fixed administrative services fee due under Fly Aladdin Engine Funding
Facility
(2)
|
12
|
12
|
12
|
12
|
10
|
—
|
58
|
|||||||||||||||||||||
Fixed administrative agency fee payments due by other subsidiaries
(2)
|
312
|
280
|
225
|
197
|
253
|
289
|
1,556
|
|||||||||||||||||||||
Fixed payments for Management Expenses
(1) (3)
|
9,561
|
9,561
|
9,561
|
9,561
|
9,561
|
62,146
|
109,951
|
|||||||||||||||||||||
Acquisition fees related to Portfolio B in the AirAsia Transactions
|
3,013
|
4,545
|
8,336
|
—
|
—
|
—
|
15,894
|
|||||||||||||||||||||
Disposition fees on flight equipment held for sale
|
5,264
|
—
|
—
|
—
|
—
|
—
|
5,264
|
|||||||||||||||||||||
Total
|
$
|
19,757
|
$
|
15,896
|
$
|
19,496
|
$
|
10,853
|
$
|
10,344
|
$
|
63,567
|
$
|
139,913
|
(1) |
Assumes Consumer Price Index (“CPI”) rates in effect as of December 31, 2018 remain constant in future
periods.
|
(2) |
Assumes number of aircraft and engines at December 31, 2018 remain constant in future periods.
|
(3) |
Assumes automatic extension for one additional term of five years to June 30, 2030. Also assumes net book values of aircraft and engines at December 31, 2018 remains
constant in future periods.
|
19. |
FAIR VALUE MEASUREMENTS
|
As of December 31, 2018
|
As of December 31, 2017
|
|||||||||||||||
Principal
Amount
Outstanding
|
Fair Value
|
Principal
Amount
Outstanding
|
Fair Value
|
|||||||||||||
Securitization Notes
|
$
|
85,584
|
$
|
80,770
|
$
|
101,551
|
$
|
95,839
|
||||||||
Term Loan
|
407,768
|
396,554
|
431,271
|
431,271
|
||||||||||||
2021 Notes
|
325,000
|
329,875
|
325,000
|
339,235
|
||||||||||||
2024 Notes
|
300,000
|
279,390
|
300,000
|
301,500
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
December 31, 2018:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
5,929
|
—
|
$
|
5,929
|
||||||||||
Derivative liabilities
|
—
|
8,558
|
—
|
8,558
|
||||||||||||
Investment in equity certificates
|
—
|
5,747
|
—
|
5,747
|
||||||||||||
December 31, 2017:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
2,643
|
—
|
$
|
2,643
|
||||||||||
Derivative liabilities
|
—
|
7,344
|
—
|
7,344
|
20. |
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED FINANCIAL INFORMATION
|
March 31,
2018
|
June 30,
2018
|
September
30, 2018
|
December 31,
2018
|
|||||||||||||
Total revenues
|
$
|
88,755
|
$
|
102,673
|
$
|
104,566
|
$
|
122,305
|
||||||||
Net income
|
$
|
9,630
|
$
|
24,344
|
$
|
20,740
|
$
|
31,009
|
||||||||
Earnings per share — Basic
|
$
|
0.34
|
$
|
0.87
|
$
|
0.68
|
$
|
0.95
|
||||||||
Earnings per share — Diluted
|
$
|
0.34
|
$
|
0.87
|
$
|
0.68
|
$
|
0.95
|
March 31,
2017
|
June 30,
2017
|
September
30, 2017
|
December 31,
2017
|
|||||||||||||
Total revenues
|
$
|
79,266
|
$
|
79,832
|
$
|
86,219
|
$
|
107,934
|
||||||||
Net income (loss)
|
$
|
5,052
|
$
|
2,880
|
$
|
(12,504
|
)
|
$
|
7,170
|
|||||||
Earnings (loss) per share — Basic
|
$
|
0.16
|
$
|
0.09
|
$
|
(0.43
|
)
|
$
|
0.25
|
|||||||
Earnings (loss) per share — Diluted
|
$
|
0.16
|
$
|
0.09
|
$
|
(0.43
|
)
|
$
|
0.25
|
21. |
SUBSEQUENT EVENTS
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
43,233
|
$
|
157,014
|
||||
Notes receivable from subsidiaries
|
466,729
|
375,477
|
||||||
Investments in subsidiaries
|
1,019,048
|
985,476
|
||||||
Other assets, net
|
11,019
|
9,851
|
||||||
Total assets
|
$
|
1,540,029
|
$
|
1,527,818
|
||||
Liabilities
|
||||||||
Payable to related parties
|
$
|
729
|
$
|
223
|
||||
Payable to subsidiaries
|
202,298
|
349,585
|
||||||
Unsecured borrowings, net
|
617,664
|
615,922
|
||||||
Deferred tax liability, net
|
3,066
|
3,739
|
||||||
Accrued and other liabilities
|
14,162
|
14,640
|
||||||
Total liabilities
|
837,919
|
984,109
|
||||||
Shareholders’ equity
|
702,110
|
543,709
|
||||||
Total liabilities and shareholders’ equity
|
$
|
1,540,029
|
$
|
1,527,818
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Revenues
|
||||||||||||
Equity earnings (loss) from subsidiaries
|
$
|
90,175
|
$
|
35,208
|
$
|
(24,385
|
)
|
|||||
Equity earnings (loss) from unconsolidated subsidiary
|
(54
|
)
|
496
|
530
|
||||||||
Intercompany management fee income
|
16,844
|
12,124
|
8,866
|
|||||||||
Intercompany interest income
|
25,740
|
34,068
|
44,394
|
|||||||||
Interest and other income
|
1,072
|
809
|
410
|
|||||||||
Total revenues
|
133,777
|
82,705
|
29,815
|
|||||||||
Expense
|
||||||||||||
Interest expense
|
38,211
|
45,970
|
48,013
|
|||||||||
Selling, general and administrative
|
12,314
|
12,630
|
11,803
|
|||||||||
Ineffective, dedesignated and terminated derivatives
|
(1,798
|
)
|
—
|
—
|
||||||||
Loss on modification and extinguishment of debt
|
—
|
19,655
|
—
|
|||||||||
Total expenses
|
48,727
|
78,255
|
59,816
|
|||||||||
Net income (loss) before provision (benefit) for income taxes
|
85,050
|
4,450
|
(30,001
|
)
|
||||||||
Provision (benefit) for income taxes
|
(673
|
)
|
1,852
|
(889
|
)
|
|||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Weighted average number of shares:
|
||||||||||||
Basic
|
29,744,083
|
30,307,357
|
33,239,001
|
|||||||||
Diluted
|
29,783,904
|
30,353,425
|
33,239,001
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
|||||
Diluted
|
$
|
2.88
|
$
|
0.09
|
$
|
(0.88
|
)
|
Years ended
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income (loss)
|
$
|
85,723
|
$
|
2,598
|
$
|
(29,112
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
|
||||||||||||
Equity (earnings) loss from subsidiaries
|
(90,175
|
)
|
(35,208
|
)
|
24,385
|
|||||||
Equity (earnings) loss from unconsolidated subsidiary
|
54
|
(496
|
)
|
(530
|
)
|
|||||||
Deferred income taxes
|
(673
|
)
|
1,852
|
(12,139
|
)
|
|||||||
Amortization of debt discount and other
|
1,742
|
1,931
|
1,982
|
|||||||||
Loss on modification and extinguishment of debt
|
—
|
19,655
|
—
|
|||||||||
Distributions from unconsolidated subsidiary
|
2,131
|
—
|
—
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Payable to subsidiaries
|
(104,303
|
)
|
6,144
|
(162,229
|
)
|
|||||||
Other assets
|
(709
|
)
|
(1,121
|
)
|
476
|
|||||||
Payable to related parties
|
506
|
(683
|
)
|
856
|
||||||||
Accrued and other liabilities
|
(477
|
)
|
(9,478
|
)
|
12,622
|
|||||||
Net cash flows used in operating activities
|
(106,181
|
)
|
(14,806
|
)
|
(163,689
|
)
|
||||||
Cash Flows from Investing Activities
|
||||||||||||
Capital contributions to subsidiaries
|
(8,986
|
)
|
—
|
—
|
||||||||
Distributions received from subsidiaries
|
25,792
|
—
|
—
|
|||||||||
Distributions received from unconsolidated subsidiary
|
3,103
|
—
|
—
|
|||||||||
Advances of notes receivable to subsidiaries
|
(265,311
|
)
|
(48,335
|
)
|
(40,172
|
)
|
||||||
Repayment of notes receivable from subsidiaries
|
223,925
|
144,718
|
334,556
|
|||||||||
Investment in Horizon I Limited equity certificates
|
(5,747
|
)
|
—
|
—
|
||||||||
Net cash flows provided by (used in) investing activities
|
(27,224
|
)
|
96,383
|
294,384
|
||||||||
Cash Flows from Financing Activities
|
||||||||||||
Proceeds from issuance of unsecured borrowings
|
—
|
295,150
|
—
|
|||||||||
Repayment of unsecured borrowings
|
—
|
(375,000
|
)
|
—
|
||||||||
Debt modification and extinguishment costs
|
—
|
(16,287
|
)
|
—
|
||||||||
Debt issuance costs
|
—
|
(917
|
)
|
—
|
||||||||
Shares issued
|
19,624
|
—
|
—
|
|||||||||
Shares repurchased
|
—
|
(57,286
|
)
|
(40,257
|
)
|
|||||||
Net cash flows provided by (used in) financing activities
|
19,624
|
(154,340
|
)
|
(40,257
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
(113,781
|
)
|
(72,763
|
)
|
90,438
|
|||||||
Cash and cash equivalents at beginning of period
|
157,014
|
229,777
|
139,339
|
|||||||||
Cash and cash equivalents at end of period
|
$
|
43,233
|
$
|
157,014
|
$
|
229,777
|
||||||
Supplemental Disclosure:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
36,425
|
$
|
41,883
|
$
|
46,032
|
||||||
Taxes
|
—
|
—
|
—
|
|||||||||
Noncash Activities
:
|
||||||||||||
Noncash investing activities:
|
||||||||||||
Capital contribution to subsidiaries
|
7
|
109,391
|
207,340
|
|||||||||
Distributions from subsidiaries
|
3,386
|
76,451
|
55,039
|
|||||||||
Intercompany sale of subsidiaries
|
39,605
|
—
|
—
|
Exhibit
Number
|
Description of Exhibit
|
|
Memorandum of Association
(1)
|
||
Amended and Restated Bye-Laws of Fly Leasing Ltd
.
(2)
|
||
Deposit Agreement between Deutsche Bank Trust Company Americas and Babcock &
Brown Air Limited.
(1)
|
||
Servicing Agreement, dated as of October 2, 2007, among Babcock & Brown Aircraft
Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(1)
|
||
Administrative Services Agreement, dated as of October 2, 2007, among Deutsche Bank
Trust Company Americas, AMBAC Assurance Corporation, Babcock & Brown Air Management Co. Limited and Babcock & Brown Air Funding I Limited.
(1)
|
||
Trust Indenture, dated as of October 2, 2007, among Deutsche Bank Trust Company
Americas, BNP Paribas, AMBAC Assurance Corporation and Babcock & Brown Air Funding I Limited.
(1)
|
||
Security Trust Agreement, dated as of October 2, 2007, between Deutsche Bank Trust
Company Americas, and Babcock & Brown Air Funding I Limited.
(1)
|
||
Cash Management Agreement between Deutsche Bank Trust Company Americas and Babcock
& Brown Air Funding I Limited.
(1)
|
||
Form of Director Service Agreement between Babcock & Brown Air Limited and each
director thereof.
(1)
|
||
Amendment No. 1 to Servicing Agreement, dated as of April 29, 2010, among Babcock
& Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(3)
|
||
Fly Leasing Limited Omnibus Incentive Plan
.
(3)
|
||
Form of Stock Appreciation Right Award Agreement
.
(3)
|
||
Form of Restricted Stock Unit Award Agreement
.
(3)
|
||
Loan Agreement dated as of November 14, 2007, among Global Aviation Holdings Fund
Limited, GAHF (Ireland) Limited, Caledonian Aviation Holdings Limited and Norddeutsche Landesbank Girozentrale.
(4)
|
||
Form of Loan Agreement among Hobart Aviation Holdings Limited, Norddeutsche
Landesbank Girozentrale and each borrower thereof.
(4)
|
||
Form of Servicing Agreement among BBAM US LP, BBAM Aviation Services Limited and each
company thereof.
(17)
|
||
Securities Purchase Agreement dated November 30, 2012, by and among Fly Leasing
Limited, Summit Aviation Partners LLC and such persons identified therein.
(8)
|
||
4.15
|
Purchase Agreement dated November 30, 2012 by and among BBAM Limited Partnership, Summit Aviation Partners LLC, Fly-BBAM Holdings Ltd., Summit
Aviation Management Co., Ltd. and such persons identified therein.
(6)
|
|
First Amendment to Purchase
Agreement
dated December 28, 2012 by and among Fly Leasing Limited, Summit Aviation
Partners LLC and such persons identified therein
.
(8)
|
Exhibit
Number
|
Description of Exhibit
|
|
Registration Rights Agreement dated as of December 28, 2012, by and among Fly Leasing
Limited and each shareholder identified therein.
