TRUST AGREEMENT ___
Dated as of September 25, 1997
Between
PACIFIC CENTURY LEASING, INC.
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION
One Embraer Model EMB-145 Aircraft
Bearing Manufacturer's Serial No. 145.___
and U.S. Registration No. N_____
with Two Xxxxxxx Model AE3007A Engines
Bearing Engine Manufacturer's Serial Nos. _______ and _______
TABLE OF CONTENTS
PAGE
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Section 1. Definitions........................................................................ 1
Section 2. Declaration of Trust............................................................... 1
Section 3. Authorization; Conditions Precedent................................................ 1
3.1 Authorization................................................................. 1
3.2 Conditions Precedent.......................................................... 2
Section 4. Receipt, Distribution and Application of Income From the Trust Estate.............. 3
4.1 Payments from Trust Estate Only............................................... 3
4.2 Distribution of Payments...................................................... 3
4.2.1 Payments to Mortgagee............................................... 3
4.2.2 Payments to Owner Trustee, Other Parties............................ 3
4.2.3 Certain Distributions to Owner Participant.......................... 4
4.2.4 Excluded Payments................................................... 4
4.3 Method of Payments............................................................ 4
Section 5. Duties of Owner Trustee............................................................ 4
5.1 Notice of Event of Default.................................................... 4
5.2 Action Upon Instructions...................................................... 5
5.3 Limitations on Duties......................................................... 5
5.4 No Duties Except as Specified; No Action Except as Specified.................. 6
5.4.1 No Duties Except as Specified....................................... 6
5.4.2 No Action Except as Specified....................................... 6
5.5 Satisfaction of Conditions Precedent.......................................... 6
5.6 Fixed Investment Trust........................................................ 7
Section 6. Owner Trustee.......................................................................... 7
6.1 Acceptance of Trusts and Duties............................................... 7
6.2 Absence of Certain Duties..................................................... 7
6.3 No Representations or Warranties as to Certain Matters........................ 8
6.4 No Segregation of Monies; Interest............................................ 9
6.5 Reliance upon Certificates, Counsel and Agents................................ 9
6.6 Not Acting in Individual Capacity............................................. 10
TABLE OF CONTENTS
(continued)
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6.7 Fees; Compensation............................................................ 10
6.8 Tax Returns................................................................... 10
Section 7. Indemnification of First Security By Owner Participant................................. 11
Section 8. Transfer of Owner Participant's Interest............................................... 12
8.1 Transfer of Interest.......................................................... 12
Section 9. Successor Owner Trustees; Co-Trustees.................................................. 12
9.1 Resignation of Owner Trustee; Appointment of Successor........................ 12
9.1.1 Resignation or Removal............................................. 12
9.1.2 Execution and Delivery of Documents, Etc........................... 13
9.1.3 Qualifications..................................................... 13
9.1.4 Merger, Etc........................................................ 13
9.2 Co-Trustees and Separate Trustees............................................. 14
Section 10. Supplements and Amendments to Trust Agreement and Other Documents..................... 15
10.1 Supplements and Amendments and Delivery Thereof............................... 15
10.1.1 Supplements and Amendments......................................... 15
10.1.2 Delivery of Amendments and Supplements to Certain Parties.......... 16
10.2 Discretion as to Execution of Documents....................................... 16
10.3 Absence of Requirements as to Form............................................ 16
10.4 Distribution of Documents..................................................... 16
10.5 No Request Needed as to Lease Supplement and Trust Indenture Supplement....... 16
Section 11. Miscellaneous......................................................................... 16
11.1 Termination of Trust Agreement................................................ 16
11.2 Termination at Option of the Owner Participant................................ 17
11.3 Owner Participant Has No Legal Title in Trust Estate.......................... 17
11.4 Assignment, Sale, Etc. of Aircraft............................................ 17
11.5 Trust Agreement for Benefit of Certain Parties Only........................... 18
11.6 Citizenship of Owner Participant.............................................. 18
11.7 Notices....................................................................... 18
11.8 Severability.................................................................. 18
TABLE OF CONTENTS
(continued)
PAGE
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11.9 Waivers, Etc.................................................................. 19
11.10 Counterparts.................................................................. 19
11.11 Binding Effect, Etc........................................................... 19
11.12 Headings; References.......................................................... 19
11.13 Governing Law................................................................. 19
TRUST AGREEMENT ___
This TRUST AGREEMENT ___, dated as of September 25, 1997, between
PACIFIC CENTURY LEASING, INC., a Hawaii corporation ("Owner Participant"), and
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association (in
its individual capacity, "First Security" and otherwise not in its individual
capacity but solely as trustee hereunder, "Owner Trustee").
