Exhibit 10.39
EXECUTION VERSION
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TRUST AGREEMENT [N288SK]
Dated as of June 5, 2001
Between
MITSUI & CO (U.S.A.), INC.
And
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
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One Embraer Model ERJ-145LR Aircraft
Bearing Manufacturer's Serial ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Registration ▇▇▇▇ N288SK
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS........................................................................................1
ARTICLE II
DECLARATION OF TRUST.............................................................................. 1
ARTICLE III
AUTHORIZATION; CONDITIONS PRECEDENT................................................................1
Section 3.01 AUTHORIZATION....................................................................1
Section 3.02 CONDITIONS PRECEDENT.............................................................2
Section 3.03 AUTHORIZATION IN RESPECT OF A REPLACEMENT AIRFRAME OR REPLACEMENT ENGINES....... 2
Section 3.04 TRUST AGREEMENT REMAINING IN FULL FORCE AND EFFECT...............................3
Section 3.05 AUTHORIZATION IN RESPECT OF RETURN OF AN ENGINE..................................3
ARTICLE IV
RECEIPT, DISTRIBUTION AND
APPLICATION OF INCOME FROM THE TRUST ESTATE........................................................3
Section 4.01 PAYMENTS FROM TRUST ESTATE ONLY..................................................3
Section 4.02 DISTRIBUTION OF PAYMENTS.........................................................3
Section 4.03 METHOD OF PAYMENTS...............................................................4
ARTICLE V
DUTIES OF OWNER TRUSTEE............................................................................4
Section 5.01 NOTICE OF EVENT OF DEFAULT.......................................................4
Section 5.02 ACTION UPON INSTRUCTIONS.........................................................4
Section 5.03 LIMITATIONS ON DUTIES............................................................5
Section 5.04 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS SPECIFIED.....................5
Section 5.05 SATISFACTION OF CONDITIONS PRECEDENT.............................................5
Section 5.06 FIXED INVESTMENT TRUST...........................................................6
Section 5.07 LIMITED PURPOSE..................................................................6
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ARTICLE VI
OWNER TRUSTEE......................................................................................6
Section 6.01 ACCEPTANCE OF TRUSTS AND DUTIES..................................................6
Section 6.02 ABSENCE OF CERTAIN DUTIES........................................................6
Section 6.03 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS...........................7
Section 6.04 NO SEGREGATION OF MONIES; INTEREST...............................................7
Section 6.05 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS...................................7
Section 6.06 NOT ACTING IN INDIVIDUAL CAPACITY................................................8
Section 6.07 FEES; COMPENSATION...............................................................8
Section 6.08 TAX RETURNS......................................................................8
Section 6.09 REPRESENTATIONS AND COVENANTS OF OWNER TRUSTEE AND WFB...........................8
ARTICLE VII
INDEMNIFICATION OF WFB BY BENEFICIARY.............................................................10
ARTICLE VIII
TRANSFER OF BENEFICIARY'S INTEREST................................................................11
Section 8.01 TRANSFER OF INTEREST............................................................11
ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES.............................................................11
Section 9.01 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR..........................11
Section 9.02 CO-TRUSTEES AND SEPARATE TRUSTEES...............................................12
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO
TRUST AGREEMENT AND OTHER DOCUMENTS...............................................................13
Section 10.01 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF.................................13
Section 10.02 DISCRETION AS TO EXECUTION OF DOCUMENTS.........................................13
Section 10.03 ABSENCE OF REQUIREMENTS AS TO FORM..............................................13
Section 10.04 DISTRIBUTION OF DOCUMENTS.......................................................13
Section 10.05 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT........................................14
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ARTICLE XI
CERTAIN LIMITATIONS...............................................................................14
Section 11.01 LIMITATIONS ON CONTROL .........................................................14
Section 11.02 DISCRETION AND ACTIONS OF OWNER TRUSTEE.........................................14
Section 11.03 PAYMENTS........................................................................15
Section 11.04 OWNER TRUSTEE ACTS AS TRUSTEE...................................................15
ARTICLE XII
MISCELLANEOUS.....................................................................................15
Section 12.01 TERMINATION OF
TRUST AGREEMENT..................................................15
Section 12.02 TERMINATION AT OPTION OF BENEFICIARY............................................15
Section 12.03 BENEFICIARY HAS NO LEGAL TITLE IN TRUST ESTATE..................................16
Section 12.04 ASSIGNMENT, SALE, ETC., OF AIRCRAFT.............................................16
Section 12.05
TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES ONLY.............................16
Section 12.06 NOTICES.........................................................................16
Section 12.07 SEVERABILITY....................................................................16
Section 12.08 WAIVERS, ETC....................................................................16
Section 12.09 COUNTERPARTS....................................................................16
Section 12.10 BINDING EFFECT, ETC.............................................................16
Section 12.11 HEADINGS; REFERENCES............................................................16
Section 12.12 GOVERNING LAW...................................................................17
Section 12.13 ADMINISTRATION OF TRUST.........................................................17
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TRUST AGREEMENT [N288SK]
This
TRUST AGREEMENT [N288SK] dated as of June 5, 2001, between MITSUI &
CO. (U.S.A.), INC., a
New York corporation ("BENEFICIARY"), and ▇▇▇▇▇ FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, a national banking association (in its
individual capacity, "WFB" and otherwise not in its individual capacity but
solely as trustee hereunder, "OWNER TRUSTEE").
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in the Aircraft Lease Agreement [N288SK]
dated June 5, 2001 (the "LEASE") between Owner Trustee and Chautauqua Airlines,
Inc. (the "LESSEE").
ARTICLE II
DECLARATION OF TRUST
WFB hereby declares that it will hold the Trust Estate as Owner Trustee
upon the trusts hereinafter set forth for the use and benefit of Beneficiary,
subject, however, to the provisions of the Lease and the other Operative
Documents. This
Trust Agreement is not intended by the Beneficiary to create,
and the trust created hereby is not intended by the Beneficiary and the other
parties interested herein to constitute a business trust for the purposes of the
Bankruptcy Code.
The Owner Trustee and the trust created hereunder shall not engage in any
business other than, and its purpose shall be restricted to, the ownership,
leasing, operation and financing, if any, of the Aircraft and Engines and any
other lawful act or activity reasonably incidental thereto (which shall include
pledging of the Trust Estate to secure indebtedness of the Lessor to the extent
required in connection with any financing of the Aircraft).
