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TRANS WORLD AIRLINES, INC.
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of April 21, 1998
$31,800,000
Mandatory Conversion Equity Notes due 1999
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TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions ................................. 1
Section 1.2 Rules of Construction ....................... 1
ARTICLE 2.
THE SECURITIES
Section 2.1 Designation, Form and Dating ................ 1
Section 2.2 Execution, Amount, Authentication and
Delivery .................................... 2
Section 2.3 Registrar and Paying Agent .................. 4
Section 2.4 Paying Agent to Hold Payments In Trust ...... 5
Section 2.5 Securityholder Lists ........................ 6
Section 2.6 Transfer and Exchange ....................... 6
Section 2.7 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities ........................... 7
Section 2.8 Treasury Securities ......................... 8
Section 2.9 Temporary Securities ........................ 9
Section 2.10 Cancellation ................................ 9
Section 2.11 Defaulted Interest; Interest on Defaulted
Principal ................................... 9
Section 2.12 CUSIP Numbers ............................... 10
ARTICLE 3.
REDEMPTIONS ..................... 10
ARTICLE 4.
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 4.1 Payment of Securities ....................... 10
Section 4.2 Maintenance of Office or Agency ............. 11
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TABLE OF CONTENTS
(Continued)
Page
Section 4.3 Limitation on Dividends and Acquisition of
Common Stock ................................ 11
Section 4.4 Corporate Existence ......................... 12
Section 4.5 Payment of Taxes and Other Claims ........... 12
Section 4.6 Notices ..................................... 13
Section 4.7 Maintenance of Properties and Insurance ..... 13
Section 4.8 Default Notices and Compliance Certificates . 14
Section 4.9 SEC Reports ................................. 14
Section 4.10 Waiver of Stay, Extension or Usury Laws ..... 15
Section 4.11 Amendment to Certain Agreements ............. 16
Section 4.12 Title to Collateral and Limitation on Liens;
Sale of Aircraft; Total Loss With Respect to
Aircraft .................................... 16
Section 4.13 Books, Records, Access; Confidentiality ..... 17
Section 4.14 Security Interests .......................... 18
Section 4.15 Repurchase of Securities Upon a Change in
Control ..................................... 18
Section 4.16 Restrictions on Becoming an Investment
Company ..................................... 19
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.1 Covenant Not to Consolidate, Merge,
Convey or Transfer Except Under Certain
Conditions .................................. 19
Section 5.2 Successor Person Substituted ................ 20
Section 5.3 Limitation on Lease of Properties ........... 20
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default ........................... 20
Section 6.2 Acceleration ................................ 22
Section 6.3 Other Remedies .............................. 23
Section 6.4 Waiver of Past Defaults ..................... 23
Section 6.5 Control by Majority ......................... 23
Section 6.6 Limitation on Suits ......................... 24
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TABLE OF CONTENTS
(Continued)
Page
Section 6.7 Rights of Holders to Receive Payment ........ 24
Section 6.8 Collection Suit by Trustee .................. 25
Section 6.9 Trustee May File Proofs of Claim ............ 25
Section 6.10 Application of Proceeds ..................... 25
Section 6.11 Undertaking for Costs ....................... 26
Section 6.12 Restoration of Rights on Abandonment of
ProceedingS ................................. 27
Section 6.13 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default .............. 27
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee ........................... 27
Section 7.2 Rights of Trustee ........................... 28
Section 7.3 Individual Rights of Trustee ................ 29
Section 7.4 Trustee's Disclaimer ........................ 29
Section 7.5 Notice of Defaults .......................... 29
Section 7.6 Reports by Trustee to Holders ............... 29
Section 7.7 Compensation and Indemnity .................. 30
Section 7.8 Replacement of Trustee ...................... 30
Section 7.9 Successor Trustee by Merger, etc. ........... 31
Section 7.10 Eligibility; Disqualification ............... 31
Section 7.11 Preferential Collection of Claims Against
Company ..................................... 32
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations ........ 32
Section 8.2 Application of Trust Money .................. 33
Section 8.3 Repayment to Company ........................ 34
Section 8.4 Reinstatement ............................... 34
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TABLE OF CONTENTS
(Continued)
Page
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders .................. 35
Section 9.2 With Consent of Holders ..................... 35
Section 9.3 Compliance with Trust Indenture Act ......... 36
Section 9.4 Revocation and Effect of Consents ........... 36
Section 9.5 Notation on or Exchange of Securities ....... 37
Section 9.6 Trustee to Sign Amendments, etc. ............ 37
Section 9.7 Effect of Supplement and/or Amendment ....... 37
ARTICLE 10.
SECURITY
Section 10.1 Other Operative Documents ................... 37
Section 10.2 Opinions, Certificates and Appraisals ....... 38
Section 10.3 Authorization of Actions to be Taken by the
Trustee Under the Operative Documents ....... 38
Section 10.4 Payment of Expenses ......................... 39
Section 10.5 Authorization of Receipt of Funds by the
Trustee Under the Operative Documents ....... 39
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Conflict with Trust Indenture Act of 1939 ... 39
Section 11.2 Notices; Waivers ............................ 39
Section 11.3 Communications by Holders with Other
Holders ..................................... 40
Section 11.4 Certificate and Opinion as to Conditions
Precedent ................................... 40
Section 11.5 Statements Required in Certificate or
Opinion ..................................... 41
Section 11.6 Rules by Trustee, Paying Agent, Registrar ... 42
Section 11.7 Holidays .................................... 42
Section 11.8 Governing Law; Waiver of Jury Trial ......... 42
Section 11.9 No Adverse Interpretation of Other
Agreements .................................. 43
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TABLE OF CONTENTS
(Continued)
Page
Section 11.10 No Recourse Against Others .................. 43
Section 11.11 Benefits of Indenture and the Securities
Restricted .................................. 43
Section 11.12 Successors and Assigns ...................... 43
Section 11.13 Counterpart Originals ....................... 43
Section 11.14 Severability ................................ 43
Section 11.15 Effect of Headings .......................... 44
ARTICLE 12.
RELEASE OF COLLATERAL
Section 12.1 Release of Collateral ....................... 44
ARTICLE 13.
MANDATORY CONVERSION OF SECURITIES
Section 13.1 Mandatory Conversion and Conversion
Price ....................................... 44
Section 13.2 Effect of Consolidation, Merger or
Conveyance on Conversion .................... 46
Section 13.3 Costs of Conversion ......................... 47
Section 13.4 No Liability to Trustee ..................... 48
Section 13.5 Applicable Laws ............................. 48
Section 13.6 Other Funds ................................. 48
Section 13.7 Release of Collateral Upon Conversion ....... 48
Section 13.8 Company to Provide Stock .................... 48
ARTICLE 14.
POSSIBLE SUBORDINATION ............... 49
APPENDIX I Definitions Appendix
EXHIBIT A Form of Mandatory Conversion Equity Note
EXHIBIT B Form of Aircraft Second Mortgage and Security
Agreement
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INDENTURE dated as of April 21, 1998 between TRANS WORLD
AIRLINES, INC., a Delaware corporation (the "Company"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the
Company's Mandatory Conversion Equity Notes due 1999 (the
"Securities").
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions.
-----------
Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in Section
1 of the Definitions Appendix attached hereto as Appendix I,
which shall be a part of this Indenture as if fully set forth in
this place.
Section 1.2 Rules of Construction.
---------------------
The rules of construction for this Indenture are set forth
in Section 2 of the Definitions Appendix.
ARTICLE 2.
THE SECURITIES
Section 2.1 Designation, Form and Dating.
----------------------------
The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A
hereto (with such appropriate insertions, omissions,
substitutions and other variations as are required by this
Indenture) and is hereby incorporated in and expressly made a
part of this Indenture. The Securities may have imprinted or
otherwise reproduced thereon such notations, legends or
endorsements, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any
rules or regulations pursuant thereto, or with the rules of any
securities market in which the Securities are admitted to
trading, or to conform to general usage. The Company shall
approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication and shall be payable, unless previously Tendered,
on the dates as specified herein or in the form of the Security.
The principal of the Securities shall not bear interest except in
the case of a default in payment of such principal or a
Registration Default, and in such cases the Securities shall bear
interest as specified herein or in the form of the Security.
The Person in whose name any Security is registered at the
close of business on any Record Date with respect to any Interest
Payment Date shall be entitled to receive the interest, if
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any, payable on such Interest Payment Date to the extent provided
by such Security, except if and to the extent the Company shall
default in the payment of the interest due on such Interest
Payment Date, in which case defaulted interest shall be paid to
the Person in whose name the Outstanding Security is registered
at the close of business on the subsequent record date (which
shall be not less than five (5) Business Days prior to the date
of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Company to the Holders of
Securities not less than fifteen (15) days preceding such
subsequent record date (a "Special Record Date").
Section 2.2 Execution, Amount, Authentication and Delivery.
----------------------------------------------
The Securities shall be signed for the Company by the
manual or facsimile signatures of an Officer and a Certifying
Officer. The Company's seal shall be affixed to or reproduced on
the Securities. Typographical or other errors or defects in any
such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security which has
been duly authenticated and delivered by the Trustee.
If an officer whose signature is on a Security no longer
holds that office at the time the Trustee authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee manually
signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to
$31,800,000 except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Sections 2.6, 2.7, 2.9, 4.15 or
9.5.
The Securities shall be known and designated as the
"Mandatory Conversion Equity Notes due 1999" of the Company.
Their Stated Maturity shall be April 15, 1999, and they shall not
bear interest; provided, however, that upon a default in payment
of principal on the Securities (whether on acceleration, at
maturity, upon tender for repurchase or otherwise) or a
Registration Default (and for so long as such default or
Registration Default, as the case may be, shall continue uncured
and unwaived), they shall bear interest at the rate of 12% per
annum, from the date of such default or Registration Default, as
the case may be, payable (a) in the case of a Registration
Default, monthly in arrears on the 15th day of each month
commencing the 15th day of the month next succeeding the month in
which such Registration Default occurred, and (b) in the case of
a default in payment of principal, payable on demand. In the
event a Registration Default shall occur and be continuing and
the Company shall have failed to use its reasonable best efforts
to avoid or cure such Registration Default, Holders shall be
entitled to make a claim for damages incurred as a result of such
Registration Default which damages shall not necessarily be
limited to the increase in the interest rate hereunder to 12% per
annum; provided, however, that any amount of interest paid
pursuant to this Section 2.2 shall be credited against any amount
of damages to be paid by the Company in connection with such
claim.
3
Subject to the limits set forth in the second preceding paragraph
of this Indenture, the Trustee shall authenticate Securities for
original issue upon written order of the Company signed by an
Officer and by a Certifying Officer of the Company. The order
shall specify the amount of Securities to be authenticated and
the date on which the original issue of Securities is to be
authenticated, shall provide instructions with respect to the
delivery thereof and shall be accompanied by the documents
specified in Sections 10.2 and 11.4 and by the following
(provided, however, that the Trustee shall be authorized
conclusively to rely upon the documents specified in Section
11.4):
(a) the grant to the Trustee, by assignment, pledge, or
otherwise pursuant to the Mortgage, of a security interest in the
Collateral;
(b) Officers' Certificates or other satisfactory
confirmation (i) with respect to the Mortgage and the Collateral,
that the Company is the legal and beneficial owner of the
Collateral, free and clear of all Liens except Permitted Liens;
and (ii) describing the actions taken to make, obtain and
accomplish all necessary filings, confirmations and
identifications referred to in Section 4.14 hereof;
(c) compliance with all applicable provisions of Sections 4.12
and 4.14 hereof;
(d) an Officers' Certificate confirming all representations
and warranties of the Company contained in this Indenture and the
other Operative Documents as of the date of authentication;
(e) an Officers' Certificate containing representations and
warranties of the type usual and customary to the issuance of the
Securities such as, but not limited to, representations regarding
due authorization of this Indenture; due authorization of the
issuance and delivery of the Securities; that the Securities,
when so issued and delivered against delivery of the Aircraft
under the Aircraft Sale Agreement will be duly and validly
issued, and constitute valid and binding obligations of the
Company, enforceable in accordance with their terms; that the
Common Stock issuable upon conversion of the Securities has been
duly authorized and reserved for issuance and, when issued and
delivered by the Company upon conversion of the Securities, will
be duly and validly issued, fully paid and non-assessable and
free of preemptive rights; that no consent, approval or
authorization of, or designation, declaration, or filing with,
any governmental authority or any other person or entity is
required of the Company in connection with the execution and
delivery of this Indenture or the issuance and delivery of the
Securities; and that the Securities have been registered under
the Securities Act or that registration is not required in
connection with the offer, issuance and delivery of the
Securities, nor does the Securities Act require registration of
the conversion of the Securities into shares of Common Stock as
provided in Article 13;
(f) an Opinion of Counsel to the effect that the Company
has the requisite corporate power and authority to execute,
deliver and perform its obligations under this Indenture and the
other Operative Documents; that the Securities have been duly
authorized and validly issued; and that the offer and issuance of
the Securities have been registered or will be exempt from the
registration requirements under the Securities Act and that the
Securities Act does not require
4
registration of the conversion of the Securities into
shares of Common Stock as provided in Article 13; and
(g) execution and delivery by the Company of the Securities
and by all parties thereto of this Indenture and all other
Operative Documents;
provided, however, that any Securities in fact authenticated by
the Trustee upon written order of the Company as set forth in the
first sentence of this paragraph shall be deemed to have been
duly authenticated hereunder and to constitute an enforceable
contractual obligation of the Company and shall be entitled to
all the benefits of this Indenture and the other Operative
Documents equally and proportionately with any and all other
Securities duly authenticated and delivered hereunder, in each
case, notwithstanding any failure of the Company to deliver any
of the documents specified in Sections 10.2 and 11.4 or above in
this sentence.
The Securities shall be issuable only in registered form,
without coupons, in denominations of $1,000 and any integral
multiple thereof.
The Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Securities. An authenticating
agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent
has the same rights as an Agent to deal with the Company, any
guarantor or any Affiliate of the Company.
Section 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where
Securities eligible for transfer or exchange may be presented for
registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment or
repurchase ("Paying Agent"). The Registrar shall keep a register
of the Securities and of their transfer and exchange
("Register"). Such Register shall be in written form in the
English language or any other form capable of being converted
into such form within a reasonable time. At all reasonable times
such Register shall be open for inspection by the Trustee. The
Company may have one or more co-Registrars and one or more
additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company may enter into an appropriate agency agreement
with any Agent not a party to this Indenture. Such agency
agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar and
Paying Agent.
5
Section 2.4 Paying Agent to Hold Payments In Trust.
--------------------------------------
Each Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all Payments held by the Paying
Agent for the payment of principal of, repurchase or redemption
price, if any, of, and interest, if any, on, the Securities
(whether such Payment has been paid to it by the Company or any
other obligor on the Securities), and shall promptly notify the
Trustee of any default by the Company (or any other obligor on
the Securities) in making any such Payment. The Company at any
time may require a Paying Agent to Pay all Payments held by it to
the Trustee and account for any funds disbursed and the Trustee
may at any time during the continuance of any payment default,
upon written request to a Paying Agent, require such Paying Agent
to Pay all Payments held by it to the Trustee and to account for
any Payments distributed. Upon doing so the Paying Agent shall
have no further liability for the Payments.
If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of,
repurchase or redemption price, if any, of, or interest, if any,
on, any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto Payments sufficient to
pay the principal, repurchase or redemption price, if any, of, or
interest, if any, so becoming due until such Payments shall be
Paid to such Persons or otherwise disposed of as herein provided,
and will promptly notify the Trustee of such action or any
failure so to act.
The Company will, on or before each due date for the
payment of the principal of, repurchase or redemption price, if
any, of, or interest, if any, on, any of the Securities, deposit
with a Paying Agent Payments (in same day funds) sufficient to
pay the principal, repurchase or redemption price, if any, of, or
interest, if any, so becoming due, such Payments to be held in
trust for the benefit of the Persons entitled to such principal,
repurchase or redemption price, if any, of, or interest, if any,
and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to
act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all Payments received by it as such agent for the
payment of the principal of, repurchase or redemption price, if
any, of, or interest, if any, on, the Securities (whether such
Payments have been paid to it by the Company or by any other
obligor on the Securities) in trust for the benefit of the
Persons entitled thereto until such Payments shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) promptly give the Trustee notice of any failure by the
Company (or any other obligor upon the Securities) to make any
payment of the principal of, repurchase or redemption price, if
any, of, or interest, if any, on, the Securities when the same
shall be due and payable; and
(c) at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the
Trustee all Payments so held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other
purpose, Pay, or direct any Paying Agent to Pay, to the Trustee
all Payments held in trust by the Company or such Paying Agent,
such Payments to be held by the Trustee upon the same trusts as
those upon which such Payments were held by the Company or such
Paying Agent; and, upon such Payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further
liability with respect to such Payments held by it as Paying
Agent.
Any Payments deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of, redemption or repurchase price, if any, of, or
interest, if any, on, any Security and unclaimed for two (2)
years after such principal, redemption, repurchase price or
interest has become due and payable shall be paid to the Company
on its request, or (if then held by the Company) shall be
discharged from such trust, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or
unclaimed property law, and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the
Company for payment thereof and all liability of the Trustee or
such Paying Agent with regard to such Payments, and all liability
of the Company as trustee thereof, shall thereupon cease.
Section 2.5 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders. If the Trustee is not
the Registrar, the Company shall furnish to the Trustee on or
before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and
addresses of Securityholders.
Section 2.6 Transfer and Exchange.
---------------------
When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Securities of
other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its requirements
for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's request.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Company or the
Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the
Company and the Trustee, duly executed by the Holder or his
attorney duly authorized in writing. The Company may require
payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any registration of
transfer or exchange, but not for any exchange pursuant to
Sections 2.9, 4.15 or 9.5 or any other Tender not involving any
transfer of Securities (other than to the Company). No service
charge shall be made for any such transaction.
In the case of any Security which is Tendered in part only,
upon such Tender the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Holder
thereof, without service charge, a new Security or Securities of
any authorized
7
denomination as requested by such Holder in aggregate principal
amount equal to the non-Tendered portion of the principal of such
Security. No Securities will be issued in denominations of less
than $1,000 upon tender of the Securities.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Company, evidencing
the same debt of the same series and entitled to the same
benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Section 2.7 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. ----------------------------------------------
-----------
In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen,
subject to compliance with the following sentence and in the
absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company
shall execute, and the Trustee shall authenticate and deliver, a
new Security, bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated or defaced
Security, or in lieu of and substitution for the Security so
apparently destroyed, lost or stolen. In every case the applicant
for a substitute Security shall furnish to the Company and to the
Trustee and any agent of the Company or the Trustee such security
or indemnity as may reasonably be required by them to indemnify
and defend and to save each of them harmless and, in every case
of destruction, loss or theft, evidence to their satisfaction of
the apparent destruction, loss or theft of such Security and of
the ownership thereof.