W I T N E S S E T H:
- - - - - - - - - -
Section 1. 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 Annex A to the Lease.
Section 2. DECLARATION OF TRUST
First Security hereby declares that it will hold the Trust Estate as
Owner Trustee upon the trusts hereinafter set forth for the use and benefit of
Owner Participant, subject, however, to the provisions of and the Lien created
by the Trust Indenture and to the provisions of the Lease and the Participation
Agreement.
Section 3. AUTHORIZATION; CONDITIONS PRECEDENT
3.1 AUTHORIZATION
In respect of the Aircraft, Owner Participant hereby authorizes and
directs Owner Trustee to, and Owner Trustee agrees for the benefit of Owner
Participant that it will, on and after the Delivery Date, subject (except with
respect to Section 3.1(a)) to due compliance with the terms of Section 3.2:
(a) execute and deliver the Participation Agreement, the Trust
Indenture, the Lease and the other Owner Trustee Agreements (in the respective
forms in which they are delivered from time to time by Owner Participant to
Owner Trustee);
(b) subject to the terms of this Trust Agreement, exercise (i) its
rights and perform its duties under the Participation Agreement, (ii) the rights
and perform the duties of Lessor under the Lease and (iii) its rights and
perform its duties under the Trust Indenture and the other Owner Trustee
Agreements;
(c) execute, issue and deliver to Mortgagee for authentication and
further delivery to the Subordination Agent the Equipment Notes in the amount
and as provided in Section 2 of the Participation Agreement;
(d) purchase the Aircraft pursuant to the Participation Agreement;
(e) accept from Existing Lessor the delivery of the Aircraft Xxxx of
Sale, the FAA Xxxx of Sale and the invoice with respect to such Aircraft;
(f) 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 FAA Xxxx
of Sale; (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 FAA Regulations); and (iii)
this Trust Agreement;
(g) execute and deliver the Financing Statements referred to in
Section 5.1.2 (xxiv) of the Participation Agreement, together with all other
agreements, documents and instruments referred to in Section 5 of the
Participation Agreement to which Owner Trustee is to be a party;
(h) make payment of Lessor's Cost for the Aircraft from the aggregate
amount of the Commitments for the Aircraft of Owner Participant and Loan
Participant, to the extent received by Owner Trustee, in the manner provided in
the Participation Agreement;
(i) execute and deliver Lease Supplement No. 1 covering the Aircraft;
(j) execute and deliver a Trust Indenture Supplement covering the
Aircraft; and
(k) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the direction of
Owner Participant, as Owner Participant may deem necessary or advisable in
connection with the transactions contemplated by this Trust Agreement and the
other Operative Agreements.
3.2 CONDITIONS PRECEDENT
The rights and obligations of Owner Trustee to take the actions
required by Section 3.1 shall be subject to the following conditions precedent:
(a) Owner Trustee shall have received the notice described in Section
5.1.1 of the Participation Agreement, when and as required thereby, or shall
have been deemed to have waived such notice in accordance with Section 5.1.1 of
the Participation Agreement;
(b) Each Participant shall have made the full amount of its Commitment
specified in Section 2.1 of the Participation Agreement available to Owner
Trustee, in immediately available funds, in accordance with Sections 2 and 4 of
the Participation Agreement; and
(c) Owner Participant shall have notified Owner Trustee that the terms
and conditions of Section 5 of the Participation Agreement, insofar as they
relate to conditions precedent to performance by Owner Participant of its
obligations thereunder, have been either fulfilled to the satisfaction of, or
waived by, Owner Participant. Owner Participant shall, by instructing Owner
Trustee to release the full amount of its Commitment then held by Owner Trustee
as provided in Section 2 of the Participation Agreement, be deemed to have found
satisfactory to it, or waived, all such conditions precedent.
Section 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST ESTATE
4.1 PAYMENTS FROM TRUST ESTATE ONLY
Except as provided in Section 7, all payments to be made by Owner
Trustee under this Trust Agreement shall be made only from (a) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, the Commitments (except as otherwise provided in Section 14 of the
Participation Agreement) and (b) in the case of all other payments, 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. Owner Participant agrees that it will look solely (y) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, to the Commitments and any income therefrom (except as otherwise
provided in Section 14 of the Participation Agreement) and (z) in the case of
all other payments, to the income from and proceeds of the Trust Estate to the
extent available for distribution to Owner Participant as provided in this Trust
Agreement. Except as provided in Section 7, Owner Participant agrees that First
Security is neither personally liable to Owner Participant for any amounts
payable nor subject to any other liability under this Trust Agreement.