ARTICLE III
AUTHORIZATION; CONDITIONS PRECEDENT
Section 3.01 AUTHORIZATION. In respect of the Aircraft, Beneficiary hereby
authorizes and directs Owner Trustee to, and Owner Trustee agrees for the
benefit of Beneficiary that it will, on and after the Delivery Date, subject
(except with respect to Section 3.01(a)) to due compliance with the terms of
Section 3.02:
(a) execute and deliver the Lease and the other Operative Documents to
which it is a party (in the respective forms in which they are delivered from
time to time by Beneficiary to Owner Trustee);
(b) subject to the terms of this
Trust Agreement, (i) exercise its
rights and perform its duties under the Operative Documents to which it is a
party and (ii) exercise the rights and perform the duties of Lessor under the
Lease;
(c) purchase the Aircraft pursuant to the Purchase Agreement;
(d) accept from Seller the delivery of the Aircraft, the ▇▇▇▇ of sale
specified in the Purchase Agreement and the invoice, if any, with respect to
such Aircraft;
(e) effect the registration of the Aircraft with the FAA in the name
of Owner Trustee by filing or causing to be filed with the FAA: (i) the ▇▇▇▇ of
sale referred to in paragraph (d) above; (ii) an aircraft registration
application in the name of Owner Trustee (including, without limitation, an
affidavit from Owner Trustee in compliance with the provisions of Section
47.7(c)(2) of the FARs); and (iii) this
Trust Agreement;
(f) make payment of the Purchase Price for the Aircraft from the
aggregate amount of funds contributed by Beneficiary therefor, if any; and
(g) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the direction of
Beneficiary, as Beneficiary may deem necessary or advisable in connection with
the transactions contemplated by this Trust Agreement and the other Operative
Documents.
(h) immediately after the delivery of the Aircraft to the Owner
Trustee, cause the Aircraft to be leased to Lessee under the Lease; and
(i) execute and deliver a Lease Supplement covering the Aircraft.
Section 3.02 CONDITIONS PRECEDENT. The rights and obligations of Owner
Trustee to take the actions required by Section 3.01 shall be subject to the
Beneficiary having notified Owner Trustee that the terms and conditions of
Section 8(a) of the Purchase Agreement, insofar as they relate to conditions
precedent to performance by Beneficiary of its obligations thereunder, have been
either fulfilled to the satisfaction of, or waived by, Beneficiary. Beneficiary
shall, by instructing Owner Trustee in writing to release the full amount of the
funds provided by it, if any, then held by Owner Trustee, be deemed to have
found satisfactory to it, or waived, all such conditions precedent.
Section 3.03 AUTHORIZATION IN RESPECT OF A REPLACEMENT AIRFRAME OR
REPLACEMENT ENGINES. The Owner Trustee agrees for the benefit of the Beneficiary
that, upon the receipt by a Responsible Officer of Owner Trustee of an
authorization and direction from the Beneficiary, it will, in the event of a
Replacement Airframe or Replacement Engines, if any, being substituted pursuant
to Section 12.01(a)(i) of the Lease, or a Replacement Engine being substituted
pursuant to Section 12.02 of the Lease, subject to due compliance with the terms
of Sections 12.01(d) and 12.02 of the Lease, as the case may be;
(a) to the extent not previously accomplished by a prior
authorization, authorize a representative or representatives of the Owner
Trustee to accept delivery of the Replacement Airframe or Replacement Engines,
if any, or the Replacement Engine;
(b) accept from Lessee or other vendor of the Replacement Airframe or
Replacement Engines, if any, or the Replacement Engine, a ▇▇▇▇ of sale or bills
of sale (if tendered) and the invoice, if any, with respect to the Replacement
Airframe and Replacement Engines, if any, or the Replacement Engine being
furnished pursuant to Section 12.01(a)(i) or 12.02 of the Lease;
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(c) in the case of a Replacement Airframe, make application to the FAA
(or the Aeronautical Authority of any jurisdiction other than the United States
of America in which the Replacement Airframe is then registered in accordance
with the terms of the Lease) for registration in the name of the Owner Trustee
of the Aircraft of which such Replacement Airframe is a part;
(d) execute and deliver a Lease Supplement covering (i) the Aircraft
of which such Replacement Airframe is part of and, (ii) such Replacement Engine,
as the case may be;
(e) transfer its interest in (without recourse except as to
obligations in respect of Lessor's Liens) and to the Airframe and Engines (if
any) or the Engine being replaced to or at the direction of Lessee; and
(f) take such further action as may be contemplated by Sections
12.01(d) or 12.02 of the Lease, as the case may be.
Section 3.04 TRUST AGREEMENT REMAINING IN FULL FORCE AND EFFECT. In the
event of substitution of a Replacement Airframe for the Airframe or the
substitution of a Replacement Engine for any Engine or engine all provisions of
this Trust Agreement relating to such replaced Airframe or Engine or engine
shall be applicable to such Replacement Airframe or Replacement Engine, with the
same force and effect as if such Replacement Airframe or Replacement Engine were
the same airframe or engine as the Airframe or Engine being replaced but for the
Event of Loss with respect to such Airframe or Engine.
Section 3.05 AUTHORIZATION IN RESPECT OF RETURN OF AN ENGINE. The Owner
Trustee agrees for the benefit of the Beneficiary that, upon the receipt by a
Responsible Officer of the Owner Trustee of an authorization and direction from
the Beneficiary, it will, in the event of an engine being transferred to the
Owner Trustee pursuant to Section 18.03 of the Lease, subject to due compliance
with the terms of such Section 18.03:
(a) accept from Lessee or other vendor the ▇▇▇▇ of sale contemplated
by such Section 18.03 with respect to such engine being transferred to the Owner
Trustee; and
(b) transfer its right, title and interest in (without recourse or
warranty except a warranty against Lessor's Liens) and to an Engine to or at the
direction of Lessee as contemplated by such Section 18.03.
ARTICLE IV
RECEIPT, DISTRIBUTION AND
APPLICATION OF INCOME FROM THE TRUST ESTATE.
Section 4.01 PAYMENTS FROM TRUST ESTATE ONLY. All payments to be made by
Owner Trustee under this Trust Agreement shall be made only from the income from
and proceeds of the Trust Estate to the extent that Owner Trustee shall have
received sufficient income or proceeds from the Trust Estate to make such
payments. Beneficiary agrees that it will look solely to the income from and
proceeds of the Trust Estate to the extent available for distribution to
Beneficiary as provided in this Trust Agreement. Except as provided in Article
VII, Beneficiary agrees that WFB is neither personally liable to Beneficiary for
any amounts payable nor subject to any other liability under this Trust
Agreement.
Section 4.02 DISTRIBUTION OF PAYMENTS. (a) PAYMENTS TO THE BENEFICIARY. All
payments of Basic Rent and Supplemental Rent, or other payments of any kind,
received by the Owner Trustee and all property constituting the Trust Estate
upon the termination of this Trust Agreement in accordance with
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the provisions of Article XII, forthwith upon receipt by Owner Trustee, shall be
paid over to the Beneficiary without deduction, set-off or adjustment of any
kind; PROVIDED, HOWEVER, that any payments received by the Owner Trustee from
the Beneficiary with respect to Owner's Trustee's fees and disbursements, or
pursuant to Article VII shall be retained by Owner Trustee and applied toward
the purpose for which such payments were made.
(b) PAYMENTS TO OWNER TRUSTEE, OTHER PARTIES. Any payment of a type
referred to in Section 4.02(a) received by Owner Trustee and any other amount
received as part of the Trust Estate and for the application or distribution of
which no provision is made in this Trust Agreement shall be distributed
forthwith upon receipt by Owner Trustee in the following order of priority:
FIRST, so much of such payment as shall be required to reimburse Owner Trustee
for any expenses not otherwise reimbursed as to which Owner Trustee is entitled
to be so reimbursed pursuant to the provisions hereof shall be retained by Owner
Trustee; SECOND, so much of the remainder for which provision as to the
application thereof is contained in the Lease or any of the other Operative
Documents shall be applied and distributed in accordance with the terms of the
Lease or such other Operative Document; and THIRD, the balance, if any, shall be
paid to Beneficiary.