Upon the issuance of any substitute Security pursuant to
the preceding paragraph, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith. In case any Security which has matured or is about to
mature, or has been tendered for repurchase pursuant to any of
the provisions hereof (as evidenced by an irrevocable written
notice from the Holder to the Company and the Trustee), shall
become mutilated or defaced or be apparently destroyed, lost or
stolen, the Company may, instead of issuing a substitute
Security, pay or authorize the payment of such Security (without
surrender of such Security except in the case of a mutilated or
defaced Security), as applicable, if the applicant for such
payment shall furnish to the Company and to the Trustee and any
agent of the Company or the Trustee such security or indemnity as
any of them may reasonably require to save each of them harmless
from all risks, however remote, and, in every case of apparent
destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the
Trustee evidence to their satisfaction of the apparent
destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security issued pursuant to the provisions
of this Section by virtue of the fact that any Security is
apparently destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company, whether or not
the apparently destroyed, lost or stolen Security shall be at any
time enforceable by anyone and shall be entitled to all the
benefits of (but shall also be subject to all the limitations of
rights set forth in) this Indenture equally and proportionately
with any and all other Securities duly authenticated and
delivered hereunder. Every substitute Security issued pursuant to
the provisions of this Section by virtue of the fact
8
that any Security is mutilated or defaced shall constitute an
additional contractual obligation of the Company and shall be
entitled to all the benefits of (but shall also be subject to all
the limitations of rights set forth in) this Indenture equally
and proportionately with any and all other Securities of the same
series duly authenticated and delivered hereunder. All Securities
shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated or
defaced or apparently destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted
to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their
surrender.
Section 2.8 Treasury Securities.
-------------------
In determining whether the Holders of the required
principal amount of Securities have given or concurred in any
amendment, request, demand, authorization, direction, notice,
consent or waiver under this Indenture or any other Operative
Document, Securities owned by the Company (including Securities
Tendered), an Affiliate of the Company, any other obligor upon
the Securities, any Affiliate of such obligor upon the Securities
or any Person who has given or concurred in any such amendment,
request, demand, authorization, direction, notice, consent or
waiver under the direction of, by agreement with, or as a
condition or in consideration of any exchange offer by or
transfer of such Person's Securities to the Company, an Affiliate
of the Company, any other obligor, any Affiliate of such obligor
or any such Person, shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except
that, for the purposes of determining whether the Trustee shall
be protected in relying on any such amendment, request, demand,
authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee that neither the Company nor
any such other obligor, Affiliate or Person is affiliated with
the pledgee or any Affiliate of the pledgee and that the pledgee
has the present right (subject to no contrary obligation or
understanding) so to act with respect to the Securities on the
basis of its best interests as a Holder independently of any
direction by or interest of the Company. In case of a dispute as
to such right, the Trustee in good faith shall be entitled to
rely upon the advice of counsel, including counsel for the
Company. Upon request of the Trustee, the Company shall promptly
furnish to the Trustee a certificate of a Certifying Officer
listing and identifying all Securities, if any, known by the
Company to be owned or held by or for the account of any of the
above-described Persons; and subject to Sections 7.1 and 7.2
herein, the Trustee shall be entitled to accept such certificate
as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for
the purpose of any such determination. The Company shall not,
directly or indirectly, pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or
otherwise, or grant any additional security, to any Holder of
Securities as consideration for or as an inducement to giving or
concurring in any amendment, request, demand, authorization,
direction, notice, consent or waiver under this Indenture or any
other Operative Document unless such remuneration is concurrently
paid, or such security is concurrently granted, as the case may
be, on the same terms ratably to the Holders of all Securities
then Outstanding (regardless of
9
whether any such Holder has given or concurred in such amendment,
request, demand, authorization, direction, notice, consent or
waiver under this Indenture or any other Operative Document).
For purposes of this Section and without limiting the
generality of the foregoing, Securities which are subject to a
binding contract or irrevocable tender offer (including an offer
which is in any way conditioned upon or simultaneous with, or
requires as a condition precedent (whether by contract or
otherwise) or which cannot be effected without, the agreement or
consent of the transferor to any amendment, request, demand,
authorization, direction, notice, consent or waiver hereunder)
pursuant to which ownership (direct or indirect) is to be
transferred (including for example, Securities tendered to the
Company or any other Person in an exchange transaction) shall be
deemed owned by such transferee, and therefore, any such
simultaneous agreement or consent by the transferor shall be
invalid.
Section 2.9 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the
Company may prepare, and, upon written order of the Company, the
Trustee shall authenticate, temporary Securities in any
authorized denominations. Temporary Securities shall be
substantially in the form of definitive Securities of the same
series but may have variations that the Company reasonably
considers appropriate and necessary for temporary Securities.
Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in
exchange for temporary Securities. Until so exchanged, the
temporary Securities shall be entitled to the same benefits under
this Indenture as definitive Securities of the same series.
Section 2.10 Cancellation.
------------
The Company may at any time deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for transfer, exchange, repurchase or payment. All Securities
purchased pursuant to any Offer to Purchase shall be canceled.
The Trustee and no one else shall cancel all Securities
surrendered for transfer, exchange, repurchase or cancellation.
The Company may not issue new Securities to replace Securities it
has paid or that have been converted (upon Tender or otherwise)
or which have been delivered to the Trustee for cancellation. The
Trustee shall destroy all canceled Securities and, if requested,
deliver a certificate of such destruction to the Company. If the
Company shall acquire any of the Securities, such acquisition
shall not operate as a satisfaction of the indebtedness
represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
Section 2.11 Defaulted Interest; Interest on Defaulted
Principal. -----------------------------------------
---------
If the Company defaults in a payment of any interest on the
Securities, it shall pay the defaulted interest, plus interest on
the defaulted interest at the rate then borne on the Securities
to the extent permitted by law and the terms thereof, to the
persons who are Securityholders on a subsequent Special Record
Date. The Company shall fix the Special Record Date and payment
date. At least fifteen (15) days before the Special Record Date,
the Company shall mail to each
10
Securityholder a notice that states the Special Record Date, the
payment date and the amount of defaulted interest to be paid. If
the Company defaults in the payment of principal on the
Securities (whether on acceleration at maturity, upon tender for
repurchase or otherwise), it shall pay interest on such defaulted
principal at the rate of 12% per annum to the Trustee upon
demand. The Trustee shall apply any such payment in accordance
with the provisions of Section 6.10.
Section 2.12 CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of
such numbers.
ARTICLE 3.
REDEMPTIONS
The Securities Outstanding shall not be subject to
redemption in whole or in part at any time.
ARTICLE 4.
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 4.1 Payment of Securities.
The Company shall pay the principal of, and interest, if
any, on, the Securities on the dates and in the manner provided
in this Indenture and in the Securities. The Securities shall not
bear interest except as set forth in the fifth paragraph of
Section 2.2 or in the Securities. All interest due and payable on
the Securities shall be paid in cash, except that the Company may
at its option, make such Payments by check mailed to the address
of the Person entitled thereto as it appears in the Register;
provided, however, that such Payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained
by a Holder with a bank in New York City if such Holder owns at
least $250,000 in aggregate principal amount of certificated
Securities and elects payment by wire transfer by giving written
notice to the Company and the Trustee to such effect designating
such account no later than 10 days immediately preceding the
relevant due date for payment (or such other date as the Company
and the Trustee may accept in their discretion).
An installment of principal or interest shall be considered
paid on the date due if the Trustee or Paying Agent (other than
the Company or any Affiliate thereof) holds on that date
11
Payments designated for and sufficient to pay such installment
and the Trustee or Paying Agent is not prohibited from Paying
such Payments to the Holders of the Securities pursuant to this
Indenture.
The Company shall pay interest, if any, at the rate set
forth in this Indenture and the Securities and the Company shall
pay interest on unpaid interest at the same rate to the extent
legally permitted.
Section 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be
surrendered for registration of transfer or exchange or for
presentation for payment, repurchase or conversion and where
notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. At the request of
the Company, said office or agency may be the office of an agent
appointed by the Trustee for such purpose. The Company shall give
prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency not designated
or appointed by the Trustee. If at any time the Company shall
fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for
such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
Section 4.3 Limitation on Dividends and Acquisition of
Common Stock. ------------------------------------------
-------------
The Company will not declare or pay any dividend or make
any distribution on its Common Stock, Employee Preferred Stock or
other Capital Stock of the Company (other than dividends or
distributions payable in the Company's Common Stock or Employee
Preferred Stock or options, warrants or other rights to acquire,
subscribe for or purchase the Company's Common Stock or Employee
Preferred Stock) and will not, and will not permit any of its
Subsidiaries to, purchase, redeem or otherwise acquire for value
any shares of its Common Stock, Employee Preferred Stock or other
Capital Stock of the Company, whether in cash or Property or in
obligations of the Company, if, at the time of such declaration,
payment, distribution, purchase, redemption or other acquisition
or, after giving effect thereto, a Default or Event of Default
shall have occurred and be continuing; provided, that
notwithstanding anything to the contrary written above, this
Section 4.3 shall not apply to: (a) any purchase or redemption of
Common Stock or Preferred Stock by the Company or an employee
stock ownership or benefit plan (i) from union employees or
former union employees, or their respective transferees, pursuant
to the terms of agreements with labor unions existing on the date
hereof; (ii) from recipients or their transferees of such stock
from employee stock ownership or benefit plans
12
subject to ERISA; (iii) from employee stock ownership or benefit
plans subject to ERISA in order to provide cash benefits to
employees pursuant to the terms of such plans; and (iv) as
required by ERISA; (b) any purchase or redemption of Common Stock
or Preferred Stock by an employee stock ownership or benefit plan
subject to ERISA for an aggregate consideration, without regard
to purchases or redemptions pursuant to clause (a) above, of up
to $200,000,000; (c) the payment of fixed or mandatory dividends
on or scheduled redemptions or exchanges of any of the Company's
8% Preferred Stock and 9 1/4% Preferred Stock and the payment of
any interest on the securities issuable upon such exchange; (d)
the payment of any dividends on or the purchase, redemption or
other acquisition or retirement of the Common Stock or Preferred
Stock of the Company within sixty (60) days after the date of
declaration of such dividend or the commitment to make such
purchase, redemption or other acquisition or retirement, if at
said date of declaration or commitment such payment or commitment
complied with this Section 4.3; (e) the purchase, redemption,
retirement or other acquisition of any shares of the Company's
Common Stock or Preferred Stock in exchange for, or out of the
proceeds of the substantially concurrent sale of, Common Stock or
Preferred Stock of the Company; (f) any consolidation or merger
with or into any Person or conveyance or transfer of all or
substantially all of the Company's Property to one or more
Persons substantially as an entirety, not prohibited by the terms
of Section 5.1; and (g) the conversion of Employee Preferred
Stock into Common Stock.
Section 4.4 Corporate Existence.
-------------------
(a) Except as otherwise provided in Article 5, the Company
shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the
corporate existence of each of its Subsidiaries engaged in
substantial business activity each in accordance with the
respective organizational documents of the Company and each such
Subsidiary and the rights (charter and statutory), licenses,
permits, approvals and governmental franchises of the Company and
each such Subsidiary necessary to the conduct of its respective
business; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or to
preserve the corporate existence of any such Subsidiary, if the
Board of Directors shall determine that the preservation thereof
is no longer in the interest of the Company and that termination
of the corporate existence is not disadvantageous to the Holders
in any material respect.
(b) The Company shall continue to be an air carrier
certificated under Section 604(b) of the Federal Aviation Act.
(c) The Company is and, to the extent required to operate
its business as presently conducted and to perform its
obligations under this Indenture and the Operative Documents,
shall remain a "citizen of the United States" as defined in
Section 101(16) of the Federal Aviation Act.
Section 4.5 Payment of Taxes and Other Claims.
---------------------------------
The Company shall, and shall cause each of its Subsidiaries
to, pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company and each
Subsidiary or upon the income, profits or Property of the Company
and each Subsidiary or upon the Collateral and
13
(b) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon the Collateral or the
other Property of the Company or a Subsidiary; provided, however,
that the Company or a Subsidiary, as the case may be, shall not
be required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim (i) the amount,
applicability or validity of which is being contested in good
faith by appropriate proceedings as permitted by and in
accordance with the provisions of the Operative Documents, to the
extent applicable, and for which adequate reserves have been
established in accordance with GAAP, as in effect from time to
time, or (ii) if the Company delivers to the Trustee a
Certificate of an Officer stating that such non-payment and
non-discharge is in the interest of the Company and not
prejudicial in any material respect to the Holders.
Nothing contained herein or in the Securities shall be
deemed to impose on the Trustee or on the Company any obligation
to pay on behalf of the Holder of any Securities any tax,
assessment or governmental charge required by any present or
future law of the U.S. or of any state, county, municipality or
other taxing authority thereof to be paid on behalf of, or
withheld from the amount payable to, the Holder of any
Securities; rather any tax, assessment or governmental charge
shall, to the extent required by law, be withheld from the
amounts provided for herein.
Section 4.6 Notices.
-------
The Company shall notify the Trustee in writing of any of
the following promptly (and in any event within five (5) Business
Days after an Officer learns of the occurrence thereof)
describing the same and, if applicable, the steps being taken by
the Person(s) affected with respect thereto:
(a) In the event that any Indebtedness of the Company or
any Significant Subsidiary of the Company in a principal amount
in excess of $10,000,000 (i) is declared due and payable before
its stated maturity because of the occurrence of any default (or
any event which, with notice or the lapse of time, or both, shall
constitute such default) under such Indebtedness or (ii) is not
paid at its stated maturity; or
(b) Any litigation, arbitration proceeding or governmental
proceeding involving damages or potential liability in excess of
$10,000,000 is instituted against the Company or any of its
Subsidiaries which, if adversely determined, would have a
material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
Section 4.7 Maintenance of Properties and Insurance.
---------------------------------------
Except as otherwise provided in this Indenture, the Company
shall, and shall cause each of its Subsidiaries to, cause all
Collateral and other Properties owned by or leased to it and used
or useful in the conduct of the business of the Company or any
such Subsidiary, as the case may be, to be maintained and kept in
good repair, working order and condition, except for reasonable
wear and use, and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in
connection therewith may be
14
properly and advantageously conducted at all times, except, in
every case, as and to the extent that the Company or any such
Subsidiary may be prevented by fire, strikes, lockouts, acts of
God, inability to obtain labor or materials, governmental
restrictions, enemy action, civil commotion or unavoidable
casualty or similar causes beyond the control of the Company or
such Subsidiary; provided, however, that subject to all
requirements of the Operative Documents, nothing in this Section
4.7 shall prevent the Company or any such Subsidiary from
discontinuing the use, operation or maintenance of any such
Properties, or disposing of any of them, if such discontinuance
or disposal is, in the good faith judgment of an Officer of the
Company (or other agent employed by the Company) having
managerial responsibility for any such Property (or, in the case
of any materially important item, with respect to operations or
value, in the good faith judgment of the Company as expressed in
a resolution of the Board of Directors), desirable in the conduct
of the Company's business or that of its Subsidiaries.
For so long as any Collateral or Property is deemed to be
useful to the conduct of the business of the Company or its
Subsidiaries, the Company shall, or shall cause such Subsidiaries
to, maintain appropriate insurance, in accordance with industry
practice, on such Collateral and Properties and as required under
the provisions of the applicable Operative Documents.
Notwithstanding the provisions of this Section 4.7, to the
extent there exists any inconsistency between the provisions
hereof and the provisions of the Mortgage relating to Property
which constitutes Collateral, the provisions of the Mortgage
shall prevail as to all Collateral.
Section 4.8 Default Notices and Compliance Certificates.
-------------------------------------------
Contemporaneously with furnishing quarterly financial
reports to the Trustee under Section 4.9(a) or mailing quarterly
statements to the Trustee and Holders under Section 4.9(c), the
Company shall furnish to the Trustee a Certifying Officer's
Certificate to the effect that no Default or Event of Default has
occurred or is continuing, or, if there is any such Default or
Event of Default, describing it and the steps, if any, being
taken to cure it.
The Company shall deliver to the Trustee within one hundred
twenty (120) days after the end of each fiscal year in which any
of the Securities remain Outstanding a certificate of the
principal executive officer, principal financial officer or
principal accounting officer of the Company (which need not
comply with the provisions of Section 11.5) stating whether or
not, to the knowledge of the signer after due inquiry, the
Company is in compliance with all conditions and covenants under
this Indenture and the Operative Documents (determined without
regard to any period of grace or requirement of notice), and if
the Company is not in compliance with all such conditions and
covenants, describing each Default or Event of Default and its
status. The first certificate to be delivered by the Company
pursuant to this Section 4.8 shall be for the fiscal year ending
December 31, 1998.
Section 4.9 SEC Reports.
-----------
(a) The Company shall deliver to the Trustee as soon as
practicable after it files them with the SEC, copies of the
annual reports and of the information, documents, and other
reports
15
(or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is
required to file with the SEC pursuant to Sections 13 or 15(d) of
the Exchange Act. The Company also shall comply with the other
provisions of TIA ss. 314(a).
(b) So long as any of the Securities remain Outstanding,
the Company shall cause its annual report to stockholders and any
quarterly or other financial reports furnished by it to
stockholders generally, to be mailed to the Holders of such
Outstanding Securities at their addresses appearing in the
Register.
(c) At any time the Company does not have a class of
securities registered, or is not otherwise required to file
quarterly and other reports under the Exchange Act, the Company
will prepare or cause to be prepared, for each of the first three
(3) quarters of each fiscal year, an unaudited balance sheet of
the Company and its consolidated Subsidiaries as at the end of
such quarter and related unaudited consolidated statements of
income and retained earnings and cash flow of the Company and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through such date, setting forth in each case in
comparative form the figures for the corresponding year-to-date
period in the previous year, certified by the principal financial
officer of the Company, and for each fiscal year, an audited
balance sheet of the Company and its consolidated Subsidiaries as
at the end of such year and related audited consolidated
statements of income and retained earnings and cash flow of the
Company and its consolidated Subsidiaries for such year, setting
forth in comparative form the figures for the previous year,
reported on without a qualification arising out of the scope of
the audit, by the Company's independent public accountants. All
financial statements will be prepared by a nationally recognized
auditing firm and will be prepared in accordance with generally
accepted accounting principles, as in effect from time to time,
consistently applied, except for changes with which the Company's
independent public accountants concur and except that quarterly
statements may be subject to year-end adjustments. The Company
will cause a copy of the respective financial statements to be
mailed to the Trustee and each of the Holders of the Securities
within forty-five (45) days after the close of each of the first
three (3) quarters of each fiscal year and within one hundred
twenty (120) days after the close of each fiscal year, to the
addresses set forth in Section 11.2 or, in the case of each of
the Holders, to such Holder's address as set forth in the
Register of the Securities.
Section 4.10 Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit
or forgive the Company from paying all or any portion of the
principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this
Indenture and the Operative Documents; and (to the extent that it
may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will
not hinder, delay or impede the execution of any power granted to
the Trustee herein and in the Operative
16
Documents, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 4.11 Amendment to Certain Agreements.
-------------------------------
The Company shall not enter into or consent to any
amendment, supplement or other modification of the Operative
Documents except as permitted under Article 9 hereof.
Section 4.12 Title to Collateral and Limitation on Liens;
--------------------------------------------
Sale of Aircraft; Total Loss With Respect to Aircraft.
------------------------------------------------------
(a) The Company represents and warrants that it has, and
covenants that it shall continue to have, full power and lawful
authority to grant, release, convey, assign, transfer, mortgage,
pledge, hypothecate and otherwise create the security interests
in the Collateral referred to in Article 10; the Company shall
warrant, preserve and defend the interest and title of the
Trustee to the Collateral, against the claims of all persons and
will maintain and preserve the security interests contemplated by
Article 10; and the Company shall not, and not permit any of its
Subsidiaries to, directly or indirectly, incur, assume or suffer
to exist any Lien of any nature whatsoever upon or with respect
to the Collateral, other than Permitted Liens. The Company shall
cause the Operative Documents, including all necessary financing
statements, notifications of secured transactions and other
assurances or instruments to be properly recorded, registered and
filed and to be kept, recorded, registered and filed in such
manner and in such places as may be required by law and shall
take all such other actions as may be required in order to make
effective the security interests intended to be created in
connection with this Indenture. The Company shall furnish to the
Trustee the Opinions of Counsel required by Section 10.2 to
confirm such action.
