EXHIBIT 4.18
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TRUST AGREEMENT
(1989 I)
dated as of
July 20, 2000
between
BANCBOSTON UNITED LEASING LLC,
as Owner Participant,
and
STATE STREET BANK AND TRUST COMPANY,
as Owner Trustee
________
United Air Lines, Inc.
1989 I Equipment Trust
One Boeing 747-422 Aircraft
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS.................................................................... 1
SECTION 1.1 Special Definitions............................................... 1
SECTION 1.2 Reference to Lease................................................ 2
ARTICLE II
AUTHORITY; DECLARATION OF TRUST BY OWNER TRUSTEE............................... 2
SECTION 2.1 Authorization..................................................... 2
SECTION 2.2 Declaration of Trust.............................................. 3
ARTICLE III
PAYMENTS TO OWNER PARTICIPANT.................................................. 3
SECTION 3.1 Payments From Trust Estate Only................................... 3
SECTION 3.2 Method of Payment................................................. 3
ARTICLE IV
ACCEPTANCE AND DELIVERY OF AIRCRAFT; TITLE TO AIRCRAFT......................... 4
SECTION 4.1 Authorization..................................................... 4
SECTION 4.2 Conditions........................................................ 4
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST
ESTATE......................................................................... 4
SECTION 5.1 Distributions..................................................... 4
ARTICLE VI
DUTIES OF THE OWNER TRUSTEE.................................................... 5
SECTION 6.1 Notice of Event of Default........................................ 5
SECTION 6.2 Action Upon Instructions.......................................... 5
SECTION 6.3 Indemnification................................................... 5
SECTION 6.4 No Duties Except as Specified in Trust Agreement or
Instructions..................................................... 6
SECTION 6.5 No Action Except Under Lease, Trust Agreement or
Instructions..................................................... 6
SECTION 6.6 Tax Returns....................................................... 6
ARTICLE VII
THE OWNER TRUSTEE.............................................................. 7
SECTION 7.1 Acceptance of Trusts and Duties................................... 7
SECTION 7.2 Absence of Duties...........................................;..... 7
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SECTION 7.3 No Representations or Warranties as to Aircraft or Documents................ 8
SECTION 7.4 No Segregation of Monies; No Interest....................................... 9
SECTION 7.5 Reliance; Agent; Advice of Counsel.......................................... 9
SECTION 7.6 Not Acting in Individual Capacity........................................... 9
SECTION 7.7 Compensation................................................................ 9
ARTICLE VIII
INDEMNIFICATION OF SSBTC BY OWNER PARTICIPANT............................................ 10
SECTION 8.1 Owner Participant to Indemnify SSBTC........................................ 10
ARTICLE IX
SUCCESSOR OWNER TRUSTEES;................................................................ 11
APPOINTMENT OF SEPARATE TRUSTEES.................................................................. 11
SECTION 9.1 Resignation of Owner Trustee; Appointment of Successor...................... 11
SECTION 9.2 Appointment of Separate Trustees............................................ 12
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST AGREEMENT AND OTHER DOCUMENTS................... 14
SECTION 10.1 Instructions of Owner Participant; Limitations............................ 14
SECTION 10.2 Owner Trustee Protected.................................................... 15
SECTION 10.3 Request of Substance Not Form.............................................. 15
ARTICLE XI
MISCELLANEOUS............................................................................ 15
SECTION 11.1 Termination of Trust Agreement............................................. 15
SECTION 11.2 No Legal Title to Trust Estate Owner Participant........................... 16
SECTION 11.3 Sale of Aircraft by Owner Trustee Is Binding............................... 16
SECTION 11.4 Trust Agreement for Benefit of Owner Trustee and Owner
Participant Only........................................................... 16
SECTION 11.5 Notices.................................................................... 16
SECTION 11.6 Severability............................................................... 17
SECTION 11.7 Limitation on Owner Participant's Liability................................ 17
SECTION 11.8 Separate Counterparts...................................................... 17
SECTION 11.9 Successors and Assigns..................................................... 17
SECTION 11.10 Headings................................................................... 17
SECTION 11.11 Governing Law.............................................................. 17
SECTION 11.12 Authorization to Cover Trustee for Trust Indenture......................... 18
SECTION 11.13 Waivers etc................................................................ 18
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TRUST AGREEMENT
(1989 I)
This TRUST AGREEMENT (1989 I), dated as of July 20, 2000, between
BANCBOSTON UNITED LEASING LLC, a Delaware limited liability company ("Owner
Participant") and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company (in its individual capacity, referred to as "SSBTC", and not in its
individual capacity but solely as owner trustee hereunder, referred to as the
"Owner Trustee"):
W I T N E S S E T H :
ARTICLE I
DEFINITIONS
SECTION 1.1 Special Definitions. For all purposes of this Trust
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Agreement the following terms shall have the following meanings (such
definitions to be equally applicable to both the singular and plural forms of
the terms herein defined):
(a) "Assignment and Assumption Agreement" means that certain
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Assignment and Assumption Agreement (1989 I) dated as of July 20, 2000 between
the Owner Participant and the Owner Trustee.
(b) "Lease" means that certain First Amended and Restated Lease
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Agreement (1989 I), dated as of July 20, 2000, between the Owner Trustee (as
Owner Trustee hereunder), as Lessor, and United Air Lines, Inc., as Lessee, as
said Lease Agreement may from time to time be supplemented or amended, or the
terms thereof waived or modified, to the extent permitted by and in accordance
with its terms, the terms of the Trust Indenture, the terms of the Participation
Agreement and the terms of this Trust Agreement. The term "Lease" also includes
the Lease Supplement (1989 I).
(c) "Mortgaged Property" means the "Indenture Estate" as defined in
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the Trust Indenture.
(d) "Participation Agreement" shall mean that certain First Amended
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and Restated Participation Agreement (1989 I), dated as of even date herewith,
among Lessee, Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, in its capacity as Pass Through Trustee under
each of the Pass Through Trust Agreements, Owner Trustee and State Street Bank
and Trust Company of Connecticut, National Association, in its individual
capacity and as Indenture Trustee.
(e) "Trust Agreement" and "this Trust Agreement" means this Trust
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Agreement (1989 I) as supplemented or amended from time to time, including as
supplemented by the Trust Supplement.
(f) "Trust Estate" means all estate, right, title and interest of the
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Owner Trustee in and to the Aircraft, the Original Lease, the Original
Participation Agreement, the Original Trust Indenture, the Assignment and
Assumption Agreement, the Lease, any Lease Supplement, the Participation
Agreement, the Purchase Agreement, the Japanese Lease, any Japanese Lease
Supplement, the Primary Lessor Mortgage, the Primary Lessor Comfort Letter, the
Japanese Lease Assignment, the Japanese Lease Assignment Supplement, the
Lessor's Purchase Agreement, the Lessor's Consent and Agreement, the
Manufacturer's FAA Xxxx of Sale and the Manufacturer's Warranty Xxxx of Sale,
including, without limitation, all amounts of Basic Rent and Supplemental Rent,
insurance proceeds (other than liability insurance proceeds payable to or for
the benefit of the Owner Trustee, for its own account, the Owner Participant,
the Certificate Holders or the Indenture Trustee) and requisition, indemnity or
other payments of any kind for or with respect to the Aircraft or the Lessee's
obligations under the Operative Documents (except amounts owing to the Owner
Participant, to the Indenture Trustee, to the Owner Trustee, or to the
Certificate Holders pursuant to Section 7(b) or 7(c) of the Participation
Agreement). Notwithstanding the foregoing, "Trust Estate" does not include any
Excluded Payments but shall include all of the property, rights and interests of
the Owner Trustee subject to the Granting Clause of the Trust Indenture.
(g) "Trust Indenture" shall mean that certain First Amended and
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Restated Trust Indenture and Security Agreement (1989 I), dated as of even date
herewith, between State Street Bank and Trust Company of Connecticut, National
Association, as Indenture Trustee and Owner Trustee.
SECTION 1.2 Reference to Lease.
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For all purposes of this Trust Agreement the terms used herein in
capitalized form but not defined herein are used as defined in the Lease.
ARTICLE II
AUTHORITY; DECLARATION OF
TRUST BY OWNER TRUSTEE
SECTION 2.1 Authorization.
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The Owner Participant hereby authorizes and directs the Owner Trustee,
and the Owner Trustee hereby agrees, (i) to execute and deliver the
Participation Agreement, the Trust Indenture, the Lease, the Assignment and
Assumption Agreement, the other Operative Documents to which it may be a party
and all other documents (including UCC financing
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statements) as the Owner Participant may from time to time direct (collectively,
the "Trustee Documents") (in the respective forms in which they are delivered
from time to time by the Owner Participant to the Owner Trustee) necessary or
desirable in order to consummate the transactions contemplated hereby and
thereby, including, without limitation, the execution and filing with the FAA of
an AC Form 8050-1 Aircraft Registration Application covering the Airframe and
the Affidavit pursuant to Section 47.7(c)(2)(ii) of the Federal Aviation
Regulations and (ii) subject to the terms of this Trust Agreement, to exercise
the rights and perform the duties of the Lessor under the Lease and its duties
under the Trustee Documents as set forth therein.
SECTION 2.2 Declaration of Trust.
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SSBTC hereby declares that it will hold the Trust Estate as Owner
Trustee upon the trusts hereinafter set forth for the use and benefit of the
Owner Participant, subject, however, to the provisions of and the Lien created
by the Trust Indenture.
ARTICLE III
PAYMENTS TO OWNER PARTICIPANT
SECTION 3.1 Payments From Trust Estate Only.
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Except as provided in Section 7.1 hereof, all payments to be made by
the Owner Trustee under this Trust Agreement shall be made only from the income
and the proceeds from the Trust Estate and only to the extent that the Owner
Trustee shall have received sufficient income or proceeds from the Trust Estate
to make such payments. The Owner Participant agrees that it will look solely to
the income and proceeds from the Trust Estate to the extent available for
distribution to the Owner Participant as herein provided and, except as provided
in Section 7.1 hereof, that SSBTC is neither personally liable to the Owner
Participant for any amounts payable under this Trust Agreement nor, except as
provided in Section 7.1 hereof, subject to any liability under this Trust
Agreement.
SECTION 3.2 Method of Payment.
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All amounts payable to the Owner Participant pursuant to this Trust
Agreement shall be payable in immediately available funds to the Owner
Participant or a nominee thereof at the Corporate Trust Department office of the
Owner Trustee in Boston, Massachusetts, or at the corporate trust office of any
successor trustee in the United States of America, or by transferring such
amount to a banking institution with bank wire transfer facilities for the
account of the Owner Participant or such nominee, as instructed from time to
time by the Owner Participant. Notwithstanding the foregoing, the Owner Trustee
will pay all amounts payable by the Owner Trustee hereunder to the Owner
Participant (including all amounts distributed pursuant to Article V of this
Trust Agreement) on the day received (or on the next succeeding Business Day
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if the funds to be so distributed shall not have been received by the Owner
Trustee by 1:00 p.m., New York time) as provided in Part B of Schedule I to the
Participation Agreement, provided, however, that the Owner Trustee shall use
reasonable efforts to invest overnight in investments permitted pursuant to
Section 22 of the Lease and identified in written instructions of the Owner
Participant or in overnight funds for the benefit of the Owner Participant all
funds received by it at or later than 1:00 p.m.
ARTICLE IV
ACCEPTANCE AND DELIVERY OF AIRCRAFT;
TITLE TO AIRCRAFT
SECTION 4.1 Authorization. The Owner Participant hereby authorizes
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and directs the Owner Trustee to, and the Owner Trustee agrees for the benefit
of the Owner Participant that on the Effective Date it will, as trustee
hereunder, subject to due compliance with the terms of Section 4.2 of this
Agreement:
(a) accept from the Owner Participant an FAA Xxxx of Sale with
respect to the Aircraft and make application with the FAA for registration of
the Aircraft in the name of the Owner Trustee;
(b) execute and deliver the Assignment and Assumption Agreement and
accept the assignment of the Owner Interests (as defined therein) assigned
thereby; and
(c) issue to each Certificate Holder the Certificate or Certificates
to be issued to them, in the amounts and otherwise as provided in Section 2.01
of the Trust Indenture.
SECTION 4.2 Conditions. The obligation of the Owner Trustee to take
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the action required by Section 4.1 hereof shall be subject to the condition
precedent that the Owner Trustee shall have received notice of the Effective
Date from Lessee (or the Owner Participant shall have directed the Owner Trustee
to waive receipt of such delivery notice) in accordance with the terms of the
Lease and of the Participation Agreement.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
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SECTION 5.1 Distributions.
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Until the lien of the Trust Indenture shall have been discharged, all
Basic Rent, Supplemental Rent, insurance proceeds and requisition or other
payments of any kind included in the Trust Estate (other than Excluded Payments)
payable to the Owner Trustee shall be payable directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set-off or adjustment
of any kind) for distribution in accordance with the provisions of Article III
of the Trust Indenture. Subject to the foregoing and to the other terms and
requirements of the Operative Documents, all payments and amounts received by
the Owner Trustee shall be distributed forthwith upon receipt in the following
order of priority: first, so much of such payment, or amount as shall, be
required to pay or reimburse the Owner Trustee for any fees or expenses not
otherwise paid or reimbursed to the Owner Trustee as to which the Owner Trustee
is entitled to be paid or reimbursed hereunder, or indemnified from the Trust
Estate pursuant to the penultimate sentence of Section 8.1 hereof, shall be
retained by the Owner Trustee; and, second, the balance, if any, of such payment
or amount remaining thereafter shall be distributed to the Owner Participant.
ARTICLE VI
DUTIES OF THE OWNER TRUSTEE
SECTION 6.1 Notice of Event of Default.
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In the event the Owner Trustee shall have actual knowledge of an Event
of Default or an Indenture Event of Default or an event or condition which after
notice or lapse of time or both would become an Event of Default or Indenture
Event of Default, the Owner Trustee shall give prompt written notice thereof to
the Owner Participant, Lessee and the Indenture Trustee. Subject to the terms of
Section 6.3 hereof, the Owner Trustee shall take or refrain from taking such
action, not inconsistent with the provisions of the Operative Documents, with
respect to an Event of Default, Indenture Event of Default or an event or
condition which after notice or lapse of time or both would become an Event of
Default or Indenture Event of Default as the Owner Trustee shall be instructed
in writing by the Owner Participant. For all purposes of this Trust Agreement,
in the absence of actual knowledge of an officer in the Corporate Trust
Department of the Owner Trustee, the Owner Trustee shall not be deemed to have
knowledge of an Event of Default or an Indenture Event of Default or an event or
condition which after notice or lapse of time or both would become an Event of
Default or Indenture Event of Default unless it receives written notification
thereof, in the manner and at the address specified in Section 11.5 hereof,
given by or on behalf of the Owner Participant, the Lessee or the Indenture
Trustee.
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SECTION 6.2 Action Upon Instructions.
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Subject to the terms of Sections 6.1 and 6.3 hereof, upon the written
instructions at any time and from time to time of the Owner Participant, the
Owner Trustee shall take or refrain from taking such action, not inconsistent
with provisions of the Trust Indenture, as may be specified in such
instructions.
SECTION 6.3 Indemnification.
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The Owner Trustee shall not be required to take any action or refrain
from taking any action under Section 6.1 or 6.2 hereof (other than as specified
in the first sentence of Section 6.1) unless the Owner Trustee shall have been
indemnified, in manner and form and to the extent reasonably satisfactory to the
Owner Trustee, against any liability, cost or expense (including reasonable
legal fees and expenses) which may be incurred in connection therewith. The
Owner Trustee shall not be required to take any action under Section 6.1 or 6.2
hereof (other than as specified in the first sentence of Section 6.1 hereof),
nor shall any other provision of this Trust Agreement be deemed to impose a duty
on the Owner Trustee to take any action, if the Owner Trustee shall have been
advised by counsel that such action is contrary to the terms hereof or of the
Lease or the Trust Indenture or is contrary to law.
SECTION 6.4 No Duties Except as Specified in Trust Agreement or
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Instructions.
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The 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 otherwise to take or to refrain from taking any
action under, or in connection with, the Lease except as expressly provided by
the terms of the Trustee Documents or as expressly provided in written
instructions from the Owner Participant received pursuant to the terms of
Section 6.1 or 6.2 hereof; and no implied duties or obligations shall be read
into this Trust Agreement against the Owner Trustee. SSBTC nevertheless agrees
in its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder or under the Participation Agreement. SSBTC further agrees in
its individual capacity to indemnify, protect, save and keep harmless the Owner
Participant from and against any loss, cost or expense (including legal fees and
expenses) incurred by the Owner Participant, as a result of the imposition or
enforcement of any such Lessor's Lien against the Aircraft, any interest therein
or on the Trust Estate or the Trust Indenture Estate resulting from the Lessor's
Liens attributable to SSBTC.
SECTION 6.5 No Action Except Under Lease, Trust Agreement or
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Instructions.
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The Owner Trustee agrees that it will not manage, control, use, sell,
dispose of or otherwise deal with the Aircraft or any other property which is
part of the Trust Estate except (i) as required by the terms hereof or of the
other Trustee Documents or (ii) in accordance with the
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express terms hereof or with written instructions from the Owner Participant
pursuant to Section 6.1 or 6.2 hereof.
SECTION 6.6 Tax Returns.
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The Owner Trustee shall be responsible for the keeping of all
appropriate books and records relating to the receipt and disbursement by it of
all monies under the Trust Agreement or any agreement contemplated hereby. The
Owner Trustee agrees at the expense of the Lessee to file an application with
the Internal Revenue Service for a taxpayer identification number with respect
to the trust created by this Trust Agreement. The Owner Trustee will at the
request of the Owner Participant and at the expense of the Lessee (as provided
in Section 7(c) of the Participation Agreement) cause to be prepared all income
tax returns required to be filed with respect to the trust created hereby and
shall execute and file such returns; provided, however, the Owner Trustee shall
send a completed copy of such return to the Owner Participant not more than 60
nor less than 30 days prior to the due date of the return provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Owner Participant such return. The Owner Participant, upon
request, will furnish the Owner Trustee with all such information as may be
required from the Owner Participant in connection with the preparation of such
income tax returns.
ARTICLE VII
THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties.
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SSBTC accepts the trusts hereby created and agrees to perform the same
as Owner Trustee but only pursuant to the terms of this Trust Agreement and the
terms of the other Trustee Documents applicable to it. The Owner Trustee also
agrees to receive all monies, and to disburse all monies actually received by
it, constituting part of the Trust Estate pursuant to the terms of this Trust
Agreement. SSBTC shall not be answerable or accountable under any circumstances,
except (a) for its own willful misconduct or gross negligence, (b) for the
inaccuracy of any representation or breach of any warranty or covenant, made in
its individual capacity, set forth in any Trustee Document, (c) as arising from
the failure by SSBTC to perform its obligations under the penultimate and the
last sentences of Section 6.4 hereof, (d) for taxes, fees or other charges on,
based on, or measured by, any fees, commissions or compensation received by
SSBTC in connection with the transactions contemplated by any Trustee Document,
or (e) for any failure to use ordinary care in receiving or disbursing funds or
in connection with its obligation to invest funds pursuant to Section 22 of the
Lease, or Section 3.2 of this Trust Agreement. Unless otherwise expressly
provided herein or in the Participation Agreement or the Trust Indenture, SSBTC
shall have no obligation to advance its individual funds for any purpose, and
the Owner
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Trustee shall have no obligation to distribute to the Participants, Lessee or
any third party any amounts to be paid to the Owner Trustee until such amounts
are collected by the Owner Trustee.
SECTION 7.2 Absence of Duties.
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Except in accordance with written instructions furnished pursuant to
Section 6.1 or 6.2 hereof and except as explicitly provided in, and without
limiting the generality of, Sections 4.1 and 6.4 hereof, the Owner Trustee shall
have no duty (i) to see to any registration of the Aircraft or any recording or
filing of the Lease or of this Trust Agreement or of any other Operative
Document, or to see to the maintenance of any such registration, recording or
filing, except that the Owner Trustee shall complete, solely on the basis of
information timely furnished to the Owner Trustee by applicable parties pursuant
to the Participation Agreement or the Lease, and submit on a timely basis
reports relating to the continued eligibility for registration, identification
and activity of the Aircraft or similar reports and take such other action as
may be necessary therefor, which may from time to time be required by the FAA or
other government or governmental authority having jurisdiction, as requested to
the Owner Trustee by Owner Participant, (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, (iii) except as provided in Section
8(b) of the Participation Agreement, Section 4.01 of the Trust Indenture, or
Section 6.4 or 7.1 hereof, to see to the payment or discharge of any tax,
assessment or other governmental charge or any Lien of any kind owing with
respect to, or assessed or levied against, any part of the Trust Estate or the
Indenture Estate, or, except as provided in Section 6.6 hereof, the filing of
any returns or reports in connection therewith, (iv) to confirm or verify any
financial statements of Lessee or (v) to inspect the Aircraft at any time or
ascertain or inquire as to the performance or observance of any of Lessee's
covenants under the Lease with respect to the Aircraft. Notwithstanding the
foregoing, the Owner Trustee will furnish to the Indenture Trustee and to the
Owner Participant, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to or by the Owner Trustee under the Lease or any
other Operative Document except to the extent an Operative Document requires
delivery thereof by some other person directly to the Owner Participant or the
Indenture Trustee.
SECTION 7.3 No Representations or Warranties as to Aircraft or
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Documents.
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THE OWNER TRUSTEE AND SSBTC MAKE (i) NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE OR 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 WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except that SSBTC hereby
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represents and warrants to the Owner Participant that on the Effective Date the
Owner Trustee received whatever title was conveyed to it by the Owner
Participant and that the Aircraft was free of Lessor's Liens attributable to
SSBTC, and (ii) no representation or warranty as to the validity, legality or
enforceability of this Trust Agreement, the Trust Indenture, the Trust
Supplement, the Participation Agreement, the Certificates, the Lease, the
Purchase Agreement or any other document or instrument referred to herein 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 as a
representation by SSBTC and except that SSBTC hereby represents and warrants to
the Owner Participant that (x) this Trust Agreement has been, and, assuming the
due authorization, execution and delivery of this Agreement by the Owner
Participant, each of said other Trustee Documents has been or will be, executed
and delivered by one of its officers who is and will be duly authorized to
execute and deliver such document on its behalf, both in its individual capacity
and as Owner Trustee, (y) SSBTC has all corporate power and authority to
execute, deliver and perform this Trust Agreement and such other Trustee
Documents and (z) assuming due authorization, execution and delivery of this
Trust Agreement by the Owner Participant, this Trust Agreement constitutes the
legal, valid and binding obligation of SSBTC enforceable against it in
accordance with its terms except as limited by bankruptcy, insolvency,
reorganization or other similar laws or equitable principles of general
application to or affecting the enforcement of creditors rights generally from
time to time in effect.
SECTION 7.4 No Segregation of Monies; No Interest.
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Monies received by the Owner Trustee hereunder need not be segregated
in any manner except to the extent required by law, and shall be invested as
provided in Section 3.2 hereof or Section 22 of the Lease.
SECTION 7.5 Reliance; Agent; Advice of Counsel.
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The Owner Trustee shall incur no liability in acting upon 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. The Owner Trustee may accept a copy of a resolution of the Board of
Directors of any party to the Participation Agreement, certified by the
Secretary or an Assistant Secretary of such party as duly adopted and in full
force and effect, as conclusive evidence that such resolution has been duly
adopted by said Board 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 herein, the Owner Trustee may, absent actual knowledge to the
contrary, for all purposes hereof rely on a certificate, signed by the
President, or by any Vice President, signing with 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 the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon. In the administration of the trusts hereunder, the Owner
Trustee may execute any of the trusts or powers hereof and perform its powers
and duties hereunder directly or through agents or attorneys and, at
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the reasonable expense of the Trust Estate, consult with independent counsel,
accountants and other skilled persons to be selected and employed by it, and the
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written advice or opinion of any such
counsel, accountants or other skilled persons appointed by it with due care
hereunder.
SECTION 7.6 Not Acting in Individual Capacity.
---------------------------------
SSBTC is entering this Agreement and accepting the trusts created
hereby in its individual capacity, however, SSBTC will act solely as Owner
Trustee hereunder and not in its individual capacity except as expressly
provided herein or in the other Trustee Documents; and all persons, other than
the Owner Participant as provided in this Trust Agreement and the Trust
Indenture having any claim against the 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 the penultimate
sentence of Section 7.1 hereof.
SECTION 7.7 Compensation.
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Except as provided in Section 6.3 or 8.1 hereof, each of SSBTC and the
Owner Trustee agrees that it shall have no right against the Owner Participant
or (subject to the provisions of the Trust Indenture) the Trust Estate for any
fee as compensation for its services hereunder.
ARTICLE VIII
INDEMNIFICATION OF SSBTC BY OWNER PARTICIPANT
SECTION 8.1 Owner Participant to Indemnify SSBTC.
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Whether or not any of the transactions contemplated hereby or by the
Participation Agreement shall be consummated, the Owner Participant shall assume
liability for, and shall indemnify, protect, save and keep harmless SSBTC and
its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any taxes
payable by SSBTC on or measured by any compensation received by SSBTC for its
services hereunder), claims, actions, suits, costs, expenses or disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against SSBTC (whether or not
also indemnified against by any other person under any other document) relating
to or arising out of this Trust Agreement or the other Trustee Documents or the
enforcement of any of the terms of any thereof, or relating to or arising out of
the manufacture, purchase, acceptance, non-acceptance, 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
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any claim for patent, trademark or copyright infringement), or relating to or
arising out of the administration of the Trust Estate or the action or inaction
of the Owner Trustee hereunder, or under the Trust Indenture or under the Lease,
except only in the case of (i) willful misconduct or gross negligence on the
part of the Owner Trustee (including, without limitation, in connection with any
activities of the Owner Trustee in violation of Section 6.5 hereof) in the
performance or nonperformance of its duties hereunder or under any other
Operative Document to which it is a party, (ii) the breach or inaccuracy of any
of SSBTC's representations or warranties or covenants referred to in Section 7.3
hereof or in the second sentence of Section 6.4 hereof, (iii) the breach or
inaccuracy of any of the representations or warranties of SSBTC in any of the
other Operative Documents, (iv) for the failure to use ordinary care to receive
or disburse funds or in connection with its obligation to invest funds pursuant
to Section 22 of the Lease, or Section 3.2 of this Trust Agreement, (v) as
otherwise excluded by the terms of Section 7(b) and 7(c) of the Participation
Agreement from the Lessee's general indemnity and general tax indemnity to the
Owner Trustee or SSBTC under said Sections, except that such exclusion shall not
apply to Section 7(b)(ii)(8) or 7(c)(10) of the Participation Agreement; (vi) to
the extent the Lessee is not obligated to pay any such amounts pursuant to
Section 7(c) of the Participation Agreement, or (viii) any Tax on any fees or
compensation payable to the Owner Trustee or SSBTC for its services hereunder;
provided that none of the foregoing exceptions shall limit the obligation of the
Owner Participant to indemnify SSBTC for actions taken or not taken in
accordance with the instructions of the Owner Participant; and provided,
further, that before asserting its right to indemnification pursuant to this
Section 8.1, SSBTC shall first demand its corresponding right to indemnification
pursuant to Section 7 of the Participation Agreement (but need not exhaust any
or all remedies available thereunder). The indemnities contained in this Section
8.1 extend to SSBTC and shall not be construed as part of the Trust Estate or
the Indenture Estate (except to the extent, if any, that SSBTC has been
reimbursed from the Trust Estate or Indenture Estate for amounts covered by the
indemnities in this Section 8.1). The indemnities contained in this Section 8.1
shall survive the termination of this Trust Agreement. In addition, if
necessary, SSBTC shall be entitled to indemnification from the Trust Estate for
any liability, obligation, loss, damage, penalty, tax, claim, action, suit,
cost, expense or disbursements indemnified against pursuant to this Section 8.1
to the extent not reimbursed by Lessee, the Owner Participant or others, but
without releasing any of them from their respective agreements of reimbursement;
and to secure the same SSBTC shall have a Lien on the Trust Estate, which shall
be subject to any interest therein of the Indenture Trustee or any Loan
Participant, but which shall be prior to any interest therein of the Owner
Participant. The payor of any indemnity under this Section 8.1 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 IX
SUCCESSOR OWNER TRUSTEES;
APPOINTMENT OF SEPARATE TRUSTEES
SECTION 9.1 Resignation of Owner Trustee; Appointment of Successor.
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(a) State Street Bank and Trust Company in its individual capacity
agrees that if at any time a responsible officer of State Street Bank and Trust
Company shall obtain actual knowledge that State Street Bank and Trust Company
has ceased to be a Citizen of the United States, it will promptly resign as
Owner Trustee (if and so long as such citizenship is necessary under the Federal
Aviation Act as in effect at such time or, if it is not necessary, if and so
long as the Owner Trustee's citizenship would have any adverse effect on a
Certificate Holder, Lessee or the Owner Participant), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.1 of the
Trust Agreement. Notwithstanding anything contained in the foregoing, Owner
Trustee may resign at any time, by giving at least 60 days prior written notice
to the Indenture Trustee, the Owner Participant, and the Lessee, such
resignation in each such case to be effective on the date the trusts hereunder
are assumed by a successor Owner Trustee. In addition, the Owner Participant may
at any time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee, the Indenture Trustee, and the Lessee. In case
of the resignation or removal of the Owner Trustee, the Owner Participant may
appoint a successor Owner Trustee by an instrument signed by the Owner
Participant. If a successor Owner Trustee shall not have been appointed within
30 days after such resignation or removal, the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Lessee or any Sublessee 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.
(b) Any successor Owner Trustee, whether appointed by a court or by
the Owner Participant, shall execute and deliver to the predecessor Owner
Trustee, with a copy to the Owner Participant and the Indenture Trustee, an
instrument accepting such appointment, 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
hereunder in the trusts hereunder, with like effect as if originally named the
Owner Trustee herein; 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, and such
predecessor Owner Trustee shall duly assign, transfer, deliver and pay over to
such successor Owner Trustee, all the estates, rights, powers, duties, monies or
other property then held by such predecessor Owner Trustee hereunder, upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
hereunder, the predecessor Owner Trustee will use its best efforts to cause
registration of the Aircraft included in the Trust Estate to be transferred
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upon the records of the FAA, or other governmental authority having
jurisdiction, into the name of the successor Owner Trustee.
(c) Any successor Owner Trustee, however appointed, shall (i) be a
Citizen of the United States, and (ii) be a bank or trust company having its
principal place of business in the United States of America, and 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 the
Owner Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Owner Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Owner Trustee may be transferred, shall, subject to the terms of
paragraph (c) of this Section, be the Owner Trustee under this Trust Agreement
without further act.
(e) The 60-day notice period specified in the first sentence of
paragraph (a) of this Section 9.1 shall be reduced as necessary so that any
resignation of the Owner Trustee or any successor Owner Trustee shall be
effective prior to the date such Owner Trustee has ceased to be a Citizen of the
United States.
SECTION 9.2 Appointment of Separate Trustees.
--------------------------------
(a) At any time or times, in the event that the Owner Trustee or the
Owner Participant shall deem it necessary or prudent or desirable in order to
conform to the legal requirements of any jurisdiction in which any part of the
Trust Estate may at such time or times be located, upon written instruction of
the Owner Participant the Owner Trustee by an instrument in writing signed by
it, shall appoint one or more individuals or corporations approved by the Owner
Participant to act as separate trustee or separate trustees of all or any part
of the Trust Estate to the full extent that local law makes it necessary or
prudent or desirable for such separate trustee or separate trustees to act.
(b) The Owner Trustee and the Owner Participant shall execute,
acknowledge and deliver all such instruments as may be required by any such
separate trustee or separate trustees for more fully confirming such title,
rights or duties to such separate trustee or separate trustees. Upon the
acceptance in writing of such appointment by any such separate trustee or
separate trustees, it, he or they shall be vested with such title to the Trust
Estate or any part thereof, and with such rights and duties, as shall be
specified in the instrument of appointment, jointly with the Owner Trustee
(except insofar as local law makes it necessary or prudent or desirable for any
such separate trustee or separate trustees to act alone) subject to all the
terms of this Trust Agreement. Any separate trustee or separate trustees may, at
any time by an instrument in writing, constitute the Owner Trustee its or his
attorney-in-fact and agent with full power and authority to do all acts and
things and to exercise all discretion on its or his behalf and
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in its or his name. Every additional trustee hereunder shall be a Citizen of the
United States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following provisions
and conditions:
(A) all powers, duties, obligations and rights conferred
upon the Owner Trustee in respect of the custody, control and
management of monies, the Aircraft or documents authorized to be
received or delivered hereunder or under the Participation
Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be conferred or
imposed upon and exercised or performed by the 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) the 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;
(C) no power given to, or which it is provided hereby may
be exercised by, any such additional trustee shall be exercised
hereunder by such additional trustee, except jointly with, or
with the consent in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder;
(E) the Owner Participant, at any time, by an instrument in
writing may remove any such additional trustee; and
(F) no appointment of, or action by, any additional trustee
will relieve the Owner Trustee of any of its obligations under,
or otherwise affect any of the terms of, the Trust Indenture or
affect the interests of the Indenture Trustee or the Loan
Participants in the Indenture Estate.
In case such separate trustee 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
the Owner Trustee, without the appointment of a successor to such separate
trustee.
(c) All provisions of this Trust Agreement which are for the benefit
of the Owner Trustee shall extend to and apply to each separate trustee
appointed pursuant to the foregoing provisions of this Section 9.2, including
without limitation Article VIII hereof.
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ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST AGREEMENT AND OTHER DOCUMENTS
SECTION 10.1 Instructions of Owner Participant; Limitations.
-----------------------------------------------
At any time and from time to time, upon the written request of the
Owner Participant, (i) the Owner Trustee, together with the Owner Participant
making such request, shall execute a supplement hereto for the purposes of
adding provisions to, or changing or eliminating provisions of, this Trust
Agreement (except Section 11.12 hereof) as specified in such request, and (ii)
the Owner Trustee shall, subject to compliance with any applicable provisions of
the Trust Indenture, enter into such written amendment of or supplement to the
Trustee Documents as the other parties thereto may agree to and as may be
specified in such request, or execute and deliver such written waiver or
modification of the terms thereof, as may be specified in such request. Without
the consent of the Owner Participant, the Owner Trustee shall not execute any
such supplement, amendment, waiver or modification. Without the consent of
Lessee, no such supplement to this Trust Agreement or waiver or modification of
the terms hereof shall permit or require any action contrary to, or disturb,
Lessee's rights under the Lease, except in accordance with the provisions of the
Lease or amend or modify the terms of Section 9.1(a) or 9.1(c) hereof relating
to the status of the Owner Trustee as a Citizen of the United States.
Until the Trust Indenture shall have been discharged, a signed copy of
each amendment or supplement to this Trust Agreement shall be delivered by the
Owner Trustee to the Indenture Trustee, without in any way affecting the Trust
Indenture or the Loan Certificates and without imposing any duty on the
Indenture Trustee with respect to such amendment or supplement. Promptly after
the execution by the Owner Trustee of any document entered into pursuant to this
Section 10.1, the Owner Trustee shall mail, by reputable overnight courier, a
conformed copy thereof to the Lessee and the Owner Participant (unless the Owner
Participant and/or Lessee is a party to such document) but the failure of the
Owner Trustee to mail such conformed copy shall not impair or affect the
validity of such document.
SECTION 10.2 Owner Trustee Protected.
-----------------------
If, in the reasonable opinion of the Owner Trustee, any document
required to be executed pursuant to the terms of Section 10.1 hereof adversely
affects any immunity or indemnity in favor of the Owner Trustee under this Trust
Agreement, the Trust Indenture or the Lease, the Owner Trustee may in its
reasonable discretion decline to execute such document.
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SECTION 10.3 Request of Substance Not Form.
-----------------------------
It shall not be necessary for any written request furnished pursuant
to Section 10.1 hereof to specify the particular form of the proposed documents
to be executed pursuant to said Section 10.1, but it shall be sufficient if such
request shall indicate the substance thereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 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 earlier,
but in no event prior to the termination of the Trust Indenture pursuant to
Section 10.01 thereof, of (i) the sale or other final disposition by the Owner
Trustee of all property constituting part of the Trust Estate and the final
distribution by the Owner Trustee of all monies or other property or proceeds
constituting part of the Trust Estate in accordance with the terms of Article V
hereof or (ii) the effective date of the revocation and termination of the
trusts as stated in a notice in writing given by the Owner Participant to the
Owner Trustee, which date shall not be less than ten nor more than thirty days
from the date of mailing such notice; provided, however, that this trust shall
not be subject to revocation or termination by the Owner Participant prior to
the payment in full and discharge of the Certificates and the security interest
granted thereby; provided, further, that any such notice given by the Owner
Participant shall be accompanied by the written agreement of the Owner
Participant to assume all of the obligations of the Owner Trustee under the
Operative Documents and all other obligations of the Owner Trustee incurred by
it hereunder in its role as Owner Trustee. Notwithstanding the foregoing, this
Trust Agreement and the trusts created hereby shall terminate no later than 90
years from the earliest execution of this Trust Agreement by any party hereto,
provided, however, that if the trust shall be or become valid under applicable
law for a period subsequent to 90 years from the earliest execution of this
Trust Agreement by any party hereto or, without limiting the generality of the
foregoing, if legislation shall become effective providing for the validity or
permitting the effective grant of such trust for a period, in gross, exceeding
the period for which such trust is hereinabove stated to extend and be valid,
then such trust shall not terminate as provided in the first part of this
sentence but shall extend to and continue in effect until, but only if such non-
termination and extension shall then be valid under applicable law, such time as
the same shall, under applicable law, cease to be valid, whereupon all monies or
other property or proceeds constituting part of the Trust Estate shall be
distributed in accordance with the terms of Article V hereof; otherwise this
Trust Agreement and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
Each of the parties hereto acknowledges that the bankruptcy or
incapacity of the Owner Participant will not terminate the Trust Agreement, nor
entitle such person's legal
16
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Estate, nor
otherwise affect the rights, obligations and liabilities of the parties hereto.
No creditor of the Owner Participant shall obtain legal title to or exercise
legal or equitable remedies with respect to the Trust Estate as a result of the
Owner Participant's status. No transfer, by operation of law or otherwise, of
any right, title and interest of the Owner Participant in and to its beneficial
interest in the Trust Estate shall operate to terminate the Trust Agreement or
the Trusts created thereby.
SECTION 11.2 No Legal Title to Trust Estate Owner Participant.
------------------------------------------------
The 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 the Owner Participant in and to the Trust Estate hereunder shall
operate to terminate this Trust Agreement or the trusts hereunder or entitle any
successor or transferee of the Owner Participant to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.
SECTION 11.3 Sale of Aircraft by Owner Trustee Is Binding.
--------------------------------------------
Any sale or other conveyance of the Aircraft by the Owner Trustee made
pursuant to the terms of this Trust Agreement or of the Lease shall bind the
Owner Participant and shall be effective to transfer or convey all right, title
and interest of the Owner Trustee and such Owner Participant in and to the
Aircraft sold or conveyed but shall be subject to the Trust Indenture and the
rights of the Loan Participants. No purchaser or other grantee shall be required
to inquire as to the authorization, necessity, expediency or regularity of such
sale or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Owner Trustee.
SECTION 11.4 Trust Agreement for Benefit of Owner Trustee and
-------------------------------------------------
Owner Participant Only.
----------------------
Except as expressly provided herein, including Section 11.1 hereof,
nothing in this Trust Agreement, whether express or implied, shall be construed
to give to any person other than the Owner Trustee and the Owner Participant any
legal or equitable right, remedy or claim under or in respect of this Trust
Agreement.
SECTION 11.5 Notices.
-------
Unless otherwise specifically provided herein, all notices required or
permitted by the terms hereof shall be given in the manner provided in Section
13 of the Participation Agreement.
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SECTION 11.6 Severability.
------------
Any provision of this Trust Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.7 Limitation on Owner Participant's Liability.
-------------------------------------------
The Owner Participant shall not have any liability for the performance
of this Trust Agreement, except as expressly set forth herein.
SECTION 11.8 Separate Counterparts.
---------------------
This Trust Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. It shall not be necessary, when making proof of this Trust
Agreement, to produce or account for more than one counterpart.
SECTION 11.9 Successors and Assigns.
----------------------
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, the Owner Trustee and its successors and assigns,
the Owner Participant and its permitted successors and assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by any Owner Participant shall bind the successors and assigns of such
Owner Participant.
SECTION 11.10 Headings.
--------
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.11 Governing Law.
-------------
THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
18
SECTION 11.12 Authorization to Cover Trustee for Trust Indenture.
--------------------------------------------------
Notwithstanding any contrary provision in this Trust Agreement, the
Owner Trustee is hereby authorized and instructed to enter into and perform
fully the Trust Indenture. This provision is for the benefit of the Owner
Trustee, the Indenture Trustee and the Loan Participants and shall not be
changed prior to the termination of the Trust Indenture pursuant to Section
10.01 thereof.
SECTION 11.13 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 hereof; and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized and this Trust Agreement shall be effective this _____ day of
______________, 2000.
BANCBOSTON UNITED LEASING LLC
Owner Participant
By_________________________________
Title:
STATE STREET BANK AND TRUST COMPANY
By_________________________________
Title:
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