Section 4.03 METHOD OF PAYMENTS. Owner Trustee shall make distributions or
cause distributions to be made to Beneficiary pursuant to this Article IV by
transferring the amount to be distributed by wire transfer in immediately
available funds on the day received (or on the next succeeding Business Day if
the funds to be so distributed shall not have been received by Owner Trustee by
12:00 noon,
New York City time, and which funds Owner Trustee shall not have
been reasonably able to distribute to Beneficiary on the day received) to
Beneficiary's account at Citibank, N.A., ABA No. ▇▇▇▇▇▇▇▇▇, Account Name: Mitsui
& Co. (U.S.A.), Inc., Account No. ▇▇▇▇▇▇▇▇, Ref: Chautauqua, or to such other
account or accounts of Beneficiary as Beneficiary may designate from time to
time in writing to Owner Trustee; PROVIDED, that Owner Trustee shall use
reasonable efforts to invest overnight, in cash equivalents, all funds received
by it at or later than 12:00 noon,
New York City time, and which funds Owner
Trustee shall not have been reasonably able to distribute to Beneficiary on the
day received.
ARTICLE V
DUTIES OF OWNER TRUSTEE
Section 5.01 NOTICE OF EVENT OF DEFAULT. (a) If Owner Trustee shall have
knowledge of a Default or an Event of Default, Owner Trustee shall give to
Beneficiary and Lessee prompt telephonic or telecopy notice thereof followed by
prompt confirmation thereof by certified mail, postage prepaid.
(b) Subject to the terms of Section 5.03, Owner Trustee shall take
such action or shall refrain from taking such action, not inconsistent with the
provisions of the Operative Documents, with respect to such Default or Event of
Default or other event as Owner Trustee shall be directed in writing by
Beneficiary. For all purposes of this Trust Agreement, the Lease and the other
Operative Documents, in the absence of actual knowledge of Owner Trustee, Owner
Trustee shall not be deemed to have knowledge of a Default or Event of Default
unless notified in writing by the Beneficiary or Lessee.
Section 5.02 ACTION UPON INSTRUCTIONS. Subject to the terms of Sections
5.01 and 5.03, upon the written instructions at any time and from time to time
of Beneficiary, Owner Trustee will take each of the following actions, not
inconsistent with the provisions of the Operative Documents, as may be specified
in such instructions: (a) give such notice or direction or exercise such right,
remedy or power under this Trust Agreement or any of the other Operative
Documents or in respect of all or any part of the Trust Estate, or take such
other action, as shall be specified in such instructions (including entering
into such agreements and instruments as shall be necessary under Article X); (b)
take such action to preserve
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or protect the Trust Estate (including the discharge of Liens) as may be
specified in such instructions; (c) approve as satisfactory to it all matters
required by the terms of the Lease and the other Operative Documents to be
satisfactory to Owner Trustee, it being understood that without written
instructions of Beneficiary, Owner Trustee shall not approve any such matter as
satisfactory to it; (d) subject to the rights of Lessee under the Lease, after
the expiration or earlier termination of the Lease, convey all of Owner
Trustee's right, title and interest in and to the Aircraft for such amount, on
such terms and to such purchaser or purchasers as shall be designated in such
instructions, or retain, lease or otherwise dispose of, or from time to time
take such other action with respect to, the Aircraft on such terms as shall be
designated in such instructions; and (e) take or refrain from taking such other
action or actions as may be specified in such instructions. In the event that
the Owner Trustee is unsure of the application of any provision of this Trust
Agreement or any other agreement relating to the transactions contemplated
hereby, the Owner Trustee may request and rely upon instructions of the
Beneficiary.
Section 5.03 LIMITATIONS ON DUTIES. Owner Trustee shall not be required to
take any action under Section 5.01 (other than the giving of the notices
referred to therein) or 5.02, other than the administrative tasks and covenants
expressly undertaken by it under the Operative Documents, if Owner Trustee shall
reasonably believe such action is not adequately indemnified by Beneficiary
under Article VII, unless Lessee or Beneficiary agrees to furnish such
additional indemnity as shall reasonably be required, in manner and form
satisfactory to Owner Trustee, and, in addition, to the extent not otherwise
paid (or as separately agreed in any applicable fee letter), to pay the
reasonable compensation of Owner Trustee for the services performed or to be
performed by it pursuant to such direction and any reasonable fees and
disbursements of counsel or agents employed by Owner Trustee in connection
therewith. Owner Trustee shall not be required to take any action under Section
5.01 or 5.02 (other than the giving of the notices referred to therein) if Owner
Trustee shall have been advised by counsel that such action is contrary to the
terms of any of the Operative Documents or is otherwise contrary to applicable
Law and Owner Trustee has delivered to Beneficiary written notice of the basis
for its refusal to act.
Section 5.04 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS SPECIFIED.
(a) NO DUTIES EXCEPT AS SPECIFIED. Owner Trustee shall not have any duty or
obligation to manage, control, use, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Estate or to otherwise take or refrain
from taking any action under, or in connection with, any of the Operative
Documents, except as expressly required by the terms of any Operative Document,
or as expressly provided by the terms hereof or in a written instruction from
Beneficiary received pursuant to the terms of Section 5.01 or 5.02, and no
implied duties or obligations shall be read into this Trust Agreement against
Owner Trustee. WFB agrees that it will, in its individual capacity and at its
own cost or expense (but without any right of indemnity in respect of any such
cost or expense hereunder or under the Lease), promptly take such action as may
be necessary to duly discharge and satisfy in full all Lessors Liens
attributable to it in its individual capacity that it is required to discharge
pursuant to Section 7.02 of the Lease and otherwise comply with the terms of
said Section 7.02 binding upon it.
(b) NO ACTION EXCEPT AS SPECIFIED. Owner Trustee shall have no power,
right or authority to, and agrees that it will not, manage, control, use, sell,
dispose of or otherwise deal with the Aircraft or any other part of the Trust
Estate except (i) as expressly required by the terms of any of the Operative
Documents to which it is a party, (ii) as expressly provided by the terms hereof
or (iii) as expressly provided in written instructions from Beneficiary pursuant
to Section 5.01 or 5.02.
Section 5.05 SATISFACTION OF CONDITIONS PRECEDENT. Anything in this Trust
Agreement to the contrary notwithstanding, Owner Trustee shall, subject to the
satisfaction of Owner Trustee of the occurrence of all the applicable conditions
precedent specified in Section 3.02, comply with the provisions of Section 3.01.
5
Section 5.06 FIXED INVESTMENT TRUST. Notwithstanding anything in this Trust
Agreement to the contrary, Owner Trustee shall not be authorized and shall have
no power to "vary the investment" of Beneficiary within the meaning of Treasury
Regulations Section 301.7701-4(c)(1), it being understood that Owner Trustee
shall have the power and authority to fulfill its obligations under Section 4.03
hereof.