(8)
|
||
Amended and Restated Servicing Agreement dated as of January 24, 2013, by and among
BBAM US LP, BBAM Aviation Services Limited and Fly Leasing Limited.
(8)
|
||
Indenture dated December 11, 2013 between Fly Leasing Limited and Wells Fargo Bank,
National Association.
(7)
|
||
First Supplemental Indenture dated December 11, 2013 between Fly Leasing Limited and
Wells Fargo Bank, Nation Association.
(7)
|
||
Second Supplemental Indenture dated as of October 3, 2014, between Fly Leasing
Limited and Wells Fargo Bank, National Association.
(10)
|
||
Amendment No. 1 to Trust Indenture, dated as of October 24, 2014, by and among
Babcock & Brown Air Funding I Limited, Deutsche Bank Trust Company Americas, BNP Paribas and AMBAC Assurance Corporation.
(12)
|
||
Amendment No. 2 to Servicing Agreement, dated as of October 24, 2014, by and among
BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(12)
|
||
First Amendment to Amended and Restated Fly Leasing Limited Management Agreement,
dated June 19, 2015, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(13)
|
||
Sale Agreement dated June 19, 2015, among certain sellers and ECAF I Ltd.
(13)
|
||
Servicing Agreement dated as of February 26, 2016, among BBAM US LP, BBAM Aviation
Services Limited and Fly Acquisition III Limited.
(14)
|
||
Second Amendment to Amended and Restated Fly Leasing Limited Management Agreement,
dated July 27, 2016, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(16)
|
||
Amendment No. 3 to Servicing Agreement, dated as of February 1, 2017, by and among
BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(17)
|
||
Third Amendment to Amended and Restated Fly Leasing Limited Management Agreement,
dated as of February 1, 2017, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(17)
|
||
Fee Rebate Side Letter, dated as of February 1, 2017, by and among Babcock &
Brown Air Funding I Limited, Fly Leasing Management Co. Limited, and AMBAC Assurance Corporation.
(17)
|
||
Guaranty [Fly 2016A Warehouse] dated February 26, 2016 by Fly Leasing Limited.
(17)
|
||
Third Supplemental Indenture dated as of October 16, 2017, between Fly Leasing
Limited and Wells Fargo Bank, National Association.
(19)
|
||
Servicing Agreement dated as of December 8, 2017, among BBAM US LP, BBAM Aviation
Services Limited and Magellan Acquisition Limited
.
(21)
|
Exhibit
Number
|
Description of Exhibit
|
|
Guaranty [Fly 2017A Term Loan] dated December 8, 2017 by Fly Leasing Limited.
(21)
|
||
Share Purchase Agreement, dated February 28, 2018, between Asia Aviation Capital
Limited, Fly Aladdin Holdings Limited, Fly Leasing Limited and AirAsia Berhad.
(22)
|
||
Aircraft Sale and Purchase Agreement, dated February 28, 2018, between Asia Aviation
Capital Limited, Fly Aladdin Holdings Limited and AirAsia Berhad.
(22)
|
||
Aircraft Sale and Purchase Option Agreement, dated April 26, 2018, but having effect
between the parties as of February 28, 2018, between Asia Aviation Capital Limited, Fly Aladdin Holdings Limited and AirAsia Berhad.
(22)
|
||
Amended and Restated Commitment Letter, dated May 1, 2018, between BNP Paribas,
Citibank, N.A., Commonwealth Bank of Australia, Singapore Branch, Deutsche Bank AG, Singapore Branch and Fly Leasing Limited.
(22)
|
||
Equity Commitment Letter, dated February 28, 2018, between Meridian Aviation Partners
Limited and Fly Leasing Limited.
(22)
|
||
Equity Commitment Letter, dated February 28, 2018, between Summit Aviation Holdings
LLC and Fly Leasing Limited.
(22)
|
||
Amended and Restated Purchase Commitment Letter (Portfolio C Aircraft and Portfolio D
Aircraft), dated May 3, 2018, but having effect between the parties as of February 28, 2018, between Fly Leasing Limited and Nomura Babcock & Brown Co., Ltd.
(22)
|
||
Amended and Restated Delivery Side Letter (Portfolio C and Portfolio D), dated May 3,
2018, but having effect between the parties as of February 28, 2018, between Fly Leasing Limited and Incline B Aviation Limited Partnership.
(22)
|
||
Securities Purchase Agreement, dated July 11, 2018, between Fly Leasing Limited and
Meridian Aviation Partners Limited.
(23)
|
||
Securities Purchase Agreement, dated July 11, 2018, between Fly Leasing Limited and
Summit Aviation Holdings LLC.
(23)
|
||
Registration Rights Agreement, dated July 18, 2018, among Fly Leasing Limited and
shareholders named therein.
(23)
|
||
Subscription Agreement, dated July 18, 2018, among Fly Leasing Limited, AirAsia Group
Berhad and AirAsia Berhad.
(23)
|
||
Registration Rights Agreement, dated July 18, 2018, between Fly Leasing Limited and
AirAsia Group Berhad.
(23)
|
||
Fly SPA Amendment Agreement (No. 1) dated July 11, 2018, among Fly Aladdin Holdings
Limited, Fly Leasing Limited, Asia Aviation Capital Limited and AirAsia Group Berhad.
(23)
|
||
Fly SPA Amendment Agreement (No. 2) dated July 18, 2018, among Fly Aladdin Holdings
Limited, Fly Leasing Limited, Asia Aviation Capital Limited and AirAsia Group Berhad.
(23)
|
||
Servicing Agreement dated June 15, 2018, among BBAM Aviation Services Limited, BBAM
US LP, Fly Aladdin Funding Limited, Fly Aladdin MaltaCo Limited and each Borrower Group Company that becomes a party thereto.
(23)
|
||
4.52
|
Purchase Agreement dated November 30, 2018 among the sellers identified therein, Horizon Aircraft Finance I Limited, Horizon Aircraft Finance I LLC and the other
purchasers identified therein.
|
|
List of the Company’s subsidiaries.
|
Exhibit
Number
|
Description of Exhibit
|
|
Aircraft Mortgage and Security Agreement dated as of August 9, 2012, among Fly
Funding II S.A.R.L., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, The Initial Intermediate Lessees, The Initial Lessor Subsidiaries, The Additional Grantors Referred to Therein and
Wells Fargo Bank Northwest, National Association.
(5)
|
||
Amended and Restated Senior Secured Credit Agreement dated July 3, 2013 among Fly
Acquisition II Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Deutsche Bank Trust Company Americas, as Security Trustee and as Administrative Agent.
(9)
|
||
Amended and Restated Term Loan Credit Agreement dated as of November 21, 2013 among
Fly Funding II S.A.R.L., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, each other Guarantor Party referred to therein, the Lenders identified therein, Citibank, N.A., and Well Fargo
Bank Northwest, National Association.
(11)
|
||
Amendment to Credit Agreement, dated as of April 22, 2015, among Fly Funding II S.à
r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative
Agent.
(13)
|
||
Facility Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly
Acquisition III Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Note Purchase Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly
Acquisition III Limited, the Purchasers party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Credit Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly
Acquisition III Limited, the Banks party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Second Amendment to Credit Agreement, dated as of October 19, 2016, among Fly Funding
II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as
Administrative Agent.
(15)
|
||
Third Amendment to Credit Agreement, dated as of April 28, 2017, among Fly Funding II
S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative
Agent.
(18)
|
||
Fourth Amendment to Credit Agreement, dated as of November 1, 2017, among Fly Funding
II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as
Administrative Agent.
(20)
|
||
Facility Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan
Acquisition Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(21)
|
||
Note Purchase Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among
Magellan Acquisition Limited, the Purchasers party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(21)
|
||
Credit Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan
Acquisition Limited, the Banks party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(21)
|
Exhibit
Number
|
Description of Exhibit
|
|
Security Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan
Acquisition Limited, the Grantors thereto, and Wells Fargo Bank, National Association, as Security Trustee.
(21)
|
||
Security Agreement [Fly 2016A Warehouse] dated February 26, 2016 among Fly
Acquisition III Limited, the Grantors party thereto, and Well Fargo Bank, National Association as Security Trustee.
(21)
|
||
Senior Secured Credit Agreement dated June 15, 2018, among Fly Aladdin Funding
Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta, the lenders party thereto, Wilmington Trust (London) Limited, as Security Trustee and BNP Paribas, as Administrative Agent.
(23)
|
||
Borrower Parent Security Agreement dated June 15, 2018, between Fly Aladdin Holdings
Limited, as Grantor and Wilmington Trust (London) Limited, as Security Trustee.
(23)
|
||
Co-Borrower Security Agreement dated June 15, 2018, between Fly Aladdin Funding
Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta and Wilmington Trust (London) Limited, as Security Trustee.
(23)
|
||
Deed of Limited Guaranty dated June 15, 2018, by Fly Leasing Limited.
(23)
|
||
Amendment to Senior Secured Credit Agreement dated July 19, 2018, among Fly Aladdin
Funding Limited, as Borrower, Fly Aladdin MaltaCo Limited, as Fly Malta, the lenders, Wilmington Trust (London) Limited, as Security Trustee and BNP Paribas, as Administrative Agent.
(23)
|
||
Omnibus Agreement No. 1 [Fly 2016A Warehouse] dated as of December 15, 2017 among Fly
Acquisition III Limited, the Lenders party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(24)
|
||
Amendment No. 2 [Fly 2016A Warehouse] dated as of September 6, 2018 among Fly
Acquisition III Limited, the Lenders party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(24)
|
||
10.23
|
Form of Loan Amendment Letter Agreement among Hobart Aviation Holdings Limited, Norddeutsche Landesbank Girozentrale and each borrower thereof.
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
||
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
||
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
|
||
Consent of Deloitte & Touche LLP.
|
||
101
|
The following materials from the Company’s Annual Report on Form 20-F for the year ended December 31, 2018, formatted in XBRL (eXtensible Business
Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2018 and 2017, (ii) Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Income for
the years ended December 31, 2018, 2017 and 2016, (iv) Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2016, 2017 and 2018, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2018,
2017 and 2016, and (vi) Notes to Consolidated Financial Statements for the year ended December 31, 2018.
|
(1) |
Previously filed with the Registration Statement on Form F-1, File No. 333-145994.
|
(2) |
Previously filed as an exhibit on Form 6-K dated June 30, 2010.
|
(3) |
Previously filed as an exhibit on Form 6-K dated May 7, 2010.
|
(4) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2011.
|
(5) |
Previously filed as an exhibit on Form 6-K dated November 13, 2012.
|
(6) |
Confidential treatment has been requested with certain portions of this exhibit. This exhibit omits the information subject to this confidential treatment request. The
omitted information has been filed separately with the Securities and Exchange Commission.
|
(7) |
Previously filed as an exhibit on Form 6-K dated December 11, 2013.
|
(8) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2012.
|
(9) |
Previously filed as an exhibit on Form 6-K dated August 6, 2013.
|
(10) |
Previously filed as an exhibit on Form 6-K dated October 3, 2014.
|
(11) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2013.
|
(12) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2014.
|
(13) |
Previously filed as an exhibit on Form 6-K dated August 5, 2015.
|
(14) |
Previously filed as an exhibit on Form 6-K dated May 19, 2016.
|
(15) |
Previously filed as an exhibit on Form 6-K dated October 20, 2016.
|
(16) |
Previously filed as an exhibit on Form 6-K dated November 17, 2016.
|
(17) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2016.
|
(18) |
Previously filed as an exhibit on Form 6-K dated May 1, 2017.
|
(19) |
Previously filed as an exhibit on Form 6-K dated October 16, 2017.
|
(20)
|
Previously filed as an exhibit on Form 6-K dated November 1, 2017.
|
(21) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2017.
|
(22) |
Previously filed as an exhibit on Form 6-K dated May 8, 2018.
|
(23) |
Previously filed as an exhibit on Form 6-K dated August 24, 2018.
|
(24)
|
Previously filed as an exhibit on Form 6-K dated November 9, 2018.
|
Fly Leasing Limited
|
|||
By:
|
/s/ Colm Barrington
|
||
Colm Barrington
|
|||
Chief Executive Officer and Director
|
(1) |
THE SELLERS LISTED ON EXHIBIT A HERETO
;
|
(2) |
HORIZON AIRCRAFT FINANCE I LIMITED
, an exempted company incorporated with limited
liability under the laws of the Cayman Islands (the
Cayman Issuer
); and
|
(3) |
HORIZON AIRCRAFT FINANCE I LLC
, a Delaware limited liability company (the
US Issuer
and, together with the Cayman Issuer, the
Issuers
).
|
A. |
The Issuer Group has agreed to acquire from the Sellers, as applicable, the Aircraft Interests or the Aircraft (as hereinafter defined) on the terms and conditions set
out in this Agreement, including the provisions contained in Clause 4.
|
B. |
Amounts payable by the Issuer Group for the acquisition by way of sale and purchase from the Sellers of the Aircraft Interests and the Aircraft will be financed, directly
or indirectly, in whole or in part, through the issue of financial instruments (including the Initial Notes and the E Note).