4.2 DISTRIBUTION OF PAYMENTS
4.2.1 PAYMENTS TO MORTGAGEE
Until the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, all Rent, insurance proceeds and requisition or other
payments of any kind included in the Trust Estate (other than Excluded Payments)
payable to Owner Trustee shall be payable directly to Mortgagee (and, if any of
the same are received by Owner Trustee, shall upon receipt be paid over to
Mortgagee without deduction, set-off or adjustment of any kind) for distribution
in accordance with the provisions of Article III of the Trust Indenture;
PROVIDED, that any payments received by Owner Trustee from (a) Airframe
Manufacturer with respect to Owner Trustee's fees and disbursements or (b) Owner
Participant pursuant to Section 7 shall not be paid over to Mortgagee but shall
be retained by Owner Trustee and applied toward the purpose for which such
payments were made.
4.2.2 PAYMENTS TO OWNER TRUSTEE, OTHER PARTIES
After the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, any payment of the type referred to in Section 4.2.1
(other than Excluded Payments) received by Owner Trustee, any payment received
from Mortgagee (other than Excluded Payments) 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, the amount set forth in Schedule 1 hereto, if any, on a Payment Date
shall be paid to Owner Participant; THIRD, the amount set forth in Schedule 2
hereto shall be paid to Equity Guarantor; and FOURTH, the balance, if any, shall
be paid to Owner Participant.
4.2.3 CERTAIN DISTRIBUTIONS TO OWNER PARTICIPANT
All amounts from time to time distributable by Mortgagee to Owner
Participant pursuant to the Trust Indenture shall, if paid to Owner Trustee, be
distributed by Owner Trustee to Owner Participant in accordance with the
provisions of Article III of the Trust Indenture; PROVIDED, that any payments
received by Owner Trustee from (a) Lessee with respect to Owner Trustee's fees
and disbursements or (b) Owner Participant pursuant to Section 7 shall not be
paid over to Owner Participant but shall be retained by Owner Trustee and
applied toward the purpose for which such payments were made.
4.2.4 EXCLUDED PAYMENTS
Any Excluded Payments received by Owner Trustee shall be paid by Owner
Trustee to the Person to whom such Excluded Payments are payable under the
provisions of the Participation Agreement, the Tax Indemnity Agreement or the
Lease.
4.3 METHOD OF PAYMENTS
Owner Trustee shall make distributions or cause distributions to be
made to Owner Participant pursuant to this Section 4 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 Owner Participant on the day received) to Owner
Participant's account set forth in Schedule 1 to the Participation Agreement or
to such other account or accounts of Owner Participant as Owner Participant may
designate from time to time in writing to Owner Trustee; PROVIDED, that Owner
Trustee shall use reasonable efforts to invest overnight, in investments that
would be permitted under Section 4.4 of the Lease, 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 Owner Participant on the
day received).
Section 5. DUTIES OF OWNER TRUSTEE
5.1 NOTICE OF EVENT OF DEFAULT
(a) If Owner Trustee shall have knowledge of a Lease Default or a
Lease Event of Default or an Indenture Default or an Indenture Event of Default,
Owner Trustee shall give to Owner Participant, Mortgagee, Lessee and Equity
Guarantor prompt telephonic or telex notice thereof followed by prompt
confirmation thereof by certified mail, postage prepaid, PROVIDED, that (i) in
the case of an event which with the passage of time would constitute an
Indenture Event of Default of the type referred to in paragraph (c) or (e) of
Section 4.02 of the Trust Indenture, such notice shall in no event be furnished
later than ten days after Owner Trustee shall first have knowledge of such event
and (ii) in the case of a misrepresentation by Owner Trustee which with the
passage of time would constitute an Indenture Event of Default of the type
referred to in paragraph (d) of Section 4.02 of the Trust Indenture, such notice
shall in no event be furnished later than ten days after Owner Trustee shall
first have knowledge of such event.
(b) Subject to the terms of Section 5.3, Owner Trustee shall take such
action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default, Lease
Event of Default, Indenture Default or Indenture Event of Default or other event
as Owner Trustee shall be directed in writing by Owner Participant. For all
purposes of this Trust Agreement, the Lease and the other Operative Agreements,
in the absence of Actual Knowledge of Owner Trustee, Owner Trustee shall not be
deemed to have knowledge of a Lease Default, Lease Event of Default, Indenture
Default or Indenture Event of Default unless notified in writing by Mortgagee,
Owner Participant or Lessee.
