ITEM 1.01. Entry into a Material Definitive Agreement.
On November 10, 2022, Old FTAI became a wholly-owned subsidiary of New FTAI as a
result of the merger and New FTAI entered into (i) a guarantee with respect to
Old FTAI's 6.50% Senior Unsecured Notes due 2025 (the "2025 Notes"), dated as of
November 10, 2022 (the "2025 Notes Guarantee"), with New FTAI as guarantor (the
"Guarantor"), (ii) a guarantee with respect to Old FTAI's 9.75% Senior Unsecured
Notes due 2027 (the "2027 Notes"), dated as of November 10, 2022 (the "2027
Notes Guarantee"), with New FTAI as Guarantor, (iii) a guarantee with respect to
Old FTAI's 5.50% Senior Unsecured Notes due 2028 (the "2028 Notes", and,
together with the 2025 Notes and 2027 Notes, the "Notes"), dated as of November
10, 2022 (the "2028 Notes Guarantee"), with New FTAI as Guarantor, and (iv) a
guarantee with respect to Old FTAI's Second Amended and Restated Credit
Agreement, dated as of September 20, 2022 (the "Revolving Credit Facility," and
such guarantee, the "Revolver Guarantee"), with New FTAI as Guarantor
(collectively, the "Guarantees"). Under the 2025 Notes Guarantee, the Guarantor
has provided a full and unconditional guarantee of the due and punctual payment
of the principal and interest on Old FTAI's 2025 Notes, and the due and punctual
payment or performance of all other obligations of New FTAI under the indenture,
dated as of September 18, 2018, between Old FTAI and the Trustee, as
supplemented by the first supplemental indenture, dated as of May 21, 2019, and
as further supplemented by the second supplemental indenture, dated December 23,
2020 (the "2025 Notes Indenture"). Under the 2027 Notes Guarantee, the
Guarantor has provided a full and unconditional guarantee of the due and
punctual payment of the principal and interest on Old FTAI's 2027 Notes, and the
due and punctual payment or performance of all other obligations of New FTAI
under the indenture, dated as of July 28, 2020, between Old FTAI and the Trustee
(the "2027 Notes Indenture"). Under the 2028 Notes Guarantee, the Guarantor has
provided a full and unconditional guarantee of the due and punctual payment of
the principal and interest on Old FTAI's 2028 Notes, and the due and punctual
payment or performance of all other obligations of New FTAI under the indenture,
dated as of April 12, 2021, between Old FTAI and the Trustee, and as
supplemented by the first supplemental indenture, dated as of September 24, 2021
(the "2028 Notes Indenture"). Under the Revolver Guarantee, the Guarantor has
provided a full and unconditional guarantee of the due and punctual payment of
the principal and interest on Revolving Credit Facility, and the due and
punctual payment or performance of all other obligations of New FTAI under the
Revolving Credit Facility.
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The foregoing descriptions of the Guarantees do not purport to be complete and
are qualified in their entirety by reference to the full text each respective
Guarantee, which are filed as Exhibits 4.1, 4.2, 4.3 and 4.4, respectively,
hereto and which are incorporated by reference herein.
On November 10, 2022, New FTAI and Old FTAI entered into an amended and restated
registration rights agreement (the "Registration Rights Agreement") with FIG LLC
(the "Manager") and Master GP.
A description of the Registration Rights Agreement is set forth in the "Certain
Relationships and Related Person Transactions - Registration Rights Agreement"
section of New FTAI's Registration Statement on Form S-4 filed with the SEC on
October 4, 2022 (the "S-4 Registration Statement"), which is incorporated by
reference herein.
On November 10, 2022, New FTAI and Old FTAI entered into a Services and Profit
Sharing Agreement (the "Services and Profit Sharing Agreement") with FTAI
Aviation Holdco Ltd. ("Aviation Holdco") and Master GP.
A description of the Services and Profit Sharing Agreement is set forth in the
"Business of the Company - Merger Agreement; Services and Profit Sharing
Agreement" section of the S-4 Registration Statement, which is incorporated by
reference herein.
ITEM 1.02. Termination of a Material Definitive Agreement.
In connection with the merger, the Fourth Amended and Restated Partner Agreement
dated May 20, 2015 (the "Partnership Agreement") of the Partnership was
terminated. Prior to the merger, Master GP was entitled to certain incentive
allocations (comprised of income incentive allocations and capital gains
incentive allocations) pursuant to the Partnership Agreement. Following the
closing of the merger, Master GP will be entitled to the same incentive
allocations pursuant to the Services and Profit Sharing Agreement.
ITEM 2.01. Completion of Acquisition or Disposition of Assets.
On November 10, 2022, New FTAI completed the merger and, in accordance with the
Merger Agreement, Merger Sub merged with and into Old FTAI, with Old FTAI
surviving the merger and becoming a wholly-owned subsidiary of New FTAI.
Consequently, New FTAI replaced Old FTAI as the publicly traded company.
Pursuant to the Merger Agreement, each of the (i) common shares, (ii) Old FTAI
Series A Preferred Shares, (ii) Old FTAI Series B Preferred Shares and the (iv)
Old FTAI Series C Preferred Shares and, together with common shares, Old FTAI
Series A Preferred Shares and Old FTAI Series B Preferred Shares, the "Old FTAI
Shares"), issued and outstanding immediately prior to the merger was converted
on a one-for-one basis into one issued and outstanding share representing a
share of New FTAI (collectively, the "New FTAI Shares"), having substantially
similar rights and privileges as the Old FTAI Shares being converted. The Merger
Agreement was approved and adopted by the Old FTAI shareholders at a special
meeting of the shareholders held on November 9, 2022.
Immediately after the consummation of the merger, New FTAI had the same number
of authorized and outstanding shares as Old FTAI immediately prior to the
merger. The common shares of New FTAI held by Old FTAI that were outstanding
immediately prior to the merger were surrendered and cancelled for no
consideration. The Old FTAI Preferred Shares remain outstanding and are held by
New FTAI.
On November 9, 2022, immediately prior to the consummation of the merger, New
FTAI adopted an amended and restated memorandum and articles of association (the
"Articles") that provides substantially similar terms, conditions and procedures
as contained in the Fourth Amended and Restated Limited Liability Company
Agreement (the "Existing LLC Agreement") that were in effect immediately prior
to the consummation of the merger. Immediately after the consummation of the
merger, each of New FTAI's directors and executive officers are the same as the
directors and executive officers of Old FTAI immediately prior to the
consummation of the merger.
Immediately prior to the consummation of the merger, the board of directors of
New FTAI formed the same board committees with identical members and
substantially similar governing charters as those of Old FTAI immediately prior
to the merger. The board of directors of New FTAI also adopted governance
policies that are substantially similar to the corresponding policies governing
Old FTAI immediately prior to the merger. As a result of the merger, New FTAI
became the successor issuer to Old FTAI with respect to the Old FTAI Shares
pursuant to Rule 12g-3(a) of the Exchange Act.
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In connection with the consummation of the merger, Old FTAI notified Nasdaq
Stock Market LLC ("Nasdaq") that each Old FTAI Share issued and outstanding
immediately prior to the merger would be converted on a one-for-one basis into
one issued and outstanding New FTAI Share. The New FTAI Shares have been
approved for listing on Nasdaq, and commenced trading on November 11, 2022 on an
uninterrupted basis under the trading symbols "FTAI" (with respect to the common
shares, and with a CUSIP (G3730V105)), "FTAIP" (with respect to the New FTAI
Series A Preferred Shares, and with a CUSIP (G3730V113)), "FTAIO" (with respect
to the New FTAI Series B Preferred Shares, and with a CUSIP (G3730V121)) and
"FTAIN" (with respect to the New FTAI Series C Preferred Shares, and with a
CUSIP (G3730V139)).