|
1. |
INTERPRETATION
|
1.1 |
Definitions:
|
|
(i) |
an amount (which may be positive or negative) equal to (A) the aggregate amount of all Lease Expenses in respect of such Remaining Aircraft paid by the Issuers pursuant
to Clause 5.1 (or, in the case of a Substitute Aircraft, all such Lease Expenses paid by the Issuers in respect of the relevant replaced Remaining Aircraft through the date of substitution and all Lease Expenses paid in respect of the
Substitute Aircraft thereafter) less (B) the aggregate of all amounts corresponding to Rental Payments and Maintenance Rent transferred to the Collections Account with respect to such Remaining Aircraft pursuant to Section 3.08(f) of
the Indenture; plus
|
|
(ii) |
an amount equal to (A) the portion of the Outstanding Principal Balance of the Initial Notes to be redeemed in an Acquisition Balance Redemption on the applicable
Redemption Date in respect of such Remaining Aircraft in accordance with Section 3.10(b) of the Indenture less (B) the balance on deposit in the sub-account in the Aircraft Acquisition Account in respect of such Remaining Aircraft on
such Redemption Date; plus
|
|
(iii) |
an amount equal to (A) interest at the rate of 4.70% per annum for the period from the Initial Closing Date to such Redemption Date on the Allocable Repayment Amount in
respect of such Remaining Aircraft calculated as of the applicable Redemption Date less (B) the sum of (1) any Interest Amount previously paid by or on behalf of the Issuers with respect to the Notes on or prior to such Redemption
Date and (2) the amount of all Investment Earnings on the amounts on deposit in the sub-account in the Aircraft Acquisition Account relating to such Remaining Aircraft on such Redemption Date; plus
|
|
(iv) |
an amount equal to interest at the rate of 12.00% per annum for the period from the Initial Closing Date to such Redemption Date on the Allocable E Note Amount for such
Remaining Aircraft less any amounts distributed to the E Note Account pursuant to Section 3.09 of the Indenture during such period that is allocable to such Remaining Aircraft (such allocation to be based on the Designated Percentage
of such Remaining Aircraft);
|
(a)
|
any Issuer Encumbrance;
|
|
(b) |
any “Permitted Lien”
(or other similar term) as defined under the relevant Lease
(other than liens created by the relevant Lessor);
|
|
(c) |
any liens created by or through or arising from debt or liabilities or any act or omission of any Lessee, in each case in contravention of the relevant Lease (whether or
not such Lease has been terminated) or without the consent of the relevant Lessor;
|
|
(d) |
any head lease, lease, conditional sale agreement or option permitted under the Leases or purchase options relating to the Aircraft which would constitute a “Permitted
Lien” as defined in the Indenture; and
|
|
(e) |
any lien for Taxes, assessments or government charges which are not yet due or payable or which are being contested in good faith and for which an adequate reserve has
been established in accordance with U.S. GAAP;
|
(a)
|
owns, leases or is to acquire or lease any of the Aircraft; or
|
|
(b) |
owns or is to acquire any Transferring Subsidiary which owns, leases or is to acquire or lease any of the Aircraft,
|
|
(a) |
is not unable to pay its debts as such debts fall due nor would it be deemed to be unable to pay its debts as such debts fall due within the meaning of the Relevant
Solvency Acts; and
|
|
(b) |
would not become unable to pay its debts as such debts fall due nor would be deemed to be unable to pay its debts as such debts fall due within the meaning of the
Relevant Solvency Acts; and the word
solvency
shall be construed accordingly;
|
1.2 |
Computation of Time Periods:
|
1.3 |
Statutes:
|
1.4 |
Number, Persons:
|
1.5 |
Indenture Definitions:
|
1.6 |
Internal References:
|
|
(1) |
Words such as
hereunder
,
hereto, hereof
and
herein
and other words commencing with
here
shall unless the context clearly indicates the contrary refer to the whole of this Agreement and not to any particular Clause, sub Clause, paragraph or sub paragraph hereof.
|
|
(2) |
References to
this Agreement
include the schedules, annexes and exhibits hereto
and the Disclosure Letter and any amendments made in accordance with Clause 15.5.
|
|
(3) |
Any reference to any Clause, sub Clause, paragraph or sub paragraph shall be a reference to the Clause, sub Clause, paragraph or sub paragraph of this Agreement in which
the reference occurs unless it is indicated that reference to some other provision is intended.
|
|
(4) |
All references to Schedules, Exhibits and Annexes refer to Schedules, Exhibits and Annexes to this Agreement.
|
1.7 |
Headings:
|
2. |
PURCHASE AND SALE
|
2.1 |
Purchase and Sale:
|
|
2.1.1 |
the Aircraft then owned by the applicable Sellers;
|
|
2.1.2 |
the Shares in the Transferring Companies; and/or
|
|
2.1.3 |
the Beneficial Interests in the Transferring Trusts.
|
2.2 |
Purchase Price and Other Payments
|
|
(1) |
The consideration for the Shares in each Transferring Company to be transferred on the applicable Closing Date shall be calculated based on the aggregate Base Purchase
Price of the Aircraft owned by such Transferring Company or, if applicable, a Transferring Subsidiary of such Transferring Company (including for the avoidance of doubt, any Aircraft the Beneficial Interest in which is held by such
Transferring Company or a Transferring Subsidiary of such Transferring Company), on such Closing Date less:
|
|
(a) |
the amount equivalent to Rental Payments (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft owned by such Transferring Company (or where
applicable, a Transferring Subsidiary of such Transferring Company) which relates to the period on and after the Initial Closing Date;
|
|
(b) |
the amount equivalent to Maintenance Rent (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft owned by such Transferring Company (or where
applicable, a Transferring Subsidiary of such Transferring Company) which relates to the period on and after the Initial Closing Date; and
|
|
(c) |
any deduction required under Clause 6.2 in respect of the relevant Aircraft;
|
|
(2) |
The obligation of the Issuers or the applicable Issuer Group Member to pay the Purchase Price shall be satisfied and discharged by the payment to or at the direction of
the applicable Seller of the Purchase Price for such Transferring Company in accordance with Clause 4.2.
|
|
(1) |
The consideration for the Beneficial Interests to be transferred on the applicable Closing Date shall be calculated based on the aggregate Base Purchase Price of the
Aircraft owned by the relevant Transferring Trust (or any Transferring Subsidiary of that Transferring Trust) on such Closing Date less:
|
|
(a) |
the amount equivalent to Rental Payments (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft owned by such Transferring Trust (or any
Transferring Subsidiary of that Transferring Trust) which relates to the period on and after the Initial Closing Date;
|
|
(b) |
the amount equivalent to Maintenance Rent (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft owned by such Transferring Trust (or any
Transferring Subsidiary of that Transferring Trust) which relates to the period on and after the Initial Closing Date;
|
|
(c) |
any deduction required under Clause 6.2 in respect of the relevant Aircraft;
|
|
(2) |
The obligation of the applicable Issuer or the applicable Issuer Group Member to pay the Purchase Price for a Transferring Trust on the Closing Date shall be satisfied
and discharged by the payment to or at the direction of the applicable Seller of the Purchase Price for such Transferring Trust, in each case in accordance with Clause 4.2.
|
|
(1) |
The consideration for the Aircraft to be transferred on the applicable Closing Date shall be calculated based on the aggregate Base Purchase Price of the Aircraft on such
Closing Date less:
|
|
(a) |
the amount equivalent to Rental Payments (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft which relates to the period on and after the
Initial Closing Date;
|
|
(b) |
the amount equivalent to Maintenance Rent (if any) paid prior to such Closing Date pursuant to the Lease of the Aircraft which relates to the period on and after the
Initial Closing Date;
|
|
(c) |
any deduction required under Clause 6.2 in respect of the relevant Aircraft;
|
|
(2) |
The obligation of the applicable Issuer or the applicable Issuer Group Member to pay the Purchase Price for an Aircraft on the Closing Date shall be satisfied and
discharged by the payment to or at the direction of the applicable Seller of the Purchase Price for such Aircraft, in each case in accordance with Clause 4.2.
|
|
(3) |
The applicable Issuer shall have received a written confirmation of the applicable Servicer, with respect to the insurances maintained in respect of the Aircraft.
|
|
2.2.4 |
Schedule 5 sets forth the amount of Rental Payments and Maintenance Rent (if any) received by a Seller on or prior to the Initial Closing Date in respect of each Aircraft
(set out on an Aircraft-by-Aircraft basis), in each case, which relates to any period on and after the Initial Closing Date. On the Initial Closing Date, pursuant to the Funds Flow, the Managing Agent shall transfer from the Aircraft
Acquisition Account to the applicable Collections Account (or retain in the applicable Collections Account in accordance with the Funds Flow) an amount equal to the aggregate amounts set forth on such Schedule 5. Within five Business
Days after each Determination Date on or prior to the end of the Delivery Period, each Seller shall (or shall cause the Servicer to) deliver a certificate (which may be included in the monthly report delivered to the Issuers pursuant
to Section 9.01 of Schedule 2.02(a) of the Servicing Agreement (the
Monthly Services Report
) in lieu of a separate certificate) to the
applicable Issuer and the Managing Agent with respect to each Aircraft for which a Closing Date (or Non-Delivery Date) has not yet occurred certifying (on an Aircraft-by-Aircraft basis) the amount of Rental Payments and Maintenance
Rent (if any) received by a Seller on or prior to such Determination Date pursuant to the Lease of each such Aircraft (other than any amount that was previously set forth on Schedule 5 or in a certificate (or Monthly Services Report)
previously delivered pursuant to this Clause 2.2.4). After receipt of each such certificate, the Managing Agent shall, pursuant to Section 3.08(f) of the Indenture, transfer from the relevant sub-accounts in the Aircraft Acquisition
Account for such Aircraft to the applicable Collections Account (or in the case of any such amount constituting Segregated Funds, the Lessee-Funded Account) an amount equal to the amount set forth therein.
|
|
(1) |
If at any time following the transfer of an Aircraft or Aircraft Interest to an Issuer or the applicable Issuer Group Member, a Seller receives any Rent Payment or any
Maintenance Rent in respect of such Aircraft or the Aircraft Interests to which such Aircraft relates, it shall, to the extent that such payments relate to any period commencing on or after the Initial Closing Date, promptly pay such
amounts to the Issuer Group.
|
|
(2) |
If at any time following the transfer of an Aircraft or Aircraft Interest to an Issuer or the applicable Issuer Group Member, an Issuer Group Member receives any Rent
Payment or any Maintenance Rent in respect of such Aircraft or the Aircraft Interests to which such Aircraft relates, it shall, to the extent that such payments relate to any period prior to the Initial Closing Date, promptly pay such
amounts to the applicable Seller.
|
2.3 |
No Liens
|
|
2.3.1 |
The Shares in each Transferring Company shall be sold free from all Liens (other than Permitted Liens) and with the benefit of all rights attached or accruing thereto.
|
|
2.3.2 |
The Beneficial Interests in each Transferring Trust held by the applicable Seller shall be sold free from all Liens (other than Permitted Liens) and with the benefit of
all rights attached or accruing thereto.
|
|
2.3.3 |
Each Aircraft shall be sold free from all Liens (other than Permitted Liens) and with the benefit of all rights attached or accruing thereto.
|
3. |
CLOSING
|
3.1 |
Closing of the sale and purchase of the Shares in each Remaining Company shall take place on each Closing Date on or by which the conditions specified in this Clause 3.1
and in Clause 14 are or have been satisfied (or waived) in relation to that Remaining Company. On the Initial Closing Date, the Initial Aircraft and Initial Aircraft Interests shall be tendered by the applicable Seller to an Issuer
for delivery hereunder by the sale of the relevant Aircraft and Aircraft Interests. Closing of the sale and purchase of the Shares in each Transferring Company to be delivered on the Initial Closing Date shall be subject to the
conditions in Clause 14 and to the following conditions in relation to that Transferring Company:
|
|
3.1.1 |
such Seller shall deliver to the applicable Issuer Group Member the following insofar as they relate either to the sale and purchase of the Shares in that Transferring
Company:
|
|
(a) |
a duly executed transfer instrument (in the form appended at Schedule 10) in favor of such Issuer or the applicable Issuer Group Member in respect of all the Shares in
that Transferring Company together with all existing share certificates issued in respect of such Transferring Company, or in the case of any lost share certificate an indemnity in lieu thereof in terms reasonably satisfactory to such
Issuer;
|
|
(b) |
a duly certified copy of the Register of Members of such Transferring Company, showing such Issuer or the applicable Issuer Group Member as the sole holder of the Shares
of such Transferring Company;
|
|
(c) |
a duly certified copy of the Register of Members of any relevant Transferring Subsidiary Company, showing the relevant Transferring Company as the sole holder of the
Shares of such Transferring Subsidiary Company; and
|
|
(d) |
a copy of the trust agreement in respect of any relevant Transferring Subsidiary Trust, showing that the relevant Transferring Company is the sole beneficiary of such
Transferring Subsidiary Trust;
|
|
(2) |
written notification by such Seller to the Issuers (with a copy to the Managing Agent) in respect of the Aircraft, if any, owned or leased by the relevant Transferring
Company (or, where relevant, any Transferring Subsidiary of such Transferring Company), which shall be delivered no less than one Business Day prior to the relevant Closing Date (the
Delivery Notice
) and shall contain the information described in Warranty 8.1 in Part 1 of Schedule 1 hereto with respect to such Aircraft;
|
|
(3) |
a copy of any power of attorney under which any document required to be delivered to the applicable Issuer Group Member under this Clause has been executed and such other
documents including any waivers or consents as the applicable Issuer Group Member may require to enable such Issuer Group Member to be registered as holders of the Shares of the relevant Transferring Company;
|
|
(4) |
the copies of the certificate of incorporation or formation or registration and certificates of incorporation or formation or registration on change of name and the
seals, statutory books (duly written up to date), books of account, and all other constitutional documents, books, documents or records and papers of the relevant Transferring Company or evidence satisfactory to the applicable Issuer
Group Member that they are held by or to the order of the relevant Transferring Company;
|
|
(5) |
the written resignations of the directors and the other officers (if any) from their respective offices in the Transferring Company, with written acknowledgments from
each of them in a form reasonably acceptable to the applicable Issuer Group Member;
|
|
(6) |
resolutions of the members of the Transferring Company to change the Constitution (or equivalent constitutional and organizational documents) of such Transferring
Company, each of the said Constitution (or equivalent constitutional and organizational documents) to conform with those as agreed with the applicable Issuer;
|
|
(7) |
insofar as not already provided to the applicable Issuer Group Member, a copy of each Lease (and, where applicable, head lease and intermediate lease) to which the
relevant Transferring Company (and, where relevant, any Transferring Subsidiary of such Transferring Company) is party (or to which such Transferring Company or Transferring Subsidiary, as the case may be, will become party on such
Closing) which, in each case, shall be in compliance with the requirements of the Indenture; and
|
|
(8) |
insofar as not already provided to the applicable Issuer Group Member, a copy of delivery acknowledgments or Bills of Sale in the possession of the relevant Seller
evidencing the title of the relevant Aircraft.