5.2 ACTION UPON INSTRUCTIONS
Subject to the terms of Sections 5.1 and 5.3, upon the written
instructions at any time and from time to time of Owner Participant, Owner
Trustee will take such of the following actions, not inconsistent with the
provisions of the Lease and the Trust Indenture, 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 Owner Trustee Agreements
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 Section 10); (b) take
such action to preserve 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 or the other Operative
Agreements to be satisfactory to Owner Trustee, it being understood that without
written instructions of Owner Participant, Owner Trustee shall not approve any
such matter as satisfactory to it; (d) subject to the rights of Lessee under the
Operative Agreements, 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.
5.3 LIMITATIONS ON DUTIES
Owner Trustee shall not be required to take any action under Section
5.1 (other than the giving of the notices referred to therein) or 5.2 if Owner
Trustee shall reasonably believe such action is not adequately indemnified by
Owner Participant under Section 7, unless Lessee or Owner Participant 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 pursuant to the provisions of the Lease or of the Participation Agreement,
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
5.1 or 5.2 (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 Owner Trustee Agreements or is otherwise contrary to Law and
Owner Trustee has delivered to Owner Participant written notice of the basis for
its refusal to act.
5.4 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS SPECIFIED
5.4.1 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 Owner Trustee Agreements, except as
expressly required by the terms of any of the Owner Trustee Agreements, or (to
the extent not inconsistent with the provisions of the Trust Indenture) as
expressly provided by the terms hereof or in a written instruction from Owner
Participant received pursuant to the terms of Section 5.1 or 5.2, and no implied
duties or obligations shall be read into this Trust Agreement against Owner
Trustee. First Security 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 Participation Agreement), promptly
take such action as may be necessary to duly discharge and satisfy in full all
Lessor Liens attributable to it in its individual capacity which it is required
to discharge pursuant to Section 7.3.1 of the Participation Agreement and
otherwise comply with the terms of said Section binding upon it.
5.4.2 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 (a) as expressly
required by the terms of any of the Owner Trustee Agreements, (b) as expressly
provided by the terms hereof or (c) as expressly provided in written
instructions from Owner Participant pursuant to Section 5.1 or 5.2.
5.5 SATISFACTION OF CONDITIONS PRECEDENT
Anything in this Trust Agreement to the contrary notwithstanding,
Owner Trustee shall, subject to the satisfaction of special counsel for Owner
Trustee of the occurrence of all the applicable conditions precedent specified
in Section 3.2, comply with the provisions of Section 3.1.
5.6 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 Owner Participant 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 4.3 hereof, Section
4.3.3 of the Participation Agreement and Section 4.4 of the Lease.
Section 6. OWNER TRUSTEE
6.1 ACCEPTANCE OF TRUSTS AND DUTIES
First Security accepts the trusts hereby created and agrees to perform
the same as Owner Trustee but only upon the terms hereof and the Trust Indenture
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. First Security 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 5.4.2), (b) its failure (in its individual
capacity) to perform its obligations under Section 5.4.1, (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 6.8, (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 capacity to perform any
covenant) in this Trust Agreement, the Trust Indenture, the Lease or the
Participation Agreement or elsewhere in any of the other Operative Agreements,
(e) taxes, fees or other charges on, based on or measured by any fees,
commissions or compensation received by First Security in connection with the
transactions contemplated by this Trust Agreement and the other Operative
Agreements to which it (in its individual capacity or as Owner Trustee) is a
party, (f) its or Owner Trustee's failure to use ordinary care in receiving or
disbursing funds or in connection with its obligation to invest funds pursuant
to Section 4 of the Participation Agreement, Section 4.4 of the Lease or Section
4.3 hereof, (g) any liability on the part of Owner Trustee arising out of its
negligence or willful or negligent misconduct in connection with its obligations
under Section 5.1 (other than the first sentence thereof), 6.8 or 9.2 hereof or
Section 4.01 of the Trust Indenture. First Security shall have no obligation to
advance its individual funds for any purpose, and Owner Trustee shall have no
obligation to distribute to Owner Participant, Lessee or any third party any
amounts to be paid to Owner Trustee until such amounts are collected by Owner
Trustee.