(b) The Company shall not, directly or indirectly,
consummate any sale, lease, transfer or other disposition of any
Collateral for so long as any of the Securities remain
Outstanding.
(c) In the event that there shall occur a Total Loss with
respect to any Aircraft, the Company shall (unless the Company is
not required to make such Offer to Purchase pursuant to the next
succeeding sentence or the provisions of Section 4.12(d)) make an
Offer to Purchase an aggregate principal amount of Outstanding
Securities (the "Total Loss OTP Amount") equal to (for each
Aircraft subject to such Total Loss) (i) the aggregate principal
amount of the Securities Outstanding on the date such Offer to
Purchase (if any) is required to be commenced hereunder minus
(ii) the product of (A) $10,600,000 multiplied by (B) the number
of Aircraft remaining that were not subject to such Total Loss,
at a purchase price equal to 100% of the aggregate principal
amount of Securities to be purchased, plus accrued and unpaid
interest, if any, on such Securities, to and including the
Payment Date. If the foregoing calculation with respect to any
such Total Loss results in a negative number, no Offer to
Purchase shall be required with respect to such Total Loss. The
Company shall commence such Offer to Purchase (if any) within
thirty (30) days after the Total Loss Date with respect to any
such Total Loss. Upon Request by the Company and payment by the
Company of the purchase price with respect to such Offer to
Purchase (if any) and the Trustee's costs (including reasonable
legal fees and disbursements)
17
incurred in complying with such Request, the Trustee shall
release from the Lien of the Operative Documents, all right,
title and interest of the Trustee in and to the Aircraft that was
the subject of such Total Loss.
(d) At its option the Company may reduce in whole or in
part its obligation to pay any Total Loss OTP Amount in cash by
delivering to the Trustee at least 15 days before the date the
related Offer to Purchase is or would be required to be commenced
under Section 4.12(c), (i) Securities which have been acquired by
the Company in open market purchases (and, for avoidance of
doubt, not acquired by way of any Offer to Purchase hereunder),
together with (ii) an Officers' Certificate directing the Trustee
to cancel such Securities and stating the election of the Company
to have credited against such Total Loss OTP Amount a specified
principal amount of Securities so delivered. Each such Officers'
Certificate shall state that the Securities forming the basis of
such credit do not include any Securities theretofore credited
against any Total Loss OTP Amount pursuant to this Section
4.12(d). All Securities made the basis of credit against a Total
Loss OTP Amount shall be credited at 100% of their principal
amount. Although the Company may obtain credit against any Total
Loss OTP Amount in advance of the related Payment Date as
provided herein, any such credit shall be applied against such
Total Loss OTP Amounts in the order in which they become due. In
case of the failure of the Company to deliver such Officers'
Certificate, the Total Loss OTP Amount due on the Payment Date
therefor shall be paid entirely in cash without the option to
reduce the Company's obligation to make such payment as specified
in this Section 4.12(d). If the principal amount of the
Securities made the basis of a credit against any Total Loss OTP
Amount (calculated, for this purpose, as of the date twenty-five
days after the Total Loss Date with respect to such Total Loss)
equals or exceeds such Total Loss OTP Amount, and the Company has
otherwise complied with the applicable provisions of this Section
4.12(d), then the Company shall not be required to make the Offer
to Purchase for which such Total Loss OTP Amount was calculated.
Such calculations shall be set forth in detail in the Officers'
Certificate required under this Section 4.12(d). The Trustee
shall promptly authenticate and mail to the Company a new
Security or Securities in an aggregate principal amount equal to
that portion (if any) of the Securities delivered to the Trustee
and not used by the Company as a credit under this Section
4.12(d) (provided, that the Company has previously delivered to
the Trustee sufficient executed Securities to enable the Trustee
to so authenticate such Securities).
Section 4.13 Books, Records, Access; Confidentiality.
---------------------------------------
(a) The Company shall, and shall cause each of its
Subsidiaries to, (i) maintain complete and accurate books and
records in which full and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its
respective business and activities, and (ii) permit authorized
representatives of the Trustee to visit and inspect the
Properties of the Company or its Subsidiaries, and any or all
books, records and documents in the possession of the Company
relating to the Collateral, including the records, logs, and
other materials referred to in Section 2.1(c) of the Mortgage,
and to make copies and take extracts therefrom and to visit and
inspect the Collateral, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may
be reasonably requested.
18
(b) The Trustee and its authorized representatives referred to in
clause (a) above agree not to use any information obtained
pursuant to this Section 4.13 for any purpose other than as
required in order to discharge their respective duties hereunder
and under the Operative Documents and except as otherwise
required for such purpose to keep confidential and not to
disclose any such information to any person except that (i) the
recipient of the information may disclose any information which
becomes publicly available other than as a result of disclosure
by such recipient, (ii) the recipient of the information may
disclose any information which its counsel reasonably concludes
is necessary to be disclosed by law or legal process, pursuant to
any court or administrative order or ruling or in any pending
legal or administrative proceeding or investigation after notice
to the Company adequate, subject to applicable laws, to allow the
Company to obtain a protective order or other appropriate remedy,
provided that the recipient of the information will (if not
otherwise required in order to discharge its duties as aforesaid)
cooperate at the Company's expense with the Company's efforts to
obtain a protective order or other reliable assurance that
confidential treatment will be accorded any such information
required to be so disclosed, and (iii) the recipient of the
information may disclose any information necessary to be
disclosed pursuant to any provision of the TIA.
Section 4.14 Security Interests.
------------------
The Company and its Subsidiaries shall perform any and all
acts and execute any and all documents (including, without
limitation, the execution, amendment or supplementation of any
financing statement and continuation statement or other
statement) for filing under the provisions of the Federal
Aviation Act and the applicable Uniform Commercial Code and the
rules and regulations thereunder or any other statute, rule or
regulation of any applicable federal, state or local
jurisdiction, which are necessary or advisable, from time to
time, in order to grant and maintain in favor of the Trustee for
the benefit of the Holders a valid, perfected Lien on the
Collateral.
The Company and its Subsidiaries shall deliver or cause to
be delivered to the Trustee from time to time such other
documentation, consents, authorizations, approvals and orders in
form and substance satisfactory to the Trustee as it shall deem
reasonably necessary or advisable to perfect or maintain the
Liens for the benefit of the Holders.
Section 4.15 Repurchase of Securities Upon a Change in Control.
-------------------------------------------------
(a) In the event that there shall occur a Change in
Control, the Company shall make an Offer to Purchase all of the
Outstanding Securities, at a purchase price equal to 101% of the
aggregate principal amount of the Securities Outstanding, plus
accrued and unpaid interest, if any, to and including the
repurchase date. The right to require such repurchase of
Securities shall not continue after a discharge of the Company
from its obligations with respect to the Securities in accordance
with Article 8.
(b) The Company shall commence such Offer to Purchase
within thirty (30) days after the occurrence of a Change in
Control.
19
Section 4.16 Restrictions on Becoming an Investment Company.
----------------------------------------------
The Company shall not become an investment company within
the meaning of the Investment Company Act of 1940 as such statute
and the regulations thereunder and any successor statute or
regulations thereto may from time to time be in effect.
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.1 Covenant Not to Consolidate, Merge, Convey
------------------------------------------
or Transfer Except Under Certain Conditions.
-------------------------------------------
The Company shall not consolidate with, or merge with or
into, or convey or transfer (excluding by way of lease) all or
substantially all of its Properties (as determined at the time of
such transfer without regard to any prior conveyance or transfer
or series of conveyances or transfers made on unrelated
transactions) to any other Person, or permit any Person to
convey, lease or transfer all or substantially all of its
Properties to the Company, unless:
(a) The Company shall be the continuing Person or the
Person (if other than the Company) formed by such consolidation
or into which the Company is merged or to which all or
substantially all of the Properties of the Company are conveyed
or transferred (the "surviving Person"): (i) shall be a
corporation organized and existing under the laws of the United
States of America or any state thereof or the District of
Columbia; (ii) shall expressly assume prior to or simultaneously
with the consummation of such transaction, by an indenture and
other agreements supplemental hereto and to the Operative
Documents, executed and delivered to the Trustee in form
reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of, and interest, if any, on, all the
Securities and the observance and performance of every covenant,
condition and obligation of this Indenture, the Securities and
the Operative Documents on the part of the Company to be observed
or performed;
(b) Immediately before and immediately after giving effect
to such transaction, no Default or Event of Default shall have
occurred and be continuing hereunder;
(c) In the case of any such conveyance or transfer, such
conveyance or transfer includes, without limitation, all of the
Collateral and in any event such consolidation, merger,
conveyance or transfer shall be on such terms as shall fully
preserve the Lien and security of each of the Operative
Documents, the priority thereof purported to be established
thereby and the rights and powers of the Trustee and the Holders
of the Securities under each of the Operative Documents; and
(d) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that (i) such
merger, consolidation, transfer, conveyance, or acquisition of
assets and such supplemental indenture (if any) comply with the
terms of this Indenture, (ii) this Indenture and the Securities
constitute the valid and legally binding obligations of the
20
surviving Person, and (iii) this Indenture and the other
Operative Documents are enforceable against the surviving Person
in accordance with their terms.
Section 5.2 Successor Person Substituted.
----------------------------
Upon any consolidation or merger, or any conveyance or
transfer (excluding by way of lease) of all or substantially all
of the Properties of the Company in accordance with Section 5.1,
the surviving entity formed by such consolidation or into which
the Company is merged or the surviving entity to which such
conveyance or transfer is made shall succeed to, and be
substituted for, and be bound by and obligated to pay the
obligations of, and may exercise every right and power of, the
Company under this Indenture, the Securities and the Operative
Documents with the same effect as if such successor had been
named as the Company herein and therein; but the predecessor
Company in the event of any such conveyance or transfer shall not
be released from the obligation to pay the principal of and
interest, if any, with respect to, the Securities.
Such surviving entity may cause to be signed, and may issue
either in its own name or in the name of the Company prior to
such succession any or all of the Securities issuable hereunder
which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such surviving
entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any
Securities which such surviving entity thereafter shall cause to
be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued
at the date of the execution hereof.
In case of any such consolidation, merger, sale, transfer
or conveyance such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued
as may be appropriate.
Section 5.3 Limitation on Lease of Properties.
---------------------------------
Without limitation of the prohibitions set forth in the
other Operative Documents, the Company shall not lease all or
substantially all of its Properties to any Person.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
-----------------
An "Event of Default" occurs if:
21
(a) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the default
continues for thirty (30) days;
(b) the Company defaults in the payment of the principal
amount of any Securities when the same becomes due and payable at
maturity, upon acceleration, redemption, tender for repurchase or
otherwise;
(c) the Company fails to comply with the agreements or
covenants contained in Article 13 hereof or in Sections 4.3 or
4.12 hereof, takes or agrees to take any action prohibited by
Section 5.1 hereof, discontinues or agrees to discontinue
substantially all of its commercial airlines operations or fails
to comply with the covenants contained in Sections 3, 6.3, 6.5 or
6.8 of the Mortgage within the time periods (if any) provided
therein;
(d) (i) the Company fails in any material respect to comply
with any of its other agreements contained in the Securities,
this Indenture or the other Operative Documents or (ii) any
representation or warranty made by the Company in this Indenture,
the other Operative Documents or any Mortgage Supplement or in
any certificate of the Company delivered hereunder or under any
such document shall prove to have been untrue in any material
respect when made, and in any such case such default continues
for the period and after the notice specified below;
(e) there shall be a default or an event under or with
respect to any Indebtedness of the Company or any of its
Significant Subsidiaries in excess of $10,000,000 in principal
amount, whether such Indebtedness now exists or shall hereafter
be created, and the effect of any such default or event is to
cause the principal amount of any such Indebtedness to become
due, to have the date of payment thereof fixed prior to its
stated maturity or the date it would otherwise become due and
while any Securities are Outstanding, or to be unpaid at maturity
while any Securities are Outstanding;
(f) the Company or any of its Significant Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law (as
hereinafter defined):
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian (as
hereinafter defined) of it or or all or substantially all of
its Property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is unable to pay its debts as the same
become due;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
22
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries for all or substantially all of
its properties, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and in each case the order and decree remains unstayed and in effect
for sixty (60) consecutive days;
(h) final, non-appealable judgments for the payment of
money, which judgments, in the aggregate, exceed $10,000,000
shall be rendered against the Company or any of its Significant
Subsidiaries by a court of competent jurisdiction and remain
undischarged, unstayed and unsatisfied for the period and after
the notice specified below; or
(i) any of the Operative Documents ceases, without the
consent of the Trustee, to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
A Default under clause (d), (e) or (h) of this Section 6.1
is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least twenty-five percent (25%) in
aggregate principal amount of the Securities Outstanding notify
the Company and the Trustee, of the Default and the Company does
not cure the Default within sixty (60) days with respect to
clauses (d) and (h), or within thirty (30) days with respect to
clause (e), after receipt of the notice; provided, however, that
the Company shall be permitted such longer period of time, if
any, as may be provided for under the other Operative Documents
in respect of any particular Default. The notice must specify the
Default, demand that it be remedied and state that the notice is
a "Notice of Default." When a Default is cured, it ceases.
Section 6.2 Acceleration.
------------
If an Event of Default (other than an Event of Default
specified in Section 6.1(f) or (g)) occurs, and is continuing,
the Trustee may, by notice to the Company, or the Holders of at
least twenty-five percent (25%) in aggregate principal amount of
the Securities Outstanding may, by notice to the Company and the
Trustee, and the Trustee shall, upon the request of such Holders,
declare all unpaid principal of and accrued interest, if any, to
the date of acceleration on the Securities Outstanding (if not
then due and payable) to be due and payable and upon any such
declaration, the same shall become and be immediately due and
payable. If an Event of Default specified in Section 6.1(f) or
(g) occurs, all unpaid principal of and accrued interest, if any,
on the Securities Outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholder. Upon payment of
23
such principal amount and interest, if any, all of the Company's
obligations under the Securities and this Indenture, other than
obligations under Sections 7.7 and 8.4, shall terminate. The
Holders of a majority in principal amount of the Securities then
Outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (a) all existing Events of Default, other
than the non-payment as to the Securities of the principal and
interest, if any, which has become due solely by such declaration
of acceleration, have been cured or waived, (b) to the extent the
payment of such interest is permitted by law, interest on overdue
installments of interest and on overdue principal which has
become due otherwise than by such declaration of acceleration,
has been paid, (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction, and (d)
all payments due to the Trustee and any predecessor Trustee under
Section 7.7 have been made.
Section 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of and interest, if
any, on the Securities or to enforce the performance of any
provision of the Securities or this Indenture including, without
limitation, instituting proceedings and exercising and enforcing,
or directing exercise and enforcement of, all rights and remedies
of the Trustee under the other Operative Documents.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.
No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.4 Waiver of Past Defaults.
-----------------------
Subject to Sections 6.7, 9.2 and 9.6, the Holders of a
majority in aggregate principal amount of the Securities
Outstanding by notice to the Trustee may authorize the Trustee to
waive an existing Default or Event of Default and its
consequences, except a Default (a) in the payment of principal
of, or interest on, any Security as specified in clauses (a) and
(b) of Section 6.1 or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of
the Holder of each Security affected. When a Default or Event of
Default is waived, it is cured and ceases, and the Company, the
Holders and the Trustee shall be restored to their former
positions and rights hereunder respectively; but no such waiver
shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon.
Section 6.5 Control by Majority.
-------------------
The Holders of a majority in aggregate principal amount of
the Securities Outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it;
provided that the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction. The
Trustee may refuse to follow any direction hereunder or
authorization under Section 6.4 that
24
legal counsel to the Trustee determines in good faith conflicts
with law or this Indenture, that the Trustee reasonably
determines may be unduly prejudicial to the rights of another
Securityholder, or that the Trustee reasonably determines may
subject the Trustee to personal liability. However, the Trustee
shall have no liability for any actions or omissions to act which
are in accordance with any such direction or authorization.
Section 6.6 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least twenty-five percent (25%) in
principal amount of the Securities Outstanding make a written
request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within
sixty (60) days after receipt of the request and the offer of
indemnity; and
(e) during such 60-day period the Holders of a majority in
aggregate principal amount of the Securities Outstanding do not
give the Trustee a direction which, in the reasonable opinion of
the Trustee, is inconsistent with such request.
A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or
priority over such other Securityholder.
Section 6.7 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal
of and interest on the Security in cash, on or after the
respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of the Holder.
It is hereby expressly understood, intended and agreed that
any and all actions which a Holder of the Securities may take to
enforce the provisions of this Indenture and/or collect Payments
due hereunder or under the Securities, except to the extent that
such action is determined to be on behalf of all Holders of the
Securities, shall be in addition to and shall not in any way
change, adversely affect or impair the rights and remedies of the
Trustee or any other Holder of the Securities thereunder or under
this Indenture and the other Operative Documents, including the
right to foreclose upon and sell the Collateral or any part
thereof and to apply any proceeds realized in accordance with the
provisions of this Indenture.
25
Section 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of interest or principal
specified in clause (a) or (b) of Section 6.1 occurs and is
continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company or any other
obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest on
overdue principal and on overdue installments of interest to the
extent that payment of such interest is permitted by law, in each
case at the rate per annum provided for by the Securities, and
such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed
in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its Property and
shall be entitled and empowered to collect and receive any moneys
or other Property payable or deliverable on any such claims and
to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Securityholder to make
such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due
the Trustee under Section 7.7, and unless prohibited by law or
applicable regulations to vote on behalf of the Holders of
Securities for the election of a trustee in bankruptcy or other
person performing similar functions. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, for
the election of a trustee in bankruptcy or person performing
similar functions.
Section 6.10 Application of Proceeds.
-----------------------
Any moneys collected by the Trustee pursuant to this
Article shall be applied in the following order at the date or
dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal or interest, if any, upon
presentation of the several Securities and stamping (or otherwise
noting) thereon the payment, or issuing Securities in reduced
principal amounts in exchange for the presented Securities if
only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses
actually incurred, including reasonable compensation to the
Trustee, its predecessors, if any, and their respective
agents and attorneys (including amounts due and unpaid under
Section 7.7),
26
and of all reasonable costs, fees, expenses and liabilities
incurred, and all advances made, by any and all of the
foregoing (including amounts due and unpaid under Section
7.7), except as a result of negligence or bad faith;
SECOND: In case the entire principal of the Securities
shall not have become and be then due and payable, as to
any Securities (a) first to the payment of interest, if
any, in default in the order of the maturity of the
installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon
the overdue installments of interest, at the rate of
interest specified in the Securities and (b) second to the
payment of principal of the Securities as the same shall
become due and payable, such payments to be made ratably to
the Persons entitled thereto, without discrimination or
preference;
THIRD: In case the entire principal of the Securities
shall have become and shall be then due and payable, as to
any Securities, to the payment of the whole amount then
owing and unpaid upon all the Securities for principal and
interest, with interest upon the overdue principal, and (to
the extent that such interest has been collected by the
Trustee) upon overdue installments of interest, at the same
rate as the rate of interest specified in this Indenture or
in the Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and
unpaid upon the Securities, then to the payment of such
principal and interest, without preference or priority of
either of principal or interest over the other, or any
installment of interest over any other installment of
interest, or of any Security over any other Security,
ratably to the aggregate of such principal, and accrued and
unpaid interest; and
FOURTH: To the payment of the remainder, if any, after
payment in full of the entire principal balance, if any, of
the Securities and all interest and other amounts due upon
or in respect of such Securities, to the Company or any
other Person lawfully entitled thereto.