|
3.2 |
Closing of the sale and purchase of the Beneficial Interest in each Remaining Trust shall take place on each Closing Date on or by which the conditions specified in this
Clause 3.2 and in Clause 14 are or have been satisfied in relation to that Remaining Trust. Closing of the sale and purchase of each Transferring Trust to be delivered on the Initial Closing Date shall be subject to the conditions in
Clause 14 and to the following conditions in relation to that Transferring Trust:
|
|
3.2.1 |
the applicable Seller shall deliver to the applicable Issuer Group Member the following insofar as they relate either to the sale and purchase of the Beneficial Interest
in that Transferring Trust:
|
|
(1) |
with respect to each Transferring Trust, a Trust Assignment Agreement (in the form appended at Schedule 11 in respect of the Irish Transferring Trusts) in respect of the
relevant Beneficial Interest, duly executed by the relevant Seller, the relevant Issuer Group Member and, if applicable, the owner trustee of such Transferring Trust;
|
|
(2) |
a copy of the relevant Trust Agreement;
|
|
(3) |
a duly certified copy of the Register of Members of any relevant Transferring Subsidiary Company, showing the relevant Transferring Company as the sole holder of the
Shares of such Transferring Subsidiary Company;
|
|
(4) |
a copy of the trust agreement in respect of any relevant Transferring Subsidiary Trust, showing that the relevant Transferring Company is the sole beneficiary of such
Transferring Subsidiary Trust;
|
|
(5) |
with respect to each Transferring Trust, a Delivery Notice by such Seller to the Issuers (with a copy to the Managing Agent) in respect of the Aircraft owned by the
Transferring Trust (or any Transferring Subsidiary of that Transferring Trust) to be transferred which shall be delivered no less than one Business Day prior to the relevant Closing Date and shall contain the information described in
Warranty 8.1 in Part 1 of Schedule 1 hereto with respect to such Transferring Trust, any relevant Transferring Subsidiary and the relevant Aircraft;
|
|
(6) |
a certificate of a duly authorized officer of the owner trustee of the Transferring Trust attaching copies of the constitutive documents of such owner trustee and
certifying the signatures of each of the directors or other officers of such owner trustee authorized to sign the Other Transaction Documents to which it is a party;
|
|
(7) |
insofar as not already provided to the applicable Issuer or applicable Issuer Group Member, a copy of each Lease (and, where applicable, head lease and intermediate
lease) to which the relevant Transferring Trust (and any Transferring Subsidiary of that Transferring Trust) is party (or to which such Transferring Trust (or any Transferring Subsidiary of that Transferring Trust) will become party
on such Closing) which, in each case, shall be in compliance with the requirements of the Indenture; and
|
|
(8) |
insofar as not already provided to the applicable Issuer Group Member, a copy of delivery acknowledgments or Bills of Sale in the possession of the relevant Seller
evidencing the title of the relevant Aircraft.
|
3.3 |
Closing of the sale and purchase of an Aircraft shall take place on each Closing Date on or by which the conditions specified in this Clause 3.3 and in Clause 14 are or
have been satisfied. Closing of the sale and purchase of the Aircraft to be delivered on the Initial Closing Date shall be subject to the conditions in Clause 14 and to the following conditions:
|
|
3.3.1 |
the applicable Seller shall deliver to the applicable Issuer Group Member the following insofar as they relate to the sale and purchase of the relevant Aircraft:
|
|
(1) |
a copy of the relevant Bill of Sale transferring title to the relevant Aircraft from the relevant Seller to the relevant Issuer Group Member duly executed by the relevant
Seller in a form reasonably satisfactory to the applicable Issuer Group Member, and, insofar as not already provided to the applicable Issuer Group Member, copies of bills of sale in the possession of the relevant Seller for such
Aircraft (including each applicable Engine) showing the chain of title from the relevant manufacturer;
|
|
(2) |
copies of the assignments of warranty in relation to the relevant airframe and engines referred to in Clause 13.2 duly consented to by the relevant manufacturer, but only
to the extent unexpired assignable warranties from the airframe and engine manufacturers having material value exist with respect to the applicable Aircraft (
provided that
any such consents may be obtained within 90 days after such Closing Date);
|
|
(3) |
the conditions precedent to the effectiveness of the Novation Agreement, as applicable, for the applicable Aircraft which are expressed to be for the benefit of the
relevant Issuer Group Member shall have been satisfied in all material respects (or waived by the relevant Issuer Group Member);
|
|
(4) |
a copy of a Delivery Notice by such Seller to the Issuers (with a copy to the Managing Agent) in respect of the relevant Aircraft to be transferred, which shall be
delivered no less than one Business Day prior to the relevant Closing Date and shall contain the information described in Warranty 8.1 in Part 1 of Schedule 1 hereto with respect to such Aircraft; and
|
|
(5) |
insofar as not already provided to the applicable Issuer Group Member, a copy of each Lease (and, where applicable, head lease and/or sublease) relating to such Aircraft,
together with all amendments thereto, which, in each case, shall be in compliance with the requirements of the Indenture.
|
4. |
RELIANCE; PAYMENTS
|
4.1 |
The applicable Seller acknowledges and agrees with the Issuers that the applicable Issuer Group Member has relied on such Seller’s representations and agreements set
forth in Clause 8 that it will use its reasonable commercial efforts to meet all conditions precedent to the transfer of the Remaining Aircraft or the Transferring Companies and Transferring Trusts with respect to such Remaining
Aircraft to the applicable Issuer Group Member prior to two hundred and seventy (270) days after the Initial Closing Date (or, for no more than ten (10) of the Remaining Aircraft, three hundred and sixty five (365) days after the
Initial Closing Date) (the
Delivery Expiry Date
), and that the Issuers have obtained financing for the purpose of purchasing all of the
Remaining Aircraft or the Remaining Entities with the Remaining Aircraft.
|
4.2 |
Following the Initial Closing Date, at any time and from time to time, until the full amount of the Purchase Price in respect of all Aircraft has been paid, subject to
receipt by the Issuers (with a copy to the Managing Agent) of a Delivery Notice specifying a date and time for payment (which shall be a Business Day and a time during normal banking hours in New York City) from or on behalf of the
applicable Sellers at least one (1) Business Day prior to the proposed date of payment and the satisfaction of the other relevant conditions precedent to Closing set out in this Agreement, the Issuers shall, on such proposed payment
date, for the account of the relevant Issuer Group Member, pay to the applicable Seller thereof the Purchase Price for each Aircraft and/or Aircraft Interest listed in the applicable notice as being sold by such Seller.
|
4.3 |
With respect to each Remaining Aircraft, upon the occurrence of the Non-Delivery Date with respect to such Remaining Aircraft, the relevant Seller shall pay to the
Issuers, for the account of the relevant Issuer Group Member, the Aircraft Non-Delivery Amount (if a positive number) for such Remaining Aircraft on such date.
|
4.4 |
Except as otherwise provided in this Agreement, neither the applicable Seller nor the Issuers nor the applicable Issuer Group Member shall have any obligation to make any
payments with respect to an Aircraft to the extent such payments relate to any period following the earlier of the Closing Date of the sale of the Aircraft or the Aircraft Interest relating to such Aircraft and the Non-Delivery Date
for such Aircraft or Aircraft Interest.
|
5. |
ADDITIONAL OBLIGATIONS WITH RESPECT TO REMAINING AIRCRAFT
|
5.1 |
Notwithstanding that the Issuers do not own the Remaining Aircraft, the Issuers (acting jointly and severally) shall pay all Lease Expenses incurred and relating to
events that occurred after the Initial Closing Date with respect to each Remaining Aircraft as notified by the Sellers,
provided that
, certain
Lease Expenses shall be payable by the relevant Seller or the Issuers, as the case may be, in each case as agreed by such Seller and the Issuers in a Disclosure Letter. All Lease Expenses described in this Section shall be paid as
“Expenses” or “Maintenance and Modification Expenses” or directly from the Maintenance Reserve Account to the extent permitted under Section 3.04(b) of the Indenture (as applicable) in respect of the relevant Remaining Aircraft in
accordance with the terms of the Indenture.
|
5.2 |
Each Seller agrees to transfer each Remaining Aircraft and to notify the Issuers immediately if such Seller reasonably believes that it will have to deliver a Termination
Notice with respect to any Remaining Aircraft, Remaining Trust or Remaining Company or proposed delivery of a Substitute Aircraft.
|
5.3 |
No Seller will be responsible for legal fees and expenses of the E Note Holder (or any Equity Certificate Investor) incurred in connection with the transactions
contemplated by this Agreement, in connection with the purchase of each Aircraft Interest;
provided that
, the applicable Seller shall pay for
all costs and expenses of the parties as specified below herein incurred in connection with the acquisition of the Aircraft and the Aircraft Interests pursuant hereto: (i) all costs and expenses of such Seller, the Issuers and any
relevant Issuer Group Member for the purpose of purchasing such Aircraft or Aircraft Interest, exclusive of any amounts payable in respect of the shares, equity or other capital of such Issuer Group Member, (ii) reasonable legal fees
of such Seller, such Issuer Group Member, the Security Trustee and the Initial Purchasers incurred in connection with the drafting, negotiating and delivering, as applicable, any relevant Trust Assignment, Novation Agreement, Notice
and Acknowledgement and other conditions precedent to the occurrence of the relevant Closing hereunder, and any other related documentation and advice and for the legal fees and other costs and expenses of the relevant Lessee that are
payable or reimbursable to the relevant Lessee under the applicable Lease in connection therewith, (iii) its own legal fees (including those of its local counsel) and the costs of any required filings or registrations incurred in
connection with the applicable transfer of an Aircraft or Aircraft Interest, (iv) its own legal fees (including those of their local counsel) and the costs and expenses of all filings and registrations (including with respect to the
relevant Aircraft or Lease ownership and security interests under the Uniform Commercial Code or under the Cape Town Convention) and any other security interest relating to the relevant Aircraft or Aircraft Interest or related Lease
and other collateral granted under the Security Trust Agreement in connection with the relevant Closing, and any costs and expenses incurred in connection with obtaining each legal opinion required to be delivered in connection with
the relevant Closing and (v) the fees of each Appraiser charged in connection with obtaining each appraisal required to be delivered hereunder in respect of the relevant Aircraft.
|
6. |
SUBSTITUTION AND TERMINATION
|
6.1 |
Substitution:
|
|
6.1.1 |
such Substitute Aircraft is subject to a Lease having aggregate Rental Payments for the remaining term of such Lease (aggregated across the Leases in respect of each
Substitute Aircraft replacing such Remaining Aircraft) with a present value that is no less than 90% of the present value of the aggregate Rental Payments for the remaining term of the Lease for the Remaining Aircraft subject to
substitution (aggregated across such Leases) (with an applied discount rate of 2% for purposes of both such present value calculations);
|
|
6.1.2 |
the average age of each such Substitute Aircraft is not greater than the average age of the Remaining Aircraft subject to substitution, plus twelve (12) months;
|
|
6.1.3 |
the aggregate Base Purchase Price of the Substitute Aircraft replacing a Remaining Aircraft subject to substitution is equal to or less than the Base Purchase Price for
the Remaining Aircraft subject to substitution unless an amount equal to the excess has been funded to the Aircraft Acquisition Account using the proceeds of Additional Advances, and shall otherwise be mutually acceptable to the
applicable Seller and the Issuers;
|
|
6.1.4 |
each Substitute Aircraft is, at the time of the substitution thereof, subject to a Lease containing the Core Lease Provisions;
|
|
6.1.5 |
the weighted average remaining term of each Lease of each Substitute Aircraft is, at the time of substitution thereof, greater than or equal to the weighted average
remaining term of the Lease of the Remaining Aircraft subject to substitution;
|
|
6.1.6 |
the addition of such Substitute Aircraft shall not result in a breach of the Concentration Limits;
|
|
6.1.7 |
not more than six (6) Remaining Aircraft may be replaced for Substitute Aircraft;
|
|
6.1.8 |
prior written notice of such Substitute Aircraft shall be provided to the Rating Agencies; and
|
|
6.1.9 |
such Substitute Aircraft must be of a Permitted Aircraft Type.