Section 5.07 LIMITED PURPOSE. The Trust shall not engage in any business
other than, and its purpose shall be restricted to, the ownership, leasing,
operation and financing of the Aircraft, a pledge of its assets to secure
indebtedness of the Lessor to the extent required in connection with any
financing of the Aircraft, and any other lawful act or activity reasonably
incidental thereto.
ARTICLE VI
OWNER TRUSTEE
Section 6.01 ACCEPTANCE OF TRUSTS AND DUTIES. WFB accepts the trusts hereby
created and agrees to perform the same as Owner Trustee but only upon the terms
hereof applicable to it. Owner Trustee also agrees to receive and disburse all
monies received by it constituting part of the Trust Estate pursuant to the
terms hereof. WFB shall not be answerable or accountable under any
circumstances, except for (a) its own willful misconduct or gross negligence
(including, without limitation, in connection with any activities of Owner
Trustee in violation of Section 5.04(b), (b) its failure (in its individual
capacity) to perform its obligations under Section 5.04(a), (c) its or Owner
Trustee's failure to use ordinary care to receive or disburse funds or to comply
with the first sentence of Section 6.08, (d) liabilities that may result from
the inaccuracy of any representation or breach of warranty of it in its
individual capacity (or from the failure by it in its individual or trust
capacity to perform any covenant) in this Trust Agreement, the Lease or in any
of the other Operative Documents, (e) taxes, fees or other charges on, based on
or measured by any fees, commissions or compensation received by WFB in
connection with the transactions contemplated by this Trust Agreement and the
other Operative Documents to which it (in its individual capacity or as Owner
Trustee) is a party, or (f) its or Owner Trustee's failure to use ordinary care
in receiving or disbursing funds or for a breach of its obligation to invest
funds pursuant to Section 4.03. WFB shall have no obligation to advance its
individual funds for any purpose, and Owner Trustee shall have no obligation to
distribute to Beneficiary, Lessee or any third party any amounts to be paid to
Owner Trustee until such amounts are collected by Owner Trustee.
Section 6.02 ABSENCE OF CERTAIN DUTIES. (a) Except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 and except as
provided in, and without limiting the generality of, Sections 3.01 and 5.04(a)
and the last sentence of Section 9.01(b), neither Owner Trustee nor WFB shall
have any duty (i) to see to any recording or filing of any Operative Document,
or of any supplement to any thereof or to see to the maintenance of any such
~recording or filing or any other filing of reports with the FAA or other
governmental agencies, except that of WFB to comply with the FAA reporting
requirements set forth in 14 C.F.R. Section 47.45 and 14 C.F.R. Section 47.51,
or any successor provisions, and that the Owner Trustee shall upon written
request furnished by Lessee take such action as may be required of the Owner
Trustee to maintain the registration of the Aircraft in the name of the Owner
Trustee under the Federal Aviation Act or, to the extent the Aircraft is
registered in a country other than the United States of America pursuant to
Section 5 of Exhibit A-2 of the Lease, other applicable law, and Owner Trustee
shall, to the extent that information for that purpose is timely supplied by
Lessee pursuant to any of the Operative Documents, complete and timely submit
(and furnish Beneficiary with a copy of) any and all reports relating to the
Aircraft that may from time to time be required by the FAA or any government or
governmental authority having jurisdiction, (ii) to see to any insurance on the
Aircraft or to effect or maintain any such insurance, whether or not Lessee
shall be in default with respect thereto, other than to forward to Beneficiary
copies of all reports and other written information that Owner Trustee receives
6
from Lessee pursuant to Articles XI and XIII of the Lease unless Beneficiary is
to receive the same directly from the Lessee pursuant to the Operative
Documents, (iii) except as provided in Section 5.04 or 6.01 hereof, to see to
the payment or discharge of any tax, assessment or other governmental charge or
any Lien or encumbrance of any kind owing with respect to or assessed or levied
against any part of the Trust Estate except as provided by Section 5.04 hereof
or Section 7.02 of the Lease or (iv) to inspect Lessee's books and records with
respect to the Aircraft at any time permitted pursuant to the Lease.
(b) Notwithstanding clause (a), Owner Trustee will furnish to the
Beneficiary, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to Owner Trustee under the Lease or any other Operative
Document except to the extent to which the same is to be provided directly to
the Beneficiary pursuant to the Operative Documents or to which a responsible
officer of Owner Trustee reasonably believes that duplicates or copies thereof
have otherwise already been furnished to Beneficiary by some other person.
Section 6.03 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS.
NEITHER WFB NOR OWNER TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE (a) ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, THE ABSENCE OF ANY STRICT
LIABILITY OBLIGATION OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF WHATSOEVER, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Trust Agreement or any other Operative Agreement to which WFB, in its
individual capacity or as Owner Trustee, is a party, or any other document or
instrument, or as to the correctness of any statement contained in any thereof
except to the extent that any such statement is expressly made herein or therein
by such party as a representation by WFB, in its individual capacity or as Owner
Trustee, as the case may be.
Section 6.04 NO SEGREGATION OF MONIES; INTEREST. Monies received by Owner
Trustee under this Trust Agreement need not be segregated in any manner except
to the extent required by applicable Law, or except as provided in written
instructions from Beneficiary, and shall be invested as provided in Section
4.03.
Section 6.05 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS. Owner Trustee
shall incur no liability to anyone in acting in good faith in reliance upon and
in accordance with any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and reasonably believed by it to be
signed by the proper party or parties. Unless other evidence in respect thereof
is specifically prescribed in this Trust Agreement, any request, direction,
order or demand of Beneficiary or Lessee mentioned in this Trust Agreement or in
any of the other Operative Documents shall be sufficiently evidenced by written
instruments signed by the Chairman of the Board, the President, any Vice
President or any other officer and in the name of Beneficiary or Lessee, as the
case may be. Owner Trustee may accept a copy of a resolution of the Board of
Directors or Executive Committee of Lessee, certified by the Secretary or an
Assistant Secretary of Lessee as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted by said Board of
Directors or Executive Committee and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically described in this Trust Agreement, Owner Trustee may, absent actual
knowledge to the contrary, for all purposes rely on a certificate signed by the
Chairman of the Board, the President, any Vice President or any other officer of
Lessee, and the Treasurer or an Assistant Treasurer or the Secretary
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or an Assistant Secretary of Lessee, as to such fact or matter, and such
certificate shall constitute full protection to Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon and in
accordance therewith. In the administration of trusts under this Trust
Agreement, Owner Trustee may execute any of the trusts or powers and perform its
powers and duties under this Trust Agreement directly or through agents or
attorneys and may, at the expense of the Trust Estate, consult with counsel,
accountants and other skilled persons to be selected and employed by it.
Section 6.06 NOT ACTING IN INDIVIDUAL CAPACITY. In acting under this Trust
Agreement, WFB acts solely as Owner Trustee and not in its individual capacity
except as otherwise expressly provided in this Trust Agreement or in the other
Operative Documents to which it is a party; and, except as may be otherwise
expressly provided in this Trust Agreement, all persons, other than Beneficiary
as provided in this Trust Agreement, having any claim against Owner Trustee by
reason of the transactions contemplated hereby shall look only to the Trust
Estate for payment or satisfaction thereof except to the extent provided in
Section 6.01 or otherwise as Owner Trustee shall expressly agree otherwise in
writing.
Section 6.07 FEES; COMPENSATION. WFB and Owner Trustee acknowledge that
Lessee is obligated to pay the fees and expenses of Owner Trustee pursuant to
Section 20.11 of the Lease; PROVIDED, that Owner Trustee shall have a Lien upon
the Trust Estate for any such fees or expenses not paid by Lessee, and such Lien
shall entitle Owner Trustee to priority as to payment thereof over payment to
any other Person under this Trust Agreement.
Section 6.08 TAX RETURNS. Owner Trustee shall be responsible for the
keeping of all appropriate books and records relating to the receipt and
disbursement of all monies under this Trust Agreement or any agreement
contemplated hereby. Beneficiary shall be responsible for causing to be prepared
and filed all income tax returns required to be filed by Beneficiary. If
requested by Beneficiary, Owner Trustee shall prepare all income tax returns
required to be filed with respect to the trust created hereby; otherwise
Beneficiary shall prepare such returns and, upon delivery to it, Owner Trustee
shall execute and file such returns; PROVIDED, that, if Owner Trustee has been
preparing such returns, Owner Trustee shall send promptly a completed copy of
such return to Beneficiary not more than sixty (60) nor less than fifteen (15)
days prior to the due date of the return; PROVIDED, that Owner Trustee shall
have timely received all necessary information to complete and deliver to
Beneficiary such return. Beneficiary, upon request, will furnish Owner Trustee
with all such information as may be reasonably required from Beneficiary in
connection with the preparation of such income tax returns. Owner Trustee shall
keep copies of all returns delivered to or filed by it.
Section 6.09 REPRESENTATIONS AND COVENANTS OF OWNER TRUSTEE AND WFB. (a)
WFB represents and warrants to the Beneficiary that it is on the date hereof a
Citizen of the United States.
(b) WFB covenants and agrees for the benefit of the Beneficiary (i)
that it shall not cause or permit to exist a Lien (other than in favor of any
Financing Party) attributable to or caused by it with respect to the Aircraft or
any other portion of the Trust Estate, (ii) that it will promptly, at its own
expense, take such action as may be necessary duly to discharge any such Lien
attributable to or caused by it with respect to the Aircraft or any other
portion of the Trust Estate and (iii) to make restitution to the Trust Estate
for any actual diminution of the assets of the Trust Estate resulting from such
Liens attributable to or caused by it.
(c) Each of WFB (in its individual capacity) and the Owner Trustee, as
applicable, represents and warrants for the benefit of the Beneficiary that:
(i) WFB is a national banking association duly organized and
existing under the laws of the United States of America and has the power
and authority to carry on its business
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as presently conducted and to perform its obligations as lessor under this
Trust Agreement and the other Operative Documents to which it is a party,
whether in its individual capacity or as Owner Trustee;
(ii) this Trust Agreement has and the other Operative Documents
to which it is a party, whether in its individual capacity or as Owner
Trustee (collectively, the "OWNER TRUSTEE DOCUMENTS"), have been duly
authorized by all necessary trust action on the part of WFB and none of
such agreements requires any approval of the shareholders of WFB (or if
such approval is required, such approval has been obtained) and neither the
execution and delivery hereof and thereof nor the consummation of the
transactions contemplated hereby and thereby nor compliance by WFB, whether
in its individual capacity or as Owner Trustee, with any of the terms and
provisions hereof and thereof will contravene any Utah law or federal law
governing the banking and trust powers of WFB, whether in its individual
capacity or as Owner Trustee, or result in any breach of, or constitute any
default under, or result in the creation of any Lien, charge or encumbrance
upon any property of WFB under any creditor agreement or instrument,
charter or by-law or other agreement or instrument to which WFB, whether in
its individual capacity or as Owner Trustee, is a party or by which WFB,
whether in its individual capacity or as Owner Trustee, or its properties
or assets are bound or affected;
(iii) WFB, whether in its individual capacity or as Owner
Trustee, has or will, prior to the Delivery Date have, received every
consent, approval or authorization of, and has given every notice to, each
Governmental Entity having jurisdiction with respect to the execution,
delivery or performance of this Trust Agreement and the other Owner Trustee
Documents (including all monetary and other obligations hereunder) that is
required for WFB, whether in its individual capacity or as Owner Trustee,
to execute and deliver this Trust Agreement and the other Owner Trustee
Documents and each such consent, approval or authorization and notice is
valid and effective and has not been revoked;
(iv) this Trust Agreement has been, and the other Owner Trustee
Documents have been, duly executed and delivered by WFB, whether in its
individual capacity or as Owner Trustee, and this Trust Agreement does, and
the other Owner Trustee Documents do, constitute legal, valid and binding
obligations of WFB, whether in its individual capacity or as Owner Trustee,
enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by such principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) as a court having jurisdiction may impose;
(v) there are no suits or proceedings pending or, to the
knowledge of WFB, threatened in any court or before any regulatory
commission, board or other Governmental Entity against or affecting WFB,
whether in its individual capacity or as Owner Trustee, that may, either
individually or in the aggregate, reasonably be expected to have a
materially adverse effect on the ability of WFB, whether in its individual
capacity or as Owner Trustee, to perform its obligations under this Trust
Agreement and the other Owner Trustee Documents;
(vi) on the Delivery Date, there are no Lessor's Liens
attributable to WFB, either in its individual capacity or as Owner Trustee,
in respect of all or any part of the Aircraft or the Trust Estate.
9
ARTICLE VII
INDEMNIFICATION OF WFB BY BENEFICIARY
Beneficiary hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and hereby
indemnifies, protects, saves and keeps harmless, WFB and its successors,
assigns, agents and servants, from and against any and all liabilities,
obligations, losses, damages, penalties, taxes (excluding any taxes payable by
WFB on or measured by any compensation received by WFB for its services under
this Trust Agreement), claims, actions, suits, costs, expenses or disbursements
(including, without limitation, reasonable legal fees and expenses, but
excluding internal costs and expenses such as salaries and overhead, and
including, without limitation, any liability of an owner, any strict liability
and any liability without fault) of any kind and nature whatsoever, which may be
imposed on, incurred by or asserted against WFB (whether or not also indemnified
against by Lessee under the Lease or also indemnified against by any other
Person, in any way relating to or arising out of this Trust Agreement or any of
the other Operative Documents or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, nonacceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement), or
in any way relating to or arising out of the administration of the Trust Estate
or the action or inaction of Owner Trustee, under this Trust Agreement, except
(a) in the case of gross negligence or willful misconduct on the part of WFB, in
its individual capacity or as Owner Trustee, in the performance or
nonperformance of its duties under this Trust Agreement or under any of the
other Operative Documents or (b) those claims resulting from the inaccuracy of
any representation or warranty of WFB (or from the failure of WFB to perform any
of its covenants) in Section 5.02 of the Lease or elsewhere in any of the
Operative Documents or (c) as may result from a breach by WFB of its covenant in
the last sentence of Section 5.04(a) hereof or (d) in the case of the failure to
use ordinary care on the part of WFB, in its individual capacity or as Owner
Trustee, in the receipt or disbursement of funds or in connection with its
obligation to invest funds pursuant to Section 4.08 of the Lease or Section 4.03
hereof or in compliance with the provisions of the first sentence of Section
6.08 or (e) those claims arising under any circumstances or upon any terms where
Lessee would not have been required to indemnify WFB pursuant to Article XIV or
XV of the Lease disregarding for purposes of this paragraph Sections 14.07(d)
and (e) and Section 15.03(a) thereof, PROVIDED, that before asserting its right
to indemnification, if any, pursuant to this Article VII, WFB shall first demand
its corresponding right to indemnification pursuant to Article XIV or XV of the
Lease (but need not exhaust any or all remedies available thereunder); PROVIDED,
that Beneficiary shall be subrogated to the rights of Owner Trustee against
Lessee or any other indemnitor. The indemnities contained in this Article VII
extend to WFB only in its individual capacity and shall not be construed as
indemnities of the Trust Estate (except to the extent, if any, that WFB has been
reimbursed by the Trust Estate for amounts covered by the indemnities contained
in this Article VII). The indemnities contained in this Article VII shall
survive the termination of this Trust Agreement. In addition, if necessary, WFB
shall be entitled to indemnification from the Trust Estate for any liability,
obligation, loss, damage, penalty, tax, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Article VII to the extent not
reimbursed by Lessee, Beneficiary or others, but without releasing any of them
from their respective agreements of reimbursement; and, to secure the same WFB
shall have a lien on the Trust Estate, subject to the provisions of Section
6.07, which shall be prior to any interest therein of Beneficiary. The payor of
any indemnity under this Article VII shall be subrogated to any right of the
person indemnified in respect of the matter as to which such indemnity was paid.
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ARTICLE VIII
TRANSFER OF BENEFICIARY'S INTEREST
Section 8.01 TRANSFER OF INTEREST. The Beneficiary shall have the right to
sell, lease, assign or otherwise transfer or dispose of all or any part of its
interest in the Trust Estate or this Trust Agreement shall be governed by and
subject to the terms of Section 10(b)(vi) of the Purchase Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
Section 9.01 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR. (a)
RESIGNATION OR REMOVAL. Owner Trustee or any successor Owner Trustee (a) shall
resign upon obtaining actual knowledge of any facts that would cast doubt upon
its continuing status as a Citizen and (b) may resign at any time without cause
by giving at least 60 days' prior written notice to Beneficiary and Lessee, such
resignation to be effective upon the assumption of the trusts hereunder by the
successor Owner Trustee under Section 9.01(b). In addition, Beneficiary may at
any time remove Owner Trustee, but only for cause, by a notice in writing
delivered to Owner Trustee, such removal to be effective upon the assumption of
the trusts hereunder by the successor Owner Trustee under Section 9.01(b). In
the case of the resignation or removal of Owner Trustee, Beneficiary may appoint
a successor Owner Trustee by an instrument signed by Beneficiary. If a successor
Owner Trustee shall not have been appointed within 30 days after such notice of
resignation or removal, Owner Trustee or the Beneficiary may apply to any court
of competent jurisdiction to appoint a successor Owner Trustee to act until such
time, if any, as a successor shall have been appointed as above provided. Any
successor Owner Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Owner Trustee appointed as above
provided within one year from the date of the appointment by such court.
(b) EXECUTION AND DELIVERY OF DOCUMENTS, ETC. Any successor Owner
Trustee, however appointed, shall execute and deliver to the predecessor Owner
Trustee, with a copy to Beneficiary, an instrument accepting such appointment
and assuming the obligations of Owner Trustee, in its individual capacity and as
Owner Trustee, hereunder and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts under
this Trust Agreement with like effect as if originally named Owner Trustee in
this Trust Agreement; but nevertheless, upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
under this Section 9.01, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will take
such further actions as are requested of it by such successor Owner Trustee as
are required to cause registration of the Aircraft included in the Trust Estate
to be transferred upon the records of the FAA, or other governmental authority
having jurisdiction, into the name of the successor Owner Trustee.
(c) QUALIFICATIONS. Any successor Owner Trustee, however appointed,
shall be a Citizen of the United States, shall be qualified to act as a trustee
in Utah (if the trust created hereby is to remain in such state) and shall also
be a bank or trust company organized under the laws of the United States or any
state thereof having a combined capital and surplus of at least $100,000,000, if
there be such
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an institution willing, able and legally qualified to perform the duties of
Owner Trustee under this Trust Agreement upon reasonable or customary terms.
(d) MERGER, ETC. Any corporation into which WFB may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which WFB shall be a party, or
any corporation to which substantially all the corporate trust business of WFB
may be transferred, shall, subject to the terms of Section 9.01(c), be Owner
Trustee under this Trust Agreement without further act.
Section 9.02 CO-TRUSTEES AND SEPARATE TRUSTEES. (a) If at any time it shall
be necessary or prudent in order to conform to any applicable Law of any
jurisdiction in which all or any part of the Trust Estate is located, or Owner
Trustee being advised by counsel shall determine that it is so necessary or
prudent in the interest of Beneficiary or Owner Trustee, or Owner Trustee shall
have been directed to do so by Beneficiary, Owner Trustee and Beneficiary shall
execute and deliver an agreement supplemental hereto and all other instruments
and agreements necessary or proper to constitute another bank or trust company
or one or more persons (any or all of which shall be a Citizen of the United
States) approved by Owner Trustee and Beneficiary, either to act as co-trustee,
jointly with Owner Trustee, or to act as separate trustee under this Trust
Agreement (any such co-trustee or separate trustee being herein sometimes
referred to as an "ADDITIONAL TRUSTEE"). In the event Beneficiary shall not have
joined in the execution of such agreements supplemental hereto within ten days
after the receipt of a written request from Owner Trustee to do so, or in case
an Event of Default shall occur and be continuing, Owner Trustee may act under
the foregoing provisions of this Section 9.02 without the concurrence of
Beneficiary; and Beneficiary hereby appoints Owner Trustee its agent and
attorney-in-fact to act for it under the foregoing provisions of this Section
9.02 in either of such contingencies.
(b) Every additional trustee under this Trust Agreement shall, to the
extent permitted by law, be appointed and act, and Owner Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) All powers, duties, obligations and rights conferred upon
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered under this Trust
Agreement shall be exercised solely by Owner Trustee;
(ii) All other rights, powers, duties and obligations conferred
or imposed upon Owner Trustee shall be conferred or imposed upon and
exercised or performed by Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Trust Estate) Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(iii) No power given to, or that it is provided hereby may be
exercised by, any such additional trustee shall be exercised under this
Trust Agreement by such additional trustee, except jointly with, or with
the consent in writing of, Owner Trustee;
(iv) No trustee under this Trust Agreement shall be personally
liable by reason of any action or omission of any other trustee under this
Trust Agreement; and
(v) Beneficiary, at any time, by an instrument in writing may
remove any such additional trustee. In the event that Beneficiary shall not
have joined in the execution of any such instrument within ten days after
the receipt of a written request from Owner Trustee to do so,
12
Owner Trustee shall have the power to remove any such additional trustee
without the concurrence of Beneficiary; and Beneficiary hereby appoints
Owner Trustee its agent and attorney-in-fact to act for it in such
connection in such contingency.
(c) In case any separate trustee under this Section 9.02 shall die,
become incapable of acting, resign or be removed or any part thereof, the title
to the Trust Estate and all rights and duties of such separate trustee shall, so
far as permitted by law, vest in and be exercised by Owner Trustee, without the
appointment of a successor to such separate trustee.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO
TRUST AGREEMENT AND OTHER DOCUMENTS
Section 10.01 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF. This Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Beneficiary. Owner Trustee
will execute any amendment, supplement or other modification of this Trust
Agreement or of any other Owner Trustee Document that it is requested in writing
to execute by Beneficiary, except that Owner Trustee shall not execute any such
amendment, supplement or other modification that, by the express provisions of
any of the above documents, requires the consent of any other party unless such
consent shall have been obtained; and PROVIDED, that, without the prior written
consent of Beneficiary, (i) no such supplement, amendment or modification shall
(A) modify any of the provisions of Article IV or this Section 10.01, (B)
reduce, modify or amend any indemnities in favor of Beneficiary as set forth in
Article XIV or XV of the Lease, (C) reduce the amount or extend the time of
payment of Basic Rent, Supplemental Rent, or Stipulated Loss Value as set forth
in the Lease or (D) modify any of the rights of Beneficiary under the Operative
Documents and (ii) no such supplement, amendment or modification shall require
Beneficiary to invest or advance funds or shall entail any additional personal
liability or the surrender of any indemnification, claim or individual right on
the part of Beneficiary with respect to any agreement or obligation.
Section 10.02 DISCRETION AS TO EXECUTION OF DOCUMENTS. Prior to executing
any document required to be executed by it pursuant to the terms of Section
10.01, Owner Trustee shall be entitled to receive an opinion of counsel to the
effect that the execution of such document is authorized under this Trust
Agreement. If in the opinion of Owner Trustee any such document adversely
affects any right, duty, immunity or indemnity in favor of Owner Trustee under
this Trust Agreement or under any other Owner Trustee Document, Owner Trustee
may in its discretion decline to execute such document unless Owner Trustee is
furnished with indemnification from Lessee or any other party upon terms and in
amounts reasonably satisfactory to Owner Trustee to protect the Trust Estate,
Owner Trustee and WFB against any and all liabilities, costs and expenses
arising out of the execution of such documents.
Section 10.03 ABSENCE OF REQUIREMENTS AS TO FORM. It shall not be necessary
for any written request furnished pursuant to Section 10.01 to specify the
particular form of the proposed documents to be executed pursuant to such
Section 10.01, but it shall be sufficient if such request shall indicate the
substance thereof.
Section 10.04 DISTRIBUTION OF DOCUMENTS. Promptly after the execution by
Owner Trustee of any document entered into pursuant to Section 10.01, Owner
Trustee shall mail, by certified mail, postage prepaid, a conformed copy thereof
to Beneficiary, but the failure of Owner Trustee to mail such conformed copy
shall not impair or affect the validity of such document.
13
Section 10.05 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT. No written request
pursuant to Section 10.01 shall be required to enable Owner Trustee to enter
into, pursuant to Section 3.01 and the Lease, as the case may be, the Lease
Supplement with Lessee.
ARTICLE XI
CERTAIN LIMITATIONS
Section 11.01 LIMITATIONS ON CONTROL. Notwithstanding any other provision
of the Trust Agreement, but subject to other provisions of this Article XI, from
and after the Delivery Date and until termination of this Trust Agreement, (i)
the Beneficiary shall not, except as otherwise provided in Section 5, have any
voting rights or other rights to direct Owner Trustee hereunder (collectively
"CONTROL RIGHTS") and (ii) Owner Trustee shall have absolute and complete
discretion in all matters as to which the Beneficiary otherwise would have had
any Control Rights, but for the provisions of this Article XI. Such discretion
(i) is in addition to the discretion given to Owner Trustee under the other
Articles of this Trust Agreement and (ii) is expressly limited to the Control
Rights that, but for the provisions of this Article XI, would be held or
exercisable by the Beneficiary, and does not extend to any other rights, powers
or privileges in respect of the beneficial interest of the Beneficiary in the
Trust Estate.
Section 11.02 DISCRETION AND ACTIONS OF OWNER TRUSTEE. (a) In exercising
its discretion under this Article XI, Owner Trustee shall exercise its best
judgment and shall not be liable for any action taken or omitted hereunder,
except for its gross negligence or willful misconduct, and shall exercise the
Control Rights in connection with all matters involving the ownership and
operation of the Aircraft by Owner Trustee. Owner Trustee shall not be required,
and shall have no duty or obligation, to exercise Control Rights in respect of
any other matters.
(b) In exercise or administration of the power or duties created under
this Article XI, Owner Trustee may act directly or through any agents or
attorneys and may, at the cost and expense of the Trust Estate, consult with
counsel, accountants and other skilled persons to be selected and retained by
it, and Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons and Owner Trustee shall not be liable for
the negligence of any such counsel, accountants or other skilled persons.
(c) Notwithstanding any other provision hereof, in exercising any
Control Rights pursuant to this Article XI in connection with all matters
involving the ownership or operation of the Aircraft by Owner Trustee, Owner
Trustee shall be free of any kind of control by the Beneficiary and shall
exercise the Control Rights as it in its discretion shall deem necessary to
protect the interests of the United States, notwithstanding any countervailing
interests of any foreign power which, or whose citizens may, have a direct or
indirect interest in the Beneficiary and any such action by Owner Trustee shall
not be considered malfeasance or in breach of any obligation which Owner Trustee
might otherwise have to the Beneficiary. In exercising any Control Rights
pursuant to this Article XI in connection with any other matters which may arise
not relating to the ownership and operation of the Aircraft, Owner Trustee shall
be permitted, but shall be under no duty, to seek the advice of the Beneficiary
before exercising any Control Rights. Owner Trustee, promptly after each
exercise of any Control Rights hereunder, shall notify the Beneficiary of the
exercise thereof.
(d) Without the prior written consent of the Beneficiary, the Owner
Trustee agrees in its individual capacity that it shall not (i) dissolve or
amend the Trust Agreement, (ii) sell, mortgage, pledge or otherwise dispose of
all or a substantial part of the Trust Estate, including the Aircraft or the
Lease, (iii) transfer any portion of the Beneficiary's beneficial interest in
the Trust Estate to any other person, or (iv) amend any Owner Trustee Document.
14
(e) Notwithstanding anything contained in this Trust Agreement, the
Owner Trustee and Beneficiary hereby agree that if Persons who are neither U.S.
citizens nor resident aliens have the power to direct or remove the Owner
Trustee, either directly or indirectly through the control of another Person,
those Persons together shall not have more than twenty-five percent (25%) of the
aggregate power to direct or remove the Owner Trustee. Nothing in this clause
(e) shall be construed to prevent those Persons from having more than
twenty-five percent (25%) of the beneficial interest in the Trust Estate.
Section 11.03 PAYMENTS. Notwithstanding any other provision of this Article
XI, the Beneficiary and not Owner Trustee shall be entitled to receive from
Owner Trustee or otherwise all Basic Rent and Supplemental Rent and other
payments of whatsoever kind and nature payable to the Beneficiary pursuant to
this Trust Agreement or any Owner Trustee Document in the same manner as if the
Control Rights had not been transferred to Owner Trustee and held in trust
hereunder.
Section 11.04 OWNER TRUSTEE ACTS AS TRUSTEE. Notwithstanding any other
provision of this Trust Agreement, in exercising any Control Rights pursuant to
this Article XI, Owner Trustee acts solely as trustee and not in its individual
capacity, and except as may be otherwise expressly provided in Section 11.02,
all persons having any claim against the Owner Trustee in its individual
capacity or as Owner Trustee by reason of the transactions contemplated by this
Article XI shall not have any recourse to the Trustee in its individual
capacity.
ARTICLE XII
MISCELLANEOUS
Section 12.01 TERMINATION OF TRUST AGREEMENT. This Trust Agreement and the
trusts created hereby shall terminate and this Trust Agreement shall be of no
further force or effect upon the earliest of (a) the sale or other final
disposition by Owner Trustee of all property constituting part of the Trust
Estate and the final distribution by Owner Trustee of all monies or other
property or proceeds constituting part of the Trust Estate in accordance with
Article IV; PROVIDED, that at such time Lessee shall have fully complied with
all of the terms of the Lease; or (b) the date that is ninety (90) years
following the earliest execution of this Trust Agreement by any party hereto,
but if this Trust Agreement and the trusts created hereby shall be or become
authorized under applicable Law to be valid for a period commencing on such date
(or, without limiting the generality of the foregoing, if legislation shall
become effective providing for the validity of this Trust Agreement and the
trusts created hereby for a period in gross exceeding the period for which this
Trust Agreement and the trusts created hereby are herein above stated to extend
and be valid), then this Trust Agreement and the trusts created hereby shall not
terminate under this clause (b) but shall extend to and continue in effect, but
only if such non-termination and extension shall then be valid under applicable
Law, until the day preceding such date as the same shall, under applicable Law,
cease to be valid; otherwise this Trust Agreement and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
Except as expressly set forth in Section 12.02, this Trust Agreement and the
trusts created hereby may not be revoked by Beneficiary.
Section 12.02 TERMINATION AT OPTION OF BENEFICIARY. Notwithstanding Section
12.01, this Agreement and trust created hereby shall terminate and the Trust
Estate shall be distributed to Beneficiary, and this Trust Agreement shall be of
no further force and effect, upon the election of Beneficiary by notice to Owner
Trustee, if such notice shall be accompanied by the written agreement (in form
and substance satisfactory to Owner Trustee) of Beneficiary assuming all
obligations of Owner Trustee under or contemplated by the Operative Documents or
incurred by it as trustee hereunder and releasing Owner Trustee therefrom.
15
Section 12.03 BENEFICIARY HAS NO LEGAL TITLE IN TRUST ESTATE. No
Beneficiary shall have legal title to any part of the Trust Estate. No transfer,
by operation of applicable Law or otherwise, of any right, title and interest of
Beneficiary in and to the Trust Estate under this Trust Agreement shall operate
to terminate this Trust Agreement or the trusts under this Trust Agreement or
entitle any successors or transferees of Beneficiary to an accounting or to the
transfer of legal title to any part of the Trust Estate.
Section 12.04 ASSIGNMENT, SALE, ETC., OF AIRCRAFT. Any assignment, sale,
transfer or other conveyance of the Aircraft by Owner Trustee made pursuant to
the terms of this Trust Agreement or of the Lease or any other Operative
Document shall bind Beneficiary and shall be effective to transfer or convey all
right, title and interest of Owner Trustee and Beneficiary in and to the
Aircraft. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by Owner Trustee.
Section 12.05 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES ONLY. Except
as otherwise provided in Sections 4.01, 4.02, 5.01, 6.07, 10.01, 11.01, 11.02,
12.01, 12.02 and 12.04 and Articles V, VIII and IX, nothing in this Trust
Agreement, whether express or implied, shall be construed to give any person
other than Owner Trustee and Beneficiary any legal or equitable right, remedy or
claim under or in respect of this Trust Agreement; and this Trust Agreement
shall be held to be for the sole and exclusive benefit of Owner Trustee, WFB and
Beneficiary.
Section 12.06 NOTICES. Unless otherwise expressly specified or permitted by
the terms hereof, all notices shall be given in the manner set forth in Section
12(a) of the Purchase Agreement.
Section 12.07 SEVERABILITY. If any provision of this Trust Agreement shall
be held invalid, illegal or unenforceable in any respect in any jurisdiction,
then, to the extent permitted by law, (a) all other provisions hereof shall
remain in full force and effect in such jurisdiction and (b) such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction. If, however, any law
pursuant to which such provisions are held invalid, illegal or unenforceable may
be waived, such law is hereby waived by the parties hereto to the full extent
permitted, to the end that this Trust Agreement shall be deemed to be a valid
and binding agreement in all respects, enforceable in accordance with its terms.
Section 12.08 WAIVERS, ETC. No term or provision hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
entered into in compliance with the terms of Article X; and any waiver of the
terms hereof shall be effective only in the specific instance and for the
specific purpose given.
Section 12.09 COUNTERPARTS. This Trust Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument.
Section 12.10 BINDING EFFECT, ETC. All covenants and agreements contained
in this Trust Agreement shall be binding upon, and inure to the benefit of, WFB,
Owner Trustee and their respective successors and assigns, and Beneficiary and
its successors and, to the extent permitted by Article VIII, assigns. Any
request, notice, direction, consent, waiver or other instrument or action by
Beneficiary shall bind its successors and assigns.
Section 12.11 HEADINGS; REFERENCES. The headings and the table of contents
used in this Trust Agreement are for convenience of reference only and shall not
define or limit any of the terms or
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provisions hereof and shall not in any way affect the construction of, or be
taken into consideration in interpreting, this Trust Agreement.
Section 12.12 GOVERNING LAW. THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY THE LAW OF THE STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAWS.
Section 12.13 ADMINISTRATION OF TRUST. The principal place of
administration of the trust created by this Trust Agreement shall be in the
State of Utah.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
[N288SK] to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
MITSUI & CO. (U.S.A.), INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: General Manager
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
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NOTE TO EXHIBIT 10.39
The two additional Trust Agreements are substantially identical in all material
respects to the filed Trust Agreement except as follows:
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TAIL NUMBER CLOSING DATE OWNER-PARTICIPANT
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N286SK June, 2001 Mitsui & Co.
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N287SK June, 2001 Mitsui & Co.
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