The Trustee, upon prior written notice to the Company, may
fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have
agreed, that any court of competent jurisdiction in its
discretion may require in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the
Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against
any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7, or a suit by
Holders of more than ten percent (10%) in principal amount of the
Securities Outstanding.
27
Section 6.12 Restoration of Rights on Abandonment of Proceedings.
---------------------------------------------------
In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the Securityholders shall be
restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company,
the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.
Section 6.13 Powers and Remedies Cumulative; Delay or Omission
-------------------------------------------------
Not Waiver of Default.
---------------------
No right or remedy herein conferred upon or reserved to the
Trustee or to the Securityholders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any
of the Securities to exercise any right or power accruing upon
any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein;
and, subject to the other applicable provisions of this
Indenture, every power and remedy given by this Indenture or by
law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
Any right or remedy herein conferred upon or reserved to
the Trustee may be exercised by it in its capacity as Trustee, as
it may deem most efficacious, if it is then acting in such
capacity.
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and the other
Operative Documents and no others.
28
(ii) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct or bad faith, except that:
(i) This paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.1 or of Section 7.2.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts.
(iii) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(d) The Trustee shall be under no obligation to exercise
any of the rights, trusts or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request, order or direction.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.1.
(f) Funds held in trust for the benefit of the Holders of
the Securities by the Trustee or any Paying Agent on deposit with
itself or elsewhere shall be held in distinct, identifiable
accounts, and other funds or investments of any nature or from
any source whatsoever may be held in such accounts, except, in
each case, to the extent required by law. The Trustee shall not
be liable for interest on any money received by it except as the
Trustee may agree with the Company.
Section 7.2 Rights of Trustee.
-----------------
(a) The Trustee may rely on any document reasonably
believed by it to be genuine and to have been signed or presented
by the proper person. Subject to Section 7.1(b)(ii), the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Section 11.5. The Trustee shall not be liable
for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
29
(c) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
its attorneys and agents and the Trustee shall not be responsible
for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
Section 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Company or
Affiliates of the Company with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the
Securities, and it shall not be responsible for any statement in
the Securities or in this Indenture other than its certificate of
authentication.
Section 7.5 Notice of Defaults.
------------------
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder notice
of the Default within ninety (90) days after the occurrence
thereof except as otherwise permitted by the TIA. Except in the
case of a Default in payment of principal of, or interest on, any
Security, the Trustee may withhold the notice if and so long as
it, in good faith, determines that withholding the notice is in
the interests of the Securityholders.
Section 7.6 Reports by Trustee to Holders.
-----------------------------
If circumstances require any report to Holders under TIA
ss. 313(a), it shall be mailed to Securityholders within sixty
(60) days after each May 15 (beginning with the May 15 following
the date of this Indenture) as of which such circumstances exist.
The Trustee also shall comply with the remainder of TIA ss. 313.
The Company shall promptly notify the Trustee if the
Securities become listed on or delisted from any stock exchange
or other recognized trading market.
The Trustee shall, upon the written request of any Holder
of Securities but subject to applicable laws and contractual
limitations, provide to such Holder copies of any reports,
certificates, opinions or other materials of any kind or nature
required to be delivered to the Trustee under this Indenture or
any of the other Operative Documents or otherwise delivered by or
on behalf of the Company to the Trustee.
30
Section 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time
reasonable compensation, as agreed upon from time to time, for
its services hereunder and under the other Operative Documents.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in
any such capacities. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents
and counsel and all agents and other persons not regularly in its
employ.
The Company shall indemnify the Trustee and each
predecessor Trustee for, and hold each of them harmless against,
any loss or liability incurred by each of them in connection with
the administration of this Indenture and its duties hereunder. In
connection with any defense of such a claim, the Trustee may have
separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss or liability incurred by
the Trustee or any predecessor Trustee through the negligence or
bad faith of such Trustee or each such predecessor Trustee.
To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a Lien (legal and equitable) prior to
the Securities on all money or Property held or collected by the
Trustee, in its capacity as Trustee, or otherwise distributable
to Securityholders, except money, securities or Property held in
trust to pay principal of or interest on particular Securities
(including, without limitation, pursuant to Section 8.1(b)
hereof).
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.1(f) or (g) occurs,
the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy
Law.
Section 7.8 Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company and the
Holders in writing. The Holders of a majority in aggregate
principal amount of the Securities Outstanding may remove the
Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the Company's consent, which consent shall
not be unreasonably refused or delayed. The Company may remove
the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its Property;
(d) the Trustee becomes incapable of acting; or
(e) no Default or Event of Default has occurred and is
continuing and the Company determines in good faith to remove the
Trustee.
31
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. Within one year after any such
successor Trustee takes office, the Holders of a majority in
aggregate principal amount of the Securities Outstanding may
appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.
Immediately after that, the retiring Trustee shall transfer all
Property held by it as Trustee to the successor Trustee, subject
to the Lien provided in Section 7.7, the resignation or removal
of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
No resignation or removal of the Trustee and no appointment
of a successor Trustee, pursuant to this Article, shall become
effective until the acceptance of appointment by the successor
Trustee under this Section 7.8. If a successor Trustee does not
take office within sixty (60) days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the
Holders of at least ten percent (10%) in principal amount of the
Securities Outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Holder of Securities may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall
continue for the benefit of the retiring Trustee which shall
retain its claim pursuant to Section 7.7.
Section 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust
business to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the
successor Trustee.
Section 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies
the requirements of TIA ss. 310(a)(1). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth
in its most recent, published annual report of condition. The
Trustee shall comply with TIA ss. 310(b); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met.
32
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has
resigned or been removed shall be subject to TIA ss. 311(a) to
the extent indicated.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations.
------------------------------------
(a) The Company may terminate its obligations under this
Indenture, except those obligations referred to in the last
paragraph of Section 8.1(b), if all Securities previously
authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for
whose payment Payments have theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.3)
have been delivered to the Trustee for cancellation and the
Company has paid all sums payable by it hereunder.
(b) The Company may terminate all its obligations under
this Indenture except those obligations referred to in the
immediately succeeding paragraph if
(i) the Company has irrevocably deposited or caused to
be irrevocably deposited with the Trustee or a Paying
Agent, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee and any such
Paying Agent, as trust funds in trust solely for the
benefit of the Holders for that purpose, cash or U.S.
Government Obligations maturing as to principal and
interest, in such amounts and at such times as are
sufficient without consideration of any reinvestment of any
such interest to pay the then maximum possible principal
of, and the then maximum possible interest on the
Securities Outstanding to maturity provided, that the
Trustee or such Paying Agent shall have been irrevocably
instructed to apply such money or the proceeds of such U.S.
Government Obligations to the payment of said principal of
and interest on the Securities.
(ii) No Default or Event of Default with respect to
the Securities shall have occurred and be continuing (A) on
the date of such deposit described in clause (i), or (B)
insofar as paragraph (f) of Section 6.1 is concerned, at
any time during the period ending on the 91st day after the
date of such deposit or, if longer, ending on the day
following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it
being understood that the condition in this clause (B) is a
condition subsequent and shall not be deemed satisfied
until the expiration of such period);
(iii) Such termination and deposit described in clause
(i) shall not (A) cause the Trustee to have a conflicting
interest as defined in TIA Section 310(b) or otherwise for
purposes of the TIA with respect to any securities of the
Company, or (B) result in the
33
trust arising from such deposit to constitute, unless it is
qualified as, a regulated investment company under the
Investment Company Act of 1940, as amended;
(iv) Such termination and deposit described in clause
(i) shall not result in a breach or violation of or
constitute a default under, this Indenture or any other
material agreement or instrument to which the Company is a
party or by which it is bound;
(v) The Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such termination
and deposit described in clause (i) and will be subject to
federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such
termination and deposit had not occurred; and
(vi) The Company shall have delivered to the Trustee
and any Paying Agent an Officer's Certificate and an
Opinion of Counsel, each stating that all conditions
precedent and subsequent provided for above in this Section
8.1(b) have been complied with.
Notwithstanding the foregoing paragraph, the Company's
obligations in Article 13 and in Sections 2.3, 2.4, 2.5, 2.6,
2.7, 4.1, 4.2, 4.8, 7.7, 7.8, 8.2, 8.3, 8.4 and 10.4 shall
survive until the Securities are no longer Outstanding.
Thereafter, the Company's obligations in Sections 7.7 and 8.3
shall survive.
(c) After the effectiveness of any termination of its
obligations (except, in the case of Section 8.1(b), as set forth
in the last paragraph thereof), under this Indenture in
accordance with Section 8.1(a) or (b) above (such effective date,
the "Indenture Discharge Date") and payment of all obligations of
the Company accrued under Section 7.7, the Trustee upon Request
shall acknowledge in writing the discharge of the Company's
obligations under this Indenture except for those surviving
obligations specified above.
Section 8.2 Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to Section
8.1, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the
payment of principal of, and interest, if any, on, the
Securities. The obligations of the Trustee and Paying Agent under
this Section 8.2 shall survive, notwithstanding any termination
or discharge of the Company's obligations pursuant to Section
8.1, until all Securities are paid in full.
The Company shall pay and indemnify the Trustee or Paying
Agent, as the case may be, against any tax, fee or other charge
imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 8.1(b)(i) or the
principal and interest received in respect thereof.
34
Section 8.3 Repayment to Company.
--------------------
Anything in Section 8.1(b) to the contrary notwithstanding,
the Trustee or Paying Agent, as the case may be, shall deliver or
pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations (or other Property and any
proceeds therefrom) held by it as provided in Section 8.1(b)
which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee and to the Paying
Agent, if applicable, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent
termination under said Section 8.1(b). The Trustee and the Paying
Agent shall Pay to the Company any Payments held by them for the
payment of principal and interest that remains unclaimed for two
(2) years after the Stated Maturity of such payment of principal
or interest, as the case may be; provided, however, that the
Trustee or such Paying Agent before making any Payment shall at
the expense of the Company cause to be published once in the
national edition of The New York Times or The Wall Street Journal
or, if such newspapers are not then in circulation, in a
newspaper of general circulation in the City of New York and mail
to each Holder entitled to such money, notice that such Payments
remain unclaimed and that, after a date specified therein which
shall be at least thirty (30) days from the date of such
publication or mailing, any unclaimed balance of such Payments
then remaining will be repaid to the Company. After payment to
the Company, Securityholders entitled to Payments must look to
the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
Section 8.4 Reinstatement.
-------------
Anything herein to the contrary notwithstanding, (i) if the
Trustee or Paying Agent, as the case may be, is unable to apply
any money or U.S. Government Obligations in accordance with
Section 8.1 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
or (ii) the deposited money or U.S. Government Obligations (or
the proceeds thereof) are, for any reason (including any
repayment to the Company under Section 8.3), insufficient in
amount, then the Company's obligations under this Indenture shall
be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 until such time as the Trustee, or Paying
Agent, as the case may be, is permitted to apply all such money
or U.S. Government Obligations and the proceeds of the investment
thereof in accordance with Section 8.1, or the deficiency is
cured in the manner set forth in Section 8.1(b), as the case may
be. In such event, the Trustee will invest all such money or the
proceeds from U.S. Government Obligations at the Company's
request in other U.S. Government Obligations and, upon written
notice from the Company, so long as there exists no Event of
Default, to the extent and only to the extent provided in the
first sentence of Section 8.3 return to the Company any money or
U.S. Government Obligations deposited with the Trustee pursuant
to Section 8.1. If the Company has made any payment of interest
on or principal of any Securities because of an event described
in clause (i) of the first sentence of this Section 8.4, the
Company shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent, as
the case may be.
35
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee, as the case may be, may amend
or supplement this Indenture, the Securities or the other
Operative Documents without notice to or consent of any
Securityholder:
(a) to provide for uncertificated Securities in
addition to or in place of certificated
Securities;
(b) to provide for the assumption of the Company's
obligations to the Holders of the Securities in the case of a
merger or consolidation or transfer of all or substantially all
of the assets of the Company or otherwise to comply with Article
5;
(c) to comply with any requirements of the SEC in
connection with the qualification of this Indenture under the
TIA; or
(d) to cure any ambiguity, defect or inconsistency or to
make any other change, in each case, provided that such action
does not materially adversely affect the interests of any
Securityholder.
Section 9.2 With Consent of Holders.
-----------------------
Subject to Section 6.7, the Company (by resolution of its
Board of Directors if required) and the Trustee may amend or
supplement this Indenture, the Securities or the other Operative
Documents without notice to any Securityholder but with the
written consent of the Required Holders. Subject to Sections 6.4,
6.5 and 6.7, the Required Holders may authorize the Trustee to,
and the Trustee, subject to Section 9.6, upon such authorization
shall, waive compliance by the Company with any provision of this
Indenture, the Securities or the other Operative Documents.
However, an amendment, supplement or waiver, including a waiver
pursuant to any provision of Section 6.4, may not without the
consent of each Securityholder affected:
(a) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the rate or extend the time for payment of
interest on any Security;
(c) reduce the principal of (whether on repurchase or
otherwise), or change the fixed maturity of any Security;
(d) change the place of payment where, or the coin or
currency in which, any Security (or the repurchase price
thereof), or interest, if any, thereon, is payable;
(e) waive a default in the payment of the principal of, or
interest on, any Security;
36
(f) make any changes in Article 3, Sections 2.8, 6.4, 6.7 or
6.10, or the third sentence of this Section 9.2;
(g) reduce any amount payable upon exercise of any
repurchase rights thereof or otherwise change any repurchase
right provision or impair the right of any Holder to institute
suit for the enforcement of any such payment on any Security when
due or adversely effect any repurchase rights hereunder; or
(h) except as otherwise permitted or required under this
Indenture, change the Conversion Date or the Conversion Price or
otherwise modify or affect Article 13 or any other provision of
this Indenture in any manner that would adversely affect any
Holder's conversion rights hereunder.
It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if
such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall mail to the Holders
affected thereby a brief notice describing such amendment,
supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment, supplement
or waiver.
Section 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to
his Security or portion of a Security. Such revocation shall be
effective only if the Trustee receives the notice of revocation
before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective,
it shall bind every Securityholder, unless it makes a change
described in any of clauses (a) through (h) of Section 9.2. In
that case the amendment, supplement or waiver shall bind each
Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security; provided, however,
that no amendment, supplement or waiver relating to any
impairment of the right to receive principal and interest when
due and payable consented to by a Holder shall be binding upon
any subsequent Holder of a Security or a portion of a Security
that evidences the same debt as the
37
consenting Holder's Security unless notation with regard thereto
is made upon such Security or the Security representing such
portion.
Section 9.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of
a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects
the changed terms.
Section 9.6 Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall be entitled to receive and rely upon an
Officers' Certificate and an Opinion of Counsel stating that the
execution of any amendment, supplement or waiver authorized
pursuant to this Article 9 has been duly authorized by the
Company and is authorized or permitted by this Indenture and the
other applicable Operative Documents. The Trustee may, but shall
not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 9.7 Effect of Supplement and/or Amendment.
-------------------------------------
Upon the execution of any supplemental indenture and/or any
such amendment or supplement to the other Operative Documents
pursuant to the provisions of this Article 9, this Indenture and
such Operative Documents shall be and be deemed to be modified
and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under
this Indenture and the other Operative Documents of the Trustee,
the Company and the Holders of Securities shall thereafter be
determined, exercised and enforced hereunder and thereunder
subject in all respects to such modifications and amendments, and
all terms and conditions of any such supplemental indenture
and/or any such amendment or supplement to the other Operative
Documents shall be and be deemed to be part of the terms and
conditions of this Indenture and the other Operative Documents
for any and all purposes.
ARTICLE 10.
SECURITY
Section 10.1 Other Operative Documents.
-------------------------
To secure the due and punctual payment, performance and
observance of the Obligations (but not to exceed, in any event,
the aggregate amount of $24,300,000), the Company has
simultaneously with the execution of this Indenture entered into
or caused to be assigned to the Trustee the other Operative
Documents and has made an assignment and pledge of or otherwise
transferred or caused to be transferred its right, title and
interest in and to the Collateral to the
38
Trustee pursuant to the other Operative Documents and in the
manner and to the extent therein provided. Each Securityholder,
by accepting a Security, agrees to all of the terms and
provisions of each Operative Document (including, without
limitation, the provisions providing for the release of
Collateral and for the subordination of the Lien of the Mortgage
to the Lien of the First Mortgage), as the same may be in effect
or may be amended from time to time pursuant to its terms and the
terms hereof. The Company will execute, acknowledge and deliver
to the Trustee such further assignments, transfers, assurances or
other instruments as the Trustee may reasonably require or
request, and will do or cause to be done all such acts and things
as may be necessary or proper, or as may be reasonably required
by the Trustee to assure and confirm to the Trustee the security
interest in the Collateral contemplated hereby and by the other
Operative Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security
and benefit of this Indenture and of the Securities secured
hereby, according to the intent and purposes herein expressed.
Section 10.2 Opinions, Certificates and Appraisals.
-------------------------------------
(a) The Company shall furnish to the Trustee promptly after
the execution and delivery of this Indenture but prior to
authentication of any Securities, Opinions of Counsel covering
such jurisdictions as the Owner Trustee may reasonably request
either (i) stating that in the opinion of such Counsel the
actions necessary to be taken under the Federal Aviation Act, the
Uniform Commercial Code of all applicable jurisdictions, or
otherwise with respect to the recording, registering and filing
of this Indenture, the other Operative Documents, financing
statements or other instruments to make effective and to perfect
the Liens intended to be created by the Mortgage have been taken
and reciting with respect to the security interests in the
Collateral, the details of such actions, or (ii) stating that, in
the opinion of such Counsel, no such action is necessary to make
such Liens effective and perfected.
(b) [Intentionally omitted.]
(c) The release of any Collateral from the terms of the
Mortgage will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the
extent the Collateral is released pursuant to the Mortgage or
this Indenture, as applicable. To the extent applicable, the
Company shall cause TIA ss. 314(d) relating to the release of
Property or securities from the Lien of the Mortgage and relating
to the substitution therefor of any Property or securities to be
subjected to the Lien of the Mortgage, to be complied with. Any
certificate or opinion required by TIA ss. 314(d) may be made by
an Officer of the Company, except in cases where TIA ss. 314(d)
requires that such certificate or opinion be made by an
independent person.
Section 10.3 Authorization of Actions to be Taken by
---------------------------------------
the Trustee Under the Operative Documents.
-----------------------------------------
The Trustee may, in its sole discretion and without the
consent of the Securityholders, take all actions it deems
necessary or appropriate to (a) enforce any of the terms of the
Operative Documents and (b) collect and receive any and all
amounts payable in respect of the obligations of the Company
hereunder and thereunder. Subject to the provisions of this
Indenture and the other Operative Documents, the Trustee shall
have power to institute and to maintain such suits
39
and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or
in violation of the other Operative Documents or this Indenture,
and such suits and proceedings as it may deem expedient to
preserve or protect its interest and the interests of the
Securityholders in the Collateral (including power to institute
and maintain suits or proceedings to restrain the enforcement of
or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such
enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the
Securityholders or of the Trustee).