|
6.2 |
Effect of Substitution
|
6.3 |
Termination:
|
7. |
NON-DELIVERY EVENTS
|
7.1 |
Definition:
|
|
7.1.1 |
with respect to a particular Aircraft or Aircraft Interest, upon delivery of a Termination Notice, or upon termination of this Agreement pursuant to Clause 6.3, in each
case with respect to such Aircraft or Aircraft Interest;
|
|
7.1.2 |
with respect to all Aircraft or Aircraft Interests with respect to which the Closing Date has not yet occurred at such time, upon the earlier to occur of:
|
|
(1) |
the applicable Seller becoming or being declared insolvent, or an examiner or receiver or liquidator or similar officer being appointed over such Seller or over all or a
substantial part of its assets, or such Seller making an arrangement for the benefit of its creditors generally or such Seller taking steps (or steps being taken and not discharged within 21 days) for the winding up or dissolution of
such Seller or for the appointment of an examiner to it;
|
|
(2) |
an Event of Default has occurred under the Indenture; and
|
|
(3) |
the Delivery Expiry Date.
|
7.2 |
Effect of Non-Delivery Event:
|
8. |
REPRESENTATIONS AND WARRANTIES OF SELLERS
|
8.1 |
Subject to Clause 8.2, each relevant Seller hereby represents and warrants with respect to such Seller and the relevant Aircraft or Aircraft Interest being transferred by
such Seller in the terms of Schedule 1.
|
8.2 |
Each relevant Seller hereby warrants and represents to the applicable Issuer and the applicable Issuer Group Member that, save as disclosed in the Disclosure Letter (as
updated and supplemented from time to time pursuant to Clause 13.1):
|
|
8.2.1 |
each of the Warranties is true, correct and not misleading in all material respects on the Initial Closing Date with respect to the facts and circumstances existing at
such time (and to the extent only that such Warranties relate to the relevant Seller and any Aircraft, Transferring Company (including, where relevant, any Transferring Subsidiary of such Transferring Company) and/or Transferring
Trust (including, where relevant, any Transferring Subsidiary of that Transferring Trust), the Aircraft Interests which are being transferred on the Initial Closing Date by such Seller); and
|
|
8.2.2 |
each of the Warranties is true, correct and not misleading in all material respects on each Closing Date with respect to the facts and circumstances existing at such time
(and to the extent only that such Warranties relate to the relevant Seller and any Aircraft, Transferring Company (including, where relevant, any Transferring Subsidiary of such Transferring Company) and/or Transferring Trust
(including, where relevant, any Transferring Subsidiary of such Transferring Trust) or the Aircraft Interests which are being transferred on such Closing Date by such Seller).
|
8.3 |
Separate and Independent:
|
8.4 |
Notice and Remedy for Breach:
|
|
8.4.1 |
At any time after the Closing of any Aircraft or Aircraft Interest, upon becoming aware of any breach of Warranty, the relevant Seller shall notify the Issuers or the
Issuers shall be entitled to deliver to such Seller a notice specifying the Warranty or Warranties which is or are untrue or incorrect by reference to the facts and circumstances subsisting at the relevant Closing Date with details of
such facts or circumstances (a
Breach Notice
).
|
|
8.4.2 |
The relevant Seller shall, on receipt or delivery by such Seller or applicable Issuer of a Breach Notice, have a period of 30 days (or such longer period as the Issuers
may agree in writing) from the date of receipt by such Seller or the Issuer, as applicable, of the Breach Notice to remedy the matter giving rise to the breach of Warranty (if capable of remedy) specified in such Breach Notice.
|
8.5 |
Disclaimer:
|
9. |
INDEMNITIES
|
9.1 |
Indemnities
|
|
9.1.1 |
The Issuers hereby jointly and severally agree to indemnify each Seller and their respective Affiliates, and any of their successors and assigns, officers, directors,
servants, agents and employees (each a
Seller Indemnified Party
) from and against any claims, damages, losses, costs, expenses, fees (including
reasonable counsel’s fees), payments, demands, liabilities, actions, proceedings, penalties or fines (together, the
Losses
) which any Seller
Indemnified Party may incur or suffer, (i) in relation to any Aircraft or Aircraft Interest to the extent it is attributable to the period from and after the Closing for the relevant Aircraft or Aircraft Interest (subject to the
provisions of Section 5.1 hereof) or (ii) in relation to any misrepresentation or breach of warranty, covenant or agreement made or to be performed by the Issuer Group pursuant to this Agreement (together the
Issuer Indemnity
),
provided that
the Issuer Indemnity provided pursuant to
this Clause 9.1.1 shall not extend to any claim on account of any Taxes (which shall be subject to Clause 10.1) and
provided further that
the
Issuer Indemnity shall not extend to Losses arising from (x) the gross negligence, fraud or willful misconduct of any Seller Indemnified Party or (y) any misrepresentation or breach of warranty, covenant or agreement made by or to be
performed by any Seller Indemnified Party pursuant to this Agreement.
|
|
9.1.2 |
Each Seller, severally and not jointly, hereby agrees to indemnify the Issuers, each Issuer Group Member and their respective Affiliates, and any of their successors and
assigns, officers, directors, servants, agents and employees (each an
Issuer Indemnified Party
) from and against any Losses which any Issuer
Indemnified Party may incur or suffer, (i) in relation to any Aircraft or Aircraft Interest such Seller sells hereunder to the extent it is attributable to the period prior to the Closing for such Aircraft or Aircraft Interest
(subject to the provisions of Section 5.1 hereof) or (ii) in relation to any misrepresentation or breach of warranty, covenant or agreement made or to be performed by such Seller pursuant to this Agreement (together the
Seller Indemnity
),
provided that
the Seller Indemnity
provided pursuant to this Clause 9.1.2 shall not extend to any claim on account of any Taxes (which shall be subject to Clause 10.1) and
provided
further that
the Seller Indemnity shall not extend to Losses arising from (x) the gross negligence, fraud or willful misconduct of any Issuer Indemnified Party or (y) any misrepresentation or breach of warranty, covenant or
agreement made by or to be performed by any Issuer Indemnified Party pursuant to this Agreement.
|
9.2 |
Notice of Claims:
|
|
9.2.1 |
Subject to Section 9.2.2, a Seller Indemnified Party or an Issuer Indemnified Party (each an
Indemnified Party
), as the case maybe, shall give the Issuers and any relevant Seller (as the case may be) (the
Indemnifying Party
)
notice of any matter which such Indemnified Party has determined has given, or could give, rise to a right of indemnification under this Agreement, within ninety (90) days of such determination. The notice shall state the amount of
the Loss, if known, and the method of its calculation and shall contain a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises.
|
|
9.2.2 |
If an Indemnified Party receives written notice of any third party claim or potential claim (
Third Party Claim
) against it which is or may be the subject of a claim by it under the Issuer Indemnity or the Seller Indemnity (as the case may be), the obligations and liabilities of the Indemnifying Party under
this Clause 9 shall be subject to the following terms and conditions:
|
|
(1) |
the Indemnified Party shall give written notice thereof to the Indemnifying Party within sixty (60) days of receipt of such notice
provided that
failure to give such notice shall not release the Indemnifying Party from any of its obligations under this Clause 9 except to the extent it has been
materially prejudiced by such failure;
|
|
(2) |
the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim and take such further action to contest, resist or appeal the
validity, applicability and amount of such claim in appropriate administrative or judicial proceedings either:
|
|
(a) |
in the name of the Indemnified Party (
provided that
the Indemnifying Party shall
indemnify and secure the Indemnified Party to its reasonable satisfaction against all losses costs damages and expenses which may be incurred thereby), or
|
|
(b) |
in its own name,
|
9.3 |
To Be Made Free From Deductions:
|
9.4 |
Recovery From Third Parties:
|
9.5 |
VAT / Consumption Tax:
|
|
9.5.1 |
Each amount that the Issuer Group must pay under this Agreement is stated inclusive of VAT. If VAT is payable in respect of any amount payable under this Agreement, the
applicable Seller shall pay (and bear the cost of) any such VAT to the relevant tax authority and such Seller shall only be entitled to recover any such VAT from the Issuer Group in accordance with Clauses 9.5.2 and 9.5.3 below.
|
|
9.5.2 |
The applicable Seller’s entitlement to recover from the Issuer Group any VAT arising pursuant to this Clause 9.5 shall be limited to the VAT amount in respect of which
the Issuer Group has received a corresponding refund or other form of credit from the relevant Governmental Authority.
|
|
9.5.3 |
To the extent that it is necessary to obtain a refund of VAT arising in respect of an amount payable under this Agreement, the applicable Issuer Group Member shall
register for VAT in the relevant jurisdiction and take all reasonable steps to recover such VAT, except, in the case of any VAT, to the extent that, in the Issuer Group Member’s reasonable judgment any such action would subject such
Issuer Group Member to any material unreimbursed cost or expense (which such Issuer Group Member would not have otherwise being required to bear) or would materially prejudice the legal or commercial position of such Issuer Group
Member.
|
10. |
TAXES
|
10.1 |
Tax Indemnity
|
10.2 |
If any Seller or Issuer Group Member is notified of the commencement of any audit or other administrative or judicial proceeding in respect of Taxes for which an
indemnity may be sought pursuant to this Clause 10, then such receiving party shall inform the other party and the Issuers (unless the Issuers received the relevant notice) in writing of such proceeding within forty five (45) days
after the relevant notice was received by the receiving party, and the receiving party shall give the other party such information with respect thereto as the other party may reasonably request; provided that the failure of an Issuer
Group Member to so inform another party shall not limit such Issuer Group Member’s rights to indemnification under this Clause 10, except as provided in the last sentence of this Clause 10.3. The party required to indemnify the other
party for such Taxes pursuant to this Clause 10 (the
Tax Indemnifying Party
) may discharge, at any time, its indemnification obligation under
this Clause 10 by paying to the other party or the relevant taxing authority, as the case may be, the amount payable pursuant to this Clause 10. Except in cases where the Tax Indemnifying Party have discharged their obligations
pursuant to the preceding sentence, the Tax Indemnifying Party may, at its own expense, take control of the conduct of any such audit or other administrative or judicial proceeding unless otherwise prohibited by applicable law (in
which case, the Tax Indemnifying Party shall be entitled to participate in the conduct of such audit or other administrative or judicial proceeding);
provided
,
however
, that if the Tax Indemnifying Party enters into any settlement of such audit or other administrative or judicial proceeding, and such settlement results
in an increase in Taxes under this Clause 10, then the Tax Indemnifying Party shall indemnify and hold harmless the relevant Issuer Indemnified Party against such increase. If the Tax Indemnifying Party takes control of the conduct of
such audit or other administrative or judicial proceeding, the Tax Indemnifying Party shall have the sole discretion as to the conduct of such audit or other proceeding; provided that the relevant Seller at its request may participate
in (but no control) such proceeding. Whether or not the Tax Indemnifying Party chooses to defend or prosecute any claim, the applicable Seller and Issuer Group Member shall cooperate in the defense or prosecution thereof. No Tax
Indemnifying Party shall be liable under this Clause 10 for any settlements effected without its consent (not to be unreasonably withheld), or resulting from any audit or other administrative or judicial proceeding to the extent (but
only to the extent) any failure to notify the Tax Indemnifying Party of such audit or other administrative or judicial proceeding materially prejudices such Tax Indemnifying Party from contesting the Tax in which the Tax Indemnifying
Party is responsible under this Clause 10.
|
10.3 |
Each Seller and each Issuer Group Member agree to treat sales with respect to each Aircraft and Aircraft Interest hereunder as occurring on the relevant Closing Date for
U.S. and Irish corporate income tax purposes.
|
10.4 |
The applicable Seller and Issuer Group Member of any Aircraft or Aircraft Interest shall act reasonably in agreeing to the delivery location for the relevant Aircraft,
which shall be in a jurisdiction where both such Seller and Issuer Group Member have determined, in each of their sole but reasonable discretion, that there are no material Taxes (other than net or overall gross income Taxes imposed
on such Seller) that would be imposed upon either or both Issuers, such Issuer Group Member, such Seller (including by application of this Clause 10) or such Aircraft as a result of the transfer of title to, or the beneficial interest
in, the applicable Aircraft or Aircraft Interest to such Issuer Group Member. Notwithstanding anything to the contrary herein, such Issuer Group Member’s agreement (or lack of objection) to any delivery location shall not prejudice,
impair, limit or otherwise modify such Issuer Group Member’s rights to indemnification under this Clause 10. The Issuers and the relevant Issuer Group Member both covenant that they shall timely pay (or shall cause the timely payment
of) all Transfer Taxes.