6.2 ABSENCE OF CERTAIN DUTIES
(a) Except in accordance with written instructions furnished pursuant
to Section 5.1 or 5.2 and except as provided in, and without limiting the
generality of, Sections 3.1 and 5.4.1 and the last sentence of Section 9.1.2,
and subject to Section 4.01 of the Trust Indenture, neither Owner Trustee nor
First Security shall have any duty (i) to see to any recording or filing of any
Operative Agreement 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 First Security to comply
with the FAA reporting requirements set forth in 14 C.F.R. ss. 47.45 and 14
C.F.R. ss. 47.51, and Owner Trustee shall, to the extent that informatioN for
that purpose is timely supplied by Lessee pursuant to any of the Operative
Agreements, complete and timely submit (and furnish Owner Participant 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 Owner Participant copies of all
reports and other written information which Owner Trustee receives from Lessee
pursuant to Section 11 of the Lease, (iii) except as provided in Section 7.3.1
or 7.3.2 of the Participation Agreement, Section 4.01 of the Trust Indenture or
Section 5.4 or 6.1 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
Indenture Estate or the Trust Estate, except as provided in Section 6.3.9 of the
Participation Agreement 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
Mortgagee and Owner Participant, 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 Agreement except to the extent to which a responsible
officer of Owner Trustee reasonably believes (and confirms by telephone call
with Owner Participant) that duplicates or copies thereof have already been
furnished to Owner Participant by some other person.
6.3 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS
NEITHER FIRST SECURITY 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, except that First Security warrants to Owner Participant that on the
Delivery Date Owner Trustee shall have received whatever title to the Aircraft
that was conveyed to it and that the Aircraft shall, on the Delivery Date and
during the Term, be free of Lessor Liens attributable to First Security or (b)
any representation or warranty as to the validity, legality or enforceability of
this Trust Agreement or any other Operative Agreement to which First Security,
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 First Security, in its
individual capacity or as Owner Trustee, as the case may be, and except that
First Security hereby represents and warrants that it has all corporate power
and authority to execute, deliver and perform this Trust Agreement and that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by it or Owner Trustee under this
Trust Agreement or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of itself or Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation of
First Security or Owner Trustee, as the case may be, enforceable against First
Security or Owner Trustee, as the case may be, in accordance with its terms.
6.4 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 Law, or except as
provided in written instructions from Owner Participant, and shall be invested
as provided in Section 4.3 hereof or Section 4.4 of the Lease.
6.5 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 Owner Participant or Lessee mentioned
in this Trust Agreement or in any of the other Owner Trustee Agreements 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
Owner Participant 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 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. Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons.
6.6 NOT ACTING IN INDIVIDUAL CAPACITY
In acting under this Trust Agreement, First Security 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 Agreements to which
it is a party; and, except as may be otherwise expressly provided in this Trust
Agreement, the Lease, the Participation Agreement and the Trust Indenture, all
persons, other than the Owner Participant as provided in this Trust Agreement or
the Trust Indenture, 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 6.1 or
otherwise as Owner Trustee shall expressly agree otherwise in writing.
6.7 FEES; COMPENSATION
Airframe Manufacturer shall pay the Transaction Expenses and ongoing
fees of Owner Trustee throughout the Term pursuant to Section 9.2 of the
Participation Agreement. The Trust Estate shall not have any liability for any
such fees and expenses; PROVIDED, that the foregoing shall not limit the
obligations of Owner Participant under Sections 5.3 and 7; PROVIDED, that Owner
Trustee shall have a Lien upon the Trust Estate for any such fee not paid by
Airframe Manufacturer as contemplated by Section 9.2 of the Participation
Agreement and such Lien shall entitle Owner Trustee to priority as to payment
thereof over payment to any other Person under this Trust Agreement; PROVIDED,
that such Lien shall be subject and subordinate in all events to the Lien of the
Trust Indenture; and PROVIDED, FURTHER, that Owner Trustee shall have no right
to exercise, and shall not exercise, any rights or remedies Owner Trustee may
have with respect to such Lien unless and until the Secured Obligations have
been paid and performed in full.