Section 10.4 Payment of Expenses.
-------------------
On demand of the Trustee, the Company forthwith shall pay
or satisfactorily provide for all reasonable expenditures
incurred by the Trustee under this Article 10, and all such sums
shall be a Lien upon the Collateral and shall be secured thereby.
Section 10.5 Authorization of Receipt of Funds by the
----------------------------------------
Trustee Under the Operative Documents.
-------------------------------------
The Trustee is authorized to receive any funds for the
benefit of Securityholders distributed under the Operative
Documents, and to make further distributions of such funds to the
Holders according to the provisions of this Indenture and the
other Operative Documents.
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Conflict with Trust Indenture Act of 1939.
-----------------------------------------
If and to the extent that any provision of this Indenture
limits, qualifies, or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the TIA, such imposed duties
shall control.
Section 11.2 Notices; Waivers.
----------------
Any request, demand, authorization, direction, notice,
consent, waiver or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with
(a) the Company shall be sufficient for every purpose
hereunder if in writing (including telecopied communications) and
made, given, furnished or filed by personal delivery or mailed by
registered or certified mail or by nationally recognized
overnight courier, postage or courier charges, as the case may
be, prepaid, to or with the Company at:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
00
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President & General Counsel
Telecopier No.: (000) 000-0000
(b) the Trustee shall be sufficient for every purpose
hereunder if in writing (including telecopied communications) and
made, given, furnished or filed by personal delivery or mailed by
registered or certified mail or by nationally recognized
overnight courier, postage or courier charges, as the case may
be, prepaid, to or with the Trustee at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Corporate Trust Services
Telecopier No.: (000) 000-0000
or to any of the above parties at any other address or telecopier
number subsequently furnished in writing by it to each of the
other parties listed above. An affidavit by any person
representing or acting on behalf of the Company or the Trustee as
to such mailing, having any registry receipt required by this
Section attached, shall be conclusive evidence of the giving of
such demand, notice or communication.
Any notice or communication mailed to a Holder shall be
mailed to such holder by first-class mail or by nationally
recognized overnight courier, postage or courier charges, as the
case may be, prepaid, at such holder's address as it appears on
the Register and shall be sufficiently given to such holder if so
mailed within the time prescribed.
Failure to mail a notice or send a communication to a
Holder or any defect in it shall not affect its sufficiency with
respect to other Holders. Notices to the Trustee or to the
Company are deemed given only when received. Where this Indenture
provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by the Holders shall
be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 11.3 Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA ss. 312(b)
with other Securityholders with respect to their rights under
this Indenture or the Securities. The Company, the Trustee, the
Registrar and any other person shall have the protection of TIA
ss. 312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any Request or application by the Company to the
Trustee to take any action under this Indenture or the other
Operative Documents, the Company shall furnish to the Trustee:
(a)
41
an Officers' Certificate, and (b) an Opinion of Counsel, each
stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, provided, that in the
case of any such application or Request as to which the
furnishing of an Officers' Certificate or Opinion of Counsel is
specifically required by any provision of this Indenture or the
other Operative Documents relating to such particular application
or Request, no additional certificate or opinion, as the case may
be, need be furnished.
Section 11.5 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion provided for and delivered to
the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture or the other Operative
Documents shall include: (a) a statement that the Person signing
such certificate or opinion has read such condition or covenant
and the definitions herein or therein relating thereto; (b) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in
the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such condition or covenant
has been complied with; and (d) a statement as to whether or not
in the opinion of such Person, such condition or covenant has
been complied with.
Any certificate or opinion of an Officer or an engineer,
insurance broker, accountant or other expert may be based,
insofar as it relates to legal matters, upon a certificate or
opinion of or upon representations by counsel, unless such
officer, engineer, insurance broker, accountant or other expert
knows that the certificate or opinion or representations with
respect to the matters upon which his opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care
should have known that the same were erroneous.
Any certificate or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon the certificate or opinion
of or representations by an officer or officers of the Company
stating that the information with respect to such factual matters
is in possession of the Company, unless such counsel knows that
the certificate or opinion or representations with respect to the
matters upon which his opinion may be based as aforesaid are
erroneous and insofar as it relates to legal matters in a
jurisdiction or area of law beyond the expertise of such counsel,
such counsel may rely upon the opinion of counsel qualified in
such other jurisdiction or area of law.
Wherever in this Indenture or the other Operative Documents
in connection with any application, certificate or report to the
Trustee it is provided that the Company shall deliver any
document as a condition of the granting of such application or as
evidence of the Company's compliance with any term hereof, it is
intended that the truth and accuracy at the time of the granting
of such application or at the effective date of such certificate
or report, as the case may be, of the facts and opinions stated
in such document shall in each such case be a condition precedent
to the right of the Company to have such application granted or
to the sufficiency of such certificate or report. Nevertheless,
in the case of any such application, certificate or report,
42
any document required by any provision of this Indenture or the
other Operative Documents to be delivered to the Trustee as a
condition of the granting of such application or as evidence of
such compliance may be received by the Trustee as conclusive
evidence of any statement therein contained and shall be full
warrant, authority and protection to the Trustee acting on the
faith thereof.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Whenever any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements or opinions or other instruments under this Indenture
or any other Operative Document such Person may, but need not,
consolidate such instruments into one.
Section 11.6 Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Registrar, Paying Agent or Tender
Agent may make reasonable rules for their respective functions.
Section 11.7 Holidays.
--------
In the event that any date for the payment of any amount
due hereunder shall not be a Business Day, then (notwithstanding
any other provision of this Indenture) such payment need not be
made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the due
date, and no interest shall accrue from such due date to and
including the next succeeding Business Day.
Section 11.8 Governing Law; Waiver of Jury Trial.
-----------------------------------
(a) The laws of the State of New York shall govern this
Indenture and the Securities without regard to principles of
conflict of laws.
(b) The Company and the Trustee each waive any right to
have a jury participate in resolving any dispute, whether
sounding in contract, tort, or otherwise arising out of,
connected with, related to or incidental to the relationship
established between them in connection with this Indenture.
Instead, any disputes resolved in court will be resolved in a
bench trial without a jury.
43
Section 11.9 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any agreement
of the Company or any of its Subsidiaries which is unrelated to
this Indenture, the Securities or the other Operative Documents.
Any such agreement may not be used to interpret this Indenture.
Section 11.10 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of
the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or
their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
Section 11.11 Benefits of Indenture and the Securities Restricted.
---------------------------------------------------
Subject to the provisions of Section 11.12 hereof, nothing
in this Indenture or the Securities, express or implied, shall
give or be construed to give to any Person, firm or corporation,
other than the parties hereto and the Holders, any legal or
equitable right, remedy or claim under or in respect of this
Indenture or under any covenant, condition, or provision herein
contained, all such covenants, conditions and provisions, subject
to Section 11.12 hereof, being for the sole benefit of the
parties hereto and of the Holders.
Section 11.12 Successors and Assigns.
----------------------
This Indenture and all obligations of the Company hereunder
shall be binding upon the successors and permitted assigns of the
Company, and shall, together with the rights and remedies of the
Trustee hereunder, inure to the benefit of the Trustee, the
Holders, and their respective successors and assigns. Any
assignment in violation hereof shall be null and void ab initio.
Section 11.13 Counterpart Originals.
---------------------
This Indenture may be signed in two or more counterparts,
each of which shall be deemed an original, but all of which shall
together constitute one and the same agreement.
Section 11.14 Severability.
------------
The provisions of this Indenture are severable, and if any
clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect in that jurisdiction
only such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Indenture
in any jurisdiction, and a Holder shall have no claim therefor
against any party hereto.
44
Section 11.15 Effect of Headings.
------------------
The Article and Section headings and the Table of Contents
contained in this Indenture have been inserted for convenience of
reference only, and are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of this
Indenture.
ARTICLE 12.
RELEASE OF COLLATERAL
Section 12.1 Release of Collateral.
---------------------
The Collateral securing the obligations evidenced by the
Securities shall be subject to release from the Lien of this
Indenture and the other Operative Documents from and to the
extent provided by this Indenture and the other Operative
Documents.
ARTICLE 13.
MANDATORY CONVERSION OF SECURITIES
Section 13.1 Mandatory Conversion and Conversion Price.
-----------------------------------------
(a) Subject to the other provisions of this Article 13, on
the Conversion Date, so long as no Default or Event of Default
shall then exist, each then Outstanding Security shall be
automatically converted into that number of fully paid and
non-assessable shares of Common Stock equal to the sum of (i) the
then outstanding principal amount of such Security, plus (ii)
accrued and unpaid interest, if any, on such Security to the
Conversion Date, divided by the lesser of (A) 0.95 multiplied by
the Average Market Price per share of Common Stock or (B) $107/8
(the "Fixed Price") (such lesser amount being hereinafter
referred to as the "Conversion Price"); provided, however, that
the aggregate number of shares of Common Stock issuable upon any
such conversion shall not exceed the Maximum Share Amount. If, on
the Conversion Date, the Company has taken all action required to
authorize the issuance of the Common Stock in conversion of the
Securities and no Default or Event of Default shall then exist,
then, notwithstanding that such Securities have not been
Tendered, from and after the Conversion Date, all of the
Securities shall no longer be deemed Outstanding and all rights
relating to such Securities shall terminate, except only the
right to receive, upon Tender of the Securities therefore, the
Common Stock and cash (if any) pursuant to the provisions hereof,
and the Person or Persons entitled to receive the Common Stock
issuable upon the conversion shall be treated for all purposes as
the record holder or holders of such Common Stock. If all the
foregoing conditions have been satisfied, interest, if any, will
cease to accrue on the Securities on the Conversion Date. The
Fixed Price will be appropriately and equitably adjusted to
reflect the effects of any stock dividend, stock split (including
a reverse stock split), reclassification, recapitalization,
combination or distribution of assets, securities or other
Property (in each of the foregoing cases, except if clause (i),
(ii) or (iii) of Section 13.2(a) is applicable to any of such
45
events) to holders of Common Stock by the Company in the case of
any of the foregoing affecting the Common Stock, the record date,
ex-dividend date or similar date of which occurs during the
period from the Issue Date through the Conversion Date. Except as
expressly provided herein, no other payment or adjustment will be
made for dividends or distributions on shares of Common Stock
issued upon conversion which were declared for payment to holders
of Common Stock of record as of a date prior to the Conversion
Date.
(b) As promptly as practicable on the Shelf Effective Date,
the Company shall send (or cause to be sent) a notice to each
Holder and the Trustee (which notice shall be sent to such Holder
and the Trustee by telex or telecopier if (with respect to such
Holder) such Holder has, at least five Business Days prior
thereto, provided such telex or telecopier information to the
Company or the Trustee), stating the Shelf Effective Date and, to
the extent then known, the following: (i) the Conversion Date,
(ii) the Conversion Price, (iii) the office or offices
(including, in any event, the office required to be maintained by
the Company pursuant to the first paragraph of Section 4.1) to
which the Securities should be Tendered for Common Stock, (iv)
that unless otherwise notified by such Holder, the certificate or
certificates of Common Stock issuable to such Holder on such
Conversion Date will be issued in the name of and delivered to
the address of such Holder as shown on the Register as of the
close of business of the Registrar on such Conversion Date and
(v) that interest, if any, will cease to accrue on the Securities
on the Conversion Date. Such a notice containing the information
in the foregoing clauses (i) through (v) shall in any event be so
sent as promptly as practicable on the Conversion Date.
(c) As promptly as practicable (but in any event not later
than five Business Days) after receipt of a Security at any
office set forth in the notice referred to in paragraph (b)
above, the Company shall issue, execute and deliver to the Holder
of such Security, in such Holder's name and to such Holder's
address as shown on the Register as of the close of business of
the Registrar on the Conversion Date (or otherwise in accordance
with such Holder's written order received by the Company), a
certificate or certificates for the number of shares of Common
Stock resulting from such conversion, together with any cash
adjustment in lieu of fractional shares or cash payable as a
result of the Maximum Share Amount, as hereinafter provided.
(d) No fractional shares of Common Stock shall be issued
upon any conversion of Securities. In lieu of any fraction of a
share of Common Stock to which any Holder would otherwise be
entitled upon conversion of any Security, the Company shall pay
to such Holder (in accordance with paragraph (c) above) a cash
adjustment for such fraction in an amount equal to the same
fraction of the Conversion Price, together with the amount (if
any) by which the Conversion Price per share then in effect
exceeds the Closing Price of the Common Stock on the Conversion
Date, multiplied by such fraction.
(e) The principal amount, if any, of any Security that
cannot be converted into Common Stock as a result of the Maximum
Share Amount (excluding any amount payable pursuant to paragraph
(d) above), shall be paid by the Company to the Holder thereof,
together with accrued and unpaid interest, if any, thereon,
together with the amount (if any) by which the Conversion Price
per share then in effect exceeds the Closing Price of the Common
Stock on the Conversion Date, multiplied by the number of shares
which could then have been received upon
46
conversion of such portion of the principal amount of such
Security. Any such amounts shall be paid in cash in accordance
with paragraph (c) above.
Section 13.2 Effect of Consolidation, Merger or
----------------------------------
Conveyance on Conversion.
------------------------
(a) If any of the following shall occur, namely: (i) any
consolidation or merger to which the Company is a constituent
party other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification of,
or change (other than a change in name, or in par value, or from
par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination) in, outstanding
shares of Common Stock; (ii) any conveyance or transfer of all or
substantially all of the assets of the Company; or (iii) any
share exchange pursuant to which all of the outstanding shares of
Common Stock are converted into or exchanged for other securities
or Property (including cash), then the Company, or such successor
or purchasing corporation, as the case may be, shall, as a
condition precedent to such consolidation, merger, conveyance,
transfer or share exchange, execute and deliver to the Trustee a
supplemental indenture providing that immediately after the
consummation of such consolidation, merger, conveyance, transfer
or share exchange, the Securities shall automatically convert
into and the Holder of each Security then outstanding shall have
the right thereafter to receive the kind and amount of shares of
stock and other securities and Property (including cash)
receivable upon such consolidation, merger, conveyance, transfer
or share exchange by a holder of the number of shares of Common
Stock deliverable upon conversion of such Security immediately
prior to the effective date of such consolidation, merger,
conveyance, transfer or share exchange, assuming that the Average
Market Price is determined utilizing the 20 consecutive Trading
Days ending on the Trading Day immediately prior to such
effective date. If, in the case of any such consolidation,
merger, conveyance, transfer or share exchange, the stock or
other securities and Property (including cash) receivable
thereupon by a holder of Common Stock include shares of stock or
other securities and Property of a corporation other than the
successor or purchasing corporation, as the case may be, in such
consolidation, merger, conveyance, transfer or share exchange,
then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to
protect the interests of the Holders as the Board of Directors
shall reasonably consider necessary by reason of the foregoing.
If in connection with any such consolidation, merger, conveyance,
transfer, or share exchange each holder of shares of Common Stock
is entitled to elect to receive either securities, cash or other
assets (or any combination thereof) upon completion of such
transaction, the Company will provide or cause to be provided to
each Holder the right to elect to receive the securities, cash or
other assets into which the Securities held by such Holder will
be convertible after completion of any such transaction on the
same terms and subject to the same conditions applicable to
holders of the Common Stock (including, without limitation,
notice of the right to elect, limitations on the period in which
such election will be made and the effect of failing to exercise
the election). In the case of any such consolidation, merger,
conveyance, transfer or share exchange, where the Holders of
shares of Common Stock will be entitled to receive securities
upon completion of such transaction, the Company will cause such
successor or purchasers respectively to provide that the securities
upon conversion of the Securities will be freely transferable
issuable without any restrictions imposed by federal, state or foreign
securities laws. The provisions of this Section 13.2 shall
similarly apply to successive consolidations,
47
mergers, conveyances, transfers or share exchanges. In the event
the Company shall execute a supplemental indenture pursuant to
this Section 13.2, the Company shall promptly file with the
Trustee (x) an Officers' Certificate briefly stating the reasons
therefor, the kind or amount of shares of stock or securities or
Property (including cash) receivable by Holders upon the
automatic conversion of their Securities immediately after any
such consolidation, merger, conveyance, transfer or share
exchange, any adjustment to be made with respect thereto and that
all conditions precedent have been complied with and (y) an
Opinion of Counsel that all conditions precedent have been
complied with.
(b) The Trustee, subject to the provisions of Section 7.1,
shall not be responsible for any such consolidation, merger,
conveyance, transfer or share exchange, the form or substance of
any plan relating thereto, or the consequences thereof to any
Holder or the correctness of any provision contained in any such
supplemental indenture relating to the kind or amount of shares
of stock or securities or Property receivable by any Holder upon
conversion of Securities immediately after any such
consolidation, merger, conveyance, transfer or share exchange.
(c) As evidence of the kind and amount of stock or other
securities or Property into which Securities will be
automatically converted after any such consolidation, merger,
conveyance, transfer or share exchange, the Trustee, subject to
the provisions of Section 7.1, may accept the certificate of a
nationally recognized firm of independent public accountants with
respect thereto; and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely thereon, and shall
not be responsible or accountable to any Holder for any provision
in conformity therewith which may be contained in the said
supplemental indenture.
(d) The Company or the Trustee may retain accountants to
make any computation required under this Article 13, and the
certificate of a nationally recognized firm of independent public
accountants shall be conclusive evidence of the correctness of
any computation made under this Article 13.
Section 13.3 Costs of Conversion.
-------------------
The issuance of certificates for shares of Common Stock
issued upon the conversion of Securities shall be made without
charge to the Holders for such certificates or for any
documentary, stamp or similar issue or transfer tax in respect of
the issuance of such certificates; provided, however, that the
Company shall not be required to pay any such tax which may be
payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the
Holder as shown on the Register as of the close of business of
the Registrar on the Conversion Date, and the Company shall not
be required to issue or deliver such certificates unless or until
the Person or Persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has
been paid. Nothing herein shall preclude any tax withholding
required by applicable law.
48
Section 13.4 No Liability to Trustee.
-----------------------
The Trustee shall not at any time be under any duty or
responsibility to any Holder to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the
same. The Trustee shall not be accountable with respect to the
validity or value (or the kind or amount) of any Common Stock or
of any securities or Property which may at any time be issued or
delivered upon the conversion of any Security; and it does not
make any representation with respect thereto. The Trustee shall
not be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or
Property upon the conversion of any Security or to comply with
any of the covenants of the Company contained in this Article 13.
Section 13.5 Applicable Laws.
---------------
Anything herein to the contrary notwithstanding, the rights
and obligations of the Holders and the Company to convert the
Securities into Common Stock or to vote said stock shall be
subject to all applicable laws then in effect.
Section 13.6 Other Funds.
-----------
Anything elsewhere contained in this Indenture to the
contrary notwithstanding, any funds which at any time shall have
been deposited by the Company or on its behalf with the Trustee
or any other Paying Agent for the purpose of paying any
Securities which shall have been converted pursuant to the
provisions of this Article 13 into Common Stock, shall forthwith
upon such conversion be repaid upon demand to the Company by the
Trustee or such other Paying Agent.
Section 13.7 Release of Collateral Upon Conversion.
-------------------------------------
On or after the effectiveness of the conversion pursuant to
this Article 13, upon request by the Company and payment by the
Company of the Trustee's costs (including reasonable legal fees
and disbursements) incurred in complying with such Request, the
Trustee shall release from the Lien of the Operative Documents,
all right, title and interest of the Trustee in and to any
Collateral.