|
10.5 |
Each Seller hereby covenants that any tax sharing agreements, tax settlement agreements, arrangements, policies or guidelines, formal or informal, express or implied that
may exist between any relevant Transferring Company (including, where relevant, any Transferring Subsidiary of such Transferring Company) or Transferring Trust (including, where relevant, any Transferring Subsidiary of such
Transferring Trust) and such Seller or any Affiliate thereof (a
Tax Sharing Agreement
) shall terminate as of the Closing Date and, except as
specifically provided herein, any obligation to make payments by any party under any Tax Sharing Agreement shall be cancelled as of the Closing Date.
|
11. |
LIMITATIONS ON WARRANTIES AND INDEMNITIES
|
11.1 |
Time Limit on Claims:
|
11.2 |
Financial Limit on Claims:
|
|
11.2.1 |
all Sellers and their respective Affiliates arising out of or resulting from or by reason of any claims under or pursuant to (i) the Warranties, and/or (ii) this
Agreement shall not exceed $250,000,000 in the aggregate;
provided that
no financial limit shall apply to any claim in respect of any Unlimited
Warranty;
|
|
11.2.2 |
the Issuer Group arising out of or resulting from or by reason of any claims under or pursuant to (i) the Issuer Warranties, (ii) the Issuer Indemnity and/or (iii) this
Agreement shall not exceed the sum of the Base Purchase Prices of all Aircraft. Each Seller hereby agrees and acknowledges, on behalf of itself and each other Seller Indemnified Party, that any Seller Indemnified Party shall be
entitled to payment of a claim under the Issuer Indemnity only to the extent there are sufficient funds available therefor in accordance with the provisions of Section 3.09(a) or (b) (as applicable) of the Indenture and only after
payment of any Prior Ranking Amounts; and
|
|
11.2.3 |
the Sellers and their respective Affiliates shall only be liable in respect of any claims under or pursuant to (i) the Warranties, and/or (ii) this Agreement, in each
case if the aggregate liability of such Persons for any individual claim would exceed in aggregate $100,000. In the event that such claim exceeds $100,000, such Persons shall be liable (subject to Sections 9, 10 and 11) for the full
amount of such claim.
|
12. |
REPRESENTATIONS AND WARRANTIES OF THE ISSUER GROUP
|
13. |
ADDITIONAL COVENANTS AND AGREEMENTS
|
13.1 |
Further Action:
|
13.2 |
Manufacturers’ Warranties/ Further Assurance:
|
14. |
CONDITIONS
|
14.1 |
Conditions To Obligations of Sellers:
|
|
14.1.1 |
the conditions set forth in Clause 3 with respect to such Aircraft or Aircraft Interest shall have been satisfied;
|
|
14.1.2 |
in the case of a Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company) compliance with rules regarding provision of financial
assistance, if any, in the jurisdiction of incorporation of such Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company), to include in the case of any Transferring Company (or any relevant
Transferring Subsidiary of such Transferring Company) which is incorporated in Ireland compliance with the procedure set out in section 82 of the Irish Companies Act 2014;
|
|
14.1.3 |
unless consented to by the applicable Issuer, no enactment, amendment or modification to a statute, order or statutory instrument passed after the date of this Agreement
shall have caused any Warranty of the applicable Seller to be untrue or incorrect;
|
|
14.1.4 |
all authorizations, consents, orders and approvals of Government Authorities and officials listed in the Disclosure Letter (as updated pursuant to Clause 13.1) having
been obtained in form and substance reasonably satisfactory to the applicable Seller;
|
|
14.1.5 |
the representations and warranties of the Issuer Group contained in Schedule 2 being true and correct in all material respects when made and on the applicable Closing
Date, other than such representations and warranties as are made on another date, and the covenants and agreements contained in this Agreement to be complied with by the Issuer Group on or before Closing having been complied with in
all material respects, and such Seller having received a duly executed certificate of the applicable Issuer Group Member to such effect on the date of such Closing;
|
|
14.1.6 |
no Action having been commenced by or before any Governmental Authority against any Seller, the Issuer Group, such Transferring Trust (or any relevant Transferring
Subsidiary of such Transferring Trust) or Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company) or any of them seeking to restrain or materially and adversely alter the transactions contemplated
by this Agreement which, in the reasonable, good faith determination of the applicable Seller, is likely to render it impossible or unlawful for any of the parties to perform their obligations hereunder,
provided however that
this condition shall not apply to any Action directly or indirectly solicited or encouraged by such Seller;
|
|
14.1.7 |
the applicable Issuer or applicable Issuer Group Member having performed or having satisfied in all material respects all covenants, agreements and conditions on its part
to be performed or satisfied by it under this Agreement and no material default on the part of the applicable Issuer Group Member having occurred and being still in existence, or resulting from the execution, delivery or performance
of this Agreement under any Other Transaction Document;
|
|
14.1.8 |
receipt of a copy of the resolution of the board of directors of the applicable Issuer or applicable Issuer Group Member duly authorizing the execution, delivery and
performance by the such Issuer or such Issuer Group Member of this Agreement and the transactions contemplated hereby and thereby;
|
|
14.1.9 |
receipt of a certificate of a director or of the secretary of the applicable Issuer or applicable Issuer Group Member certifying the names and signatures of each of the
directors or other officers of such Issuer or such Issuer Group Member authorized to sign this Agreement and the documents to be delivered hereunder and thereunder;
|
|
14.1.10 |
in the case of any Aircraft that is a Substitute Aircraft, receipt by the applicable Seller of any amounts owing to it pursuant to Clause 6.2; and
|
|
14.1.11 |
receipt of an insurance and, if applicable, reinsurance certificate in respect of the relevant Aircraft evidencing that the relevant Seller and such other persons as such
Seller shall specify are named as an additional insureds for liability insurances for the tail period set forth in the relevant Lease.
|
14.2 |
Conditions To Obligations of The Issuer Group:
|
|
14.2.1 |
the conditions set forth in Clause 3 with respect to such Aircraft or Aircraft Interest shall have been satisfied;
|
|
14.2.2 |
in the case of a Transferring Company and any Transferring Subsidiary of such Transferring Company, compliance with rules regarding provision of financial assistance, if
any, in the jurisdiction of incorporation of such Transferring Company and Transferring Subsidiary;
|
|
14.2.3 |
the relevant Seller, Transferring Trust (or any relevant Transferring Subsidiary of such Transferring Trust) or Transferring Company (or any relevant Transferring
Subsidiary of such Transferring Company) being the owner of the Aircraft, if any, specified in the applicable Delivery Notice;
|
|
14.2.4 |
all authorizations, consents, orders and approvals of Government Authorities and officials listed in the Disclosure Letter (as updated pursuant to Clause 13.1 hereof)
having been obtained in form and substance reasonably satisfactory to the Issuers;
|
|
14.2.5 |
subject to such matters as may be disclosed in the Disclosure Letter (as updated pursuant to Clause 13.1 hereof), the Warranties being true and correct in all material
respects on the applicable Closing Date, other than such Warranties as are made on another date, and the covenants and agreements contained in this Agreement to be complied with by the Sellers on or before the relevant Closing having
been complied with in all material respects in relation to such Aircraft, Seller, Transferring Trust (and any relevant Transferring Subsidiary of such Transferring Trust) or Transferring Company (and any relevant Transferring
Subsidiary of such Transferring Company) and the applicable Issuer Group Member having received a duly executed certificate from the relevant Seller to such effect on the date of such Closing;
|
|
14.2.6 |
no Action having been commenced or threatened by or before any Governmental Authority against the relevant Seller, the Issuer Group, any relevant Transferring Trust (or
any relevant Transferring Subsidiary of such Transferring Trust) or Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company) or any of them seeking to restrain or materially and adversely alter the
transactions contemplated hereby which the Issuers reasonably believe is likely to render it impossible or unlawful for any of the parties to perform their obligations hereunder;
provided however that
this condition shall not apply to any Action solicited or encouraged by the Issuers or any other Issuer Group Member;
|
|
14.2.7 |
the Other Transaction Documents relating to such Aircraft, Transferring Company (and any relevant Transferring Subsidiary of such Transferring Company) or Transferring
Trust (and any relevant Transferring Subsidiary of such Transferring Trust) or the relevant Seller having been duly entered into and having become unconditional in all respects save for any conditions relating to this Agreement or the
satisfaction of the conditions precedent hereunder;
|
|
14.2.8 |
receipt of copies of the reports of the Appraisers (including, if applicable, with respect to Substitute Aircraft);
|
|
14.2.9 |
receipt of the Disclosure Letter, if any, (including any updated and/or supplements to the applicable Closing Date) in form and substance reasonably satisfactory to the
Issuers;
|
|
14.2.10 |
receipt of a broker’s letter and insurance certificate with respect to the relevant Aircraft, if any, owned by such Seller, Transferring Trust (or any relevant
Transferring Subsidiary of such Transferring Trust) or Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company) evidencing compliance with the requirements set forth in Exhibit D of the Indenture and
the related Lease;
|
|
14.2.11 |
receipt of evidence (including the results of any applicable customary lien search) satisfactory to the applicable Issuer Group Member that there are is no mortgage,
charge, pledge of or other security over the Aircraft or over the Shares in such Transferring Company (or any relevant Transferring Subsidiary of such Transferring Company) or the Beneficial Interest in such Transferring Trust (or any
relevant Transferring Subsidiary of such Transferring Trust) (as the case may be), or that any such security has been released (or will be released after Closing in a manner reasonably satisfactory to the Issuers);
|
|
14.2.12 |
a copy of the organizational or constitutional documents of each relevant Transferring Company (and any Transferring Subsidiary of such Transferring Company) or
Transferring Trust (and any relevant Transferring Subsidiary of such Transferring Trust), if any, certified as of such Closing Date to be a true, complete and up-to-date copy by a director, manager, secretary or other officer of such
Transferring Company (or any Transferring Subsidiary of such Transferring Company) or Transferring Trust (or any relevant Transferring Subsidiary of such Transferring Trust), as applicable, and in a form satisfying the requirements of
the Indenture;
|
|
14.2.13 |
a copy of resolutions of the directors and/or board of managers or other applicable governing body of the relevant Seller, in each case certified as of such Closing Date
to be a true, complete and up to date copy and as being in full force and effect and not amended or rescinded by a director, manager, secretary or other officer of the relevant Seller, approving or authorizing the transactions
contemplated by this Agreement, including an incumbency certificate (or equivalent document) of the Person or Persons authorized to execute and deliver on behalf of such relevant Seller this Agreement and any notices or other
documents to be given pursuant hereto or thereto;
|
|
14.2.14 |
The following legal opinions in the Agreed Form shall be delivered dated as of the applicable Closing Date:
|
|
(a) |
an opinion of counsel as to the laws of the jurisdiction of such Person in respect of the applicable Seller as to its incorporation, formation or registration and its
execution, delivery and performance of the documents to which it is a party contemplated by this Agreement and related matters;
|
|
(b) |
an opinion of counsel as to the laws of the jurisdiction of such Person in respect of any relevant Transferring Company (and any Transferring Subsidiary of such
Transferring Company), Transferring Trust (and any relevant Transferring Subsidiary of such Transferring Trust) or the applicable Issuer Group Member (and as applicable, an Issuer) as to its incorporation, formation or registration
and its execution, delivery and performance of the documents to which it is a party contemplated by this Agreement and related matters;
|
|
(c) |
an opinion of independent or in-house counsel, as applicable, to the relevant Guarantor as to such Guarantor’s incorporation, formation or registration and such
Guarantor’s execution, delivery and performance of the relevant Guaranty;
|
|
(d) |
an opinion of New York counsel as to the enforceability of the documents governed by New York law entered into in connection with the Closing and related matters;
|
|
(e) |
an opinion of counsel as to any applicable filings or registrations with the FAA and/or the International Registry as required under the Security Trust Agreement in
connection with the Closing; and
|
|
(f) |
an opinion of counsel as to the laws of the jurisdiction of the Lessee and the jurisdiction of registration of the Aircraft (if different) as to such matters in such
jurisdiction as are contemplated in the Agreed Form thereof;
|
|
14.2.15 |
if, on the relevant Closing Date, any Security Deposit held under the Lease for the relevant Aircraft is in the form of a letter of credit, guarantee, promissory note or
other instrument, and not already issued in the name of the Servicer or any relevant Transferring Company, Transferring Trust or Transferring Subsidiary, the applicable Seller shall cause such letter of credit, guarantee or other
instrument to be duly endorsed, amended or reissued in favor of the relevant Issuer Group Member within ninety (90) days of the relevant Closing Date;
|
|
14.2.16 |
any relevant Transferring Company (and any Transferring Subsidiary of such Transferring Company) or Transferring Trust (and any relevant Transferring Subsidiary of such
Transferring Trust), or if none, the applicable Issuer Group Member, and the applicable Issuer shall have duly executed and delivered each document required by an Issuer Group Member under the Related Documents in connection with the
Closing, including a Collateral Supplement or Grantor Supplement (as applicable), accession agreements and guaranties in the forms set forth in the Security Trust Agreement and agreements with the Service Providers, any powers of
attorney in favor of a Service Provider required thereunder, an FAA security document (if applicable) and any local law security document required to be provided pursuant to the Security Trust Agreement;
|
|
14.2.17 |
in the case of a Transferring Company, the applicable Seller having delivered to the applicable Issuer Group Member a solvency certificate in respect of such Transferring
Company and a solvency certificate in respect of such Seller, in each case in a form agreed with the applicable Issuer on the date hereof and on each Closing Date;
|
|
14.2.18 |
insofar as it has not been already provided to the applicable Issuer or applicable Issuer Group Member or is not held by such Transferring Company (or a subsidiary of
it), receipt by the applicable Issuer or applicable Issuer Group Member of a copy of the applicable Lease relating to the Aircraft owned by or leased by (as applicable) such Seller, Transferring Trust or Transferring Company (or its
subsidiaries), along with the tangible chattel paper original of such Lease (or if an original was never so designated or such original has been lost, a certificate from the applicable Seller to such effect) on the applicable Closing
Date; and
|
|
14.2.19 |
all the conditions precedent to the effectiveness of the Novation Agreement, as applicable, for the applicable Aircraft which are expressed to be for the benefit of the
Issuer Group Member shall have been satisfied.