Upon completion of the merger, the Fortress Transportation and Infrastructure
Investors LLC Nonqualified Stock Option and Incentive Award Plan (the "Old FTAI
Plan") was assumed by New FTAI as the FTAI Aviation Ltd. Nonqualified Stock
Option and Incentive Award Plan (the "New FTAI Plan"). In connection with the
assumption by New FTAI of the New FTAI Plan, the common shares reserved for
issuance under the Old FTAI Plan were converted into ordinary shares of New FTAI
on a one-for-one basis. The number of ordinary shares of New FTAI reserved for
issuance under the New FTAI Plan were not increased in connection with the
assumption by New FTAI of the New FTAI Plan, and there was no (i) material
increase in the benefits to the participants in the New FTAI Plan (including no
extension to the term of the New FTAI Plan), (ii) expansion in the class of
participants eligible to participate in the New FTAI Plan or in the types of
award provided under the New FTAI Plan or (iii) any other material amendment to
the terms of the New FTAI Plan. In addition, each outstanding Old FTAI option
will be converted into a New FTAI option on the same terms and conditions
applicable to the corresponding Old FTAI option as of the completion of the
merger.
The foregoing descriptions of the Merger Agreement do not purport to be complete
and are qualified in their entirety by reference to the full text of the Merger
Agreement, a copy of which was included as Annex A to the New FTAI Registration
Statement on Form S-4, filed with the SEC on October 11, 2022, and which is
incorporated by reference herein.
ITEM 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The information related to the Articles, which provides holders of New FTAI
Shares substantially similar rights to those provided under the Existing LLC
Agreement immediately prior to the consummation of the merger, that is required
by this Item 5.03 is included in Item 2.01 and is incorporated by reference
herein.
On November 10, 2022, the board of directors of Old FTAI amended and restated
Old FTAI's limited liability company agreement (the "LLCA"), effective as of
such date. Among other things, the amendments: (a) provide for the Old FTAI's
board composition and size to be identical to the board composition and size of
the board of directors of New FTAI, (b) update the procedural mechanics for
meetings of the board of directors including providing that any meetings held by
the board of directors of New FTAI will also be deemed to constitute meetings of
the board of directors, (c) update the procedural mechanics for shareholder
meetings including removing the requirement for holding annual meetings and
providing for shareholders to act by written consent, (d) remove the requirement
for Old FTAI shares to be certificated, (e) remove Old FTAI's reporting
obligations to record holders and (f) revise the tax provisions in the LLCA to
reflect the fact that the Company became a wholly-owned subsidiary of New FTAI
as a result of the merger. The LLCA also incorporates various other updates and
technical, clarifying and conforming changes.
The foregoing description is qualified in its entirety by reference to the full
text of the LLCA, as amended and restated, which is filed as Exhibit 3.1 hereto
and which is incorporated by reference herein.
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ITEM 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1 Agreement and Plan of Merger dated August 12, 2022, by and among
Fortress Transportation and Infrastructure Investors LLC, FTAI Aviation
Ltd. and FTAI Aviation Merger Sub LLC (incorporated by reference to
Annex A to FTAI's Registration Statement on Form S-4, filed on October
11, 2022).
3.1 Amended and Restated Limited Liability Company Agreement of Fortess
Transportation and Infrastructure Investors LLC.
4.1 2025 Notes Guarantee.
4.2 2027 Notes Guarantee.
4.3 2028 Notes Guarantee.
4.4 Revolver Guarantee.
10.1 Services and Profit Sharing Agreement, dated November 10, 2022, by and
among FTAI Aviation Holdco Ltd., Fortess Transportation and
Infrastructure Investors LLC and Fortress Worldwide Transportation and
Infrastructure Master GP LLC.
10.2 Amended and Restated Registration Rights Agreement, dated November 10,
2022, by and among FTAI Finance Ltd., Fortess Transportation and
Infrastructure Investors LLC, Fortress Worldwide Transportation and
Infrastructure Master GP LLC and FIG LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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