Section 13.8 Company to Provide Stock.
------------------------
The Company shall, prior to issuance of any Securities
hereunder, and from time to time as it may be necessary, reserve,
out of its authorized but unissued Common Stock, a sufficient
number of shares of Common Stock to permit the conversion of all
outstanding Securities into shares of Common Stock.
49
All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall
be duly authorized, validly issued, fully paid and nonassessable
and shall be free from preemptive rights and free of any lien or
adverse claim.
The Company will list or cause to have quoted all shares of
Common Stock deliverable upon conversion of the Securities on the
American Stock Exchange and each other national securities
exchange or in the over-the-counter market or such other market
on which the Common Stock is then listed or quoted.
ARTICLE 14.
POSSIBLE SUBORDINATION
If, on the Business Day immediately succeeding the Issue
Date, the Holders (other than Lazard Freres & Co. LLC, as Holder
of the Compensation Notes, as defined in the Placement Agreement)
do not include at least one of the Owner Trustee, Seven Sixty
Seven Leasing, Inc. or any member of the Bank Group, then the
Securities shall automatically, without any further act or deed,
become unsecured obligations of the Company and shall rank junior
in priority to all secured indebtedness of the Company and pari
passu with all unsecured indebtedness of the Company, in each
case whether such indebtedness is existing on the Issue Date or
thereafter incurred, and the Trustee shall be authorized to enter
into or execute and deliver such agreements, instruments or other
documents as may be reasonably requested by (and at the cost and
expense of) the Company to evidence or confirm the release of
Liens on the Collateral or such subordination of the Securities.
50
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the date first written above.
TRANS WORLD AIRLINES, INC.
By:
Name:
Title:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Trustee
By:
Name:
Title:
DEFINITIONS APPENDIX
Appendix I
To the Indenture between
Trans World Airlines, Inc.
and
First Security Bank, National Association, as Trustee
dated as of April 21, 1998
for the Company's Mandatory Conversion Equity Notes due 1999
and the Aircraft Second Mortgage and Security Agreement
dated as of an even date therewith
TABLE OF CONTENTS
Page
Section 1. Definitions................................... 1
Act........................................... 1
Affiliate..................................... 1
Agent......................................... 1
Aircraft...................................... 1
Aircraft Sale Agreement....................... 1
Airframe...................................... 1
Applicable Percentage......................... 1
Average Market Price.......................... 2
Bank Group.................................... 2
Bankruptcy Law................................ 2
Bills of Sale................................. 2
Board of Directors............................ 2
Business Day.................................. 2
Capital Stock................................. 2
Capitalized Lease Obligation.................. 2
Certificated Air Carrier...................... 2
Certifying Officer............................ 3
Change in Control............................. 3
CL/PK......................................... 3
Closing Price................................. 3
Code.......................................... 4
Collateral.................................... 4
Common Stock.................................. 4
Company....................................... 4
Conversion Date............................... 4
Conversion Price.............................. 4
Corporate Trust Office........................ 4
Custodian..................................... 5
Default....................................... 5
Definitions Appendix.......................... 5
8% Preferred Stock............................ 5
11 3/8% Secured Notes......................... 5
Employee Preferred Stock...................... 5
Engine........................................ 5
ERISA......................................... 5
Event of Default.............................. 5
Exchange Act.................................. 5
FAA........................................... 5
FAA Xxxx of Sale.............................. 6
Federal Aviation Act.......................... 6
First Mortgage................................ 6
(i)
TABLE OF CONTENTS
(Continued)
Page
GAAP.......................................... 6
Holder or Holder of Securities................ 6
Indebtedness.................................. 6
Indenture..................................... 7
Indenture Discharge Date...................... 7
Indenture Trustee............................. 7
Interest Payment Date......................... 7
Issue Date.................................... 7
Legal Holiday................................. 7
Lien.......................................... 7
Maximum Share Amount.......................... 7
Mortgage...................................... 7
Mortgage Supplement........................... 7
9 1/4% Preferred Stock........................ 8
Notes Indenture............................... 8
Notes Trustee................................. 8
Obligations................................... 8
Offer to Purchase............................. 8
Officer....................................... 10
Officers' Certificate......................... 10
Operative Documents........................... 10
Opinion of Counsel............................ 10
Outstanding or outstanding.................... 10
Owner Trustee................................. 11
Parts......................................... 11
Paying Agent.................................. 11
Payment Date.................................. 11
Payments...................................... 11
Permitted Liens............................... 11
Person........................................ 12
Placement Agreement........................... 12
Preferred Stock............................... 12
principal..................................... 12
Property...................................... 12
Record Date................................... 12
Register...................................... 13
Registrar..................................... 13
Registration Default.......................... 13
Registration Rights Agreement................. 13
Replacement Engine............................ 13
Request....................................... 13
Required Holders.............................. 13
SEC........................................... 13
(ii)
TABLE OF CONTENTS
(Continued)
Page
Securities.................................... 14
Securities Act................................ 14
Securityholder................................ 14
Seven Leasing................................. 14
Shelf Effective Date.......................... 14
Shelf Registration Statement.................. 14
Significant Subsidiary........................ 14
Special Record Date........................... 14
Stated Maturity............................... 14
Subsidiary.................................... 14
Taxes......................................... 14
Tender........................................ 15
TIA........................................... 15
Total Loss and Total Loss Date................ 15
Total Loss OTP Amount......................... 15
Trading Day................................... 15
Trust Agreement............................... 15
Trust Officer................................. 15
Trustee....................................... 15
TWA........................................... 15
U.S. or United States......................... 15
U.S. Government Obligations................... 15
Warranty Xxxx of Sale......................... 16
Section 2. Rules of Construction......................... 16
(iii)
DEFINITIONS APPENDIX
Section 1. Definitions. Unless the context otherwise requires,
each of the terms included in this Section 1 shall have the
respective meanings given in this Section 1 for all purposes of
the Indenture and the other Operative Documents (including this
appendix and any other appendices, exhibits or schedules to any
thereof) and of such other agreements as may incorporate this
appendix by reference except as otherwise specifically provided
herein or therein.
"Act" means the Federal Aviation Act.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person. For
the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar
or co-Paying Agent.
"Aircraft" means each Airframe together with the two
associated Engines identified by manufacturer's serial number in
the Mortgage Supplement for such Airframe executed and delivered
on the Issue Date, whether or not any of such Engines may at any
time be installed on such Airframe or installed on any other
airframe.
"Aircraft Sale Agreement" means the Aircraft Sale and Note
Purchase Agreement, made and entered into as of the 9th day of
April, 1998, among the Company, the Owner Trustee and Seven
Leasing.
"Airframe" means each Boeing Model 767-231 ETOPS airframe
(excluding any Engines and any other engines, but including any
and all Parts which may from time to time be incorporated or
installed in, or attached to such airframe, and including any and
all Parts removed therefrom so long as the removed Parts remain
subject to the Lien of the Mortgage under the terms thereof)
purchased by the Company under the Aircraft Sale Agreement and
identified by the FAA registration number and manufacturer's
serial number in the Mortgage Supplements executed and delivered
on the Issue Date.
"Applicable Percentage" means (i) with respect to any
amendment, supplement or waiver of the Indenture or any other
Operative Document that would (A) terminate the Lien of the
Mortgage with respect to any Collateral or permit the release of
any Collateral (other than releases permitted by the applicable
Operative Document, which releases shall not require any consent
of the Holders) or permit the creation of any Lien on any
Collateral (other than Permitted Liens), (B) increase the
aggregate principal amount of Securities that may be issued under
the Indenture or (C) modify this definition, 66 2/3%, and (ii)
otherwise, a majority.
2
"Average Market Price" means, with respect to Common Stock,
the average of the daily Closing Prices per share of Common Stock
for the 20 consecutive Trading Days ending on the Trading Day
immediately prior to the Conversion Date. The Average Market
Price of Common Stock will be appropriately and equitably
adjusted to reflect the effects of any stock dividend, stock
split (including a reverse stock split), reclassification,
recapitalization, combination or distribution of assets,
securities or other Property (in each of the foregoing cases,
except if clause (i), (ii) or (iii) of Section 13.2(a) of the
Indenture is applicable to any of such events) to holders of
Common Stock by the Company in the case of any of the foregoing
affecting the Common Stock, the record date, ex-dividend date or
similar date of which occurs during the period in which the
Average Market Price is to be determined.
"Bank Group" means any Person who, immediately prior to the
issuance of the Securities on the Issue Date, held a beneficial
interest (through participation or otherwise) in Seven Leasing,
or any Affiliate of any such Person.
"Bankruptcy Law" has the meaning provided in Section 6.1 of
the Indenture.
"Bills of Sale" means, for each Aircraft, the FAA Xxxx of
Sale and the Warranty Xxxx of Sale.
"Board of Directors" means the Board of Directors of the
Company or any committee of such board duly authorized to act in
respect of any particular matter.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means, as applied to any
Person for any period, an obligation of such Person to pay rent
or other amounts under a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP.
"Certificated Air Carrier" means a United States "air
carrier" within the meaning of the Act, holding an air carrier
operating certificate issued pursuant to chapter 447 of the Act
and of the type referred to in 11 U.S.C. ss. 1110, or if such
certification shall cease to be available, a carrier of
comparable status under the laws of the United States then in
force.
"Certifying Officer" means an Officer or an assistant
secretary of the Company.
"Change in Control" means the occurrence of any of the
following events: (i) any person (including any entity or group
deemed to be a "person" under Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) is or becomes the direct or
indirect beneficial owner (as
3
determined in accordance with Rule 13d-3 under the Exchange Act)
of shares of the Company's Capital Stock representing greater
than 50% of the total voting power of all shares of Capital Stock
of the Company entitled to vote in the election of directors of
the Company under ordinary circumstances or to elect a majority
of the Board of Directors of the Company, (ii) the Person then
constituting the "Company" under the Indenture sells, transfers
or otherwise disposes of all or substantially all of its assets,
(regardless of whether such Person thereupon ceases to constitute
the "Company" under the Indenture pursuant to Section 5.2
thereof), (iii) when, during any period of 12 consecutive months
after the date of original issuance of the Securities,
individuals who at the beginning of any such 12-month period
constituted the Board of Directors (together with any new
directors whose election by such Board or whose nomination for
election by the stockholders of the Company was approved by a
vote of majority of the directors still in office entitled to
vote with respect to such nomination who were either directors at
the beginning of such period or whose election or nomination for
election was previously so approved, but excluding any of the
individuals who at the beginning of such 12-month period
constituted such Board but who ceased to be a member of the Board
pursuant to the Company's mandatory retirement policy as in
effect as of the Issue Date), cease for any reason to constitute
a majority of the Board of Directors then in office or (iv) the
date of the consummation of the merger or consolidation of the
Person then constituting the "Company" under the Indenture with
another corporation where the stockholders of such Person,
immediately prior to the merger or consolidation, would not
beneficially own, immediately after the merger or consolidation,
shares entitling such stockholders to 50% or more of all votes
(without consideration of the rights of any class of stock to
elect directors by a separate class vote) to which all
stockholders of the corporation issuing cash or securities in the
merger or consolidation would be entitled in the election of
directors or where members of the Board of Directors of the
Person then constituting the "Company" under the Indenture,
immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation, constitute a
majority of the board of directors of the corporation issuing
cash or securities in the merger or consolidation.
"CL/PK" means Credit Lyonnais/PK Airfinance, a financial
sector corporation organized and existing under and by virtue of
the laws of the Grand Duchy of Luxembourg.
"Closing Price" means, for any day, the last reported sales
price, regular way, per share of Common Stock, or, in case no
such reported sale takes place on such date, the average of the
reported closing bid and asked prices, regular way, per share of
Common Stock, in either case on the American Stock Exchange, or,
if the Common Stock is not listed or admitted to trading on the
American Stock Exchange, on the principal national securities
exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national
securities exchange, the closing sales price, regular way, of the
Common Stock as quoted by National Association of Securities
Dealers Automated Quotation System ('NASDAQ"), or, in case no
reported sale takes place, the average of the closing bid and
asked prices, regular way, as quoted by NASDAQ or any comparable
system, or, if the Common Stock is not quoted on NASDAQ or any
comparable system, the closing sales price, regular way, or, in
case no reported sale takes place, the average of the closing bid
and asked prices, regular way, as furnished by any two members of
the National Association of Securities Dealers, Inc. selected
from time to time by the Company for that purpose.
4
"Code" means the United States Internal Revenue Code of
1986, as amended from time to time, or any similar legislation of
the United States enacted to supersede, amend or supplement such
Code, and any reference to a provision or provisions of the Code
shall also mean and refer to any successor provision or
provisions, however designated or distributed.
"Collateral" has the meaning specified in Section 2.1 of
the Mortgage.
"Common Stock" includes any stock of any class of the
Company which has no preference in respect to dividends or of
amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which
is not subject to redemption by the Company; initially it refers
to the common stock, $0.01 par value, of the Company.
"Company" means the party named as such in the Indenture or
any obligor on the Securities until a successor replaces it
pursuant to the Indenture and thereafter means the successor.
"Conversion Date" means the first Business Day following
the earliest date on which either (a) both of the following
statements shall be true: (i) the Shelf Effective Date shall have
occurred and (ii) the Common Stock issuable on conversion of the
Equity Notes shall be listed on the American Stock Exchange or
such other stock exchange or market as the Common Stock of the
Company is then principally traded or (b) a transaction
contemplated by Section 13.2 (a) of the Indenture has been
consummated.
"Conversion Price" has the meaning provided in Section 13.1
of the Indenture.
"Corporate Trust Office" when used with respect to the
Trustee means the office of the Trustee at which at any
particular time its corporate trust business is administered and
which, at the Issue Date, is located at First Security Bank,
National Association, as Trustee, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, Attention: Corporate Trust Services.
"Custodian" has the meaning provided in Section 6.1 of the
Indenture.
"Default" means any event which is, or after notice or
passage of time, or both, would be, an Event of Default.
"Definitions Appendix" means this Definitions Appendix
attached as Appendix I to the Indenture and the Mortgage and
constituting a part of the Indenture and each other Operative
Document.
"8% Preferred Stock" means the 8% Cumulative Convertible
Exchangeable Preferred Stock of the Company and dividends on such
stock, and payments on account of which are to be deemed
equivalent to distributions on such stock.
"11 3/8% Secured Notes" means the 11 3/8% Senior Secured
Notes due 2003 of the Company issued concurrently with the
Securities.
5
"Employee Preferred Stock" means the IFFA Preferred Stock,
the ALPA Preferred Stock and the IAM Preferred Stock of the
Company and dividends on such stock, and payments on account of
which are to be deemed equivalent to distributions on such stock.
"Engine" means (i) each of the Xxxxx & Xxxxxxx Model
JT9D-7R4D aircraft engines identified by manufacturer's serial
number in the Mortgage Supplements executed and delivered on the
Issue Date, so long as a Replacement Engine shall not have been
substituted therefor pursuant to the Mortgage, and (ii) each
Replacement Engine, so long as another Replacement Engine shall
not have been substituted therefor pursuant to the Mortgage,
whether or not such engine or Replacement Engine, as the case may
be, is from time to time installed on an Airframe or installed on
another airframe, and including, in each case all Parts
incorporated or installed in or attached thereto and any and all
Parts removed therefrom so long as such Parts remain subject to
the Lien of the Mortgage under the terms thereof.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Event of Default" has the meaning provided in Section 6.1
of the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time.
"FAA" means the Federal Aviation Administration or similar
regulatory authority established to replace it.
"FAA Xxxx of Sale" means, for each Aircraft, the xxxx of
sale for such Aircraft on AC Form 8050-2 or such other form as
may be acceptable to the FAA for recordation with it, executed by
the Owner Trustee in favor of the Company.
"Federal Aviation Act" means Title 49 of the United States
Code, "Transportation," as amended from time to time, or any
similar legislation of the United States enacted in substitution
or replacement thereof. In the event there is enacted any
legislation replacing, modifying or repealing, in whole or in
part, the Federal Aviation Act, then the term "certificated,"
when used with reference to the Federal Aviation Act or any
particular provision thereof, shall mean authorized to provide,
or not prohibited from providing, air transportation services.
"First Mortgage" means the Aircraft Mortgage and Security
Agreement, dated as of April 21, 1998, between the Company and
the Notes Trustee, securing, among other things, the obligations
of the Company under the Notes Indenture.
"GAAP" means generally accepted accounting principles in
the United States of America as in effect as of the Issue Date,
including those set forth in (i) the opinions and pronouncements
of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (ii) statements and pronouncements
of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant
segment of the accounting profession and (iv) the rules and
regulations of the SEC governing the inclusion of financial
statements
6
(including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting
staff of the SEC.
"Holder" or "Holder of Securities" means the Person in
whose name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person at any
date, without duplication, (a) all indebtedness, obligations and
other liabilities (contingent or otherwise) of such Person for
borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such Person or only to a portion
thereof), (b) all obligations and other liabilities (contingent
or otherwise) of such Person evidenced by bonds, notes or others
similar instruments, (c) all obligations and other liabilities
(contingent or otherwise) of such Person in respect of letters of
credit or other similar instruments (and reimbursement
obligations with respect thereto), (d) all obligations and other
liabilities (contingent or otherwise) of such Person to pay the
deferred and unpaid purchase price of property or services (other
than any such obligations that represent trade payables or
accrued expenses incurred in the ordinary course of business),
(e) all Capitalized Lease Obligations of such Person, (f) all
Indebtedness of others secured by a Lien on any asset or assets
of such Person, whether or not such Indebtedness is assumed by
such Person (and, if not assumed, such Indebtedness shall be
limited to the fair market value of such asset or assets as
determined on the date such Indebtedness was incurred), and (g)
all Indebtedness of others guaranteed by such Person to the
extent of such guarantee. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date
of all unconditional obligations as described above and the
maximum liability of such Person for any such contingent
obligations at such date. A change in GAAP that results in an
obligation of the Company existing at the time of such change
becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness.
"Indenture" means the Indenture dated as of April 21, 1998
between the Company and the Trustee, under which the Securities
are issued, as amended or supplemented from time to time.
"Indenture Discharge Date" means the date of the
effectiveness of the termination of the Company's obligations
under the Indenture pursuant to Section 8.1(a) or (b) thereof.
"Indenture Trustee" means the Trustee.
"Interest Payment Date" means the 15th day of each month
during which any Security is Outstanding (commencing the 15th day
of the month next succeeding the month in which a Registration
Default, if any, occurs) and (if a Registration Default has
occurred) the date on which the Securities mature, if different.
"Issue Date" means the date on which the Securities are
originally issued.
"Legal Holiday" means a Saturday, Sunday or any other day
on which banks located in New York City or the city and state of
the Trustee's Corporate Trust Office as of the Issue Date are
authorized or obligated by law to remain closed.
7
"Lien" means any conveyance in trust, assignment, mortgage,
pledge, security interest, encumbrance, lien or charge of any
kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Maximum Share Amount" means the maximum number of shares
of Common Stock that can be issued upon conversion of the
Securities on the Conversion Date without causing the Company to
be (without prior stockholder approval) in violation of any
applicable listing requirement of the American Stock Exchange.
"Mortgage" means the Aircraft Second Mortgage and Security
Agreement, dated as of April 21, 1998, between the Company and
the Trustee in substantially the form attached to the Indenture
as Exhibit B.