|
14.3 |
Legal Opinions:
|
14.4 |
Further Condition and Agreement:
|
15. |
MISCELLANEOUS
|
15.1 |
Waiver:
|
15.2 |
Notices:
|
|
15.2.1 |
be in writing delivered personally, or by prepaid courier delivery services such as Federal Express, DHL or other similar services, or facsimile (confirmed, in the case
of facsimile, by prepaid airmail letter sent within 24 hours of dispatch but so that non-receipt of such confirmation shall not affect in any way the validity of the facsimile in question). Notices may be sent by e-mail (including pdf
or other attachment to e-mail) if the receiving party has provided the sending party an e-mail address in the address information at 15.2.3 below (as such address information may have been updated in accordance with this Clause 15);
|
|
15.2.2 |
be deemed to have been received, subject as otherwise provided in this Agreement in the case of an e-mail, upon the date the sender’s receipt of an acknowledgment from
the intended recipient (such as by the return receipt requested function, return e-mail or other written acknowledgment), in the case of a facsimile, at the time of dispatch with confirmed answerback of the addressee appearing at the
beginning and end of the communication, (
provided, however, that
, in the case of a facsimile or an e-mail, if the date of dispatch is not a
Business Day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such Business Day and provided further that such notice or communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient), and in the case of a letter, when delivered personally;
provided, however, that
if personal delivery or delivery by courier of a notice is tendered but refused, such notice shall be effective upon such
tender; and
|
|
15.2.3 |
be sent:
|
15.3 |
Severability:
|
15.4 |
Assignment; Third Party Beneficiary:
|
15.5 |
Amendment:
|
15.6 |
Applicable Law and Jurisdiction:
|
|
15.6.1 |
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
|
|
15.6.2 |
Each party hereto hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State
court sitting in New York County for the purposes of all legal proceedings arising out of or relating to this Agreement and each other Transaction Document or the transactions contemplated hereby or thereby. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum. Each Issuer agrees that the process by which any suit, action or proceeding in any such court is begun may be served on it by being delivered to Corporation Service Company (the
“
Agent
”), 1180 Avenue of the Americas, Suite 210, New York, New York 10036 U.S.A., its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf such service of legal process. Without limiting the effect of the immediately preceding sentence, each of the parties hereto hereby irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies to it or in any other manner permitted by Applicable Law.
|
|
15.6.3 |
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES THE RIGHT TO DEMAND A TRIAL BY JURY, IN ANY SUCH SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE SUBJECT MATTER HEREOF OR THEREOF OR THE OVERALL TRANSACTION BROUGHT BY ANY OF THE PARTIES HERETO OR THEIR SUCCESSORS OR ASSIGNS.
|
|
15.6.4 |
Nothing in this Clause 15.6 limits the right of each of the parties hereto to bring proceedings against another party hereto in connection with this Agreement (i) in any
other court of competent jurisdiction; or (ii) concurrently in more than one jurisdiction.
|
15.7 |
Survival After Closing:
|
15.8 |
Entire Agreement; Counterparts:
|
15.9 |
Issuer Limited Recourse:
|
BABCOCK & BROWN AIR FUNDING I LIMITED
|
|||
By:
|
/s/ Colm Barrington
|
||
Name: Colm Barrington
|
|||
Title: Director
|
|||
BAKER & SPICE AVIATION LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
FLASHDELL LIMITED
|
|||
By:
|
/s/ Gavin Mercer
|
||
Name: Gavin Mercer
|
|||
Title: Director
|
|||
FLY AIRCRAFT HOLDINGS TWO LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
FLY AIRCRAFT HOLDINGS FIVE LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
FLY AIRCRAFT HOLDINGS FOURTEEN LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
LAPIS AIRCRAFT LEASING LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
LUCYDELL LIMITED
|
|||
By:
|
/s/ Gavin Mercer
|
||
Name: Gavin Mercer
|
|||
Title: Director
|
|||
MALACHITE AIRCRAFT LEASING LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
MERAH AIRCRAFT 5 LIMITED
|
|||
By:
|
/s/ Declan Cotter
|
||
Name: Declan Cotter
|
|||
Title: Director
|
|||
SAP MERIDIAN 12 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
SAP MERIDIAN 13 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN 15 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN 18 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN 19 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN 22 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN 23 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
SAP MERIDIAN 34903 LP
|
|||
By:
|
/s/ Vincent Cannon
|
||
Name: Vincent Cannon
|
|||
Title: Vice President
|
|||
SAP MERIDIAN AVIATION 21 LIMITED
|
|||
By:
|
/s/ Maurice Prendergast
|
||
Name: Maurice Prendergast
|
|||
Title: Director
|
|||
SAP MERIDIAN AVIATION 24 LIMITED
|
|||
By:
|
/s/ Maurice Prendergast
|
||
Name: Maurice Prendergast
|
|||
Title: Director
|
|||
SAP MERIDIAN AVIATION 26 LIMITED
|
|||
By:
|
/s/ Maurice Prendergast
|
||
Name: Maurice Prendergast
|
|||
Title: Director
|
|||
SAP MERIDIAN AVIATION 29076 LIMITED
|
|||
By:
|
/s/ Maurice Prendergast
|
||
Name: Maurice Prendergast
|
|||
Title: Director
|
|||
YALEDELL LIMITED
|
|||
By:
|
/s/ Gavin Mercer
|
||
Name: Gavin Mercer
|
|||
Title: Director
|
UMB BANK, N.A., NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE OF MSN 37365 TRUST
|
|||
By:
|
/s/ Scott Rosevear
|
||
Name: Scott Rosevear
|
|||
Title: Senior Vice President
|
|||
HORIZON AIRCRAFT FINANCE I LIMITED
|
|||
By:
|
/s/ Christopher Cullen
|
||
Name: Christopher Cullen
|
|||
Title: Director
|
|||
HORIZON AIRCRAFT FINANCE I LLC
|
|||
By:
|
/s/ Edward L. Truitt Jr.
|
||
Name: Edward L. Truitt Jr.
|
|||
Title: Independent Manager
|
|||
HORIZON AVIATION 1 LIMITED
|
|||
By:
|
/s/ Colm Davis
|
||
Name: Colm Davis
|
|||
Title: Director
|
|||
HORIZON AVIATION 2 LIMITED
|
|||
By:
|
/s/ Colm Davis
|
||
Name: Colm Davis
|
|||
Title: Director
|
HORIZON AVIATION 3 LIMITED
|
|||
By:
|
/s/ Colm Davis
|
||
Name: Colm Davis
|
|||
Title: Director
|
|||
HORIZON AVIATION 4 LIMITED
|
|||
By:
|
/s/ Colm Davis
|
||
Name: Colm Davis
|
|||
Title: Director
|
|||
HORIZON AVIATION 5 LIMITED
|
|||
By:
|
/s/ Colm Davis
|
||
Name: Colm Davis
|
|||
Title: Director
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Amber Aircraft Leasing Limited
|
Ireland
|
|
Amethyst Aircraft Leasing Limited
|
Ireland
|
|
Aphrodite Aviation Limited
|
Ireland
|
|
Aquamarine Aircraft Leasing Limited
|
Ireland
|
|
Artemis Aviation Limited
|
Ireland
|
|
B&B Air Acquisition 3151 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 3237 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 34953 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 34956 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 403 Leasing Limited
|
Ireland
|
|
B&B Air Funding 27974 Leasing Limited
|
Ireland
|
|
B&B Air Funding 28595 Leasing Limited
|
Ireland
|
|
B&B Air Funding 29052 Leasing Limited
|
Ireland
|
|
B&B Air Funding 29330 Leasing Limited
|
Ireland
|
|
B&B Air Funding 30785 Leasing Limited
|
Ireland
|
|
B&B Air Funding 888 Leasing Limited
|
Ireland
|
|
Babcock & Brown Air Acquisition I Limited
|
Bermuda
|
|
Babcock & Brown Air Finance (Cayman) Limited
|
Cayman Islands
|
|
Babcock & Brown Air Finance II (Cayman) Limited
|
Cayman Islands
|
|
Babcock & Brown Air Funding I Limited
|
Bermuda
|
|
Baker & Spice Aviation Limited
|
Ireland
|
|
Balfour Aviation Limited
|
Ireland
|
|
Brookdell Limited
|
Ireland
|
|
Caledonian Aviation Holdings Limited
|
Ireland
|
|
Callista Aviation Limited
|
Ireland
|
|
Caraway Aircraft Leasing SARL
|
France
|
|
Cardamom Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Carnelian Aircraft Leasing Limited
|
Ireland
|
|
Cassia Aircraft Leasing (Labuan) Ltd.
|
Malaysia
|
|
Churchill Aviation Limited
|
Ireland
|
|
Citrine Aircraft Leasing Limited
|
Ireland
|
|
Clementine Aviation Limited
|
Ireland
|
|
Coral Aircraft Holdings Limited
|
Cayman Islands
|
|
Coral Aircraft One Limited
|
Ireland
|
|
Coral Aircraft Three Limited
|
Ireland
|
|
Coral Aircraft Two Limited
|
Ireland
|
|
Drake Aviation Limited
|
Ireland
|
|
Eternity Aviation Limited
|
Ireland
|
|
Fairydell Limited
|
Ireland
|
|
Fly 30144 Leasing SARL
|
France
|
|
Fly 30145 Leasing SARL
|
France
|
|
Fly Acquisition 37774 Owner Limited
|
Ireland
|
|
Fly Acquisition 39330 Leasing Limited
|
Ireland
|
|
Fly Acquisition II Limited
|
Bermuda
|
|
Fly Acquisition III Limited
|
Bermuda
|
|
Fly Aircraft Holdings Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Eighteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Eleven Limited
|
Ireland
|
|
Fly Aircraft Holdings Fifteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Forty Limited
|
Ireland
|
|
Fly Aircraft Holdings Forty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Fourteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Nineteen Limited
|
Ireland
|
|
Fly Aircraft Holdings One Limited
|
Ireland
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Fly Aircraft Holdings Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Seventeen Limited
|
Ireland
|
|
Fly Aircraft Holdings Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Sixteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Ten Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Two Limited
|
Ireland
|
|
Fly Aircraft Holdings Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Twelve Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Two Limited
|
Ireland
|
|
Fly Aircraft Holdings Two Limited
|
Ireland
|
|
Fly Aladdin Engine Funding Ltd.
|
Bermuda
|
|
Fly Aladdin Funding Limited
|
Ireland
|
|
Fly Aladdin Holdings Limited
|
Ireland
|
|
Fly Aladdin MaltaCo Limited
|
Malta
|
|
Fly Funding II S.à.r.l.
|
Luxembourg
|
|
Fly Peridot Holdings Limited
|
Cayman Islands
|
|
Fly-BBAM Holdings, Ltd.
|
Cayman Islands
|
|
GAAM China No. 1 Limited
|
Ireland
|
|
GAHF (Ireland) Limited
|
Ireland
|
|
Garnet Aircraft Leasing Limited
|
Ireland
|
|
Global Aviation Holdings Fund Limited
|
Cayman Islands
|
|
Goa Aviation Limited
|
Ireland
|
|
Grace Aviation Limited
|
Ireland
|
|
Great Wall Aviation Limited
|
Ireland
|
|
Hermes Aviation Limited
|
Ireland
|
|
Hobart Aviation Holdings Limited
|
Ireland
|
|
JET-i 2522 Leasing Limited
|
Ireland
|
|
JET-i 2670 Leasing Limited
|
Ireland
|
|
JET-i 2728 Holdings Limited
|
Ireland
|
|
JET-i 28042 Leasing Limited
|
Ireland
|
|
JET-i 2849 Leasing Limited
|
Ireland
|
|
JET-i 34293 Leasing Limited
|
Ireland
|
|
JET-i 34295 Leasing Limited
|
Ireland
|
|
JET-i 34898 Leasing Limited
|
Ireland
|
|
JET-i 34899 Leasing Limited
|
Ireland
|
|
JET-i 35089 Leasing Limited
|
Ireland
|
|
Kimolos Limited
|
Ireland
|
|
Lapis Aircraft Leasing Limited
|
Ireland
|
|
Lemongrass Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Magellan Acquisition Limited
|
Bermuda
|
|
Malachite Aircraft Leasing Limited
|
Ireland
|
|
Marlborough Aviation Limited
|
Ireland
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Merah Aircraft 2 Limited
|
Ireland
|
|
Merah Aircraft 5 Limited
|
Ireland
|
|
Merah Aircraft 6 Limited
|
Ireland
|
|
Montgomery Aviation Limited
|
Ireland
|
|
Mumbai Aviation Limited
|
Ireland
|
|
Nelson Aviation Limited
|
Ireland
|
|
Opal Holdings Australia Pty Limited
|
Australia
|
|
Opal Holdings Lux S.à.r.l.