6.8 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. Owner Participant
shall be responsible for causing to be prepared and filed all income tax returns
required to be filed by Owner Participant. Owner Trustee shall be responsible
for causing to be prepared, at the expense of Airframe Manufacturer, all income
tax returns required to be filed with respect to the trust created hereby and
shall execute and file such returns; PROVIDED, that Owner Trustee shall send
promptly a completed copy of such return to Owner Participant not more than
sixty nor less than fifteen 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 Owner Participant such return. Owner Participant, upon
request, will furnish Owner Trustee with all such information as may be
reasonably required from Owner Participant 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 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT
Owner Participant 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, First Security and
its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any Taxes
which are not required to be indemnified by Lessee pursuant to Section 9.1 or
9.3 of the Participation Agreement and excluding any taxes payable by First
Security on or measured by any compensation received by First Security 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 First
Security (whether or not also indemnified against by Lessee under the Lease or
under the Participation Agreement or also indemnified against by any other
Person; PROVIDED, that Owner Participant shall be subrogated to the rights of
Owner Trustee against Lessee or any other indemnitor) in any way relating to or
arising out of this Trust Agreement or any of the other Operative Agreements 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 First Security, 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 Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its covenants)
in Section 6.3, in Section 6.03 of the Trust Indenture, in Section 4 of the
Lease, in Section 6.3 of the Participation Agreement or elsewhere in any of the
other Operative Agreements or (c) as may result from a breach by First Security
of its covenant in the last sentence of Section 5.4.1 or (d) in the case of the
failure to use ordinary care on the part of First Security, 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 of the
Participation Agreement, Section 4.4 of the Lease or Section 4.3 hereof or in
compliance with the provisions of the first sentence of Section 6.8 or (e) any
liability on the part of Owner Trustee arising out of its negligence or willful
or negligent misconduct in connection with its obligations under Section 5.1,
6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture, or (f) those claims
arising under any circumstances or upon any terms where Lessee would not have
been required to indemnify First Security pursuant to Section 9.1 or 9.3 of the
Participation Agreement (disregarding for purposes of this paragraph Sections
9.1.2(b) and 9.3.2(j)); PROVIDED, that before asserting its right to
indemnification, if any, pursuant to this Section 7, First Security shall first
demand its corresponding right to indemnification pursuant to Section 9 of the
Participation Agreement (but need not exhaust any or all remedies available
thereunder). The indemnities contained in this Section 7 extend to First
Security only in its individual capacity and shall not be construed as
indemnities of the Trust Indenture Estate or the Trust Estate (except to the
extent, if any, that First Security has been reimbursed by the Trust Indenture
Estate or the Trust Estate for amounts covered by the indemnities contained in
this Section 7). The indemnities contained in this Section 7 shall survive the
termination of this Trust Agreement. In addition, if necessary, First Security
shall be entitled to indemnification from the Trust Estate, subject to the Lien
of the Trust Indenture, for any liability, obligation, loss, damage, penalty,
tax, claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7 to the extent not reimbursed by Lessee, Owner
Participant or others, but without releasing any of them from their respective
agreements of reimbursement; and, to secure the same First Security shall have a
lien on the Trust Estate, subject to the lien of the Trust Indenture and subject
further to the provisions of Section 6.7, which shall be prior to any interest
therein of Owner Participant. The payor of any indemnity under this Section 7
shall be subrogated to any right of the person indemnified in respect of the
matter as to which such indemnity was paid.
Section 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST
8.1 TRANSFER OF INTEREST
All provisions of Section 10 of the Participation Agreement shall
(with the same force and effect as if set forth in full in this Section 8.1) be
applicable to any assignment, conveyance or other transfer by Owner Participant
of any of its right, title or interest in and to the Participation Agreement,
the Trust Estate or this Trust Agreement.
Section 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
9.1 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR
9.1.1 RESIGNATION OR REMOVAL
Owner Trustee or any successor Owner Trustee (a) shall resign if
required to do so pursuant to Section 13.3 of the Participation Agreement or
upon obtaining Actual Knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and (b) may resign at any
time without cause by giving at least 60 days' prior written notice to Owner
Participant, Mortgagee and Lessee, such resignation to be effective upon the
assumption of the trusts hereunder by the successor Owner Trustee under Section
9.1.2. In addition, Owner Participant may at any time remove Owner Trustee, with
or without cause by a notice in writing delivered to Owner Trustee, Mortgagee
and Lessee, such removal to be effective upon the assumption of the trusts
hereunder by the successor Owner Trustee under Section 9.1.2, PROVIDED, that, in
the case of a removal without cause, unless a Lease Event of Default shall have
occurred and be continuing, such removal shall be subject to the consent of
Lessee (which consent shall not be unreasonably withheld). In the case of the
resignation or removal of Owner Trustee, Owner Participant may appoint a
successor Owner Trustee by an instrument signed by Owner Participant, with,
unless a Lease Event of Default shall have occurred and be continuing, the
consent of Lessee (which consent shall not be unreasonably withheld). If a
successor Owner Trustee shall not have been appointed within 30 days after such
notice of resignation or removal, Owner Trustee, any Owner Participant, Lessee
or Mortgagee 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.
9.1.2 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 Owner Participant,
Lessee and Mortgagee, an instrument accepting such appointment and assuming the
obligations of Owner Trustee, in its individual capacity and as Owner Trustee,
under the Owner Trustee Agreements, 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 9.1, 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.