"Mortgage Supplement" means (i) each Second Mortgage and
Security Agreement Supplement executed and delivered on the Issue
Date for an Aircraft, in substantially the form attached to the
Mortgage as Exhibit A, which describes with particularity the
Airframe and Engines associated with such Aircraft, (ii) each
other Second Mortgage and Security Agreement Supplement from time
to time executed and delivered, in substantially the form
attached to the Mortgage as Exhibit A, which shall describe with
particularity any Replacement Engine and (iii) any other
supplement to the Mortgage from time to time executed and
delivered in accordance with the provisions of the Mortgage or
any other Operative Document.
"9 1/4% Preferred Stock" means the 9 1/4% Cumulative
Convertible Exchangeable Preferred Stock of the Company and
dividends on such stock, and payments on account of which are to
be deemed equivalent to distributions on such stock.
"Notes Indenture" means the Indenture dated as of April 21,
1998 between the Company and First Security Bank, National
Association, as trustee, pursuant to which the Company is issuing
the 11 3/8% Secured Notes.
"Notes Trustee" means First Security Bank, National
Association, as trustee under the Notes Indenture, and its
successors and assigns in such capacity.
"Obligations" has the meaning provided in Section 2.1 of
the Mortgage.
"Offer to Purchase" means an offer to purchase all or a
portion, as the case may be, of the Securities by the Company
from the Holders commenced by the mailing (by first class mail,
postage prepaid) by the Company (or if requested by the Company
on at least five Business Days' prior notice to the Trustee and
at the Company's expense, by the Trustee) of a notice to each
Holder (and, if mailed by the Company, to the Trustee) at such
Holder's address appearing in the Register, stating: (i) the
covenant pursuant to which the offer is being made and that all
Securities validly tendered will be accepted for payment,
provided, that if Securities in excess of
the aggregate principal amount that the Company has offered to
purchase are tendered by the Holders, then Securities will be
purchased from the tendering Holders pro rata, based on the
aggregate principal amount of Securities tendered by each such
Holder; (ii) the purchase price and the date of purchase (which
shall be a Business Day no earlier than 30 days nor later than 60
8
days from the date such notice is mailed) (the "Payment Date");
(iii) that any Security not tendered will continue to accrue
interest (if any) pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price on the
Payment Date, any Security accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the
Payment Date; (v) that Holders electing to have a Security
purchased pursuant to the Offer to Purchase will be required to
surrender the Security, together with the form entitled "Option
of the Holder to Elect Purchase" attached to or on the reverse
side of the Security completed, to the Paying Agent at the
address specified in the notice at any time beginning with the
date of such notice but prior to the close of business on the
Business Day immediately preceding the Payment Date (or, if such
day is a Legal Holiday, on the next subsequent day which is not a
Legal Holiday), and such Holder shall be entitled to receive from
the Paying Agent a non-transferable receipt of deposit evidencing
such deposit; (vi) that, unless the Company defaults in making
the payment of the purchase price or shall otherwise, in its sole
discretion, consent thereto, Holders will be entitled to withdraw
their election only if the Trustee receives, not later than the
close of business on the fifth Business Day immediately preceding
the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of
Securities delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities
purchased; and (vii) that Holders whose Securities are being
purchased only in part will be promptly issued new Securities
equal in principal amount to the unpurchased portion of the
Securities surrendered; provided that each Security purchased and
each new Security issued shall be in a principal amount of $1,000
or integral multiples thereof. The Company shall place such
notice in the national edition of The New York Times or The Wall
Street Journal or, if such newspapers are not then in
circulation, in a financial newspaper of general circulation in
New York City. No failure of the Company to give the foregoing
notice shall limit any Holder's right to exercise a repurchase
right. On the Payment Date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to an
Offer to Purchase, provided, that if Securities in excess of the
aggregate principal amount that the Company has offered to
purchase are tendered by the Holders, then Securities will be
purchased from the tendering Holders pro rata, based on the
aggregate principal amount of Securities tendered by each such
Holder; (ii) deposit with the Trustee money sufficient to pay the
purchase price of all Securities or portions thereof so accepted;
and (iii) deliver, or cause to be delivered, to the Trustee all
Securities or portions thereof so accepted together with an
Officers' Certificate specifying the Securities or portions
thereof accepted for payment by the Company. The Trustee shall
promptly mail to the Holders of Securities so accepted payment in
an amount equal to the purchase price, and the Trustee shall
promptly authenticate, and the Company shall promptly execute and
mail (or cause to be mailed) to such Holders a new Security equal
in principal amount to any unpurchased portion of the Securities
surrendered; provided that each Security purchased and each new
Security issued shall be in a principal amount of $1,000 or
integral multiples thereof; provided further that if the Payment
Date is between a regular Record Date and the next succeeding
Interest Payment Date, Securities to be repurchased must be
accompanied by payment of an amount equal to the interest, if
any, payable on such succeeding Interest Payment Date on the
principal amount to be repurchased, and the interest, if any, on
the principal amount of the Security being repurchased will be
paid on such next succeeding Interest Payment Date to the
registered holder of such Security on the immediately preceding
Record Date. A Security repurchased on an Interest Payment Date
need not be accompanied by any such
9
payment, and the interest on the principal amount of the Security
being repurchased, if any, will be paid on such Interest Payment
Date to the registered holder of such Security on the
corresponding Record Date. The Company will publicly announce the
results of an Offer to Purchase as soon as practicable after the
Payment Date. The Trustee shall act as the Paying Agent for an
Offer to Purchase. The Company will comply with Rule 14e-l under
the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are
applicable, in the event that the Company is required to
repurchase Securities pursuant to an Offer to Purchase. Both the
notice of the Company and the notice of the Holder having been
given as specified above, the Securities so to be repurchased
shall, on the Payment Date become due and payable at the purchase
price applicable thereto and from and after such date (unless the
Company shall default in the payment of such purchase price) such
Securities shall cease to bear interest. If any Security shall
not be paid upon surrender thereof for repurchase, the principal
shall, until paid, bear interest from the Payment Date at the
rate and in accordance with the provisions set forth in such
Security and the Indenture. Any Security which is to be submitted
for repurchase only in part shall be delivered pursuant to the
above provisions with (if the Company or Trustee so requires) due
endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in
writing.
"Officer" means the Chairman of the Board, the President,
any Vice President of any grade, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Secretary or the
Controller of the Company.
"Officers' Certificate" means a certificate signed by an
Officer and by a Certifying Officer satisfying the requirements
of Sections 11.4 and 11.5 of the Indenture.
"Operative Documents" means the Indenture, the Mortgage and
the Mortgage Supplements.
"Opinion of Counsel" means a written opinion from the
General Counsel of the Company, legal counsel to the Company or
another legal counsel who is reasonably acceptable to the
Trustee, which Opinion of Counsel shall comply with Sections 11.4
and 11.5 of the Indenture. The counsel may be an employee of the
Company. The acceptance by the Trustee (without written objection
to the Company during the fifteen (15) Business Days following
receipt) of, or its action on, an opinion of counsel not
specifically referred to above shall be sufficient evidence that
such counsel is acceptable to the Trustee.
"Outstanding" or "outstanding" when used with respect to
Securities or a Security, means all Securities theretofore
authenticated and delivered under the Indenture, except:
(a) Securities theretofore canceled by the Trustee,
delivered to the Trustee for cancellation or converted in
accordance with Article 13 of the Indenture;
(b) Securities for which payment has been deposited
with the Trustee or any Paying Agent in trust other than
deposits pursuant to Section 8.1 of the Indenture; and
10
(c) Securities which have been paid, or for which
other Securities shall have been authenticated and
delivered in lieu thereof or in substitution therefor
pursuant to the terms of Section 2.7 of the Indenture,
unless proof satisfactory to the Trustee is presented that
any such Securities are held by holders in due course.
A Security does not cease to be Outstanding because the Company
or one of its Affiliates holds the Security; provided, however,
that in determining whether the Holders of the requisite
aggregate principal amount of Securities Outstanding have given
any request, demand, authorization, direction, notice, consent or
waiver under the Indenture, Section 2.8 of the Indenture shall be
applicable.
"Owner Trustee" means First Security Bank, National
Association (f/k/a First Security Bank of Utah, National
Association), not in its individual capacity (except as otherwise
expressly set forth) but as trustee f/b/o Seven Leasing pursuant
to the Trust Agreement.
"Parts" means any and all appliances, parts, spare parts,
instruments, appurtenances, accessories, furnishings, seats and
other equipment of whatever nature (other than Engines or
engines) which may from time to time be incorporated or installed
in or attached to any Airframe or any Engine, or which have been
removed therefrom but which remain subject to the Lien of the
Mortgage in accordance with the terms thereof, exclusive of any
items (i) permitted by the Mortgage to be leased by the Company
in the ordinary course of business from third parties (and
installed without discrimination with respect to other Boeing
Model 767-231 ETOPS aircraft (or improved models) owned or
operated by the Company) and (ii) not required in the navigation
of the Aircraft in which they are installed. The terms "spare
parts" and "appliances" (as used in this definition) shall
include, but not be limited to, the definitions assigned to those
terms by Section 40102 of Title 49 of the United States Code as
amended from time to time or any recodification thereof or any
regulation of the FAA.
"Paying Agent" has the meaning provided in Section 2.3 of
the Indenture, except that for the purposes of Article 8 of the
Indenture and any Offer to Purchase, the Paying Agent shall not
be the Company.
"Payment Date" with respect to any Offer to Purchase, has
the meaning specified in the definition herein of Offer to
Purchase.
"Payments" means such monies as the Company shall cause to
be delivered to the Trustee or any Paying Agent for the purpose
of paying principal, purchase price or redemption price of, or
interest, if any, on the Securities on any Interest Payment Date,
Payment Date, redemption date or acceleration; and "Pay" means
paying such monies.
"Permitted Liens" shall mean any of the following Liens:
(a) Liens in favor of the Trustee arising by reason of
the Mortgage or any other Operative Document and Liens in
favor of the Notes Trustee arising by reason of the First
Mortgage or any other Operative Document (as defined in the
Notes Indenture);
11
(b) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable without penalty or being contested by the Company
in good faith by appropriate proceedings and for which
adequate reserves have been established if required in
accordance with GAAP, and which Lien presents no material
risk of sale, forfeiture or loss of any Collateral;
(c) Liens of carriers, warehousemen, mechanics,
materialmen and landlords incurred in the Company's
ordinary course of business for sums not overdue or being
contested by the Company in good faith by appropriate
proceedings and for which adequate reserves have been
established if required in accordance with GAAP, and which
Lien presents no material risk of sale, forfeiture or loss
of any Collateral;
(d) Liens incurred in the ordinary course of business
in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders and statutory
obligations entered into in the ordinary course of business
or to secure obligations on surety or appeal bonds;
(e) judgment Liens (so long as the related judgments
do not, individually or in the aggregate, constitute an
Event of Default) in existence less than thirty (30) days
after the entry thereof or with respect to which execution
has been stayed or the payment of which is covered in full
by insurance;
(f) Liens on an Aircraft in favor of a permitted
lessee of such Aircraft which result solely from the lease
(so long as it is a permitted lease under the Mortgage) on
such Aircraft; and
(g) Liens on the Aircraft which are "Permitted Liens"
arising under, and defined by definitions substantially
similar to above subparagraphs (b) and (c) in, the leases
(if any) for the Aircraft; provided, however, that such
leases are permitted under the Mortgage.
"Person" means any individual, corporation, partnership,
limited liability issuer, joint venture, association, joint-stock
issuer, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
"Placement Agreement" means the Placement Agreement, dated
April 9, 1998, between Lazard Freres & Co. LLC and the Company.
"Preferred Stock" as applied to the Capital Stock of any
Person means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such
Person.
"principal" of a Security means the principal of the
Security plus the premium, if any, payable on the Security which
is due or overdue or is to become due at the relevant time.
12
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, present or future, or
tangible or intangible.
"Record Date" means the fifteenth (15th) day preceding any
Interest Payment Date, whether or not a Business Day.
"Register" has the meaning provided in Section 2.3 of the
Indenture.
"Registrar" has the meaning provided in Section 2.3 of the
Indenture.
"Registration Default" means the occurrence of any of the
following events: (a) the Company shall fail to file with the SEC
the Shelf Registration Statement on or before the sixtieth (60th)
day following the Issue Date, (b) the Shelf Effective Date shall
not occur on or before the one hundred and fiftieth (150th) day
following the Issue Date or (c) the Company shall fail to list,
on or prior to the Shelf Effective Date, the Common Stock
issuable on conversion of the Equity Notes on the American Stock
Exchange or such other stock exchange or market as the Common
Stock of the Company is then principally traded.
"Registration Rights Agreement" means the Registration
Rights Agreement, made and entered into as of April 21, 1998, by
and among the Company, Lazard Freres & Co. LLC and the Owner
Trustee, relating to the shares of Common Stock to be issuable
upon conversion of the Securities.
"Replacement Engine" means a Xxxxx & Xxxxxxx Model
JT9D-7R4D aircraft engine (or engine of the same or another
manufacturer of a comparable or an improved model and suitable
for installation and use on an Airframe) (i) which has a value,
utility and remaining useful life at least equal to the Engine
which it is replacing, assuming such Engine was of the value and
utility required by the terms of the Mortgage; provided that any
such engine shall be of the same make and model as the other
engine then installed on such Airframe, shall be an engine model
then being utilized by the Company on other Boeing Model 767-231
ETOPS aircraft operated by the Company and, for so long as such
engine has been operated by Company, shall have been maintained,
serviced, repaired and overhauled in substantially the same
manner as the Company maintains, services, repairs and overhauls
similar engines utilized by the Company, and (ii) which shall
have been made subject to the Lien of the Mortgage pursuant to
Section 2 and Section 3.3 of the Mortgage.
"Request" means a written request for the action therein
specified signed on behalf of the Company by any Officer and
delivered to the Trustee. Each Request shall be accompanied by an
Officers' Certificate if and to the extent required by Section
11.4 of the Indenture.
"Required Holders" means from time to time the Holders of
the Applicable Percentage in principal amount of the Securities
then Outstanding.
"SEC" means the Securities and Exchange Commission and any
government agency succeeding to its functions.
13
"Securities" means the "Securities" (as defined in the
preamble to the Indenture and includes the Company's Mandatory
Conversion Equity Notes due 1999), as amended or supplemented
from time to time, that are issued under the Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Seven Leasing" means Seven Sixty Seven Leasing, Inc., a
Delaware corporation.
"Shelf Effective Date" means the date that the Shelf
Registration Statement shall become effective as declared by the
SEC.
"Shelf Registration Statement" has the meaning provided in
Section 3(a) of the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which is a
Significant Subsidiary within the meaning of Article I of
Regulation S-X under the Exchange Act.
"Special Record Date" has the meaning provided in Section
2.1 of the Indenture.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the
final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening
of any contingency unless such contingency has occurred).
"Subsidiary" means, in respect of any Person, any
corporation, association, partnership or other business entity of
which more than 50% of the total voting power of shares of
Capital Stock or other interests (including membership or
partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person, (ii) such Person and
one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Taxes" means any and all fees (including, without
limitation, license, documentation and registration fees), taxes
(including, without limitation, income, gross receipts, sales,
rental, use, turnover, value-added, property (tangible and
intangible), excise and stamp taxes), levies, imposts, duties,
recording charges or fees, charges, assessments or withholdings
of any nature whatsoever, together with any and all assessments,
penalties, additions to tax, fines or interest thereon.
"Tender" means, with respect to any Security, the effective
tender of such Security (in whole or in part) for repurchase or
conversion in accordance with the provisions of the Indenture.
14
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture;
provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to
the extent required by any such amendment, the Trust Indenture
Act of 1939 as so amended.
"Total Loss" and "Total Loss Date" have the meanings
provided in Section 1.1 of the Mortgage.
"Total Loss OTP Amount" has the meaning provided in Section
4.12 of the Indenture.
"Trading Day" means, with respect to any Common Stock, each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any
day on which securities are not generally traded on the exchange
or market in which such Common Stock is traded.
"Trust Agreement" means the Trust Agreement, dated as of
January 24, 1995, between Seven Leasing and First Security Bank,
National Association (f/k/a First Security Bank of Utah, National
Association).
"Trust Officer" means any officer in the corporate trust
department of the Trustee, or any other officer or assistant
officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such in the Indenture
until a successor replaces it in accordance with the provisions
of the Indenture and thereafter means the successor.
"TWA" means the Company.
"U.S." or "United States" means the United States of
America.
"U.S. Government Obligations" means securities which are
(i) direct obligations of the United State government or (ii)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States government, are
full faith and credit obligations of the United States government
and are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a
bank or trust Company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
"Warranty Xxxx of Sale" means, for each Aircraft, the full
warranty (as to title) xxxx of sale covering such Aircraft
executed by the Owner Trustee in favor of the Company.
15
Section 2. Rules of Construction. Unless the context otherwise
requires, the following rules of construction shall apply to all
purposes of the Indenture and the other Operative Documents
(including this appendix) and of such agreements as may
incorporate this appendix by reference.
(a) a term has the meaning assigned to it;
(b) whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and
neuter forms;
(c) the words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without
limitation";
(d) all terms used in Article 9 of the Uniform
Commercial Code as in effect in the State of New York that
are used but not defined herein shall have the meaning
assigned to such terms therein;
(e) references to a specific Person shall include the
Person and (except as limited by any agreement by which
such Person is bound) the successors and assigns of such
Person;
(f) references to "applicable laws" shall include
statutes, ordinances, rules, regulations, court and
administrative decisions and conditions, restrictions and
limitations in licenses, permits, approvals and
authorizations issued or granted by federal, state or local
United States or foreign governmental bodies and agencies;
(g) unless otherwise specified in the computation of a
period of time from a specified date to a later specified
date, the word "from" means "from and including", and the
words "to" and "until" each mean "to but excluding";
(h) words in the singular include the plural, and
words in the plural include the singular;
(i) provisions apply to successive events and
transactions;
(j) "herein", "hereto" and other words of similar
import in any agreement refer to that agreement as a whole
and not to any particular Article, Section or other
subsection of that agreement;
(k) unless otherwise specified, all references in any
Operative Document to Sections, Articles, Exhibits,
Appendices and Schedules are to Sections of, Articles of,
Exhibits to, Appendices to and Schedules to such Operative
Document;
(l) all accounting terms used herein and not expressly
defined shall have the meanings given to them in accordance
with GAAP; and
(m) unless otherwise specified, references in this
Definitions Appendix to any instrument, contract, agreement
or other document shall be deemed to be references to
16
such instrument, agreement or other document as it may be
amended, restated, supplemented or otherwise modified from
time to time pursuant to and as permitted by the terms
thereof, whether or not so stated in any particular
definition.
EXHIBIT A
to
INDENTURE
[FORM OF FACE OF SECURITY]
[Restricted Securities Legend]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT, OR ANY STATE SECURITIES LAWS. NEITHER THESE
SECURITIES NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE WHICH
IS THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE OF THESE SECURITIES AND THE LAST DATE ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THESE SECURITIES (OR ANY PREDECESSOR OF THESE SECURITIES) ONLY
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2) (3), OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER (i) PURSUANT TO
CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT
A CERTIFICATE OF TRANSFER IN THE FORM ATTACHED TO OR ON THE
REVERSE SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
2
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS
THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
3
No. CUSIP No.