|
Luxembourg
|
|
Padoukios Limited
|
Ireland
|
|
Palma Aviation Limited
|
Ireland
|
|
Panda Aviation Limited
|
Ireland
|
|
Pandan Aircraft Leasing SARL
|
France
|
|
Pyrite Aircraft Leasing Limited
|
Ireland
|
|
Quilldell Limited
|
Ireland
|
|
Red Aircraft Holdings 3 Co., Ltd.
|
Bermuda
|
|
Red Aircraft Holdings 4 Co., Ltd.
|
Bermuda
|
|
Richoux Aviation Limited
|
Ireland
|
|
Roosevelt Holdings Limited
|
Ireland
|
|
Sage Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Sapphire Leasing Pty Limited
|
Australia
|
|
Somerset Aviation Limited
|
Ireland
|
|
Suffolk Aviation Limited
|
Ireland
|
|
Surrey Aviation Limited
|
Ireland
|
|
Sussex Aviation Limited
|
Ireland
|
|
Temple Aviation Holdings Limited
|
Ireland
|
|
Topaz Aircraft Leasing Limited
|
Ireland
|
|
Tourmaline Aircraft Leasing Limited
|
Ireland
|
|
Victoria Peak Aviation Limited
|
Ireland
|
|
Wingate Aviation Limited
|
Ireland
|
|
Zircon Aircraft Leasing Limited
|
Ireland
|
1 |
We refer to the loan agreement relating to the Aircraft dated 6 February 2012 between the Borrower, the Shareholder, the Lender, the Facility Agent and the Security Trustee
(as amended, supplemented or varied from time to time, the
Loan Agreement
).
|
2 |
In this letter agreement:
|
|
(a) |
Collateral Agreement Letter Agreement
means the letter agreement dated on or about
the date hereof between,
inter alios
, the Borrower, [ ], Global Aviation Holdings Fund Limited, the Shareholder, the Lender, the Facility
Agent and the Security Trustee relating to the collateral agreement dated 6 February 2012 between,
inter alios
, the Borrower, [ ], the
Shareholder, the Lender, the Facility Agent and the Security Trustee;
|
|
(b) |
Effective Time
means the time at which the Facility Agent confirms to the Parties
that each of the conditions specified in paragraph 5 has been satisfied (or waived or postponed) in accordance with the provisions of paragraphs 5 to 8;
|
|
(c) |
Extension Letter Agreements
means, together, this letter agreement, the Collateral
Agreement Letter Agreement and the Other Letter Agreements (each, an
Extension Letter Agreement
);
|
|
(d) |
MSN [ ] Letter Agreement
means the letter agreement dated on or about the date
hereof between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee relating to the loan agreement relating to one (1) [ ] aircraft bearing manufacturer’s serial number [ ] dated 6 February 2012
between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee;
|
|
(e) |
MSN [ ] Letter Agreement
means the letter agreement dated on or about the date
hereof between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee relating to the loan agreement relating to one (1) [ ] aircraft bearing manufacturer’s serial number [ ] dated 6 February
2012 between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee;
|
|
(f) |
MSN [ ] Letter Agreement
means the letter agreement dated on or about the date
hereof between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee relating to the loan agreement relating to one (1) [ ] aircraft bearing manufacturer’s serial number [ ] dated 6 February 2012
between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee;
|
|
(g) |
MSN [ ] Letter Agreement
means the letter agreement dated on or about the date
hereof between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee relating to the loan agreement relating to one (1) [ ] aircraft bearing manufacturer’s serial number [ ] dated 6 February 2012
between [ ], the Shareholder, the Lender, the Facility Agent and the Security Trustee;
|
|
(h) |
Other Letter Agreements
mean, together, the MSN [ ] Letter Agreement, the MSN [ ]
Letter Agreement, the MSN [ ] Letter Agreement and the MSN [ ] Letter Agreement (each, an
Other Letter Agreement
);
|
|
(i) |
Parties
means, together, the parties to this letter agreement (each, a
Party
);
|
|
(j) |
any reference to a
paragraph
means a paragraph of this letter agreement; and
|
|
(k) |
all terms defined in the Loan Agreement shall, unless otherwise defined in this letter agreement, have the same respective meanings when used in this letter agreement.
|
3 |
The Parties have agreed to enter into this letter agreement in connection with the extension and amendment of the financing arrangements relating to the Aircraft.
|
4 |
With effect from the Effective Time, each Party hereby agrees that:
|
|
(a) |
the definitions of “Commercial Margin” and “Liquidity Costs Margin” in clause 1.1 of the Loan Agreement are deleted in their entirety;
|
|
(b) |
the definition of “Cost of Funds” in clause 1.1 of the Loan Agreement is amended by deleting the words “(net of the Liquidity Costs Margin)”;
|
|
(c) |
the definitions of “Final Repayment Date” and “Margin” in clause 1.1 of the Loan Agreement are deleted in their entirety and replaced with the following new definitions:
|
|
(d) |
the provisions of paragraph 20 of part A of schedule 3 to the Loan Agreement are deleted in their entirety and replaced with the following:
|
|
(e) |
the provisions of paragraph 6(b) of part A of schedule 8 to the Loan Agreement are deleted in their entirety and replaced with the words “[intentionally omitted]”.
|
5 |
The effectiveness of this letter agreement shall be subject to the satisfaction (or waiver or postponement) in each of the following conditions precedent:
|
|
(a) |
The Security Trustee shall have received a fully executed copy of each Extension Letter Agreement.
|
|
(b) |
The Borrower shall have delivered (or caused to be delivered) to the Security Trustee each of the following corporate documents:
|
|
(i) |
an original (or a certified true copy) of a corporate certificate of each Obligor attaching:
|
|
(A) |
a certified true copy of its constitutive documents;
|
|
(B) |
a certified true copy of its board resolutions that authorise the execution by it of the Extension Letter Agreements to which it is a party and the transactions contemplated
thereby;
|
|
(C) |
a certified true copy of the power of attorney or letter of delegation of authority relating to the execution by it of the Extension Letter Agreements to which it is a party;
|
|
(D) |
an incumbency certificate detailing the persons entitled to execute on its behalf the Extension Letter Agreements to which it is a party; and
|
|
(E) |
a list of its directors and secretary;
|
|
(ii) |
evidence that the process agent appointed by each Obligor in England in relation to the Extension Letter Agreement to which it is a party shall have accepted such
appointment.
|
|
(c) |
Each of the following legal opinions shall have been signed and addressed and delivered to each Finance Party:
|
|
(i) |
Irish
legal opinion of McCann FitzGerald; and
|
|
(ii) |
English
legal opinion of Vedder Price LLP.
|
|
(d) |
The following further conditions precedent shall have been satisfied:
|
|
(i) |
the “Effective Time” under each Other Letter Agreement shall occur simultaneously with the Effective Time hereunder, which time must occur on 14 November 2018;
|
|
(ii) |
no Total Loss shall have occurred in relation to the Aircraft;
|
|
(iii) |
no Event of Default shall have occurred and be continuing;
|
|
(iv) |
no Illegality Event shall have occurred and be continuing; and
|
|
(v) |
the Facility Agent shall have received such documentation and other evidence as it shall have required (acting reasonably) in relation to each Obligor so as to comply with
all applicable “know your customer” or similar identification procedures.
|
6 |
When making any determination with respect to any condition precedent set forth in paragraph 5, each Representative will act on the instructions of the Lender.
|
7 |
Each document or other written item to be delivered to a Representative pursuant to paragraph 5 must be in form and substance satisfactory to each Representative (acting
reasonably).
|
8 |
If any of the conditions precedent set forth in paragraph 5 are not satisfied in accordance with the provisions of paragraph 5, a Representative (acting on the instructions
of the Lender) shall be entitled to waive or postpone (in whole or in part) satisfaction of any such condition upon such terms as it may think fit. Any such waiver or postponement must be made in writing.
|
9 |
Each of the Borrower and the Shareholder hereby:
|
|
(a) |
confirms that all of the security granted in favour of the Security Trustee pursuant to the Security Documents for the Secured Obligations (as amended pursuant to this letter
agreement) remains in full force and effect; and
|
|
(b) |
acknowledges that the security granted by it pursuant to or in connection with the Aircraft Mortgages and each other Security Document shall remain unaffected and any
reference to the Loan Agreement in the Aircraft Mortgages and each other Security Document shall be a reference to the Loan Agreement as amended by this letter agreement.
|
10 |
Each Party hereby represents and warrants that:
|
|
(a) |
this letter agreement has been duly authorised and executed by it; and
|
|
(b) |
this letter agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms (except to the extent that enforcement may be
limited by applicable insolvency and similar laws affecting the rights of creditors generally).
|
11 |
Each of the Parties hereby agrees and confirms that this letter agreement is a “Loan Document” (and, accordingly, a “Transaction Document”) for the purposes of the Loan
Agreement as amended by this letter agreement and the other Transaction Documents.
|
12 |
The Parties agree that, save as amended by this letter agreement, the Loan Agreement remains in full force and effect.
|
13 |
A person who is not a party to this letter agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this
letter agreement.
|
14 |
This letter agreement may be executed in any number of counterparts and on separate counterparts, each of which when executed shall constitute an original, and all
counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart signature page of this letter agreement by e-mail (pdf) or fax shall be as effective as delivery of a manually executed counterpart of
this letter agreement. In relation to each counterpart, upon confirmation by or on behalf of the signatory that the signatory authorises the attachment of such counterpart signature page to the final text of this letter agreement, such
counterpart signature page shall take effect together with such final text as a complete authoritative counterpart.
|
15 |
This letter agreement and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with English law.
|
16 |
The provisions of clauses 35.2 to 35.6 inclusive of the Loan Agreement apply
mutatis
mutandis
to this letter agreement.
|
Borrower
|
||
SIGNED AND DELIVERED AS A DEED
by
|
)
|
|
)
|
||
|
)
|
|
as attorney for
|
)
|
|
[
]
|
)
|
|
in the presence of:
|
)
|
Signature of Witness:
|
|
|
Name of Witness:
|
|
|
Address of Witness:
|
|
|
|
||
Occupation of Witness:
|
|
Shareholder
|
||
SIGNED AND DELIVERED AS A DEED
by
|
)
|
|
)
|
||
|
)
|
|
as attorney for
|
)
|
|
HOBART AVIATION HOLDINGS LIMITED
|
)
|
|
in the presence of:
|
)
|
Signature of Witness:
|
|
|
Name of Witness:
|
|
|
Address of Witness:
|
|
|
|
||
Occupation of Witness:
|
|
Lender
|
|
EXECUTED AS A DEED by
|
)
|
NORDDEUTSCHE LANDESBANK GIROZENTRALE
|
)
|
acting by:
|
)
|
|
|
||
Name:
|
|
Name:
|
|
Title:
Authorised Signatory
|
|
Title:
Authorised Signatory
|
|
Facility Agent
|
|
EXECUTED AS A DEED by
|
)
|
NORDDEUTSCHE LANDESBANK GIROZENTRALE
|
)
|
acting by:
|
)
|
|
|
||
Name:
|
|
Name:
|
|
Title:
Authorised Signatory
|
|
Title:
Authorised Signatory
|
|
Security Trustee
|
|
EXECUTED AS A DEED by
|
)
|
NORDDEUTSCHE LANDESBANK GIROZENTRALE
|
)
|
acting by:
|
)
|
|
|
||
Name:
|
|
Name:
|
|
Title:
Authorised Signatory
|
|
Title:
Authorised Signatory
|
|
|
1. |
I have reviewed this annual report on Form 20-F of Fly Leasing Limited;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c. |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d. |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors
and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information; and
|
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: March 12, 2019
|
|
/s/ Colm Barrington
|
|
Colm Barrington
|
|
Chief Executive Officer
|
|
Fly Leasing Limited
|
|
1. |
I have reviewed this annual report on Form 20-F of Fly Leasing Limited;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c. |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d. |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors
and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information; and
|
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: March 12, 2019
|
|
/s/ Julie Ruehl
|
|
Julie Ruehl
|
|
Chief Financial Officer
|
|
Fly Leasing Limited
|
|
1. |
the accompanying annual report on Form 20-F of the Company for the year ended December 31, 2018 (the “Report”), furnished to the U.S. Securities and Exchange Commission,
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
|
Date: March 12, 2019
|
|
/s/ Colm Barrington
|
|
Colm Barrington
|
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Chief Executive Officer
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Fly Leasing Limited
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Date: March 12, 2019
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/s/ Julie Ruehl
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Julie Ruehl
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Chief Financial Officer
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Fly Leasing Limited
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