9.1.3 QUALIFICATIONS
Any successor Owner Trustee, however appointed, shall be a Citizen of
the United States 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 an institution willing, able
and legally qualified to perform the duties of Owner Trustee under this Trust
Agreement upon reasonable or customary terms. No such successor Owner Trustee
shall be located in a jurisdiction which creates material adverse consequences
for Lessee (unless such material adverse consequences would be created by
substantially all jurisdictions where major banking or trust institutions are
located).
9.1.4 MERGER, ETC.
Any corporation into which First Security may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which First Security shall be a party, or
any corporation to which substantially all the corporate trust business of First
Security may be transferred, shall, subject to the terms of Section 9.1.3, be
Owner Trustee under this Trust Agreement without further act, PROVIDED, that
such corporation shall not also be the Mortgagee.
9.2 CO-TRUSTEES AND SEPARATE TRUSTEES
(a) If at any time it shall be necessary or prudent in order to
conform to any 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 Owner Participant or Owner
Trustee, or Owner Trustee shall have been directed to do so by Owner
Participant, Owner Trustee and Owner Participant 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 Owner Participant, 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 Owner Participant 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 so to do, or in case a Lease
Event of Default or Indenture Event of Default shall occur and be continuing,
Owner Trustee may act under the foregoing provisions of this Section 9.2 without
the concurrence of Owner Participant; and Owner Participant hereby appoints
Owner Trustee its agent and attorney-in-fact to act for it under the foregoing
provisions of this Section 9.2 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 or under the Participation 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 which 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;
(v) Owner Participant, at any time, by an instrument in writing
may remove any such additional trustee. In the event that Owner Participant
shall not have joined in the execution of any such instrument within ten
days after the receipt of a written request from Owner Trustee so to do,
Owner Trustee shall have the power to remove any such additional trustee
without the concurrence of Owner Participant; and Owner Participant hereby
appoints Owner Trustee its agent and attorney-in-fact to act for it in such
connection in such contingency; and
(vi) No appointment of, or action by, any additional trustee will
relieve Owner Trustee of any of its obligations under, or otherwise affect
any of the terms of, the Trust Indenture or affect the interests of
Mortgagee or the Note Holders in the Trust Indenture Estate.
(c) In case any separate trustee under this Section 9.2 shall die,
become incapable of acting, resign or be removed, 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.
Section 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER DOCUMENTS
10.1 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF
10.1.1 SUPPLEMENTS AND AMENDMENTS
Subject to Section 7.2.2 of the Participation Agreement, this Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Owner Participant. Subject to
Section 10.2, Section 9.01 of the Trust Indenture and Section 7.6.7 of the
Participation Agreement, Owner Trustee will execute any amendment, supplement or
other modification of this Trust Agreement or of any other Owner Trustee
Agreement which it is requested in writing to execute by Owner Participant,
except that Owner Trustee shall not execute any such amendment, supplement or
other modification which, 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
Owner Participant, (a) no such supplement, amendment or modification shall (i)
modify any of the provisions of Section 4 or this Section 10.1, (ii) reduce,
modify or amend any indemnities in favor of Owner Participant as set forth in
Section 9 of the Participation Agreement or in the Tax Indemnity Agreement,
(iii) reduce the amount or extend the time of payment of Basic Rent,
Supplemental Rent, Stipulated Loss Value or Termination Value as set forth in
the Lease (except in accordance with Section 3 of the Lease) or (iv) modify any
of the rights of Owner Participant under the Trust Indenture and (b) no such
supplement, amendment or modification shall require Owner Participant 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 Owner
Participant with respect to any agreement or obligation.
10.1.2 DELIVERY OF AMENDMENTS AND SUPPLEMENTS TO CERTAIN PARTIES
A signed copy of each amendment or supplement referred to in Section
10.1.1 to which Lessee is not a party shall be delivered promptly by Owner
Trustee to Lessee, and a signed copy of each amendment or supplement referred to
in Section 10.1.1 shall be delivered promptly by Owner Trustee to Mortgagee.
10.2 DISCRETION AS TO EXECUTION OF DOCUMENTS
Prior to executing any document required to be executed by it pursuant
to the terms of Section 10.1, Owner Trustee shall be entitled to receive an
opinion of its 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
Agreement, 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 and the Owner Trustee against any and all liabilities,
costs and expenses arising out of the execution of such documents.
10.3 ABSENCE OF REQUIREMENTS AS TO FORM
It shall not be necessary for any written request furnished pursuant
to Section 10.1 to specify the particular form of the proposed documents to be
executed pursuant to such Section 10.1, but it shall be sufficient if such
request shall indicate the substance thereof.