$
Mandatory Conversion Equity Note due 1999
TRANS WORLD AIRLINES, INC., a Delaware corporation
promises to pay to __________, or registered assigns, the
principal sum of __________ Dollars on April 15, 1999.
Interest Payment Dates (if any): The 15th day of each month.
Record Dates: The 1st day of each month.
Additional provisions of this Security are set forth
on the other side of this Security.
Dated:
TRANS WORLD AIRLINES, INC.
By:__________________________
Name:
Title:
Attest:
__________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
First Security Bank, National Association,
as Trustee, certifies that this is one of
the Securities referred to in the
Indenture.
By:__________________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
Mandatory Conversion Equity Note due 1999
This Security is one of a duly authorized issue of
securities of the Company designated as its Mandatory Conversion
Equity Notes due 1999 (hereinafter called the "Securities"),
limited in aggregate principal amount Outstanding to $31,800,000,
issued or to be issued pursuant to an Indenture, dated as of
April 21, 1998 (hereinafter called the "Indenture") between the
Company and First Security Bank, National Association, as Trustee
(herein called the "Trustee", which term includes any successor
trustee under the Indenture).
1. Interest. This Security shall not bear interest;
provided, however, that upon a default in payment of principal on
the Securities (whether on acceleration, at maturity, upon tender
for repurchase or otherwise) or a Registration Default (as for so
long as such default or Registration Default, as the case may be,
shall continue uncured and unwaived), this Security shall bear
interest at the rate of Twelve percent (12%) per annum, from the
date of such default or Registration Default, as the case may be,
payable (a) in the case of a Registration Default, monthly in
arrears on the 15th day of each month commencing the 15th day of
the month next succeeding the month in which such Registration
Default occurred, and (b) in the case of a default in payment of
principal, payable on demand, in each case until the principal
thereof is paid or made available for payment. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company and each Holder of a Security, by the acceptance
hereof, agree that in the event a Registration Default shall
occur and be continuing and the Company shall have failed to use
its reasonable best efforts to avoid or cure such Registration
Default, Holders shall be entitled to make a claim for damages
incurred as a result of such Registration Default, which damages
shall not necessarily be limited to the increase in the interest
rate hereunder to 12% per annum; provided, however, that any
amount of interest paid pursuant to this provision shall be
credited against any amount of damages to be paid by the Company
in connection with such claim.
2. Method of Payment. Subject to the provisions of
paragraph 8 hereof, the Company will pay interest, if any, on the
Securities (except defaulted interest and interest on defaulted
principal) to the persons who are registered Holders of
Securities at the close of business on the Record Date set forth
on the face of this Security next preceding the applicable
Interest Payment Date. Defaulted interest and interest on
defaulted principal will be paid by the Company in accordance
with the applicable provisions of the Indenture. Holders must
surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest, if any, at
the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York and at any
other office or agency maintained by the Company for such purpose
in money of the United States that at the time of payment is
legal tender for payment of public and private debts; provided,
however, that at the option of the Company, payment of interest,
if any, on the Securities may be by check payable in such money
and mailed to a Holder's registered address; provided further,
however, that payments on a certificated Security will be made by
wire transfer to a U.S. dollar account maintained by a
5
Holder with a bank in New York City if such Holder owns at least
$250,000 in aggregate principal amount of certificated Securities
and elects payment by wire transfer by giving written notice to
the Company and the Trustee to such effect designating such
account no later than 10 days immediately preceding the relevant
due date for payment (or such other date as the Company and the
Trustee may accept in their discretion). If a payment date is a
legal holiday at a place of payment, payment may be made at that
place on the next succeeding Business Day, and no interest shall
accrue for the intervening period.
3. Registrar, Paying Agent and Tender Agent. Initially, the
Trustee will act as Registrar and Paying Agent. The Company may
change any Paying Agent or Registrar or co-registrar without
prior notice to any Securityholder. The Company may act in any
such capacity, except in certain circumstances.
4. Indenture. The Company issued the Securities under the
Indenture. The terms of the Securities include those stated in
the Indenture and those made applicable to the Indenture by the
TIA. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and such Act for a
statement of such terms. Until converted to Common Stock as
described in paragraph 8 hereof and in the Indenture and subject
to paragraphs 6 and 9 hereof, the Securities are senior secured
obligations of the Company limited to $31,800,000 aggregate
principal amount, except as otherwise provided in the Indenture.
Terms used in this Security and not defined in this Security
shall have the meaning set forth in Section 1 of the Definitions
Appendix attached as Appendix I to the Indenture, which shall be
a part of this Security as if fully set forth in this place. The
rules of construction for this Security are set forth in Section
2 of the Definitions Appendix.
5. Redemption. This Security is not subject to redemption
in whole or in part at any time.
6. Security. The Securities are secured by second priority
Liens on certain Properties of the Company pursuant to the
Mortgage and the other Operative Documents described in the
Indenture and such Liens are subject to release as provided
herein and in the Mortgage and the other Operative Documents.
Enforcement of the Lien of the Mortgage is limited to an
aggregate amount of Obligations not exceeding $24,300,000 and is
further restricted due to its second priority status, as more
fully set forth in the Mortgage, and each Holder, by accepting a
Security, agrees to all the provisions thereof.
7. Offers to Purchase. In the event that there shall occur
a Change in Control, the Company shall make an Offer to Purchase
all of the Outstanding Securities, at a purchase price equal to
101% of the aggregate principal amount of the Securities
Outstanding, plus accrued and unpaid interest, if any, to and
including the repurchase date. The right to require such
repurchase of Securities shall not continue after a discharge of
the Company from its obligations with respect to the Securities
in accordance with Article 8 of the Indenture. The Company shall
commence such Offer to Purchase within thirty (30) days after the
occurrence of a Change in Control.
6
In the event that there shall occur a Total Loss with respect
to any Aircraft, the Company shall (unless the Company is not
required to make such Offer to Purchase pursuant to the
provisions of Section 4.12 of the Indenture) make an Offer to
Purchase an aggregate principal amount of Outstanding Securities
(the "Total Loss OTP Amount") equal to (for each Aircraft subject
to such Total Loss) (a) the aggregate principal amount of the
Securities Outstanding on the date such Offer to Purchase (if
any) is required to be commenced under the Indenture, minus (b)
the product of (i) $10,600,000 multiplied by (ii) the number of
Aircraft remaining that were not subject to such Total Loss, at a
purchase price equal to 100% of the aggregate principal amount of
Securities to be purchased, plus accrued and unpaid interest, if
any, on such Securities, to and including the Payment Date, and
the Aircraft that was the subject of such Total Loss shall be
released from the Lien of the Operative Documents in accordance
with the provisions thereof. The Company shall commence such
Offer to Purchase (if any) within thirty (30) days after the
Total Loss Date with respect to any such Total Loss. The Company
may receive credit against any or all of the Total Loss OTP
Amount for open market purchases of Securities as provided in the
Indenture.
"Offer to Purchase" means an offer to purchase all, or a
portion, as the case may be, of the Securities by the Company
from the Holders commenced by the mailing (by first class mail,
postage prepaid) by the Company (or, if requested by the Company
on at least five Business Days' prior notice to the Trustee and
at the Company's expense, by the Trustee) of a notice to each
Holder (and, if mailed by the Company, to the Trustee) at such
Holder's address appearing in the Register, stating: (i) the
covenant pursuant to which the offer is being made and that all
Securities validly tendered will be accepted for payment,
provided, that if Securities in excess of the aggregate principal
amount that the Company has offered to purchase are tendered by
the Holders, then Securities will be purchased from the tendering
Holders pro rata, based on the aggregate principal amount of
Securities tendered by each such Holder; (ii) the purchase price
and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such
notice is mailed) (the "Payment Date"); (iii) that any Security
not tendered will continue to accrue interest (if any) pursuant
to its terms; (iv) that, unless the Company defaults in the
payment of the purchase price on the Payment Date, any Security
accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest on and after the Payment Date; (v) that
Holders electing to have a Security purchased pursuant to the
Offer to Purchase will be required to surrender the Security,
together with the form entitled "Option of the Holder to Elect
Purchase" attached to or on the reverse side of the Security
completed, to the Paying Agent at the address specified in the
notice at any time beginning with the date of such notice but
prior to the close of business on the Business Day immediately
preceding the Payment Date (or, if such day is a Legal Holiday,
on the next subsequent day which is not a Legal Holiday), and
such Holder shall be entitled to receive from the Paying Agent a
non-transferable receipt of deposit evidencing such deposit; (vi)
that, unless the Company defaults in making the payment of the
purchase price or shall otherwise, in its sole discretion,
consent thereto, Holders will be entitled to withdraw their
election only if the Trustee receives, not later than the close
of business on the fifth Business Day immediately preceding the
Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of
Securities delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities
purchased; and (vii) that Holders whose Securities are being
purchased only
7
in part will be promptly issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered;
provided that each Security purchased and each new Security
issued shall be in a principal amount of $1,000 or integral
multiples thereof. The Company shall place such notice in the
national edition of The New York Times or The Wall Street Journal
or, if such newspapers are not then in circulation, in a
financial newspaper of general circulation in New York City. No
failure of the Company to give the foregoing notice shall limit
any Holder's right to exercise a repurchase right. On the Payment
Date, the Company shall (i) accept for payment Securities or
portions thereof tendered pursuant to an Offer to Purchase,
provided, that if Securities in excess of the aggregate principal
amount that the Company has offered to purchase are tendered by
the Holders, then Securities will be purchased from the tendering
Holders pro rata, based on the aggregate principal amount of
Securities tendered by each such Holder; (ii) deposit with the
Trustee money sufficient to pay the purchase price of all
Securities or portions thereof so accepted; and (iii) deliver, or
cause to be delivered, to the Trustee all Securities or portions
thereof so accepted together with an Officers' Certificate
specifying the Securities or portions thereof accepted for
payment by the Company. The Trustee shall promptly mail to the
Holders of Securities so accepted payment in an amount equal to
the purchase price, and the Trustee shall promptly authenticate,
and the Company shall promptly execute and mail (or cause to be
mailed) to such Holders a new Security equal in principal amount
to any unpurchased portion of the Securities surrendered;
provided that each Security purchased and each new Security
issued shall be in a principal amount of $1,000 or integral
multiples thereof; provided further that if the Payment Date is
between a regular Record Date and the next succeeding Interest
Payment Date, Securities to be repurchased must be accompanied by
payment of an amount equal to the interest, if any, payable on
such succeeding Interest Payment Date on the principal amount to
be repurchased, and the interest, if any, on the principal amount
of the Security being repurchased, will be paid on such next
succeeding Interest Payment Date to the registered holder of such
Security on the immediately preceding Record Date. A Security
repurchased on an Interest Payment Date need not be accompanied
by any such payment, and the interest, if any, on the principal
amount of the Security being repurchased, will be paid on such
Interest Payment Date to the registered holder of such Security
on the corresponding Record Date. The Company will publicly
announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the
Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-l under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is
required to repurchase Securities pursuant to an Offer to
Purchase. Both the notice of the Company and the notice of the
Holder having been given as specified above, the Securities so to
be repurchased shall, on the Payment Date become due and payable
at the purchase price applicable thereto and from and after such
date (unless the Company shall default in the payment of such
purchase price) such Securities shall cease to bear interest. If
any Security shall not be paid upon surrender thereof for
repurchase, the principal shall, until paid, bear interest from
the Payment Date at the rate and in accordance with the
provisions set forth in this Security and the Indenture. Any
Security which is to be submitted for repurchase only in part
shall be delivered pursuant to the above provisions with (if the
Company or Trustee so requires) due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing.
8
8. Mandatory Conversion. Subject to the provisions of Article 13
of the Indenture, on the Conversion Date, so long as no Default
or Event of Default shall then exist, this Security (if then
Outstanding) shall be automatically converted into that number of
fully paid and non-assessable shares of Common Stock equal to the
sum of (i) the then outstanding principal amount of this
Security, plus (ii) accrued and unpaid interest, if any, on this
Security to the Conversion Date, divided by the lesser of (A)
0.95 multiplied by the Average Market Price per share of Common
Stock or (B) $107/8 (such lesser amount being hereinafter
referred to as the "Conversion Price").
Any such conversion is subject to the procedures,
restrictions and adjustments to the Conversion Price as set forth
in Article 13 of the Indenture, and on or after the effectiveness
of the conversion, the Liens on the Collateral are subject to
release as provided in the Indenture.
9. Possible Subordination. If, on the Business Day
immediately succeeding the Issue Date, the Holders (other than
Lazard Freres & Co. LLC, as Holder of the Compensation Notes, as
defined in the Placement Agreement) do not include at least one
of the Owner Trustee, Seven Sixty Seven Leasing, Inc. or any
member of the Bank Group, then this Security shall automatically,
without any further act or deed, become an unsecured obligation
of the Company and shall rank junior in priority to all secured
indebtedness of the Company and pari passu with all unsecured
indebtedness of the Company, in each case whether such
indebtedness is existing on the Issue Date or thereafter
incurred, and the Trustee shall be authorized to enter into or
execute and deliver such agreements, instruments or other
documents as may be reasonably requested by (and at the cost and
expense of) the Company to evidence or confirm the release of
Liens on the Collateral or such subordination of the Securities.
10. Denominations, Transfer, Exchange. The Securities shall
be issuable only in registered form without coupons and in
denominations of $1,000 and integral multiples thereof. The
transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes required by law or
permitted by the Indenture.
11. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose
name the Security is registered with the Registrar as the owner
for all purposes.
12. Discharge. Subject to certain conditions set forth in
Article 8 of the Indenture, the Company may terminate its
obligations under the Securities and the Indenture, except those
obligations referred to in Section 8.1(b) of the Indenture, if
the Company deposits with the Trustee or a Paying Agent cash or
U.S. Government Obligations for the payment of principal of,
interest, if any, on the Securities to Stated Maturity.
13. Amendments and Waivers. Subject to certain exceptions,
the Indenture, the Securities, or the other Operative Documents
may be amended with the consent of the Holders of at least a
majority in principal amount of the then Outstanding Securities,
and any existing Default, Event of Default or acceleration may be
waived with the consent of the Holders of a
9
majority in principal amount of the then Securities Outstanding.
Without the consent of any Holder, the Indenture, the Securities
or any of the Operative Documents may be amended to, among other
things, cure any ambiguity, defect or inconsistency.
14. Defaults and Remedies. Events of Default under the
Indenture include the following: default for the period specified
in the Indenture in payment of interest, if any, on the
Securities; default in payment of the principal amount of any
Securities when the same becomes due and payable (at maturity,
upon acceleration, redemption, tender for repurchase or
otherwise); failure by the Company to comply with specific
covenants of the Indenture or of the Mortgage within the time
periods provided therein, discontinuing substantially all of its
commercial airlines operations, or failure to pay over amounts
required under the Mortgage; failure to comply in any material
respect with any of its other agreements contained in the
Indenture, the other Operative Documents or the Securities; a
representation or warranty of the Company in the Indenture, the
other Operative Documents or any Mortgage Supplement or in any
certificate of the Company delivered under any such document
proves to be untrue in any material respect when made; the
occurrence of certain defaults under any Indebtedness of the
Company or any of its Significant Subsidiaries in excess of
$10,000,000 in principal amount; the rendering or domestication
of final judgments by a court of competent jurisdiction against
the Company or any of its Significant Subsidiaries in an
aggregate amount of $10,000,000 or more which remain undischarged
for a period (during which execution is not stayed) of sixty (60)
days after the date on which the right to appeal has expired;
cessation of effectiveness of Operative Documents without the
consent of the Trustee; and certain events of bankruptcy,
insolvency or reorganization. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing,
the Trustee or the Holders of twenty-five percent (25%) in
principal amount of the Securities Outstanding may declare all
the Securities to be due and payable immediately, except that in
the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all Securities Outstanding become due
and payable immediately without further action or notice.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture and the Mortgage. Enforcement
of the Lien of the Mortgage is limited to an aggregate amount of
Obligations not exceeding $24,300,000 and is further restricted
due to its second priority status, as more fully set forth in the
Mortgage. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to
certain limitations, Holders of a majority in principal amount of
the then Outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing default (except a
default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must
furnish compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by
reference, and subject in its entirety to the more complete
description thereof contained in the Indenture and the other
Operative Documents.
15. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with
and collect obligations owed to it by the Company or Affiliates
of the Company with the same rights it would have if it were not
Trustee.
10
16. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Securityholder by
accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issue of
the Securities.
17. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
18. Unclaimed Money. If money for the payment of principal
of, or interest, if any, on, or the purchase price for the
Securities remains unclaimed for two (2) years, the Trustee or
Paying Agent will pay the money back to the Company at its
request. After such payment, Holders entitled to any portion of
such money must look to the Company for payment unless an
applicable law designates another person.
19. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
20. CUSIP Numbers. The Company in issuing this Security may
use a "CUSIP" number (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
21. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement,
including, without limitation, the obligations of the Holders
with respect to a registration and the indemnification of the
Company to the extent provided therein.
22. Governing Law. THIS SECURITY SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
The Company will furnish to any Holder of this
Security, upon written request and without charge, a copy of the
Indenture. Request may be made to: Trans World Airlines, Inc.,
One City Centre, 000 X. 0xx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000,
Attention: Corporate Secretary.
11
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
(Insert Assignee's Soc. Sec. or Tax I.D. No.)
(Print or type assignee's name, address and zip
code)
and irrevocably appoint ______________
agent to transfer this Security on the books of
the Company. The agent may substitute
another to act for him.
Date:______________________________ Signature(s):__________________________
__________________________
_________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
_________________________________________
(All signatures must be guaranteed by
a member of a national securities
exchange or of the National Association
of Securities Dealers, Inc. or by a
commercial bank or trust company located
in the United States)
12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security repurchased
by the Company pursuant to any Offer to Purchase under the
Indenture, check the box:
|_|
If you want to elect to have only part of this
Security repurchased by the Company pursuant to any Offer to
Purchase under the Indenture, state the amount to be repurchased:
$ _________________________________
(in an integral multiple of $1,000)
Date:______________________________ Signature(s):__________________________
__________________________
_________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:
_________________________________________
(All signatures must be guaranteed by
a member of a national securities
exchange or of the National Association
of Securities Dealers, Inc. or by a
commercial bank or trust company located
in the United States)
13
CERTIFICATE OF TRANSFER
Re: Mandatory Conversion Equity Notes due 1999 (the "Notes") of Trans
World Airlines, Inc. (the "Company")
This Certificate relates to Notes held in definitive
form by ___________ (the "Transferor").
The Transferor has requested the Registrar by written
order to exchange or register the transfer of a Note or Notes. In
connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is
familiar with the Indenture relating to the above captioned Notes
and that the transfer of this Note does not require registration
under the Securities Act of 1933 (the "Securities Act"),
because:*
|_| Such Note is being transferred to the Company.
|_| Such Note is being transferred pursuant to an
effective Registration Statement under the Securities Act.
|_| Such Note is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities
Act) in reliance on Rule 144A.
|_| Such Note is being transferred pursuant to an
offshore transaction in accordance with Rule 904 under the
Securities Act.
|_| Such Note is being transferred to an Institutional
"Accredited Investor" within the meaning of Subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act.
|_| Such Note is being transferred in a transaction
meeting the requirements of Rule 144 under the Securities Act.
The Registrar and the Company are entitled to rely
upon this Certificate and are irrevocably authorized to produce
this Certificate or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_________________________________
[INSERT NAME OF TRANSFEROR]
By:______________________________
Date:______________________________
___________________________________
* Please check applicable box.