10.4 DISTRIBUTION OF DOCUMENTS
Promptly after the execution by Owner Trustee of any document entered
into pursuant to Section 10.1, Owner Trustee shall mail, by certified mail,
postage prepaid, a conformed copy thereof to Owner Participant, but the failure
of Owner Trustee to mail such conformed copy shall not impair or affect the
validity of such document.
10.5 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND TRUST INDENTURE
SUPPLEMENT
No written request pursuant to Section 10.1 shall be required to
enable Owner Trustee to enter into, pursuant to Section 3.1 and the Lease or the
Trust Indenture, as the case may be, the Lease Supplement with Lessee and the
Trust Indenture Supplement.
Section 11. MISCELLANEOUS
11.1 TERMINATION OF TRUST AGREEMENT
This Trust Agreement and the trusts created hereby shall be of no
further force or effect upon the earlier of (a) both the final discharge of the
Trust Indenture pursuant to Section 10.01 thereof and 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
Section 4, PROVIDED, that at such time Lessee shall have fully complied with all
of the terms of the Lease and the Participation Agreement or (b) 21 years less
one day after the death of the last survivor of all of the descendants of the
grandparents of Xxxxx X. Xxxxxxxxxxx living on the date of 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 the 21st anniversary of
the death of such last survivor (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 hereinabove 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 nontermination 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 11.2, this Trust Agreement and the trusts created hereby may not be
revoked by Owner Participant.
11.2 TERMINATION AT OPTION OF THE OWNER PARTICIPANT
Notwithstanding Section 11.1 hereof, this Agreement and trust created
hereby shall terminate and the Trust Estate shall be distributed to the Owner
Participant, and this Agreement shall be of no further force and effect, upon
the election of the Owner Participant by notice to the Owner Trustee, if such
notice shall be accompanied by the written agreement (in form and substance
satisfactory to the Owner Trustee) of the Owner Participant assuming all
obligations of the Owner Trustee under or contemplated by the Operative
Agreements or incurred by it as trustee hereunder and releasing the Owner
Trustee therefrom; provided, however, that such notice may be given only after
the time the Lien of the Trust Indenture is discharged under Section 10.01 of
the Trust Indenture and after the Lease shall no longer be in effect.
11.3 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST ESTATE
Owner Participant shall not have legal title to any part of the Trust
Estate. No transfer, by operation of Law or otherwise, of any right, title and
interest of Owner Participant 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 Owner
Participant to an accounting or to the transfer of legal title to any part of
the Trust Estate.
11.4 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 the Participation Agreement shall bind Owner Participant and shall be
effective to transfer or convey all right, title and interest of Owner Trustee
and Owner Participant 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.
11.5 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES ONLY
Except for the terms of Section 10 of the Participation Agreement
incorporated in Section 8 and except as otherwise provided in Sections 5.1, 6.7,
9, 10.1 and 11.1, nothing in this Trust Agreement, whether express or implied,
shall be construed to give any person other than Owner Trustee and Owner
Participant 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 and Owner Participant.
11.6 CITIZENSHIP OF OWNER PARTICIPANT
Reserved.
11.7 NOTICES
Unless otherwise expressly permitted by the terms of this Trust
Agreement, all notices, requests, demands, authorizations, directions, consents,
waivers and other communications required or permitted to be made, given,
furnished or filed under this Trust Agreement shall be in writing, shall refer
specifically to this Trust Agreement and shall be personally delivered, sent by
telecopy, telex or other means of electronic facsimile or telecommunication
transmission, sent by registered mail or certified mail, return receipt
requested, postage prepaid, or sent by overnight courier service, in each case
to the respective telex, telecopy or other number or address set forth for such
party in Schedule 1 to the Participation Agreement, or to such other telex,
telecopy or other number or address as each party hereto may hereafter specify
by notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by telecopy
or other means of electronic facsimile or telecommunication transmission, when
confirmed, or (b) by registered or certified mail, three Business Days after
being deposited, properly addressed, in the U.S. mail.
11.8 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.
11.9 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 Section 10; and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific purpose
given.
11.10 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.
11.11 BINDING EFFECT, ETC.
All covenants and agreements contained in this Trust Agreement shall
be binding upon, and inure to the benefit of, Owner Trustee and its successors
and assigns, and Owner Participant and its successors and, to the extent
permitted by Section 8, assigns. Any request, notice, direction, consent, waiver
or other instrument or action by Owner Participant shall bind its successors and
assigns.
11.12 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 provisions hereof and shall not in any way affect the construction of,
or be taken into consideration in interpreting, this Trust Agreement.
11.13 GOVERNING LAW
THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF
THE STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
PACIFIC CENTURY LEASING, INC.
By_______________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
By_______________________________
Name:
Title:
