PARTICIPATION AGREEMENT N___AT
dated as of __________, 200_
among
AMERICAN TRANS AIR, INC.,
Lessee,
GENERAL ELECTRIC CAPITAL CORPORATION,
Owner Participant,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS EXPRESSLY PROVIDED HEREIN,
BUT SOLELY AS OWNER TRUSTEE, Owner Trustee,
and
WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS
EXPRESSLY PROVIDED HEREIN, BUT SOLELY AS MORTGAGEE, SUBORDINATION AGENT UNDER
THE INTERCREDITOR AGREEMENT, AND PASS-THROUGH TRUSTEE UNDER EACH OF THE
PASS-THROUGH TRUST AGREEMENTS, Mortgagee and Loan Participant
One Boeing model 737-800 aircraft bearing manufacturer's serial no. _____
and U.S. registration no. N___AT
CONTENTS
1. DEFINITIONS AND CONSTRUCTION......................................2
2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES; .....2
TERMINATION OF OBLIGATION TOPARTICIPATE
2.1 Participation in Lessor's Cost...................................2
2.2 Nature of Obligations of Participants..........................3
2.3 Termination of Obligation to Participate.......................3
3. LEASE OF AIRCRAFT.................................................3
4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
POSTPONEMENT OF SCHEDULED DELIVERY DATE..............................4
4.1 Notices of Scheduled Delivery Date.............................4
4.2 Payment of Lessor's Cost.......................................4
4.3 Postponement of Scheduled Delivery Date........................5
4.4 Closing........................................................5
5. CLOSING CONDITIONS................................................5
5.1 Conditions to Participants'Obligations.........................6
5.2 Conditions to Owner Trustee's Obligations.....................11
5.3 Conditions to Mortgagee's Obligations.........................12
5.4 Conditions to Lessee's Obligations............................12
5.5 Post-Registration Opinion.....................................13
6. REPRESENTATIONS AND WARRANTIES............... ...................13
6.1 Lessee's Representations and Warranties.......................13
6.2 Owner Participant's Representations and Warranties............17
6.3 FSB's Representations and Warranties..........................20
6.4 WTC's Representations and Warranties..........................22
7. COVENANTS........................................................25
7.1 Lessee's Covenants............................................25
7.2 Owner Participant's Covenants.................................27
7.3 FSB's and Owner Trustee's Covenants...........................30
7.4 WTC's Covenants...............................................32
7.5 Note Holders'Covenants........................................33
7.6 Other Agreements..............................................34
8. CONFIDENTIALITY..................................................41
9. INDEMNIFICATION AND EXPENSES....................................42
9.1 General Indemnity.............................................42
9.2 Expenses......................................................49
9.3 General Tax Indemnity.........................................50
9.4 Payments......................................................61
9.5 Interest......................................................62
9.6 Benefit of Indemnities........................................62
10. ASSIGNMENT OR TRANSFER OF INTERESTS.............................62
10.1 Participants, Owner Trustee, and Note Holders....... ........62
10.2 Effect of Transfer...........................................64
11. RE-FUNDING AND CERTAIN OTHER MATTERS............................65
11.1 Re-Funding Generally.........................................65
11.2 Limitations on Obligation to Refund..........................67
11.3 Execution of Facilitating Documents..........................68
11.4 ERISA........................................................68
11.5 Consent to Optional Redemptions..............................68
11.6 Lessee's Assumption of Equipment Notes.......................68
12. SECTION 1110....................................................72
13. CHANGE OF CITIZENSHIP...........................................72
13.1 Generally....................................................72
13.2 Owner Participant............................................72
13.3 Owner Trustee................................................73
13.4 Mortgagee....................................................73
14. CONCERNING OWNER TRUSTEE........................................73
15. MISCELLANEOUS...................................................74
15.1 Amendments...................................................74
15.2 Severability.................................................74
15.3 Survival.....................................................74
15.4 Reproduction of Documents....................................74
15.5 Counterparts.................................................75
15.6 No Waiver....................................................75
15.7 Notices......................................................75
15.8 Governing Law; Submission to Jurisdiction; Venue... .........76
15.9 Third-Party Beneficiary......................................77
15.10 Entire Agreement............................................77
15.11 Further Assurances..........................................77
ANNEX A Definitions
SCHEDULE 1 Accounts; Addresses
SCHEDULE 2 Commitments
SCHEDULE 3 Certain Terms
EXHIBIT A Opinion of special counsel to Lessee
EXHIBIT B Opinion of corporate counsel to Lessee
EXHIBIT C Opinion of corporate counsel to Airframe
Manufacturer Trustee
EXHIBIT D Opinion of special counsel to Owner
EXHIBIT E Opinion of special counsel to Mortgagee and Loan
Participants
EXHIBIT F Opinion of special counsel to Owner Participant
EXHIBIT G Opinion of FAA Counsel
EXHIBIT H Opinion of corporate counsel to Owner Participant
EXHIBIT I Form of Assignment and Assumption Agreement
EXHIBIT J Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT N___AT
This Participation Agreement N___AT (this "AGREEMENT"), dated as of
__________, 200_, is entered into by and among (1) American Trans Air, Inc.
("LESSEE"), an Indiana corporation, (2) General Electric Capital Corporation
("OWNER PARTICIPANT"), a New York corporation, (3) First Security Bank, National
Association, a national banking association, not in its individual capacity
(except as expressly provided herein), but solely as Owner Trustee (in its
capacity as Owner Trustee, "OWNER TRUSTEE" or "LESSOR", and in its individual
capacity, "FSB"), (4) Wilmington Trust Company, a Delaware banking corporation,
not in its individual capacity (except as expressly provided herein), but solely
as mortgagee (in its capacity as Mortgagee, "MORTGAGEE", and in its individual
capacity, "WTC"), (5) Wilmington Trust Company, not in its individual capacity
(except as expressly provided herein) but solely as trustee under each of the
Pass-Through Trust Agreements (each, a "PASS-THROUGH TRUSTEE"), and (6)
Wilmington Trust Company, not in its individual capacity (except as expressly
provided herein), but solely as subordination agent under the Intercreditor
Agreement ("SUBORDINATION AGENT").
RECITALS
A...........Owner Participant and FSB are entering into the Trust
Agreement, pursuant to which Owner Trustee agrees to hold the Trust Estate for
the use and benefit of Owner Participant.
B...........Lessee and Airframe Manufacturer entered into the Purchase
Agreement, pursuant to which Airframe Manufacturer agreed to manufacture certain
aircraft (including the Aircraft) and sell them to Lessee, and Lessee agreed to
buy certain aircraft (including the Aircraft) from Airframe Manufacturer.
C...........Seller will sell the Aircraft to Owner Trustee pursuant to the
terms of this Participation Agreement.
D...........Lessee and Owner Trustee are entering into the Purchase
Agreement Assignment and the Engine Manufacturer Warranty Agreement, pursuant to
which Lessee assigns to Owner Trustee certain of Lessee's rights under the
Purchase Agreement and the Engine Manufacturer Warranty Agreement.
E...........Pursuant to each of the Pass-Through Trust Agreements, on the
Issuance Date, the Pass-Through Trusts were created and the Pass-Through
Certificates were issued and sold.
F...........Pursuant to the Note Purchase Agreement, each Pass-Through
Trustee agreed to use a portion of the proceeds from the issuance and sale of
the Pass-Through Certificates issued by each Pass-Through Trust to purchase from
Owner Trustee, on behalf of the related Pass-Through Trust, the Equipment Note
bearing the same interest rate as the Pass-Through Certificates issued by such
Pass-Through Trust.
G...........Owner Trustee and Mortgagee are entering into the Mortgage for
the benefit of the Note Holders, pursuant to which Owner Trustee agrees (1) to
issue Equipment Notes, in the amounts and otherwise as provided in the Mortgage,
the proceeds of which will be used to pay a portion of Lessor's Cost, and (2) to
mortgage, pledge, and assign to Mortgagee all of Owner Trustee's right, title,
and interest in the Collateral to secure the Secured Obligations, including
Owner Trustee's obligations under the Equipment Notes.
H...........Lessor and Lessee are entering into the Lease, pursuant to
which Lessor is leasing the Aircraft to Lessee and Lessee is leasing the
Aircraft from Lessor.
I...........The parties to this Agreement want to set forth in this
Agreement the terms and conditions upon and subject to which the foregoing
transactions shall be effected.
The parties hereto agree as follows:
1. DEFINITIONS AND CONSTRUCTION
The terms defined in Annex A, when capitalized as in Annex A, have the same
meanings when used in this Agreement. Annex A also contains rules of usage that
control construction in this Agreement.
2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES; TERMINATION
OF OBLIGATION TO PARTICIPATE
2.1 PARTICIPATION IN LESSOR'S COST
Subject to the terms and conditions of this Agreement, on the Delivery
Date, Owner Participant and each Pass-Through Trustee shall participate in the
payment of Lessor's Cost as follows: (a) Owner Participant shall finance, in
part, Owner Trustee's payment of Lessor's Cost for the Aircraft by making an
equity investment in the beneficial ownership of the Aircraft in the amount in
Dollars equal to Owner Participant's Percentage multiplied by Lessor's Cost; and
(b) each Pass-Through Trustee shall make a non-recourse secured loan to Owner
Trustee to finance, in part, Owner Trustee's payment of Lessor's Cost in the
amount in Dollars equal to such Pass-Through Trustee's PTT Percentage multiplied
by Lessor's Cost, such loan to be evidenced by one or more Equipment Notes,
dated the Delivery Date, issued to Subordination Agent as the registered holder
on behalf of each such Pass-Through Trustee for the related Pass-Through Trust
by Owner Trustee in accordance with this Agreement and the Mortgage, in an
aggregate principal amount equal to the Commitment of each such Pass-Through
Trustee.
2.2 NATURE OF OBLIGATIONS OF PARTICIPANTS
The obligations hereunder of each Participant are several, and not joint,
and a Participant shall have no obligation to make available to Owner Trustee
any portion of any amount not paid hereunder by any other Participant. The
failure by any Participant to perform its obligations hereunder shall not affect
the obligations of Lessee toward any other Participant, except to the extent
provided in ss. 5.4.
2.3 TERMINATION OF OBLIGATION TO PARTICIPATE
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IF THE CLOSING DOES
NOT OCCUR ON OR BEFORE THE COMMITMENT TERMINATION DATE, THE COMMITMENT OF EACH
PARTICIPANT AND ITS OBLIGATION TO PARTICIPATE IN THE PAYMENT OF LESSOR'S COST
SHALL EXPIRE AND BE OF NO FURTHER FORCE AND EFFECT; PROVIDED, THAT THE LIABILITY
OF ANY PARTICIPANT THAT HAS DEFAULTED IN THE PAYMENT OF ITS COMMITMENT SHALL NOT
BE RELEASED.
3. LEASE OF AIRCRAFT
Subject to the terms and conditions of this Agreement, concurrently with
the issuance of the Equipment Notes on the Delivery Date, Owner Trustee shall
purchase and accept delivery of the Aircraft from Seller under and pursuant to
the Purchase Agreement and the Purchase Agreement Assignment, and thereupon
Owner Trustee shall lease the Aircraft to Lessee, and Lessee shall lease the
Aircraft from Owner Trustee, under the Lease.
4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST; POSTPONEMENT OF
SCHEDULED DELIVERY DATE
4.1 NOTICES OF SCHEDULED DELIVERY DATE
Without limiting its obligations to the Loan Participant under ss. 1(b) of
the Note Purchase Agreement, Lessee agrees to give Participants, Owner Trustee,
and Mortgagee at least one Business Day's written notice of the Scheduled
Delivery Date, which notice shall set forth Lessor's Cost and the amount of each
Participant's Commitment. Each Participant agrees that making its Commitment
available shall constitute a waiver of such notice. Owner Trustee and Mortgagee
shall be deemed to have waived such notice if WTC receives from each Participant
funds in the full amount of its respective Commitment.
4.2 PAYMENT OF LESSOR'S COST
(a).........Each Participant agrees, subject to the terms and conditions of
this Agreement, to make the Dollar amount of its respective Commitment
available, by wire transfer of immediately available funds to WTC's account at
Wilmington Trust Company, ABA No. __________, account no. __________, reference
American Trans Air, Inc. Lease N5__AT, at or before 12:00 noon, New York City
time, on the Scheduled Delivery Date. All such funds made available by each
Participant to WTC shall, until payment thereof to Seller as provided in ss.
4.2(b)(2) or return thereof to the respective Participant as provided in ss.
4.3.2, be held by WTC in trust for the benefit of the respective Participant, as
the sole and exclusive property of the respective Participant and not as part of
the Trust Estate or the Collateral.
(b).........Subject to the satisfaction, or waiver by the applicable party,
of the conditions precedent set forth in ss. 5, and simultaneously with the
receipt by the parties hereto of all amounts to be paid to them on the Delivery
Date pursuant to this ss. 4.2, Owner Trustee shall:
(1) purchase, take title to, and accept delivery of the Aircraft;
(2) in consideration of the transfer of title to the Aircraft to Owner
Trustee, direct WTC to pay, from the funds made available to WTC hereunder by
the Participants, all of the Commitments of the Participants to Seller, which
payments in the aggregate shall be equal to Lessor's Cost, by wire transfer of
immediately available funds to Seller's account set forth in Schedule 1 or as
otherwise directed by Seller;
(3) execute an application for registration of the Aircraft with the FAA;
(4) execute the Mortgage and issue the Equipment Notes to Subordination
Agent in accordance withss. 2.1(b);
(5) lease the Aircraft to Lessee pursuant to the Lease; and
(6) take such other action as may be required to be taken by Owner Trustee
on the Delivery Date by the terms of any Operative Agreement.
4.3 POSTPONEMENT OF SCHEDULED DELIVERY DATE
4.3.1 POSTPONEMENT
If for any reason whatsoever the Closing is not consummated on the
Scheduled Delivery Date, Lessee may, subject to the provisions of 1(e) of the
Note Purchase Agreement, by telephonic notice, given by 5:00 p.m. New York City
time (such telephonic notice to be promptly confirmed in writing by personal
delivery or facsimile) on the Scheduled Delivery Date, to each Participant,
Owner Trustee, and Mortgagee, designate a Delayed Delivery Date, in which case
Owner Participant will keep its funds available, and each Loan Participant shall
comply with its obligations under ss. 5.01 of each applicable Pass-Through Trust
Agreement.
4.3.2 RETURN OF FUNDS
WTC shall promptly return to each Participant that makes funds available to
it in accordance with ss. 4.2(a) such funds, together with interest or income
earned thereon, if the Closing fails to occur on the Scheduled Delivery Date,
PROVIDED, that any such funds made available by the Loan Participant shall be
returned on such Scheduled Delivery Date.
4.4 CLOSING
The Closing shall occur at the offices of Xxxxxxxx Xxxxxxx LLP, 0000 Xxxx
xx Xxxxxxx Xxxxx, Xxxxxxx, XX (with a set of Operative Agreements also being
delivered in New York City), or such other place as the parties shall agree.
5. CLOSING CONDITIONS
5.1 CONDITIONS TO PARTICIPANTS' OBLIGATIONS
Each Participant's obligation to make the Dollar amount of its Commitment
available for payment as directed by Owner Trustee on the Delivery Date is
subject to the satisfaction or such Participant's waiver, on or before the
Delivery Date, of the conditions in this ss. 5.1; PROVIDED, that it shall not be
a condition to the obligation of any Participant that any document be produced
or action taken that is to be produced or taken by such Participant or by a
Person within such Participant's control; PROVIDED, FURTHER, that ss. 5.1.2 (a),
(m), and (u)(8) shall not be conditions to the Loan Participants' obligations
and ss. 5.1.15 and ss. 5.1.16 shall not be conditions to Owner Participant's
obligations.
5.1.1 NOTICE
Such Participant received the notice described in ss. 4.1 or, in the case
of a Delayed Delivery Date, ss. 4.3, when and as required thereby.
5.1.2 DELIVERY OF DOCUMENTS
Except as otherwise provided in this ss. 5.1.2, such Participant receives
executed counterparts of the following documents, and such counterparts (x) have
been duly authorized, executed, and delivered by the party or parties thereto,
(y) are reasonably satisfactory in form and substance to such Participant, and
(z) are in full force and effect:
(a) the Lease (Mortgagee to receive the sole executed chattel paper
original thereof);
(b) the Tax Indemnity Agreement; PROVIDED, that only Owner Participant and
Lessee shall receive copies of the Tax Indemnity Agreement;
(c) the Trust Agreement;
(d) the Mortgage;
(e) the Purchase Agreement Assignment;
(f) the Consent and Agreement and the Engine Manufacturer Warranty
Agreement;
(g) the Equipment Notes dated the Delivery Date; PROVIDED, that only the
Subordination Agent shall receive the authenticated Equipment Notes;
(h) an excerpted copy of the Purchase Agreement to the extent relating to
Airframe Manufacturer's or Engine Manufacturer's warranties or related
obligations or any right in the Purchase Agreement assigned to Owner Trustee
pursuant to the Purchase Agreement Assignment; PROVIDED, that only Owner Trustee
and Mortgagee shall receive copies of such agreement (copies of which may be
inspected by Participants and their respective special counsel on the Delivery
Date, but after the Delivery Date such copies shall be retained by Owner Trustee
and Mortgagee and may be inspected and reviewed by Owner Participant or Loan
Participant or their counsel if and only if a Lease Default exists);
(i) the Bills of Sale;
(j) the Guarantee;
(k) an invoice from Seller specifying the amount due to Seller in respect
of the Aircraft, which amount shall equal Lessor's Cost of the Aircraft;
(l) the broker's report and insurance certificates required byss. 11 of the
Lease;
(m) an appraisal or appraisals from an Appraiser, which appraisal or
appraisals shall be reasonably satisfactory in form and substance to Owner
Participant; PROVIDED, that only Owner Participant shall receive copies of such
appraisal(s);
(n) (1) a copy of Lessee's articles of incorporation, by-laws, and
resolutions, in each case certified as of the Delivery Date by the Secretary or
an Assistant Secretary of Lessee, duly authorizing Lessee's execution, delivery,
and performance of the Lessee Operative Agreements required to be executed and
delivered by Lessee on or before the Delivery Date in accordance with the
provisions hereof and thereof; (2) a copy of Guarantor's articles of
incorporation, by-laws, and resolutions, in each case certified as of the
Delivery Date by the Secretary or an Assistant Secretary of Guarantor, duly
authorizing Guarantor's execution, delivery, and performance of the Guarantee;
(3) incumbency certificates of Lessee, Guarantor, Owner Participant, FSB, and
WTC as to the person(s) authorized to execute and deliver the relevant Operative
Agreements on behalf of such party; and (4) copies of the certificate or
articles of incorporation, by-laws, and general authorizing resolutions of the
boards of directors (or executive committees) or other satisfactory evidence of
authorization of Owner Participant, FSB, and WTC, certified as of the Delivery
Date by the Secretary or an Assistant or Attesting Secretary of Owner
Participant, FSB, and WTC, respectively, which authorize the execution, delivery
and performance by Owner Participant, FSB, and WTC, respectively, of each of the
Operative Agreements to which it is a party, together with such other documents
and evidence with respect to it as Lessee or any Participant reasonably requests
in order to establish the consummation of the transactions contemplated by this
Agreement and the taking of all corporate proceedings in connection therewith;
(o) an Officer's Certificate of Lessee, dated the Delivery Date, stating
that its representations and warranties in this Agreement are true and correct
as of the Delivery Date (or, to the extent that any such representation and
warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(p) an Officer's Certificate of FSB, dated the Delivery Date, stating that
its representations and warranties, in its individual capacity and as Owner
Trustee, in this Agreement are true and correct as of the Delivery Date (or, to
the extent that any such representation and warranty expressly relates to an
earlier date, true and correct as of such earlier date);
(q) an Officer's Certificate of Owner Participant, dated the Delivery Date,
stating that its representations and warranties in this Agreement are true and
correct as of the Delivery Date (or, to the extent that any such representation
and warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(r) an Officer's Certificate of WTC, dated the Delivery Date, stating that
its representations and warranties, in its individual capacity, or as Mortgagee,
a Pass-Through Trustee, or Subordination Agent (as applicable) in this Agreement
are true and correct as of the Delivery Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and
correct as of such earlier date);
(s) an application for registration of the Aircraft with the FAA in the
name of Owner Trustee (FAA Counsel to receive the sole executed copy thereof,
for filing with the FAA);
(t) the Financing Statements;
(u) the following opinions of counsel, in each case dated the Delivery
Date:
(1) an opinion of Xxxxxxxx Xxxxxxx LLP, special counsel to Lessee and
Guarantor, substantially in the form of Exhibit A;
(2) an opinion of Lessee's and Guarantor's Legal Department, substantially
in the form of Exhibit B;
(3) an opinion of corporate counsel to Airframe Manufacturer, substantially
in the form of Exhibit C;
(4) an opinion of Ray, Xxxxxxx & Xxxxxxx, special counsel to Owner Trustee,
substantially in the form of Exhibit D;
(5) an opinion of Xxxxxxxx, Xxxxxx & Finger, special counsel to Mortgagee
and the Loan Participants, substantially in the form of Exhibit E;
(6) an opinion of Xxxxx Xxxxxxxxxx LLP, special counsel to Owner
Participant, substantially in the form of Exhibit F;
(7) an opinion of FAA Counsel, substantially in the form of Exhibit G;
(8) an opinion of Xxxxx Xxxxxxxxxx LLP, special tax counsel to Owner
Participant, with respect to certain tax consequences of the transactions
contemplated hereby; PROVIDED, that only Owner Participant shall receive such
opinion; and
(9) an opinion of corporate counsel of Owner Participant, substantially in
the form of Exhibit H, and
(v) each Participant receives copies of such other documents as it
reasonably requests, except as provided in clauses (b), (h), (m), and (u)(8) of
this ss. 5.1.2.
5.1.3 OTHER COMMITMENTS
Each other Participant makes available the Dollar amount of its Commitment
in accordance with ss. 4.
5.1.4 VIOLATION OF LAW
No change occurs after the date of this Agreement in any applicable
Law that makes it a violation of Law for (a) Lessee, any Participant,
Subordination Agent, Owner Trustee, or Mortgagee to execute, deliver, and
perform the Operative Agreements to which it is a party or to be a party subject
to the obligations of the Operative Agreements to which such Participant is
bound, or (b) any Participant to make the Dollar amount of its Commitment
available or, in the case of any Loan Participant, to acquire an Equipment Note,
or to realize the benefits of the security afforded by the Mortgage.
5.1.5 PERFECTED SECURITY INTEREST
After giving effect to the filing of the FAA-Filed Documents and the
Financing Statements, Mortgagee shall have a duly-perfected first-priority
security interest in all of Owner Trustee's right, title, and interest in the
Aircraft and the Lease, subject only to Permitted Liens.
5.1.6 REPRESENTATIONS, WARRANTIES, AND COVENANTS
The representations and warranties of each other party to this Agreement
made, in each case, in any Operative Agreement to which it is a party, are true
and accurate in all material respects as of the Delivery Date (unless any such
representation and warranty was made with reference to a specified date, in
which case such representation and warranty was true and accurate as of such
specified date), and each other party to this Agreement has performed and
observed, in all material respects, all of its covenants, obligations, and
agreements in each Operative Agreement to which it is a party to be observed or
performed by it as of the Delivery Date.
5.1.7 NO DEFAULT
On the Delivery Date, no Lease Default or Mortgage Default exists or would
result from the sale, mortgage, or lease of the Aircraft.
5.1.8 NO EVENT OF LOSS
No Event of Loss with respect to the Airframe or any Engine has occurred,
and no circumstance, condition, act, or event has occurred that, with the giving
of notice or lapse of time, would give rise to or constitute an Event of Loss
with respect to the Airframe or any Engine.
5.1.9 TITLE
Owner Trustee has good title (subject to filing and recordation of the FAA
Xxxx of Sale with the FAA) to the Aircraft, free and clear of Liens, except (a)
the rights of Lessee under the Lease, (b) the Lien created by the Mortgage, (c)
the beneficial interest of Owner Participant created by the Trust Agreement, (d)
Liens permitted by clause (d) (solely for taxes not yet due) of ss. 6 of the
Lease, and (e) Liens permitted by clause (e) of ss. 6 of the Lease.
5.1.10 CERTIFICATION
The Aircraft has been duly certificated by the FAA as to type, and upon
registration in Owner Trustee's name will be eligible for an FAA airworthiness
certificate.
5.1.11 SECTION 1110
Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee of
Owner Trustee under the Mortgage), is entitled to the benefits of Section 1110
(as currently in effect) with respect to the right to take possession of the
Airframe and Engines as provided in the Lease in the event of a case under
Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.
5.1.12 FILING
The FAA-Filed Documents are on the Delivery Date duly filed for recordation
with the FAA in accordance with the Transportation Code, and each Financing
Statement has been duly filed or is in the process of being duly filed in the
appropriate jurisdiction.
5.1.13 NO PROCEEDINGS
No action or proceeding has been instituted, nor is any action threatened
in writing, before any Government Entity, nor has any order, judgment, or decree
been issued or proposed to be issued by any Government Entity, to set aside,
restrain, enjoin, or prevent the completion and consummation of any Operative
Agreement or the Transactions.
5.1.14 GOVERNMENTAL ACTION
All appropriate action required to have been taken before the Delivery Date
by the FAA, or any other Government Entity of the United States, in connection
with the Transactions has been taken, and all orders, permits, waivers,
authorizations, exemptions, and approvals of such entities required to be in
effect on the Delivery Date in connection with the Transactions have been
issued.
5.1.15 NOTE PURCHASE AGREEMENT
The conditions precedent to the obligations of the Loan Participants and
the other requirements relating to the Aircraft and the Equipment Notes in the
Note Purchase Agreement have been satisfied.
5.2 CONDITIONS TO OWNER TRUSTEE'S OBLIGATIONS
Owner Trustee's obligation to direct WTC to apply the Commitments to pay
Lessor's Cost on the Delivery Date is subject to the satisfaction or Owner
Trustee's waiver, on or before the Delivery Date, of the conditions in this ss.
5.2.
5.2.1 NOTICE
Owner Trustee receives the notice described in ss. 4.1 or, in the case of a
Delayed Delivery Date, ss. 4.3, when and as required thereby.
5.2.2 DOCUMENTS
Owner Trustee receives executed originals of the documents described in ss.
5.1.2, except as otherwise provided therein, unless the failure to receive any
such document is the result of any action or inaction by Owner Trustee.
5.2.3 OTHER CONDITIONS PRECEDENT
Each of the conditions in xx.xx. 5.1.4, 5.1.6, 5.1.7, and 5.1.11 is
satisfied, unless the failure of any such condition to be satisfied is the
result of any action or inaction by Owner Trustee.
5.3 CONDITIONS TO MORTGAGEE'S OBLIGATIONS
Mortgagee's obligation to authenticate the Equipment Notes on the Delivery
Date is subject to the satisfaction or Mortgagee's waiver, on or before the
Delivery Date, of the conditions in this ss. 5.3.
5.3.1 NOTICE
Mortgagee receives the notice described in ss. 4.1 or, in the case of a
Delayed Delivery Date, ss. 4.3, when and as required thereby.
5.3.2 DOCUMENTS
Mortgagee receives executed originals of the documents described in ss.
5.1.2, except as otherwise provided therein, unless the failure to receive any
such document is the result of any action or inaction by Mortgagee.
5.3.3 OTHER CONDITIONS PRECEDENT
Each of the conditions in xx.xx. 5.1.4, 5.1.6, 5.1.7, and 5.1.11 has been
satisfied, unless the failure of any such condition to be satisfied is the
result of any action or inaction by Mortgagee.
5.4 CONDITIONS TO LESSEE'S OBLIGATIONS
Lessee's obligation to lease the Aircraft on the Delivery Date is subject
to the satisfaction or Lessee's waiver, on or before the Delivery Date, of the
conditions in this ss. 5.4.
5.4.1 DOCUMENTS
Lessee receives executed originals of the documents described in ss. 5.1.2,
except as otherwise provided therein, and they are satisfactory to Lessee,
unless the failure to receive any such document is the result of any action or
inaction by Lessee.
5.4.2 TAXES
Lessee is satisfied that no sales, use, value-added, goods-and-services, or
like tax, and no stamp tax duty, is payable with respect to the delivery of the
Aircraft on the Delivery Date (to the extent that Lessee could be liable
therefor under ss. 9.3).
5.4.3 OTHER CONDITIONS
Each of the conditions in xx.xx. 5.1.3 (as to all Participants), 5.1.4,
5.1.6, 5.1.7 (as to Mortgage Defaults' not constituting Lease Defaults), 5.1.8,
5.1.9, 5.1.10, 5.1.11, 5.1.12, 5.1.13, and 5.1.14 has been satisfied or waived
by Lessee, unless the failure of any such condition to be satisfied is the
result of any action or inaction by Lessee.
5.5 POST-REGISTRATION OPINION
Promptly after the registration of the Aircraft and the recordation of the
FAA-Filed Documents pursuant to the Transportation Code, Lessee will cause FAA
Counsel to deliver to Lessee, each Participant, Subordination Agent, Owner
Trustee, and Mortgagee a favorable opinion or opinions addressed to each of them
with respect to such recordation.
6. REPRESENTATIONS AND WARRANTIES
6.1 LESSEE'S REPRESENTATIONS AND WARRANTIES
Lessee represents and warrants to each Participant, Owner Trustee,
Subordination Agent, and Mortgagee that:
6.1.1 ORGANIZATION; QUALIFICATION
Lessee is a corporation duly incorporated, validly existing, and in good
standing under the Laws of Indiana, and has the corporate power and authority to
conduct the business in which it is currently engaged and to own or hold under
lease its properties and to enter into and perform its obligations under the
Lessee Operative Agreements. Lessee is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the nature
and extent of the business conducted by it, or the ownership of its properties,
requires such qualification, except where the failure to be so qualified would
not give rise to a Materially Adverse Change to Lessee.
6.1.2 CORPORATE AUTHORIZATION
Lessee has taken, or caused to be taken, all necessary corporate action
(including obtaining any consent or approval of stockholders required by its
articles of incorporation or by-laws) to authorize its execution, delivery, and
performance of its obligations under each of the Lessee Operative Agreements.
6.1.3 NO VIOLATION
Lessee's execution, delivery, and performance of its obligations under the
Lessee Operative Agreements do not and will not (a) violate any provision of
Lessee's articles of incorporation or by-laws, (b) violate any Law applicable to
or binding on Lessee, or (c) violate or constitute any default under (other than
any violation or default that would not result in a Materially Adverse Change to
Lessee), or result in the creation of any Lien (other than as permitted under
the Lease) upon the Aircraft under, any lease, loan, or other material agreement
to which Lessee is a party or by which Lessee or any of its properties is bound.
6.1.4 APPROVALS
Lessee's execution and delivery of, and performance of its obligations
under, the Lessee Operative Agreements do not and will not require the consent
or approval of, the giving of notice to, the registration with, the recording or
filing of any documents with, or the taking of any other action in respect of
(a) any trustee or other holder of any Debt of Lessee, (b) any Government
Entity, or (c) any other Person, other than (x) the FAA-Filed Documents and the
Financing Statements (and continuation statements periodically), and (y)
filings, recordings, notices, corporate approvals of Lessee (which have been
duly obtained) or other ministerial actions pursuant to any routine recording,
contractual, or regulatory requirements.
6.1.5 VALID AND BINDING AGREEMENTS
The Lessee Operative Agreements have been duly authorized, executed, and
delivered by Lessee, and (assuming their due authorization, execution, and
delivery by the other parties thereto) constitute legal, valid, and binding
obligations of Lessee and are enforceable against Lessee in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
insolvency, and other similar Laws affecting the rights of creditors generally
and general principles of equity.
6.1.6 LITIGATION
Except as set forth in Guarantor's most recent Annual Report on Form 10-K,
filed by Lessee with the SEC on or before the Delivery Date, or in any Quarterly
Report on Form 10-Q or Current Report on Form 8-K filed by Guarantor with the
SEC subsequent to such Form 10-K and on or before the Delivery Date, no action,
claim, or proceeding is now pending or, to Lessee's Actual Knowledge,
threatened, against Lessee, Guarantor, or any of their Affiliates, before any
Government Entity or any arbitrator, that is reasonably likely to be determined
adversely to Lessee and if determined adversely to Lessee would result in a
Materially Adverse Change.
6.1.7 FINANCIAL CONDITION
Guarantor's audited consolidated balance sheet for its most-recent fiscal
year, included in Guarantor's Annual Report on Form 10-K filed by Guarantor with
the SEC for such fiscal year, and the related consolidated statements of
operations and cash flows for the period then ended, have been prepared in
accordance with GAAP and fairly present in all material respects the financial
condition of Guarantor and its consolidated subsidiaries as of such date and the
results of its operations and cash flows for such period, and since the date of
such balance sheet, there has been no Materially Adverse Change in such
financial condition or operations, except for matters disclosed in (a) the
financial statements referred to above, or (b) any subsequent Quarterly Report
on Form 10-Q or Current Report on Form 8-K filed by Guarantor with the SEC on or
before the Delivery Date.
6.1.8 REGISTRATION AND RECORDATION
Except for (a) registering the Aircraft with the FAA pursuant to the
Transportation Code in the name of Owner Trustee, (b) filing for recordation
(and recording) the FAA-Filed Documents, (c) filing the Financing Statements
(and continuation statements relating thereto at periodic intervals), (d)
Mortgagee's taking possession and retaining the chattel paper original
counterpart of the Lease, and (e) affixing the placards referred to in ss. 7.1.3
of the Lease, no further action, including filing or recording any document
(including any financing statement under UCC Article 9) is necessary in order to
establish and perfect Owner Trustee's right, title, and interest, and
Mortgagee's security interest, in the Aircraft and the Lease, as against Lessee
and any other Person, in any applicable jurisdiction in the United States.
6.1.9 CHIEF EXECUTIVE OFFICE
Lessee's chief executive office (as defined in UCC Article 9) is located at
0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx, 00000.
6.1.10 NO DEFAULT
No Lease Default exists.
6.1.11 NO EVENT OF LOSS
No Event of Loss has occurred with respect to the Airframe or any Engine,
and, to Lessee's Actual Knowledge, no circumstance, condition, act, or event has
occurred that, with the giving of notice or lapse of time, gives or would give
rise to or constitutes or would constitute an Event of Loss to the Airframe or
any Engine.
6.1.12 COMPLIANCE WITH LAWS
(a) Lessee is a Citizen of the United States and a U.S. Air Carrier.
(b) Lessee holds all licenses, permits, and franchises from the appropriate
Government Entities necessary to authorize Lessee lawfully to engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except to the extent that the failure to hold any such
license, permit, or franchise would not give rise to a Materially Adverse Change
to Lessee.
(c) Lessee is not an "investment ompany" or a company controlled by an
"investment company" within the meaning of the Investment Company Act of 1940.
6.1.13 SECURITIES LAWS
Neither Lessee nor any Person authorized to act on its behalf has directly
or indirectly offered any beneficial interest or Security relating to the
ownership of the Aircraft or the Lease or any interest in the Trust Estate and
the Trust Agreement, or any of the Equipment Notes or any other interest in or
security under the Mortgage, for sale to, or solicited any offer to acquire any
such interest or security from, or has sold any such interest or security to,
any Person in violation of the Securities Act.
6.1.14 BROKER'S FEES
No Person acting on behalf of Lessee is or will be entitled to any broker's
fee, commission, or finder's fee in connection with the Transactions, except for
fees payable to Lessee's Advisor(s), if any.
6.1.15 SECTION 1110
Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee under
the Mortgage), will be entitled to the benefits of Section 1110 (as currently in
effect), with respect to the right to take possession of the Airframe and
Engines as provided in the Lease, in the event of a case under Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor.
6.1.16 NO GOVERNMENT CONSENTS
Neither Lessee's execution and delivery of any of the Lessee Operative
Agreements nor Lessee's performance of its obligations hereunder requires the
consent or approval of, the giving of notice to, or the registration with, or
the taking of any other action in respect of any Government Entity, except for
(a) the orders, permits, waivers, exemptions, authorizations and approvals of
the regulatory authorities having jurisdiction over the operation of the
Aircraft by Lessee, which orders, permits, waivers, exemptions, authorizations
and approvals have been duly obtained and are, or will on the Delivery Date be,
in full force and effect, and the registration and filings referred to herein
and (b) any normal periodic and other reporting requirements under the
applicable rules of the FAA to the extent required to be given or obtained only
on or after the Delivery Date.
6.1.17 PAYMENT OF TAXES
Lessee and its Affiliates have filed or caused to be filed all federal,
state, and material local and non-U.S. tax returns that are required to be filed
and have paid or caused to be paid all taxes shown to be due on such returns or
on any assessment received by Lessee or its Affiliates, except any that are
being contested diligently and in good faith by appropriate proceedings and for
which adequate provision for payment has been made in accordance with GAAP.
There is no ongoing audit or, to the knowledge of Lessee, other investigation by
any Government Entity of the tax liability of Lessee or its Affiliates and there
is no unresolved claim by a taxing authority concerning Lessee's or any
Affiliate's tax liability, for any period for which returns have been filed or
were due, that, in either case, reasonably may be expected to result in
liability of Lessee which could have a materially adverse effect on the
business, operations or financial condition of Lessee or the ability of Lessee
to perform its obligations under the Operative Agreements.
6.2 OWNER PARTICIPANT'S REPRESENTATIONS AND WARRANTIES
Owner Participant represents and warrants to Lessee, the Loan Participants,
Subordination Agent, Owner Trustee, and Mortgagee that:
6.2.1 ORGANIZATION, ETC.
Owner Participant (a) is a corporation duly incorporated, validly existing
and in good standing under the Laws of the OP Jurisdiction, (b) has the
corporate power and authority to conduct the business in which it is currently
engaged, to own or hold under lease its properties, and to enter into and
perform its obligations under the Owner Participant Agreements, and (c) has a
tangible net worth (exclusive of goodwill) greater than $50 million.
6.2.2 CORPORATE AUTHORIZATION
Owner Participant has taken (or caused to be taken) all necessary corporate
action (including obtaining any consent or approval of stockholders required by
its certificate of incorporation or by-laws) to authorize its execution,
delivery, and performance of its obligations under each of the Owner Participant
Agreements.
6.2.3 NO VIOLATION
Owner Participant's execution, delivery, and performance of its obligations
under each of the Owner Participant Agreements do not and will not (a) violate
any provision of Owner Participant's certificate of incorporation or by-laws,
(b) violate any Law applicable to or binding on Owner Participant (no
representation or warranty is made with respect to ERISA, other than as set
forth in ss. 6.2.9) or (c) violate or constitute any default under (other than
any violation or default that would not result in a Materially Adverse Change to
Owner Participant), or result in the creation of any Lien (other than as
provided for or otherwise permitted in the Operative Agreements) upon the Trust
Estate under, any lease, loan, or other material agreement to which Owner
Participant is a party or by which Owner Participant or any of its properties is
bound.
6.2.4 APPROVALS
Owner Participant's execution, delivery, and performance of its obligations
under each of the Owner Participant Agreements do not and will not require the
consent or approval of, the giving of notice to, the registration with, the
recording or filing of any documents with, or the taking of any other action in
respect of (a) any trustee or other holder of any Debt of Owner Participant, and
(b) any Government Entity, other than filing the FAA-Filed Documents and the
Financing Statements and routine regulatory filings.
6.2.5 VALID AND BINDING AGREEMENTS
The Owner Participant Agreements have been duly authorized, executed, and
delivered by Owner Participant, and (assuming the due authorization, execution,
and delivery by the other parties thereto) constitute legal, valid, and binding
obligations of Owner Participant and are enforceable against Owner Participant
in accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, and other similar Laws affecting the rights of creditors
generally and general principles of equity.
6.2.6 CITIZENSHIP
Owner Participant is a Citizen of the United States.
6.2.7 NO LIENS
There are no Lessor Liens attributable to Owner Participant on all or any
part of the Trust Estate.
6.2.8 INVESTMENT BY OWNER PARTICIPANT
Owner Participant is acquiring its beneficial interest in the Trust Estate
for its own account, for investment and not with a view to any resale or
distribution thereof; PROVIDED, that, subject to the transfer restrictions in
ss. 10, its disposition of its beneficial interest in the Trust Estate shall at
all times be within its control.
6.2.9 ERISA
No part of the funds to be used by Owner Participant to acquire or hold its
interests in the Trust Estate directly or indirectly constitutes assets of a
Plan.
6.2.10 LITIGATION
There are no pending or, to Owner Participant's Actual Knowledge,
threatened actions or proceedings against Owner Participant before any
Government Entity that, if determined adversely to Owner Participant, would
materially adversely affect Owner Participant's ability to perform its
obligations under the Owner Participant Agreements.
6.2.11 SECURITIES LAWS
Neither Owner Participant nor any Person Owner Participant has authorized
to act on its behalf has directly or indirectly offered any beneficial interest
in or Security relating to the ownership of the Aircraft or any interest in the
Trust Estate, or any of the Equipment Notes or any other interest in or Security
under the Mortgage, for sale to, or solicited any offer to acquire any of the
same from, any Person in violation of the Securities Act or applicable state
securities Laws (with the understanding that Owner Participant shall not be
deemed to have authorized Lessee's Advisor(s) to act on Owner Participant's
behalf).
6.2.12 BROKER'S FEES
No Person acting on behalf of Owner Participant is or will be entitled to
any broker's fee, commission, or finder's fee in connection with the
Transactions.
6.3 FSB'S REPRESENTATIONS AND WARRANTIES
FSB represents and warrants to Lessee, Owner Participant, the Loan
Participants, Subordination Agent, and Mortgagee that:
6.3.1 ORGANIZATION, ETC.
FSB is a national banking association duly organized, validly existing and
in good standing under the Laws of the United States, holding a valid
certificate to do business as a national banking association with banking
authority to execute, deliver, and perform its obligations under the Owner
Trustee Agreements.
6.3.2 CORPORATE AUTHORIZATION
FSB has taken (or caused to be taken) all necessary corporate action
(including obtaining any consent or approval of stockholders required by Law or
by its articles of association or by-laws) to authorize the execution and
delivery by FSB or Owner Trustee, of each of the Owner Trustee Agreements, and
the performance of its obligations thereunder.
6.3.3 NO VIOLATION
FSB's and Owner Trustee's execution, delivery, and performance of their
respective obligations under the Owner Trustee Agreements do not and will not
(a) violate any provision of FSB's articles of association or by-laws, (b)
violate any Utah Law or federal banking Law applicable to or binding on Owner
Trustee or FSB, or (c) violate or constitute any default under (other than any
violation or default that would not result in a Materially Adverse Change to FSB
or Owner Trustee), or result in the creation of any Lien (other than the Lien of
the Mortgage) upon any property of FSB, Owner Trustee, or any of FSB's
subsidiaries under, any lease, loan, or other material agreement to which FSB or
Owner Trustee is a party or by which FSB, Owner Trustee, or any of their
properties is or may be bound or affected.
6.3.4 APPROVALS
FSB's and Owner Trustee's execution, delivery, and performance of their
respective obligations under the Owner Trustee Agreements do not and will not
require the consent, approval, or authorization of, the giving of notice to, the
registration with, the recording or filing of any documents with, or the taking
of any other action in respect of, (a) any trustee or other holder of any Debt
of FSB, or (b) any Government Entity governing banking and trust powers, other
than filing the FAA-Filed Documents and the Financing Statements.
6.3.5 VALID AND BINDING AGREEMENTS
The Owner Trustee Agreements have been duly authorized, executed, and
delivered by FSB and Owner Trustee, and (assuming the due authorization,
execution, and delivery thereof by the other parties thereto) constitute legal,
valid, and binding obligations of FSB and Owner Trustee and are enforceable
against FSB and Owner Trustee in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, and other similar Laws
affecting the rights of creditors generally and general principles of equity.
6.3.6 CITIZENSHIP
FSB is a Citizen of the United States.
6.3.7 CHIEF EXECUTIVE OFFICE
The chief executive office (as defined in UCC Article 9) of Owner Trustee
is located at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
6.3.8 TITLE
On the Delivery Date, Owner Trustee shall have received whatever title to
the Aircraft as was conveyed to it by Seller.
6.3.9 NO LIENS; FINANCING STATEMENTS
There are no Lessor Liens attributable to FSB or Owner Trustee in respect
of all or any part of the Aircraft, Trust Estate, or the Collateral. Except for
the Financing Statements, neither FSB nor Owner Trustee has executed any UCC
financing statement relating to the Aircraft or the Lease.
6.3.10 LITIGATION
There are no pending or, to FSB's Actual Knowledge, threatened actions or
proceedings against FSB or Owner Trustee before any Government Entity that, if
determined adversely to FSB, would materially adversely affect the ability of
FSB or Owner Trustee to perform its obligations under the Owner Trustee
Agreements.
6.3.11 SECURITIES LAWS
Neither FSB, nor any Person authorized to act on its behalf, has directly
or indirectly offered any beneficial interest or Security relating to the
ownership of the Aircraft or any interest in the Trust Estate or any of the
Equipment Notes or any other interest in or security under the Mortgage for sale
to, or solicited any offer to acquire any such interest or security from, or has
sold any such interest or security to, any Person other than the Participants,
except for the offering and sale of the Pass-Through Certificates.
6.3.12 EXPENSES AND TAXES
There are no Expenses or Taxes that may be imposed on or asserted against
the Trust, the Trust Estate, or any part thereof or any interest therein, the
Collateral, Lessee, Owner Participant, any Pass-Through Trustee, Subordination
Agent, Owner Trustee, or Mortgagee (except as to Owner Trustee, Taxes imposed on
the fees payable to Owner Trustee) under the laws of Utah in connection with
Owner Trustee's execution, delivery, or performance of any Operative Agreement
or in connection with the issuance of the Equipment Notes, which Expenses or
Taxes would not have been imposed if Owner Trustee had not (x) had its principal
place of business in Utah, (y) performed (in its individual capacity or as Owner
Trustee) any or all of its duties under the Operative Agreements in Utah, or (z)
engaged in any activities unrelated to the transactions contemplated by the
Operative Agreements in Utah.
6.4 WTC'S REPRESENTATIONS AND WARRANTIES
WTC, Mortgagee, Pass-Through Trustee and Subordination Agent, each as to
itself, represent and warrant (with respect to ss. 6.4.10, solely in its
capacity as Subordination Agent) to Lessee, Owner Participant, and Owner Trustee
that:
6.4.1 ORGANIZATION, ETC.
WTC is a Delaware banking corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware, and authorized to do
business as a Delaware banking corporation with banking authority to execute,
deliver, and perform its obligations under the Mortgagee Agreements, the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements.
6.4.2 CORPORATE AUTHORIZATION
WTC has taken (or caused to be taken) all necessary corporate action
(including obtaining any consent or approval of stockholders required by Law or
by its certificate of incorporation or by-laws) to authorize the execution and
delivery by WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent
(as applicable) of the Mortgagee Agreements, the Pass-Through Trustee
Agreements, and the Subordination Agent Agreements and the performance by WTC,
Mortgagee, each Pass-Through Trustee, and Subordination Agent (as applicable) of
its obligations thereunder.
6.4.3 NO VIOLATION
The execution and delivery by WTC, Mortgagee, each Pass-Through Trustee,
and Subordination Agent (as applicable) of the Mortgagee Agreements, the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements, and the
performance by WTC, Mortgagee, each Pass-Through Trustee, and Subordination
Agent (as applicable) of its obligations thereunder, do not and will not (a)
violate any provision of WTC's certificate of incorporation or by-laws, (b)
violate any Law of the United States or of Delaware applicable to or binding on
WTC or (except in the case of any Law relating to any Plan) Mortgagee, any
Pass-Through Trustee, or Subordination Agent, or (c) violate or constitute any
default under (other than any violation or default that would not result in a
Materially Adverse Change to WTC, Mortgagee, any Pass-Through Trustee, or
Subordination Agent), or result in the creation of any Lien (other than the Lien
of the Mortgage) upon any property of WTC, Mortgagee, any Pass-Through Trustee,
Subordination Agent, or any of WTC's subsidiaries under any lease, loan, or
other agreement to which WTC, Mortgagee, any Pass-Through Trustee, or
Subordination Agent is a party or by which WTC, Mortgagee, any Pass-Through
Trustee, Subordination Agent, or any of their properties is bound.
6.4.4 APPROVALS
The execution and delivery by WTC, Mortgagee, each Pass-Through Trustee,
and Subordination Agent (as applicable) of the Mortgagee Agreements, the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements to which
it is a party, and the performance by WTC, Mortgagee, each Pass-Through Trustee,
and Subordination Agent (as applicable) of its obligations thereunder, do not
and will not require the consent, approval, or authorization of, the giving of
notice to, the registration with, the recording or filing of any document with,
or the taking of any other action in respect of (a) any trustee or other holder
of any Debt of WTC, or (b) any Government Entity of the United States or of
Delaware, other than filing the FAA-Filed Documents and the Financing
Statements.
6.4.5 VALID AND BINDING AGREEMENTS
The Mortgagee Agreements, the Pass-Through Trustee Agreements, and the
Subordination Agent Agreements have been duly authorized, executed, and
delivered by WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent
(as applicable), and (assuming the due authorization, execution, and delivery by
the other parties thereto) constitute legal, valid, and binding obligations of
WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent (as
applicable) and are enforceable against WTC, Mortgagee, each Pass-Through
Trustee, and Subordination Agent (as applicable) in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency, or other
similar Laws affecting the rights of creditors generally and general principles
of equity.
6.4.6 CITIZENSHIP
WTC is a Citizen of the United States.
6.4.7 NO LIENS
There are no Lessor Liens attributable to WTC in respect of all or any part
of the Trust Estate or the Collateral.
6.4.8 LITIGATION
There are no pending or, to WTC's Actual Knowledge, threatened actions or
proceedings against WTC, Mortgagee, any Pass-Through Trustee, or Subordination
Agent (as applicable) before any Government Entity that, if determined adversely
to WTC, Mortgagee, any Pass-Through Trustee, and Subordination Agent (as
applicable), would materially adversely affect the ability of WTC, Mortgagee,
any Pass-Through Trustee, or Subordination Agent to perform its obligations
under any of the Mortgagee Agreements, the Pass-Through Trustee Agreements, or
the Subordination Agent Agreements.
6.4.9 SECURITIES LAWS
Other than as contemplated herein and in the Operative Agreements, neither
WTC nor any Person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of the
Aircraft or any interest in the Collateral or any of the Equipment Notes or any
other interest in or security under the Mortgage for sale to, or solicited any
offer to acquire any such interest or security from, or has sold any such
interest or security to, any Person other than the Participants, except for the
offering and sale of the Pass-Through Certificates.
6.4.10 INVESTMENT
THE EQUIPMENT NOTES TO BE ACQUIRED BY SUBORDINATION AGENT ARE BEING
ACQUIRED BY IT FOR THE ACCOUNT OF THE PASS-THROUGH TRUSTEES, FOR INVESTMENT AND
NOT WITH A VIEW TO ANY RESALE OR DISTRIBUTION THEREOF; PROVIDED THAT, SUBJECT TO
THE TRANSFER RESTRICTIONS IN SS. 10.1.3, ITS DISPOSITION OF ITS EQUIPMENT NOTES
SHALL AT ALL TIMES BE WITHIN ITS CONTROL.
6.4.11 TAXES
There are no Taxes payable by any Pass-Through Trustee or WTC imposed by
Delaware or any political subdivision or taxing authority thereof in connection
with such Pass-Through Trustee's or WTC's execution, delivery, and performance
of this Agreement or any Pass-Through Trustee Agreement (other than franchise or
other taxes based on or measured by any fees or compensation received by any
such Pass-Through Trustee or WTC for services rendered in connection with the
transactions contemplated by any of the Pass-Through Trust Agreements), and
there are no Taxes payable by any Pass-Through Trustee or WTC imposed by
Delaware or any political subdivision thereof in connection with the
acquisition, possession, or ownership by any such Pass-Through Trustee of any of
the Equipment Notes (other than franchise or other taxes based on or measured by
any fees or compensation received by any such Pass-Through Trustee or WTC for
services rendered in connection with the transactions contemplated by any of the
Pass-Through Trust Agreements), and, assuming that the trusts created by the
Pass-Through Trust Agreements will not be taxable as corporations, but, rather,
that each will be characterized as a grantor trust under Part I, subpart E of
Subchapter J of the Code or as a partnership under Subchapter K of the Code,
such trusts will not be subject to any Taxes imposed by Delaware or any
political subdivision thereof.
6.4.12 CONTROL
WTC is not an Affiliate of Owner Participant or Owner Trustee.
6.4.13 BROKER'S FEES
No Person acting on behalf of WTC, Mortgagee, any Pass-Through Trustee, or
Subordination Agent is or will be entitled to any broker's fee, commission, or
finder's fee in connection with the Transactions.
7. COVENANTS
7.1 LESSEE'S COVENANTS
Lessee agrees for the benefit of Owner Participant, the Loan Participants,
Owner Trustee, and Mortgagee as follows:
7.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER
Lessee shall at all times maintain its corporate existence, except as
permitted byss. 13.2 of the Lease, and shall at all times remain a U.S. Air
Carrier.
7.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE
Lessee will give to Owner Participant, Owner Trustee, and Mortgagee timely
written notice of (but in any event within 90 days after) any relocation of its
chief executive office (as defined in UCC Article 9), and will promptly take any
action required by ss. 7.1.3(c) as a result of sucH relocation.
7.1.3 CERTAIN ASSURANCES
(a) Lessee shall duly execute, acknowledge, and deliver (or cause to be
executed, acknowledged, and delivered) all such further documents, and shall do
and cause to be done such further things, as Owner Participant, Owner Trustee,
or Mortgagee reasonably requests to accomplish the purposes of the Operative
Agreements, provided that no document so executed by Lessee will expand any
obligations or limit any rights of Lessee in respect of the Transactions.
(b) Lessee shall promptly take such action with respect to the recording,
filing, re-recording, and refiling of the Lease, the Trust Agreement, and the
Mortgage, and any supplements thereto, as shall be necessary to establish,
perfect, and protect Owner Trustee's interests and rights in and to the Aircraft
and under the Lease and the perfection and priority of the Lien created by the
Mortgage. Lessee shall furnish to Owner Participant or Owner Trustee such
information (other than with respect to the citizenship of Owner Participant and
Owner Trustee) in Lessee's possession or otherwise reasonably available to
Lessee and required to enable Owner Participant or Owner Trustee to apply to
register the Aircraft under the Transportation Code (subject to Lessee's rights
under ss. 7.1.2 of the Lease), and shall pay or cause to be paid all
out-of-pocket costs and expenses thereof (includinG reasonable attorneys' fees
and disbursements).
(c) Lessee will cause the FAA-Filed Documents, the Financing Statements,
and all continuation statements (and any amendments necessitated by any
combination, consolidation, or merger pursuant to ss. 13.2 of the Lease, or any
relocation of its chief executive office) in respect oF the Financing Statements
to be prepared and, subject only to the execution and delivery thereof by Owner
Trustee or Mortgagee (as applicable), duly and timely filed and recorded, or
filed for recordation, to the extent permitted under the Transportation Code
(with respect to the FAA-Filed Documents) or the UCC or similar law of any other
applicable jurisdiction (with respect to such other documents).
(d) If the Aircraft is registered in a country other than the United States
pursuant to ss. 7.1.2 of the Lease, Lessee will furnish tO Owner Trustee,
Mortgagee, and each Participant annually while the Aircraft is not
U.S.-registered (starting with the calendar year after such registration is
effected) an opinion of special counsel reasonably satisfactory to Owner
Participant and Mortgagee stating that, in the opinion of such counsel, either
(1) such action has been taken with respect to the recording, filing,
re-recording, and re-filing of the Operative Agreements and any supplements and
amendments thereto as is necessary to establish, perfect, and protect Owner
Trustee's and Mortgagee's right, title and interest in and to the Aircraft and
the Operative Agreements, reciting the details of such actions, or (2) no such
action is necessary to maintain the perfection of such right, title, and
interest.
7.1.4 SECURITIES LAWS
Neither Lessee nor any Person authorized to act on its behalf will directly
or indirectly offer any beneficial interest or Security relating to the
ownership of the Aircraft or the Lease or any interest in the Trust Estate and
Trust Agreement or any of the Equipment Notes or any other interest in or
security under the Mortgage for sale to, or solicit any offer to acquire any
such interest or security from, or sell any such interest or security to, any
Person in violation of the Securities Act or applicable state or foreign
securities Laws.
7.1.5 CERTIFICATION
Lessee shall cause the Aircraft to be duly certified by the FAA as to
airworthiness and shall, immediately upon registration of the Aircraft in Owner
Trustee's name, obtain an FAA airworthiness certificate for the Aircraft.
7.2 OWNER PARTICIPANT'S COVENANTS
Owner Participant agrees for the benefit of Lessee, and (except with
respect to ss. 7.2.4) Loan Participants, Owner Trustee, and Mortgagee, aS
follows:
7.2.1 LIENS
Owner Participant (a) (1) will not directly or indirectly create, incur,
assume, or suffer to exist any Lessor Lien attributable to it on or with respect
to all or any part of the Trust Estate, the Collateral, or the Aircraft, and (2)
will, at its own cost and expense, promptly take such action as is necessary to
discharge any Lessor Lien attributable to Owner Participant on all or any part
of the Trust Estate, the Collateral or the Aircraft; PROVIDED, that Owner
Participant shall not be required to comply with the foregoing provisions of
this clause (a) if it shall in good faith by appropriate proceedings contest
claims or charges resulting in any such Lien as long as such contest does not
involve any material danger of the sale, forfeiture, loss, or loss of use of the
Aircraft or the interest of Lessor, Mortgagee, or any Participant therein; and
(b) will hold harmless and indemnify Lessee, Owner Trustee, each Note Holder,
Mortgagee, each of their respective Affiliates, successors, and permitted
assigns, the Trust Estate, and the Collateral from and against (1) any and all
Expenses, (2) any reduction in the amount payable out of the Trust Estate or the
Collateral, and (3) any interference with the possession, operation, or other
use of all or any part of the Aircraft, in each case imposed on, incurred by, or
asserted against any of the foregoing as a consequence of any such Lessor Lien
(without regard to the proviso to the foregoing clause (a)).
7.2.2 REVOCATION OF TRUST AGREEMENT
(a) Owner Participant will comply with the provisions of the Trust
Agreement applicable to it, will not terminate or revoke the Trust Agreement or
the trusts created thereunder without the prior written consent of Lessee and
Mortgagee, and will not amend, modify, or supplement the Trust Agreement, or
waive any of the provisions thereof, if such amendment, modification,
supplement, or waiver would have any adverse effect (1) on Lessee, without the
consent of Lessee, or (2) on Mortgagee or any Note Holder, without the consent
of Mortgagee.
(b) Notwithstanding ss. 7.2.2(a), Owner Participant may at any time remove
Owner Trustee pursuant to ss. 9.1 of the Trust Agreement or terminate the Trust
Agreement pursuant to ss. 11.2 of the Trust Agreement.
7.2.3 CHANGE OF SITUS OF OWNER TRUST
If, at any time, any Tax Indemnitee or the Trust Estate becomes subject to
any Taxes for which it is indemnified pursuant to ss. 9.3 of thiS Agreement and
if, as a consequence thereof, Lessee requests that the situs of the Trust be
moved to another state in the United States from the state in which it is then
located, the situs of the Trust may be moved with the written consent of Owner
Participant (which consent shall not be unreasonably withheld) and Owner
Participant will take whatever action is reasonably necessary to accomplish such
removal; PROVIDED, that, in any event, (a) Lessee shall provide such additional
tax indemnification as Owner Participant and the Note Holders or the
Pass-Through Trustees reasonably request to cover any additional unindemnified
Taxes or loss of Tax benefits described in the assumptions in the Tax Indemnity
Agreement resulting from such change in situs, (b) the rights and obligations
under the Operative Agreements of Owner Participant, the Note Holders,
Pass-Through Trustees, and Mortgagee shall not be adversely affected as a result
of the taking of such action, (c) the Lien of the Mortgage, on the Collateral
shall not be adversely affected by such action, and Lessee and Owner Trustee
shall execute and deliver such documents as Mortgagee reasonably requests to
protect and maintain the perfection and priority of such Lien, (d) Owner
Participant, the Pass-Through Trustees, and Mortgagee shall receive an opinion
or opinions of counsel (which counsel is reasonably satisfactory to Owner
Participant, the Pass-Through Trustees, and Mortgagee), in scope, form, and
substance reasonably satisfactory to Owner Participant, the Pass-Through
Trustees, and Mortgagee, to the effect that (1) the Trust, as thus removed,
remains a validly-established trust, (2) any amendments to the Trust Agreement
necessitated by such removal have been duly authorized, executed, and delivered
and constitute valid and binding obligations of such parties, enforceable in
accordance with their terms, (3) covering such other matters as Owner
Participant, the Pass-Through Trustees, or Mortgagee reasonably request, (e) if
such removal involves the replacement of Owner Trustee, then Owner Participant,
the Pass-Through Trustees, and Mortgagee shall receive an opinion of counsel to
such successor Owner Trustee, in form and substance reasonably satisfactory to
Owner Participant, the Pass-Through Trustees, and Mortgagee, covering the
matters described in the opinion delivered pursuant to ss. 5.1.2(u)(4), and (f)
Lessee shall indemnify anD hold harmless Owner Participant, the Note Holders,
Pass-Through Trustees, FSB, and Owner Trustee, on a net after-tax basis, against
any and all reasonable out-of-pocket costs and expenses (including attorneys'
fees and disbursements), fees and expenses of any new owner trustee,
registration, recording, or filing fees, and taxes incurred by Owner
Participant, the Note Holders, Pass-Through Trustees, or Owner Trustee in
connection with such change of situs. Owner Participant agrees, for Lessee's
benefit, that Owner Participant will not consent to or direct a change in the
situs of the Trust Estate without Lessee's prior written consent.
7.2.4 COMPLIANCE WITH LEASE PROVISIONS
Owner Participant agrees, solely for Lessee's benefit, to comply with the
express provisions applicable to Owner Participant in the Lease.
7.2.5 SECURITIES ACT
Owner Participant will not directly or indirectly offer any beneficial
interest or security relating to the ownership of the Aircraft or any interest
in the Trust Estate or any of the Equipment Notes or any other interest in or
security under the Mortgage for sale to, or solicit any offer to acquire any
such interest or security from, or sell any such interest or security to, any
Person in violation of the Securities Act or applicable state or foreign
securities Laws, PROVIDED, that this ss. 7.2.5 shall not impose on Owner
Participant any responsibility with respect to any such offer, sale, oR
solicitation by any other party hereto.
7.2.6 REGARDING OWNER TRUSTEE
Owner Participant will direct Owner Trustee to perform its obligations
under each Owner Trustee Agreement.
7.3 FSB'S AND OWNER TRUSTEE'S COVENANTS
FSB and Owner Trustee agree for the benefit of Lessee, Owner Participant,
each Note Holder, and Mortgagee as follows:
7.3.1 LIENS
FSB (a) will not directly or indirectly create, incur, assume, or suffer to
exist any Lessor Lien attributable to it or Owner Trustee on all or any part of
the Trust Estate, the Collateral, or the Aircraft, (b) will, at its own cost and
expense, promptly take such action as is necessary to discharge any Lessor Lien
attributable to FSB or Owner Trustee on all or any part of the Trust Estate, the
Collateral, or the Aircraft, and (c) will personally hold harmless and indemnify
Lessee, Owner Participant, each Note Holder, Mortgagee, each of their
Affiliates, successors, and permitted assigns, the Trust Estate, and the
Collateral from and against (1) any and all Expenses, (2) any reduction in the
amount payable out of the Trust Estate or the Collateral, and (3) any
interference with the possession, operation, or other use of all or any part of
the Aircraft imposed on, incurred by, or asserted against any of the foregoing
as a consequence of any such Lessor Lien.
7.3.2 OTHER BUSINESS
Owner Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.
7.3.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE
FSB and Owner Trustee will give to Lessee, each Participant, and Mortgagee
30 days' prior written notice of any relocation of its chief executive office
(as defined in UCC Article 9), and will promptly take any action required by ss.
7.3.8 as a result of such relocation.
7.3.4 SECURITIES ACT
Neither FSB nor Owner Trustee will directly or indirectly offer any
beneficial interest or Security relating to the ownership of the Aircraft or any
interest in the Trust Estate or any of the Equipment Notes or any other interest
in or security under the Mortgage for sale to, or solicit any offer to acquire
any such interest or security from, or sell any such interest or security to,
any Person in violation of the Securities Act or applicable state or foreign
securities Laws, PROVIDED, that the foregoing shall not impose on FSB or Owner
Trustee any responsibility with respect to any such offer, sale, or solicitation
by any other party hereto.
7.3.5 PERFORMANCE OF AGREEMENTS
Owner Trustee shall perform its obligations under the Owner Trustee
Agreements in accordance with the terms thereof.
7.3.6 RELEASE OF LIEN OF MORTGAGE
In each instance referred to in the Lease in which a transfer of any
property is required to be made by Owner Trustee to Lessee or any other Person
(other than Mortgagee or Owner Participant), Owner Trustee shall, at Lessee's
request and expense, use reasonable efforts to procure from Mortgagee the prompt
release of the Lien of the Mortgage with respect to such property.
7.3.7 NOTICES; DOCUMENTS
If any claim with respect to any liabilities is filed against Owner Trustee
and Owner Trustee has Actual Knowledge thereof, then Owner Trustee shall
promptly notify Lessee in writing thereof. Owner Trustee further agrees to
provide to Lessee promptly any documents (including the certificate of aircraft
registration) that it receives from the FAA with respect to the Aircraft.
7.3.8 FILINGS
After the Delivery Date, Owner Trustee shall duly execute and deliver to
Lessee all filings and recordings (including all filings and UCC financing
statements under the Transportation Code and the UCC and any amendments to UCC
financing statements necessitated by any relocation of its chief executive
office), prepared and delivered to it by Lessee, required to perfect Owner
Trustee's title to the Aircraft and the liens of and security interests granted
by the Mortgage (or to maintain such perfection) and to make such title, liens,
and security interests valid and enforceable.
7.3.9 TRUST AGREEMENT
FSB and Owner Trustee hereby (a) agree for the benefit of Lessee, Loan
Participants, and Mortgagee not to amend, supplement, terminate, or otherwise
modify any provision of the Trust Agreement in a manner that adversely affects
the rights of any such party without the prior written consent of such party,
and (b) agree for the benefit of Lessee, Loan Participant, and Mortgagee not to
revoke the trust created by the Trust Agreement so long as the Mortgage remains
undischarged or if such revocation would have an adverse effect on Lessee.
Nothing in this Agreement shall impair any right under the Trust Agreement of
FSB to resign as Owner Trustee in accordance with the provisions of the Trust
Agreement.
7.4 WTC'S COVENANTS
WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent, each as
to itself, agree for the benefit of Lessee, Owner Participant, and Owner Trustee
as follows:
7.4.1 LIENS
Other than Liens arising in connection with the transactions contemplated
in the Operative Agreements, WTC (a) will not directly or indirectly create,
incur, assume, or suffer to exist any Lessor Lien attributable to it on or with
respect to all or any part of the Trust Estate, the Collateral, or the Aircraft,
(b) will, at its own cost and expense, promptly take such action as is necessary
to discharge any Lessor Lien attributable to WTC on all or any part of the Trust
Estate, the Collateral, or the Aircraft, and (c) will personally hold harmless
and indemnify Lessee, Owner Participant, each Note Holder, Owner Trustee, each
of their respective Affiliates, successors, and permitted assigns, the Trust
Estate, and the Collateral from and against (1) any and all Expenses, (2) any
reduction in the amount payable out of the Trust Estate or the Collateral, and
(3) any interference with the possession, operation, or other use of all or any
part of the Aircraft, imposed on, incurred by, or asserted against any of the
foregoing as a consequence of any such Lessor Lien.
7.4.2 SECURITIES ACT
WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent
(respectively) will not offer any beneficial interest or Security relating to
the ownership of the Aircraft or any interest in the Collateral or any of the
Equipment Notes or any other interest in or security under the Mortgage for sale
to, or solicit any offer to acquire any such interest or security from, or sell
any such interest or security to, any Person in violation of the Securities Act
or applicable state or foreign securities Laws, PROVIDED, that the foregoing
shall not impose on WTC any responsibility with respect to any such offer, sale,
or solicitation by any other party hereto.
7.4.3 PERFORMANCE OF AGREEMENTS
WTC, Mortgagee, each Pass-Through Trustee, and Subordination Agent
(respectively) shall perform its obligations under the Mortgage Agreements, the
Pass-Through Trustee Agreements, and the Subordination Agent Agreements in
accordance with their terms.
7.4.4 WITHHOLDING TAXES
WTC shall indemnify (on an after-tax basis) and hold harmless Lessee,
Lessor, and Owner Participant against any United States withholding taxes (and
related interest, penalties, and additions to tax) as a result of WTC's failure
to withhold on payments to any Note Holder who does not provide to Mortgagee
necessary certificates or forms to substantiate the right to exemption from such
withholding tax.
7.5 NOTE HOLDERS' COVENANTS
Each Note Holder (including Subordination Agent), as to itself only, agrees
for the benefit of Lessee, Owner Participant, Owner Trustee, and Mortgagee as
follows:
7.5.1 WITHHOLDING TAXES
Such Note Holder (if it is a Non-U.S. Person) agrees to indemnify (on an
after-tax basis) and hold harmless Lessee, Lessor, Owner Participant, and
Mortgagee against any United States withholding taxes (and related interest,
penalties, and additions to tax) as a result of the inaccuracy or invalidity of
any certificate or form provided by such Note Holder to Mortgagee in connection
with such withholding taxes. Any amount payable under this ss. 7.5.1 shall be
paid within 30 days after the pertinent Note Holder receives a written demand
therefor.
7.5.2 TRANSFER; COMPLIANCE
(a) Such Note Holder will (1) not transfer any Equipment Note or interest
therein in violation of the Securities Act or applicable state or foreign
securities Law; PROVIDED, that the foregoing provisions of this ss. 7.5.2(a)
shall not impose on such Note Holder any responsibility for any such offer,
sale, or solicitation by any other party hereto, and (2) perform and comply with
the obligations specified to be imposed on it (as a Note Holder) under the
Mortgage and the Equipment Note.
(b) Except as otherwise required by the terms of ss. 2.13 of the Mortgage
or ss. 11 hereof, such Note Holder will not sell, assign, convEy, exchange, or
otherwise transfer any Equipment Note or any interest in, or represented by, any
Equipment Note (this provision not being applicable to the Pass-Through
Certificates) unless the proposed transferee thereof first provides Lessee and
Owner Participant with both of the following:
(1) a written representation and covenant that either (aa) no portion of
the funds it uses to purchase, acquire, and hold such Equipment Note or interest
directly or indirectly constitutes, or may be deemed under the Code or ERISA or
any rulings, regulations, or court decisions thereunder to constitute, the
assets of any Plan, or (bb) the transfer, and subsequent holding, of such
Equipment Note or interest shall not involve or give rise to a transaction that
constitutes a prohibited transaction within the meaning of ERISA ss. 406 or CodE
ss. 4975(c)(1) involving Lessee, Owner Participant, a Pass-Through Trustee,
Subordination Agent, or the proposed transferee (other than A transaction that
is exempted from the prohibitions of such sections by applicable provisions of
ERISA or the Code or administrative exemptions or regulations issued
thereunder); and
(2) a written covenant that it will not transfer any Equipment Note or any
interest in, or represented by, any Equipment Note unless the subsequent
transferee also makes the representation described in clause (1) of this ss.
7.5.2(b) and agrees to comply with thiS clause (2).
7.6 OTHER AGREEMENTS
7.6.1 OWNER TRUSTEE IS OWNER FOR ALL PURPOSES
Lessee, Owner Participant, and Owner Trustee agree that for all purposes,
after the Closing, Owner Trustee will be the owner of the Aircraft (except that
Owner Participant will be the owner for income tax purposes) and Lessee will be
the lessee thereof. No transfer, by operation of Law or otherwise, of Owner
Participant's beneficial interest in and to the Trust Estate shall operate to
transfer legal title to any part of the Trust Estate to any transferee thereof.
7.6.2 COMMENCEMENT OF BANKRUPTCY PROCEEDINGS
Lessee, each Participant, each Note Holder, FSB, Owner Trustee, WTC, and
Mortgagee agree for the benefit of each of the others that it will not commence
or join in any proceeding under the Bankruptcy Code to commence a case under ss.
303 of the Bankruptcy Code against the Trust Estate. NothinG contained herein
shall be deemed to preclude any Participant, any Note Holder, FSB, Owner
Trustee, WTC, or Mortgagee from filing any claim against the Trust Estate in any
case commenced against the Trust Estate.
7.6.3 CERTAIN BANKRUPTCY MATTERS
If (a) all or any part of the Trust Estate becomes the property of, or
Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (b) pursuant to such
reorganization provisions (including Bankruptcy Code ss. 1111(b)), FSB or OwneR
Participant is required, by reason of FSB's or Owner Participant's being held to
have recourse liability to any Note Holder or Mortgagee directly or indirectly
(other than the recourse liability of FSB or Owner Participant under this
Agreement or the Mortgage or by separate agreement), to make payment on account
of any amount payable as principal, Make-Whole Amount (if any), interest, or
other amounts on the Equipment Notes, and (c) any Note Holder or Mortgagee
actually receives any Excess Amount (as defined below) which reflects any
payment by FSB or Owner Participant on account of clause (b) of this paragraph,
then such Note Holder or Mortgagee shall promptly refund to FSB or Owner
Participant (whichever shall have made such payment) such Excess Amount.
For purposes of this ss. 7.6.3, "EXCESS AMOUNT" means the amount by which
such payment exceeds the amount that would have been received by a NotE Holder
or Mortgagee if FSB or Owner Participant had not become subject to the recourse
liability referred to in clause (b) of the preceding paragraph. Nothing in this
ss. 7.6.3 shall prevent a Note Holder or Mortgagee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) oF FSB or Owner
Participant under this Agreement (other than as referred to in clause (b) of the
preceding paragraph) or the Mortgage (including any exhibits or annexes thereto)
or from retaining any amount paid by Owner Participant under ss. 2.13 or ss.
4.03 of the Mortgage.
7.6.4 QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING
(a) Each of Owner Participant, each Pass-Through Trustee, Subordination
Agent, each Note Holder, Owner Trustee, and Mortgagee agrees (as to itself) for
the benefit of Lessee that, unless a Lease Event of Default exists, such Person
shall not interfere (and shall not permit any Affiliate or other Person claiming
by, through, or under it to interfere) with Lessee's rights in accordance with
the Lease to the quiet enjoyment, possession, and use of the Aircraft during the
Term.
(b) Any assignment, sale, transfer, or other conveyance of the Aircraft by
Owner Trustee made pursuant to the terms of this Agreement or the Lease 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, as regards Owner Participant.
7.6.5 RELEASE OF LIEN OF MORTGAGE
Each of Lessee, Lessor, and Mortgagee agrees that in each instance referred
to in the Lease in which a transfer of any property is required to be made by
Lessor to Lessee or any other Person (other than Mortgagee), Mortgagee shall,
upon request of Lessor and compliance with the applicable provisions of the
Lease and the Mortgage (including payment of all amounts then due and payable to
each Liquidity Provider and the Policy Provider as Supplemental Rent), promptly
execute (at Lessee's cost and expense) such instruments as Lessor or Lessee
reasonably requests to evidence the release of the Lien of the Mortgage on such
property.
7.6.6 NON-RECOURSE
Loan Participant and Mortgagee agree that (a) obligations of Owner Trustee
under the Mortgage or any other Operative Agreement and with respect to the
Equipment Notes shall be non-recourse to Owner Participant and to FSB, and (b)
they will look solely to the income and proceeds from the Trust Estate and the
Collateral to the extent available for distribution to Note Holder or Mortgagee
as provided in the Mortgage, and neither Owner Participant nor FSB will be
personally liable to Loan Participant or Mortgagee for any amounts payable by
Owner Trustee under the Mortgage or any other Operative Agreement; PROVIDED,
that the foregoing is not intended nor shall it be construed to limit any
recourse liability of Owner Participant or FSB to the extent that such liability
is expressly set forth in this Agreement or in any of the Operative Agreements
or arises by reason of the breach of any representation or warranty or covenant
given by such Person (in the case of FSB, in its individual capacity).
7.6.7 OTHER DOCUMENTS; AMENDMENT
(a) Each of Owner Participant and Owner Trustee hereby agrees for the
benefit of Lessee, the Loan Participants, and Mortgagee not to amend,
supplement, or otherwise modify any provision of the Trust Agreement in a manner
that could adversely affect such party, without the prior written consent of
such party. Notwithstanding the foregoing, so long as the Lease has not been
terminated or expired, each Participant, Mortgagee, and Owner Trustee hereby
agree for the benefit of Lessee that, without Lessee's consent, they will not
amend, supplement, or otherwise modify (1) ss. 3, ss. 9, or ss. 2.05 of the
Mortgage, (2) any provision of any Operative Agreement that will affect the
stated principal amount of or premium or interest on the Equipment Notes, or (3)
any other provision of the Mortgage or Equipment Notes in a manner that could
adversely affect Lessee. Mortgagee and Owner Trustee agree to furnish promptly
to Lessee copies of any supplement, amendment, waiver, or modification of any of
the Operative Agreements to which Lessee is not a party. Each Loan Participant
agrees that it will not take any action in respect of the Collateral except
through Mortgagee pursuant to the Mortgage or as otherwise permitted by
Mortgage.
(b) Owner Trustee agrees to join with Lessee to the extent that action on
its part is necessary or appropriate (1) to cause the following to be duly
accomplished in accordance with applicable United States federal Law by the time
the Aircraft is delivered under this Agreement and the Lease: (aa) to apply to
register the Aircraft in Owner Trustee's name, and (bb) all related action
necessary in order for Lessee to have temporary or permanent authority to
operate the Aircraft as contemplated by the Lease, and (2) forthwith upon
delivery of the Aircraft under this Agreement and the Lease, to cause all
necessary documents to be duly filed for recording in accordance with applicable
United States federal Law.
7.6.8 CONSENTS
Each of each Participant, each Pass-Through Trustee, Subordination Agent,
Owner Trustee, and Mortgagee covenants and agrees, for Lessee's benefit, that it
shall not unreasonably withhold its consent to any consent or approval requested
of it or of Owner Trustee or Mortgagee under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.
7.6.9 INSURANCE
Each of Owner Participant, the Pass-Through Trustees, Subordination Agent,
and Owner Trustee agrees not to obtain or maintain insurance for its own account
as permitted by ss. 11.2 of the Lease if such insurance would limit, increase
the cost of, or otherwise adversely affect the coverage of anY insurance
required to be obtained or maintained by Lessee pursuant to ss. 11 and Annex D
of the Lease.
7.6.10 EXTENT OF NOTE HOLDER'S INTEREST
A Note Holder shall not, as such, have any further interest in, or other
right with respect to, the Trust Estate or the Collateral when and if the
principal and Make-Whole Amount (if any) of and interest on the Equipment Note
held by such Note Holder, and all other sums, then due and payable to such Note
Holder under any Operative Agreement, have been paid in full.
7.6.11 FOREIGN REGISTRATION
(a) Each Participant, Owner Trustee, and Mortgagee hereby agree for
Lessee's benefit that, subject to ss. 7.1.2 of the Lease, LesseE shall be
entitled to register the Aircraft or cause the Aircraft to be registered in a
country other than the United States, if:
(1) such registration is made only after the Tax Attribute Period, unless
Lessee prepays on a lump-sum basis any liability that would be due under the Tax
Indemnity Agreement as a result of such registration based upon the assumption
that such registration would continue for the remainder of the term of the
Permitted Sublease described in clause (3) below;
(2) no Special Default or Lease Event of Default exists at the time of such
registration;
(3) such proposed change of registration is made in connection with a
Permitted Sublease to a Permitted Air Carrier, and such country is such
Permitted Air Carrier's domicile;
(4) such country is a country with which the United States then maintains
normal diplomatic relations (or, if Taiwan, the United States then maintains
diplomatic relations at least as good as those in effect on the Delivery Date,
PROVIDED that Lessee may not effect such registration in Taiwan unless it has
obtained the prior written consent of Owner Participant, which Owner Participant
may withhold in its sole and absolute discretion); and
(5) Owner Participant, Owner Trustee, and Mortgagee receive an opinion of
counsel (subject to customary exceptions) reasonably satisfactory to Owner
Participant (and, while the Policy is in effect, the Policy Provider), addressed
to each such party, to the effect that:
(aa) such country recognizes Owner Trustee's ownership interest in the
Aircraft;
(bb) Lessee's obligations, and Owner Trustee's rights and remedies, under
the Lease are valid, binding, and enforceable under the laws of such
jurisdiction;
(cc) after giving effect to such change in registration, (x) Owner
Trustee's title continues as a valid and protected interest, (y) the Lien of the
Mortgage on Owner Trustee's right, title, and interest in and to the Aircraft
and the Lease continue as a valid and duly-perfected first-priority security
interest, and (z) all filing, recording, or other action necessary to protect
those matters addressed in (x) and (y) above have been accomplished (or, if such
opinion cannot be given at the time of such proposed change in registration
because such change in registration is not yet effective, (1) the opinion shall
detail what filing, recording, or other action is necessary, and (2) Owner
Participant, Owner Trustee and Mortgagee shall receive a certificate from Lessee
that all possible preparations to accomplish such filing, recording, and other
action are done, and such filing, recording, and other action are accomplished,
and a supplemental opinion to that effect shall be delivered to Owner
Participant, Owner Trustee and Mortgagee promptly after the effective date of
such change in registration;
(dd) it is not necessary, solely as a consequence of such change in
registration and without giving effect to any other activity of Owner Trustee,
Owner Participant, or Mortgagee (or any Affiliate thereof), for Owner Trustee,
Owner Participant, or Mortgagee (respectively) to qualify to do business in such
jurisdiction as a result of such reregistration or in order to exercise any
rights or remedies with respect to the Aircraft pursuant to the Lease;
(ee) there is no tort liability of the owner or lessor of an aircraft not
in possession thereof under the laws of such jurisdiction (it being agreed that,
if such latter opinion cannot be given in a form satisfactory to Owner
Participant, such opinion shall be waived if insurance reasonably satisfactory
to Owner Participant is provided to cover such risk); and
(ff) unless Lessee agrees to provide insurance covering the risk of
requisition of use of the Aircraft by the government of such country (so long as
the Aircraft is registered under the laws of such country), the laws of such
country require fair compensation by the government of such country payable in
currency freely convertible into Dollars and freely removable from such country
(without license or permit, unless Lessee before such proposed reregistration
has obtained such license or permit) for the taking or requisition by such
government of such use.
(b) In addition, as a condition precedent to any change in registration,
Lessee shall give to Owner Participant and Mortgagee assurances reasonably
satisfactory to each of them:
(1) that the provisions ofss. 11 of the Lease have been complied with after
giving effect to such change of registration;
(2) of Lessee's payment, on an after-tax basis, of all reasonable
out-of-pocket expenses of Lessor, each Participant, and Mortgagee in connection
with such change of registry, including (aa) the reasonable fees and
disbursements of counsel to Lessee, Lessor, and Mortgagee, (bb) any filing or
recording fees, Taxes, or similar payments incurred in connection with the
change of registration of the Aircraft and the creation and perfection of the
security interest therein in favor of Mortgagee for the benefit of Note Holders,
and (cc) all costs and expenses incurred in connection with any filings
necessary to continue in the United States the perfection of the security
interest in the Aircraft and the Lease in favor of Mortgagee for the benefit of
Note Holders; and
(3) that the tax and other indemnities in favor of each Person named as an
indemnitee under any other Operative Agreement afford to each such Person
substantially the same protection as provided before such change of registration
(or Lessee agrees to provide, or cause to be provided, additional indemnities
that, together with such original indemnities, in the reasonable judgment of
Owner Participant, Lessor, and Mortgagee, afford such protection).
7.6.12 OTHER COMMERCIAL RELATIONS UNAFFECTED
Notwithstanding anything to the contrary set forth in any Operative
Agreement:
(a) except as set forth in the Purchase Agreement Assignment, nothing in
the Operative Agreements shall constitute or be deemed to be a waiver by Lessee
of any rights, remedies, or claims it may have against Airframe Manufacturer or
Engine Manufacturer or any subcontractor or supplier of either; and the
Operative Agreements do not and shall not be construed or deemed to create any
rights, waivers, immunities, or indemnities in favor of Airframe Manufacturer,
Engine Manufacturer, or any subcontractor or supplier of either with respect to
any such rights, remedies, or claims of Lessee; and
(b) neither Airframe Manufacturer, by its execution and delivery of the
Consent and Agreement, nor Engine Manufacturer, by its execution and delivery of
the Engine Manufacturer Warranty Agreement, shall be deemed to have waived any
rights, remedies, or claims which Airframe Manufacturer or Engine Manufacturer
(or any subcontractor or supplier of either) has against Lessee; and the
Operative Agreements do not and shall not be construed or deemed to create any
rights, waivers, immunities, or indemnities in favor of Lessee with respect to
any such rights, remedies, or claims of Airframe Manufacturer or Engine
Manufacturer (or any subcontractor or supplier of either).
7.6.13 INTEREST IN CERTAIN ENGINES
Each Participant, Owner Trustee, and Mortgagee agree, for the benefit of
each lessor, conditional seller, or secured party of any airframe or engine
leased to, purchased by, or owned by Lessee or any Permitted Sublessee subject
to a lease, conditional sale, or other security agreement that it will not
acquire or claim, as against such lessor, conditional seller, or secured party,
any right, title, or interest in any engine as the result of the installation of
such engine on the Airframe at any time while such engine is subject to such
lease, conditional sale, or other security agreement and owned by such lessor or
conditional seller or subject to a security interest in favor of such secured
party.
8. CONFIDENTIALITY
Lessee, Owner Participant, Note Holders, Owner Trustee, and Mortgagee shall
keep Annexes B, C, and D and Schedules 1, 2, 3, and 4 to the Lease, the
Participation Agreement, the Purchase Agreement Assignment, and the Tax
Indemnity Agreement confidential, and shall not disclose them, or cause them to
be disclosed, to any Person, except (a) to prospective and permitted transferees
of Lessee's, Owner Participant's, a Note Holder's, each Liquidity Provider's,
Policy Provider's, Owner Trustee's, Mortgagee's, or other Mortgage Indemnitee's
interest or their counsel, independent insurance brokers, auditors, or other
agents who agree to hold such information confidential, (b) to Lessee's, Owner
Participant's, a Note Holder's, each Liquidity Provider's, Policy Provider's, a
Pass-Through Trustee's, Owner Trustee's, Mortgagee's, or other Mortgage
Indemnitee's counsel, independent insurance brokers, auditors, or other agents,
Affiliates, or investors who agree to hold such information confidential, (c) as
may be required by any statute, court, or administrative order or decree, legal
process, or governmental ruling or regulation, including those of any applicable
insurance regulatory bodies (including the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors, or any stock exchange, (d) with respect to Lessee and Owner
Participant, by mutual agreement of such parties, (e) with respect to a Note
Holder or any Pass-Through Trustee, to a nationally-recognized rating agency for
the purpose of obtaining a rating on the Equipment Notes or the Pass-Through
Trust Certificates or to support an NAIC rating for the Equipment Notes, or (f)
to such other Persons as are reasonably deemed necessary by the disclosing party
in order to protect the interests of such party or for the purposes of enforcing
such documents by such party; PROVIDED, that any and all disclosures permitted
by clauses (c), (d), (e), and (f) above shall be made only to the extent
necessary to meet the specific requirements or needs of the Persons making such
disclosures.
9. INDEMNIFICATION AND EXPENSES
9.1 GENERAL INDEMNITY
9.1.1 INDEMNITY
Whether or not any of the Transactions are consummated, Lessee shall
indemnify, protect, defend, and hold harmless each Indemnitee from, against, and
in respect of, and shall pay on a net after-tax basis, any and all Expenses of
any kind or nature whatsoever, including those imposed on, incurred or suffered
by, or asserted against any Indemnitee, relating to, based on, resulting from,
or arising out of or in connection with, in each case directly or indirectly,
any one or more of the following:
(a) the Operative Agreements, the Pass-Through Agreements, or the
enforcement of any of the terms of any of the Operative Agreements or the
Pass-Through Agreements;
(b) the Aircraft, the Airframe, any Engine, or any Part, including, with
respect thereto, (1) the manufacture, design, purchase, acceptance,
nonacceptance, rejection, ownership, registration, reregistration,
deregistration, delivery, nondelivery, lease, sublease, assignment, possession,
use, non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage, airworthiness,
replacement, repair, sale, substitution, return, abandonment, redelivery, or
other disposition of the Aircraft, any Engine, or any Part, (2) any claim or
penalty arising out of violations of applicable Laws, (3) tort liability,
whether or not arising out of the negligence of any Indemnitee (whether active,
passive, or imputed, and including strict liability and liability without
fault), (4) death or property damage of passengers, shippers, or others, (5)
environmental control, noise, or pollution, (6) any claim for patent, trademark,
or copyright infringement and (7) any Liens in respect of the Aircraft, any
Engine, or any Part;
(c) the offer, sale, or delivery of any Equipment Notes, Pass-Through
Certificates, or any interest therein or represented thereby; and
(d) any breach of or failure to perform or observe, or any other
noncompliance with, any covenant, agreement, or other obligation to be performed
by Lessee under any Lessee Operative Agreement, or any Pass-Through Agreement,
or the falsity of any representation or warranty of Lessee in any Lessee
Operative Agreement or any Pass-Through Agreement, other than in the Tax
Indemnity Agreement.
9.1.2 EXCEPTIONS
Notwithstanding anything in ss. 9.1.1, Lessee shall not be required
to indemnify, protect, defend, and hold harmless any Indemnitee pursuant tO ss.
9.1.1 against any Expense of such Indemnitee:
(a) for any Taxes or a loss of Tax benefit, whether or not Lessee is
required to indemnify therefor pursuant to ss. 9.3 or the TaX Indemnity
Agreement (other than amounts required to be paid to render the payment of any
Expense payable under ss. 9.1.1 on aN after-tax basis);
(b) except to the extent attributable to acts or events occurring prior
thereto, acts or events (other than acts or events related to Lessee's
performance of its obligations pursuant to the terms of the Lessee Operative
Agreements) that occur after: (1) with respect to the Airframe, any Engine, or
any Part, the return of possession (which, if the Aircraft is placed in storage
as provided inss. 5 of the Lease, is the date that the Aircraft is placed in
storage) of such Airframe, Engine, or Part pursuant to the Lease (other than
pursuant toss. 15 thereof, in which case Lessee's liability under thisss. 9.1
shall survive for so long as Lessor iS entitled to exercise remedies under
suchss. 15 or in connection with Lessee in the event of exercise of its early
termination option underss. 9 of the Lease or its purchase options underss. 17.3
of the Lease), and (2) the termination of the Term in accordance witH the Lease;
(c) to the extent attributable to any Transfer (voluntary or involuntary)
by or on behalf of such Indemnitee of any Equipment Note or interest therein,
except (1) for out-of-pocket costs and expenses incurred as a result of any such
Transfer pursuant to the exercise of remedies under any Operative Agreement
resulting from a Lease Event of Default, and (2) as otherwise required by the
terms of ss. 2.15 of the Mortgage or ss. 11 hereof;
(d) to the extent attributable to any Transfer (voluntary or involuntary)
by or on behalf of Owner Participant of any interest in the Aircraft or the
Trust Estate, except for out-of-pocket costs and expenses incurred as a result
of such Transfer during the existence of a Lease Event of Default (or in
connection with Lessee in the event of exercise of its early termination option
under ss. 9 of the Lease or its purchase options under ss. 17.3 of the Lease);
(e) to the extent attributable to the gross negligence or willful
misconduct of such Indemnitee or any related Indemnitee (as defined below)
(other than gross negligence or willful misconduct imputed to such Person by
reason of its interest in the Aircraft or any Operative Agreement);
(f) in the case of FSB, to the extent attributable to matters enumerated in
the proviso toss. 14;
(g) to the extent attributable to the incorrectness or breach of any
representation or warranty of such Indemnitee or any related Indemnitee
contained in or made pursuant to any Operative Agreement or any Pass-Through
Agreement;
(h) to the extent attributable to the failure, by such Indemnitee or any
related Indemnitee, to perform or observe any agreement, covenant, or condition
on its part to be performed or observed in any Operative Agreement or any
Pass-Through Agreement;
(i) to the extent attributable to the offer or sale by such Indemnitee or
any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the
Pass-Through Trust Certificates, the Trust Estate, or the Trust Agreement, or
any similar interest, in violation of the Securities Act or other applicable
federal, state, or foreign securities Laws (other than any thereof caused by the
acts or omissions of Lessee or any person acting on behalf of Lessee);
(j) (1) with respect to Mortgagee, to the extent attributable to its
negligence or willful misconduct in the distribution of funds received and
distributable by it in accordance with the Mortgage, (2) with respect to Owner
Trustee, to the extent attributable to its negligence or willful misconduct in
the distribution of funds received and distributable by it in accordance with
the Trust Agreement, (3) with respect to Subordination Agent, to the extent
attributable to its negligence or willful misconduct in the distribution of
funds received and distributable by it in accordance with the Intercreditor
Agreement, (4) with respect to the Pass-Through Trustees, to the extent
attributable to its negligence or willful misconduct in the distribution of
funds received and distributable by it in accordance with the Pass-Through Trust
Agreements, (5) with respect to Escrow Agent, to the extent attributable to its
negligence or willful misconduct in the payment of funds received and payable by
it in accordance with any Escrow Agreement, (6) with respect to Depository, to
the extent attributable to Depository's failure to pay funds payable by it in
accordance with any Deposit Agreement, and (7) with respect to Paying Agent, to
the extent attributable to its negligence or willful misconduct in the
distribution of funds received and distributable by it in accordance with any
Escrow Agreement,
(k) other than during the existence of a Lease Event of Default, to the
extent attributable to the authorization or giving or withholding of any future
amendments, supplements, waivers, or consents with respect to any Operative
Agreement or Pass-Through Agreement, other than any requested by Lessee or
required by or made pursuant to the terms of the Operative Agreements or
Pass-Through Agreements (unless such requirement results from the actions of an
Indemnitee not required by or made pursuant to the Operative Agreements or the
Pass-Through Agreements);
(l) to the extent attributable to any amount which any Indemnitee expressly
agrees to pay or such Indemnitee expressly agrees shall not be paid by or be
reimbursed by Lessee;
(m) to the extent that it is an ordinary and usual operating or overhead
expense of such Indemnitee;
(n) with respect to Owner Participant or Owner Trustee, or any related
Indemnitee, to the extent attributable to the deregistration of the Aircraft
under the Transportation Code as a result of the failure of such Person (or any
related Indemnitee of such Person) to be a Citizen of the United States as a
result of any act (other than reregistration of the Aircraft pursuant to ss.
7.1.2 of thE Lease) of Owner Participant or Owner Trustee or any related
Indemnitee of such Person (not taken at the request of Lessee);
(o) for any Lessor Lien attributable to such Indemnitee or any related
Indemnitee;
(p) to the extent constituting principal, Make-Whole Amount, or interest on
the Equipment Notes attributable solely to a Mortgage Event of Default not
constituting a Lease Event of Default; or
(q) to the extent incurred by or asserted against an Indemnitee other than
Owner Participant (but without limiting the other provisions of this ss. 9.1.2,
including clauses (g) and (h), as to Owner Participant) as a result of any
"prohibited transaction", within thE meaning of ERISA ss. 406 or Code ss.
4975(c)(1).
With respect to the Pass-Through Indemnitees, Lessee's obligations under
this ss. 9.1 shall be limited to the same extent that Lessee'S obligations are
limited in clause (5) of the definition of Supplemental Rent. In addition,
"Expenses" payable by Lessee pursuant to this ss. 9.1 shall bE deemed not to
include amounts payable under clauses (2), (3), (4), and (5) of the definition
of Supplemental Rent in the Lease, the "Lease" for any other "Leased Aircraft",
or the third paragraph of ss. 2.02 of any "Owned Aircraft Indenture" (each as
defined in the Note Purchase Agreement), in each case, assuming each such
definition or third paragraph is in the form attached as Exhibit A-1 or C-2, as
the case may be, to the Note Purchase Agreement as originally in effect (which
amounts shall be payable as Supplemental Rent or "Supplemental Rent" under a
"Lease", or pursuant to ss. 2.02 of the Mortgage, aS applicable).
For purposes of this ss. 9.1, a Person shall be considered a
"related Indemnitee" of an Indemnitee if that Person is an Affiliate or employer
oF such Indemnitee, a director, officer, employee, or agent of such Indemnitee
or any such Affiliate, or a successor or permitted assignee of any of the
foregoing; PROVIDED, that Owner Trustee and FSB shall not be deemed to be
related Indemnitees of Owner Participant merely because of their trust or
fiduciary relationships.
9.1.3 SEPARATE AGREEMENT
This Agreement constitutes a separate agreement with respect to each
Indemnitee, and is enforceable directly by each such Indemnitee.
9.1.4 NOTICE
If an Indemnitee makes a claim for any Expense indemnifiable under this ss.
9.1, such Indemnitee shall give prompt written notice thereof tO Lessee.
Notwithstanding the foregoing, any Indemnitee's failure to notify Lessee as
provided in this ss. 9.1.4, or in ss. 9.1.5, shall not release Lessee fRom any
of its obligations to indemnify such Indemnitee hereunder, except to the extent
that such failure results in an additional Expense to Lessee (in which event
Lessee shall not be responsible for such additional expense) or materially
impairs Lessee's ability to contest such claim.
9.1.5 NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS; LIMITATIONS
(a) If any action, suit, or proceeding for which Lessee is responsible
under this ss. 9.1 is brought against any Indemnitee, such Indemnitee shall
notify Lessee of the commencement thereof, and Lessee may, at its expense,
participate in and, to the extent that it so desires (subject to the provisions
of the following paragraph), assume and control its defense and, subject to ss.
9.1.5(c), settle or compromise it. Unless OwneR Participant agrees in writing
otherwise, no settlement of any claim hereunder may require Owner Participant to
agree to any remedy apart from the payment of money damages (for which such
payment of money damages Lessee will in any event indemnify the Indemnitees).
(b) Lessee or its insurer(s) shall have the right, at its or their expense,
to investigate or, if Lessee or its insurer(s) agree not to dispute liability to
the Indemnitee giving notice of such action, suit, or proceeding under this ss.
9.1.5 for indemnification hereunder or under anY insurance policies pursuant to
which coverage is sought, control the defense of, any action, suit, or
proceeding, relating to any Expense for which indemnification is sought pursuant
to this ss. 9.1, and each Indemnitee shall cooperate with Lessee or its
insurer(s) with respect thereto; PROVIDED, thaT Lessee shall not be entitled to
control the defense of any such action, suit, or proceeding, or to settle or
compromise any such Expense, (i) while any Special Default or Lease Event of
Default under ss. 14.1 of the Lease exists, or (ii) if such action, suit, or
proceeding will involve a material risk of thE sale, forfeiture, or loss of, or
the creation of any Lien (other than a Permitted Lien) on the Aircraft, the
Trust Estate, or any part thereof, unless Lessee shall have posted a bond or
other security or collateral satisfactory to Owner Participant and Mortgagee in
respect to such risk, or (iii) if such action, suit, or proceeding could in the
good faith opinion of such Indemnitee entail any risk of criminal liability or
material civil liability or present a conflict of interest making separate
representation necessary. In connection with any such Lessee-controlled action,
suit, or proceeding, such Indemnitee shall have the right to participate
therein, at its sole cost and expense, with counsel reasonably satisfactory to
Lessee, provided that such Indemnitee's participation does not, in the
reasonable opinion of the independent counsel appointed by Lessee or its
insurers to conduct such proceedings, interfere with the defense of such case.
(c) In no event shall any Indemnitee enter into a settlement or other
compromise with respect to any Expense without Lessee's prior written consent
(which shall not be unreasonably withheld or delayed), unless such Indemnitee
waives its right to be indemnified with respect to such Expense under this ss.
9.1.
(d) To the extent that any Expense indemnified by Lessee hereunder may be
covered by insurance maintained by Lessee, at Lessee's expense, each Indemnitee
agrees to cooperate with the insurers in the exercise of their rights to
investigate, defend, or compromise that Expense as may be required to retain the
benefits of the insurance for that Expense.
(e) If an Indemnitee is not a party to this Agreement, Lessee may require
that Indemnitee to agree in writing to the terms of this ss. 9 and ss. 15.8
before making any payment to such Indemnitee under this ss. 9.
(f) Nothing herein shall be deemed to be an assumption by Lessee of
obligations of Owner Trustee with respect to, or a guarantee by Lessee of, any
amounts payable by Owner Trustee upon Equipment Notes or a guarantee of any
residual value of the Aircraft.
(g) Nothing in this ss. 9.1.5 shall require an Indemnitee to contest any
Expense or to assume responsibility for or control of any judicial proceeding
with respect thereto.
9.1.6 INFORMATION
Lessee will provide the relevant Indemnitee with such information not
within the control of such Indemnitee (but in Lessee's control or reasonably
available to Lessee) which such Indemnitee reasonably requests, and will
otherwise cooperate with such Indemnitee so as to enable such Indemnitee to
fulfill its obligations under ss. 9.1.5 and to control or participate in any
proceeding to the extent permitted by ss. 9.1.5. The IndemniTee shall supply
Lessee with such information not within the control of Lessee (but in such
Indemnitee's control or reasonably available to such Indemnitee) which Lessee
reasonably requests to control or participate in any proceeding to the extent
permitted by ss. 9.1.5.
9.1.7 EFFECT OF OTHER INDEMNITIES; SUBROGATION; FURTHER ASSURANCES
Upon payment in full by or on behalf of Lessee of any indemnity provided
for under this Agreement, without any further action and to the full extent
permitted by Law, Lessee will be subrogated to all rights and remedies of the
Person indemnified (other than with respect to any of such Indemnitee's
insurance policies or in connection with any indemnity claim of such Indemnitee
under ss. 5.03 or ss. 7 of the Mortgage or ss. 5.3 or ss. 7 of the Trust
Agreement) in respect of the matter as to which such indemnity was paid. Each
Indemnitee will give such further assurances or agreements and cooperate with
Lessee to permit Lessee to pursue any such claims, to the extent reasonably
requested by Lessee and at Lessee's expense.
9.1.8 REFUNDS
If an Indemnitee receives any refund, in whole or in part, with respect to
any Expense paid by or on behalf of Lessee hereunder, that Indemnitee will
promptly pay the amount refunded (but not an amount in excess of the amount
Lessee or any of its insurers has paid in respect of such Expense) over to
Lessee unless a Lease Event of Default exists, in which case such amount shall
be paid over to Owner Trustee (or, if the Mortgage has not been discharged, to
Mortgagee) to hold as security for Lessee's obligations under the Lessee
Operative Agreements or, if requested by Lessee, applied to satisfy those
obligations. Any subsequent loss of such recovery or tax benefit or refund shall
be subject to the provisions of ss. 9.1 and ss. 9.3.
9.2 EXPENSES
9.2.1 INVOICES AND PAYMENT
Each of Owner Trustee, Mortgagee, Owner Participant, the Pass-Through
Trustees, and Subordination Agent shall promptly submit to Lessee for its prompt
approval (which shall not be unreasonably withheld) copies of invoices in
reasonable detail of the Transaction Expenses for which it is responsible for
providing information as they are received (and not later than the 90th day
after the Delivery Date). If so submitted and approved, Owner Participant agrees
promptly (and not later than the later of (i) the 105th day after the Delivery
Date and (ii) the tenth Business Day following such approval) to pay such
Transaction Expenses . Notwithstanding the foregoing, Lessee at its sole option
shall have the right to pay directly any and all Transaction Expenses payable to
Lessee Advisor or Lessee's counsel or (if such payment does not result in
adverse tax consequences to Owner Participant) to any other Person. If Owner
Participant fails to pay any Transaction Expense that it is obligated to pay
hereunder, Lessee shall pay such Transaction Expense. Any such payment by Lessee
shall not affect Owner Participant's obligations or Lessee's rights against
Owner Participant for its failure to make any such payment.
9.2.2 PAYMENT OF OTHER EXPENSES
Lessee shall pay (a) the ongoing fees and expenses of Owner Trustee and
Mortgagee, and (b) all reasonable out-of-pocket costs and expenses (including
the reasonable fees and disbursements of counsel) incurred by any Participant
attributable to (1) any transfer of title to the Aircraft or any Engine
contemplated by ss. 4.5 of the Lease, or (2) any waiver, amendment, or
modification of any Operative Agreement to the extent requested by Lessee.
9.2.3 INDEMNIFICATION INTEREST
Lessee will pay to each Indemnitee upon demand, to the extent permitted by
applicable Law, interest at the Past Due Rate on any amount of indemnity not
paid when due pursuant to this ss. 9 until the same shall be paid.
9.3 GENERAL TAX INDEMNITY
9.3.1 GENERAL
Except as provided in ss. 9.3.2, Lessee agrees that each payment of Rent
paid by Lessee pursuant to the Lease, and any other payment or indemnitY paid by
Lessee to a Tax Indemnitee under any Operative Agreement, shall be free of all
withholdings or deductions with respect to Taxes of any nature, and if Lessee is
required by applicable law to make any such withholding or deduction for any
such payment, (a) Lessee shall make all such withholdings or deductions, (b) the
amount payable by Lessee shall be increased so that, after making all required
withholdings or deductions, such Tax Indemnitee receives the same amount that it
would have received had no such withholdings or deductions been made, and (c)
Lessee shall pay the full amount withheld or deducted to the relevant Taxing
Authority in accordance with applicable law. Lessee further agrees that, if it
is required to withhold from any payment of Basic Rent, Stipulated Loss Value
(and amounts determined by reference thereto), and amounts payable upon exercise
of Lessee's purchase option pursuant to ss. 17.3 of the Lease, any Tax imposed
upon Owner Participant or Owner Trustee (including any withholding Tax based on
income or receipts of Owner Participant or Owner Trustee), and such Tax is
excluded from indemnification pursuant to ss. 9.3.2, Lessee shall pay such
additional amount (if any) required so that thE total amount paid by Lessee
(after making all required withholdings) is equal to (assuming timely payment of
the Equipment Notes before the relevant Payment Date) the aggregate principal
amount of scheduled installments due on the Equipment Notes outstanding on the
relevant Payment Date, together with accrued and unpaid interest, due on the
Equipment Notes; and Owner Participant or Owner Trustee (as applicable) shall
reimburse Lessee for any such additional amounts within two Business Days after
demand therefor. Except as provided in ss. 9.3.2, and whether or not any of the
Transactions arE consummated, Lessee shall pay, indemnify, protect, defend, and
hold harmless on an after-tax basis each Tax Indemnitee from all Taxes imposed
by any Taxing Authority imposed on or asserted against any Tax Indemnitee or the
Aircraft, the Airframe, any Engine, or any Part, or any interest in any of the
foregoing (whether or not indemnified against by any other Person), upon or with
respect to the Operative Agreements and the Pass-Through Agreements, their
execution, or the transactions or payments contemplated thereby, including any
Tax imposed upon or with respect to (w) the Aircraft, the Airframe, any Engine,
any Part, any Operative Agreement (including any Equipment Notes, their
issuance, acquisition, transfer or refinancing or the payment of principal,
interest, premium or other amounts with respect thereto), any Pass-Through
Agreement, any data, or any other thing delivered or to be delivered under an
Operative Agreement, (x) the purchase, manufacture, acceptance, rejection, sale,
transfer of title, return, ownership, mortgaging, delivery, transport, charter,
rental, lease, re-lease, sublease, assignment, possession, repossession,
presence, use, condition, storage, preparation, maintenance, modification,
alteration, improvement, operation, registration, transfer or change of
registration, reregistration, repair, replacement, overhaul, location, control,
imposition of any Lien (other than a Lessor Lien), financing, refinancing
requested by Lessee, abandonment, or other disposition of the Aircraft, the
Airframe, any Engine, any Part, any data, or any other thing delivered or to be
delivered under an Operative Agreement, (y) rent, interest, fees, or other
income, proceeds, receipts, or earnings, whether actual or deemed, arising upon,
in connection with, or in respect of any of the Operative Agreements (including
the property or income or other proceeds with respect to property held as part
of the Trust Estate) or the transactions contemplated thereby, or (z) the
Pass-Through Certificates, their issuance or acquisition, or the payment of any
amounts thereof.
9.3.2 CERTAIN EXCEPTIONS
The provisions of ss. 9.3.1 shall not apply to, and Lessee shall have no
liability hereunder for, Taxes:
(a) imposed on a Tax Indemnitee by the federal government of the United
States or any Taxing Authority or governmental subdivision of the United States
or any state or local Taxing Authority (1) on, based on, or measured by gross or
net income or gross or net receipts, including capital gains taxes, excess
profits taxes, minimum taxes from tax preferences, alternative minimum taxes,
branch profits taxes, accumulated earnings taxes, personal holding company
taxes, succession taxes and estate taxes, and any withholding taxes on, based
on, or measured by gross or net income or receipts, or (2) on, or with respect
to, or measured by capital or net worth or in the nature of a franchise tax or a
tax for the privilege of doing business (other than, in the case of clause (1)
or (2), Taxes in the nature of sales, use, license, value added (to the extent
not imposed as a substitute for an income tax), transfer, stamp, ad valorem, or
property Taxes);
(b) imposed on a Tax Indemnitee by any Taxing Authority or governmental
subdivision thereof or therein outside of the United States (including any
Taxing Authority in or of a territory, possession, or commonwealth of the United
States) (1) on, based on, or measured by gross or net income or receipts,
including capital gains taxes, excess profits taxes, minimum taxes from tax
preferences, alternative minimum taxes, branch profits taxes, accumulated
earnings taxes, personal holding company taxes, succession taxes and estate
taxes, and any withholding taxes on, based on, or measured by gross or net
income or receipts, or (2) on, or with respect to, or measured by capital or net
worth or in the nature of a franchise tax or a tax for the privilege of doing
business (other than, in the case of clause (1) or (2), Taxes in the nature of
(aa) sales, use, license, value added (to the extent not imposed as a substitute
for an income tax), transfer, stamp, ad valorem, or property Taxes, or (bb) any
Taxes imposed by any Taxing Authority (other than a Taxing Authority within
whose jurisdiction such Tax Indemnitee is incorporated or organized or maintains
its principal place of business) if such Tax Indemnitee would not have been
subject to such Taxes by such jurisdiction but for (i) the location,
registration, use, or operation of the Aircraft, the Airframe, any Engine, or
any Part thereof by a Lessee Person within the jurisdiction of the Taxing
Authority imposing such Tax, or (ii) the activities of any Lessee Person (except
for activities of a Lessee Person who is not an Affiliate, successor, or assign
of Lessee acting in its capacity other than as a Lessee Person, which activities
are unrelated to the transactions contemplated by the Operative Agreements) in
such jurisdiction, including use of any other aircraft by Lessee in such
jurisdiction, (iii) the status of any Lessee Person as a foreign entity or as an
entity owned in whole or in part by foreign persons, (iv) Lessee's having made
(or having been deemed to have made) payments to such Tax Indemnitee from the
relevant jurisdiction, or (v) in the case of the Pass-Through Trustees, any
Participant, or any related Tax Indemnitee, Lessee's being incorporated,
organized, or maintaining a place of business in such jurisdiction);
(c) on, with respect to, or measured by any trustee fees, commissions,
premiums, or compensation received by Owner Trustee, Pass-Through Trustee,
Subordination Agent, Policy Provider or Mortgagee;
(d) on the Trust or the Trust Estate that result from treatment of the
Trust or the Trust Estate as an entity, such as a corporation, separate and
apart from Owner Participant;
(e) that are being contested as provided inss. 9.3.4 during the pendency of
such contest;
(f) imposed on any Tax Indemnitee to the extent that such Taxes result from
the gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof (other than the gross negligence or willful misconduct imputed
to such Tax Indemnitee by reason of such Tax Indemnitee's participation in the
transactions contemplated by the Operative Agreements);
(g) imposed on or with respect to a Tax Indemnitee (including the
transferee in those cases in which the Tax on transfer is imposed on, or is
collected from, the transferee) as a result of a transfer or other disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee (or, in the case of Owner Participant, by Owner Trustee, or, in
the case of Taxes imposed on a transferee, by the transferor) of any interest in
the Aircraft, the Airframe, any Engine, or any Part, the Rent (other than the
assignment of Rent to Mortgagee pursuant to the Mortgage), the Trust, the Trust
Estate, the Collateral, the Lease, or any interest arising under the Operative
Agreements or any Equipment Note or a transfer or disposition (including a
deemed transfer or disposition) of any interest in a Tax Indemnitee (other than
(1) a substitution, replacement, modification, pooling, or improvement of the
Aircraft, the Airframe, any Engine or any Part by a Lessee Person that is
treated for Tax purposes as a transfer or disposition, (2) a transfer pursuant
to an exercise of remedies upon a then-existing Lease Event of Default, (3) a
transfer pursuant toss. 17.3 orss. 9 of the Lease, or (4) a transfer pursuant to
an Event of Loss);
(h) in excess of those that would have been imposed had there not been a
transfer or other disposition by or to such Tax Indemnitee or a related Tax
Indemnitee described in clause (g) of this ss. 9.3.2;
(i) imposed on Owner Participant and indemnified by Lessee pursuant to the
Tax Indemnity Agreement;
(j) imposed with respect to any period after the expiration or earlier
termination of the Term and, if required pursuant to the terms of the Lease, the
return of possession of the Aircraft to Lessor or placement in storage at the
request of Lessor in accordance with the Lease (PROVIDED, that this clause (j)
shall not apply to Taxes imposed after such period arising as a result of
payments by Lessee under the Operative Agreements after such period or are
attributable to events occurring prior to or coincident with such expiration or
earlier termination of the Term);
(k) consisting of any interest, penalties, or additions to tax imposed on a
Tax Indemnitee as a result (in whole or in part) of a failure of such Tax
Indemnitee or a related Tax Indemnitee to file any return properly and timely,
unless such failure is caused by Lessee's failure to fulfill its obligations, if
any, under ss. 9.3.6 with respect to such return;
(l) resulting from, or that would not have been imposed but for, any Lessor
Liens arising as a result of claims against, or acts or omissions of, or
otherwise attributable to such Tax Indemnitee or a related Tax Indemnitee;
(m) imposed on any Tax Indemnitee as a result of the breach by such Tax
Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or
any Affiliate thereof contained in any Operative Agreement or the inaccuracy of
any representation or warranty by such Tax Indemnitee or any Affiliate thereof
in any Operative Agreement;
(n) in the nature of an intangible or similar Tax (1) upon or with respect
to the value or principal amount of the interest of any Loan Participant or any
Note Holder in any Equipment Note or the loan evidenced thereby, or (2) upon or
with respect to the value of the interest of Owner Participant in the Trust
Estate or the Trust, in each case only if such Taxes are in the nature of
franchise Taxes or result from the conduct of business by such Tax Indemnitee in
the taxing jurisdiction and are imposed because of the place of incorporation or
the activities unrelated to the Transactions in the taxing jurisdiction of such
Tax Indemnitee;
(o) that is included in Lessor's Cost and paid to the appropriate Taxing
Authority;
(p) other than any Tax described in ss. 9.3.2(b) hereof, imposed on a Tax
Indemnitee by a Taxing Authority of a jurisdiction outside thE United States, to
the extent that such Taxes would not have been imposed but for a connection
between the Tax Indemnitee or a related Tax Indemnitee and such jurisdiction
imposing such Tax unrelated to the Transactions; or
(q) relating to ERISA or to Codess. 4975.
For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees
who are successors, assigns, agents, or Affiliates of such Tax Indemnitee shall
be related Tax Indemnitees; PROVIDED, that neither Mortgagee nor any Loan
Participant shall be deemed a related Tax Indemnitee as to Lessor or Owner
Participant merely because of the assignment made in the Mortgage.
9.3.3 PAYMENT
(a) Without regard to ss. 9.3.2(a), (b), or (h) hereof, Lessee's indemnity
obligation to a Tax Indemnitee under this ss. 9.3 shall be The amount which,
after taking into account any Tax imposed upon the receipt or accrual of the
amounts payable under this ss. 9.3 and any tax benefits actuallY recognized by
such Tax Indemnitee as a result of the indemnifiable Tax (including any benefits
recognized as a result of such Tax Indemnitee's use of an indemnifiable Tax as a
credit against Taxes not indemnifiable under this ss. 9.3), equals the amount of
the Tax indemnifiable under this ss. 9.3.
(b) At Lessee's request, the computation of the amount of any indemnity
payment owed by Lessee or any amount owed by a Tax Indemnitee to Lessee pursuant
to this ss. 9.3 shall be verified and certified by an independent public
accounting firm selected by such Tax Indemnitee and reasonablY satisfactory to
Lessee. Such verification shall be binding. The costs of such verification
(including the fee of such public accounting firm) shall be borne by Lessee
unless such verification results in an adjustment in Lessee's favor of 5% or
more of the net present value of the payment as computed by such Tax Indemnitee,
in which case such Tax Indemnitee shall pay those costs.
(c) Each Tax Indemnitee shall provide Lessee with such certifications, and
such information and documentation in such Tax Indemnitee's possession, as
Lessee reasonably requests to minimize any indemnity payment pursuant to this
ss. 9.3; PROVIDED, that notwithstanding anything to the contrarY in this ss.
9.3.3(c), no Tax Indemnitee shall be required to provide Lessee with any Tax
returns.
(d) Each Tax Indemnitee shall promptly forward to Lessee any written
notice, xxxx, or advice that such Tax Indemnitee receives from any Taxing
Authority concerning any Tax for which it seeks indemnification under this ss.
9.3. Lessee shall pay any amount for which it is liable pursuant tO this ss. 9.3
directly to the appropriate Taxing Authority if legally permissible, or upon
demand of a Tax Indemnitee, to such Tax Indemnitee within 30 dayS of such demand
(or, if a contest occurs in accordance with ss. 9.3.4, within 30 days after a
Final Determination (as defined below)), but in no event morE than one Business
Day before the related Tax is due. If requested by a Tax Indemnitee in writing,
Lessee shall furnish to the appropriate Tax Indemnitee the original or a
certified copy of a receipt for Lessee's payment of any Tax paid by Lessee, or
such other evidence of payment of such Tax as is acceptable to such Tax
Indemnitee. Lessee shall also furnish promptly upon written request such data as
any Tax Indemnitee reasonably requires to enable such Tax Indemnitee to comply
with the requirements of any taxing jurisdiction, unless such data are not
reasonably available to Lessee or (unless such data are specifically requested
by a Taxing Authority) are not customarily furnished by domestic air carriers
under similar circumstances. For purposes of this ss. 9.3, a "FINAL
DETERMINATION" is (1) a decision, judgment, decree, or other order by any court
of competent jurisdiction that occurs pursuant to thE provisions of ss. 9.3.4,
which decision, judgment, decree, or other order has become final and
unappealable, (2) a closing agreement or settlement agreemenT entered into in
accordance with ss. 9.3.4 that has become binding and is not subject to further
review or appeal (absent fraud, misrepresentation, etc.), oR (3) the termination
of administrative proceedings and the expiration of the time for instituting a
claim in a court proceeding.
(e) If any Tax Indemnitee actually realizes a tax savings by reason of any
Tax paid or indemnified by Lessee pursuant to this ss. 9.3 (whether such tax
savings arise by means of a foreign tax credit, depreciation or cost recovery
deduction, or otherwise), and such savings are not otherwise taken into account
in computing such payment or indemnity, such Tax Indemnitee shall pay to Lessee
an amount equal to the lesser of (1) the amount of such tax savings, plus any
additional net tax savings recognized as the result of any payment made pursuant
to this sentence, when, as, if, and to the extent realized, and (2) the amount
of all payments pursuant to this ss. 9.3 by Lessee to such Tax Indemnitee (less
any payments previously made bY such Tax Indemnitee to Lessee pursuant to this
ss. 9.3.3(e)) (and the excess, if any, of the amount described in clause (1)
over the amount described iN clause (2) shall be carried forward and applied to
reduce PRO TANTO any subsequent obligations of Lessee to make payments to such
Tax Indemnitee pursuant to this ss. 9.3); PROVIDED, that such Tax Indemnitee
shall not be required to make any payment pursuant to this sentence so long as a
Special Default or A Lease Event of Default of a monetary nature exists. If a
tax benefit is later disallowed or denied, the disallowance or denial shall be
treated as a Tax indemnifiable under ss. 9.3.1 without regard to the provisions
of ss. 9.3.2 (other than ss. 9.3.2(f)). Each such Tax Indemnitee shall in good
faitH use reasonable efforts in filing its tax returns and in dealing with
Taxing Authorities to seek and claim any such tax benefit.
9.3.4 CONTEST
(a) If a written claim is made against a Tax Indemnitee for Taxes that
Lessee could be liable to pay or indemnify for hereunder, or if a Tax Indemnitee
determines that a Tax is due and that Lessee could have an indemnity obligation
for that Tax hereunder, such Tax Indemnitee shall promptly notify Lessee in
writing of such claim (PROVIDED, that failure so to notify Lessee shall not
relieve Lessee of its indemnity obligations hereunder unless the failure to
notify effectively forecloses Lessee's rights to require a contest of such
claim), and shall take no action with respect to such claim without Lessee's
prior written consent for 30 days following Lessee's receipt of such notice;
PROVIDED, that, if applicable Law requires such Tax Indemnitee to take action
before the end of such 30-day period, such Tax Indemnitee shall, in such notice
to Lessee, so inform Lessee, and such Tax Indemnitee shall take no action for as
long as it is legally able to avoid taking action (and a Tax Indemnitee shall be
entitled to pay the Tax claimed and xxx for a refund before the end of such
30-day period if (1)(aa) the failure to pay the Tax would result in substantial
penalties (unless immediately reimbursed by Lessee) and the act of paying the
Tax would not materially prejudice the right to contest, or (bb) the failure to
pay would result in criminal penalties, and (2) such Tax Indemnitee shall take
any action so required in connection with so paying the Tax in a manner that is
the least prejudicial to the pursuit of the contest). In addition, such Tax
Indemnitee shall (provided that Lessee shall have agreed to keep such
information confidential other than to the extent necessary in order to contest
the claim) furnish Lessee with copies of any requests for information from any
Taxing Authority relating to such Taxes with respect to which Lessee may be
required to indemnify hereunder. If requested by Lessee in writing within 30
days after its receipt of such notice, such Tax Indemnitee shall, at Lessee's
expense (including all reasonable costs, expenses, and reasonable attorneys' and
accountants' fees and disbursements), in good faith contest (or, if permitted by
applicable law, allow Lessee to contest) through appropriate administrative and
judicial proceedings the validity, applicability, or amount of such Taxes by (x)
resisting payment thereof, (y) not paying the Taxes except under protest if
protest is necessary and proper, or (z) if the payment is made, using reasonable
efforts to obtain a refund thereof in an appropriate administrative or judicial
proceeding. If requested to do so by Lessee, the Tax Indemnitee shall appeal any
adverse administrative or judicial decision, except that the Tax Indemnitee
shall not be required to pursue any appeals to the United States Supreme Court.
If and to the extent that the Tax Indemnitee is able to separate the contested
issue(s) from other issues arising in the same administrative or judicial
proceeding that are unrelated to the Transactions without (in such Tax
Indemnitee's good faith judgment) adversely affecting such Tax Indemnitee, such
Tax Indemnitee shall permit Lessee to control the conduct of any such proceeding
and shall provide to Lessee (at Lessee's cost and expense) with such information
or data in such Tax Indemnitee's control or possession and reasonably necessary
to conduct such contest (other than such Tax Indemnitee's federal income Tax
returns) in which case Lessee shall keep such Tax Indemnitee reasonably informed
concerning the progress of such contest. If the contest is being controlled by a
Tax Indemnitee, such Tax Indemnitee shall consult with Lessee in good faith
regarding the manner of contesting such claim and shall keep Lessee reasonably
informed regarding the progress of such contest. A Tax Indemnitee shall not fail
to take any action expressly required by this ss. 9.3.4 (including anY action
regarding any appeal of an adverse determination with respect to any claim) or
settle or compromise any claim without Lessee's prior written consent (except as
contemplated by ss. 9.3.4(b) or (c)).
(b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be
required to pursue any contest (or to permit Lessee to pursue any contest)
unless (1) Lessee agrees to pay to such Tax Indemnitee on demand and on an
after-tax basis all reasonable costs and expenses that such Tax Indemnitee
incurs in connection with contesting such Taxes, including all reasonable
out-of-pocket costs and expenses and reasonable attorneys' and accountants' fees
and disbursements, (2) if such contest involves the payment of the claim, Lessee
advances the amount thereof (to the extent indemnified hereunder) plus interest,
penalties, and additions to tax with respect thereto that are required to be
paid before commencing the contest on an interest-free net after-Tax basis to
such Tax Indemnitee, (3) such Tax Indemnitee does not reasonably determine that
the action to be taken will result in any material risk of forfeiture, sale, or
loss of the Aircraft (unless Lessee makes provisions to protect the interests of
any such Tax Indemnitee in a manner reasonably satisfactory to such Tax
Indemnitee) (PROVIDED, that such Tax Indemnitee shall notify Lessee in writing
promptly after it becomes aware of any such risk), (4) no Lease Event of Default
exists, unless Lessee has provided security for its obligations hereunder by
advancing to such Tax Indemnitee, before proceeding or continuing with such
contest, the amount of the Tax being contested, plus any interest and penalties
and an amount estimated in good faith by such Tax Indemnitee for expenses, (5)
before commencing any judicial action controlled by Lessee, Lessee acknowledges
its liability for such claim hereunder in writing, PROVIDED, that Lessee shall
not be bound by its acknowledgment if the Final Determination articulates
conclusions of law and fact that demonstrate that Lessee has no liability for
the contested amounts hereunder, (6) such Tax Indemnitee shall have received at
Lessee's sole expense, an opinion independent tax counsel, such counsel to be
selected by Lessee and reasonably satisfactory to such Tax Indemnitee ("Tax
Counsel"), to the effect that a reasonable basis, within the meaning of ABA
Formal Opinion No. 85-352, exists for contesting such claim, (7) the amount of
payments or indemnification that would be required as a result of such
adjustment, when aggregated with further potential payments or adjustments where
the subject matter of the proposed adjustment is of a continuing nature, as to
the Aircraft and all other aircraft operated by Lessee, shall be at least
$10,000, and (8) the issue shall not be substantially identical as an issue
previously contested hereunder and decided adversely, unless such Tax Indemnitee
shall have received, at Lessee's sole expense, a written opinion, in form and
substance reasonably satisfactory to such Tax Indemnitee, of Tax Counsel to the
effect that the applicable circumstances or law have changed and in light
thereof, there is reasonable basis under ABA Formal Opinion No. 85-352 that the
tax treatment of the item which is the subject of the claim will be upheld in
litigation if the claimed tax treatment is challenged by a Taxing Authority.
Notwithstanding the foregoing, if any Tax Indemnitee releases, waives,
compromises, or settles any claim that may be indemnifiable by Lessee pursuant
to this ss. 9.3 and which such Tax Indemnitee is otherwise obligated to contest
under this ss. 9.3.4 without Lessee's written permissiOn, Lessee's obligation to
indemnify such Tax Indemnitee with respect to such claim (and all
directly-related claims, and claims based on the outcome of such claim) shall
terminate, subject to ss. 9.3.4(c), and subject to ss. 9.3.4(c), such Tax
Indemnitee shall repay to Lessee any amount previously paid or advanCed to such
Tax Indemnitee with respect to such claim, plus interest at the rate that would
have been payable by the relevant Taxing Authority on a refund of such Tax.
(c) Notwithstanding anything in this ss. 9.3, a Tax Indemnitee will not be
required to contest the imposition of any Tax, and shall bE permitted to settle
or compromise any claim without Lessee's consent, if such Tax Indemnitee (1)
waives its right to indemnity under this ss. 9.3 witH respect to such Tax (and
any directly-related claim, and any claim the outcome of which is determined
based upon the outcome of such claim), (2) pays to Lessee any amount previously
paid or advanced by Lessee pursuant to this ss. 9.3 with respect to such Tax,
plus interest at the rate that would have beeN payable by the relevant Taxing
Authority on a refund of such Tax, and (3) agrees to discuss with Lessee the
views or positions of any relevant Taxing Authority with respect to the
imposition of such Tax PROVIDED, that if Lessee has agreed in writing to settle
a claim for a stated amount and the relevant Tax Indemnitee settles the claim on
more favorable terms, such Tax Indemnitee shall not be required to waive the
indemnity for such claim to the extent of the amount agreed to by Lessee.
9.3.5 REFUND
If any Tax Indemnitee receives a refund of, or becomes entitled to a credit
against other liability for, all or any part of any Taxes paid, reimbursed, or
advanced by Lessee, such Tax Indemnitee shall pay to Lessee within 30 days of
such receipt an amount equal to the lesser of (a) the amount of such refund or
credit plus any net tax benefit (taking into account any Taxes incurred by such
Tax Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment by
such Tax Indemnitee made pursuant to this sentence (including this clause (a)),
and (b) such tax payment, reimbursement, or advance by Lessee to such Tax
Indemnitee theretofore made pursuant to this ss. 9.3 (and the excess, if any, of
the amount described in clause (a) over the amount described in clause (b) shall
be carried forward and applied to reduce PRO TANTO any subsequent obligation of
Lessee to make payments to such Tax Indemnitee pursuant to this ss. 9.3). If, in
addition to such refund or credit, sucH Tax Indemnitee receives (or is credited
with) an amount representing interest on the amount of such refund or credit,
such Tax Indemnitee shall pay to Lessee within 30 days after receiving or
realizing such credit the portion of such interest fairly attributable to Taxes
paid, reimbursed, or advanced by Lessee before the receipt of such refund or
realization of such credit. Notwithstanding the foregoing, a Tax Indemnitee
shall not be obligated to make any payment to Lessee pursuant to this ss. 9.3.5
if a Special Default or a Lease Event of Default has occurred and is continuing.
If it is later determined thaT such Tax Indemnitee was not entitled to such
refund or credit, the portion of the refund or credit repaid, recaptured or
disallowed (and any interest and tax savings paid by such Tax Indemnitee to
Lessee with respect thereto) shall be treated as Taxes for which Lessee must
indemnify such Tax Indemnitee pursuant to this ss. 9.3 without regard to ss.
9.3.2 hereof other than ss. 9.3.2(f).
9.3.6 TAX FILING
Lessee shall timely file any report, return, or statement that is required
to be filed with respect to any Tax which is subject to indemnification under
this ss. 9.3 (except for any such report, return, or statement which a Tax
Indemnitee has timely notified Lessee in writing that sucH Tax Indemnitee
intends to file, or for which such Tax Indemnitee is required by law to file, in
its own name); PROVIDED, that the relevant Tax Indemnitee shall furnish Lessee
with any information in such Tax Indemnitee's possession or control that is
reasonably necessary to file any such return, report, or statement and that
Lessee reasonably requests in writing (but the Tax Indemnitee shall not be
required to furnish copies of its actual tax returns, although it may be
required to furnish relevant information contained therein). Lessee shall either
file such report, return, or statement and send a copy to such Tax Indemnitee
(and to Owner Trustee, if the Tax Indemnitee is not Owner Trustee), or, if
Lessee is not permitted to file such report, return, or statement, it shall
notify such Tax Indemnitee of such requirement and prepare and deliver such
report, return, or statement to such Tax Indemnitee in a manner reasonably
satisfactory to such Tax Indemnitee within a reasonable time before the time
such report, return, or statement is to be filed.
9.3.7 FORMS
Each Tax Indemnitee agrees to furnish from time to time to Lessee,
Mortgagee, or such other Person as Lessee or Mortgagee shall designate, at
Lessee's or Mortgagee's request, such duly-executed and properly-completed forms
as may be necessary or appropriate in order to claim any reduction of or
exemption from any withholding or other Tax imposed by any Taxing Authority, if
(a) such reduction or exemption is available to such Tax Indemnitee, and (b)
Lessee has provided such Tax Indemnitee with any information necessary to
complete such form not otherwise reasonably available to such Tax Indemnitee.
9.3.8 NON-PARTIES
If a Tax Indemnitee is not a party to this Agreement, Lessee may require
the Tax Indemnitee to agree in writing, in a form reasonably acceptable to
Lessee, to the terms of this ss. 9.3 and ss. 15.8 before making any payment to
such Tax Indemnitee under this ss. 9.3.
9.3.9 FOREIGN TAX ON LOAN PAYMENTS
If an Owner Participant is incorporated or organized, or maintains a place
of business in a country other than the United States or in a territory,
possession, or commonwealth of the United States (within the meaning of the tax
law of that foreign jurisdiction), and if as a result thereof any foreign Taxes
(including withholding Taxes) are imposed on the Pass-Through Trustees,
Pass-Through Trusts, or Note Holders, then such Owner Participant shall
reimburse Lessee for any payments that Lessee is required to make to or on
behalf of any Pass-Through Trustee, Pass-Through Trust, or Note Holder under
this ss. 9.3 as a result of the imposition of such Taxes. The amount payable by
Owner Participant to Lessee shall be an amount which, after takinG into account
any such Taxes, any Tax imposed upon the receipt or accrual by Lessee of such
payment by such Owner Participant, and any tax benefits or tax savings realized
by Lessee with respect to the payment of such withholding Tax or the payment
hereunder, shall equal the amount of Lessee's payment to or on behalf of such
Pass-Through Trustee or Note Holder.
9.4 PAYMENTS
Any payments made pursuant to ss. 9.1 or ss. 9.3 shall be due on the 30th
day after demand, and shall be made directly to the relevant IndemniTee or Tax
Indemnitee or to Lessee, in immediately available funds at such bank or to such
account as specified by such Indemnitee or Tax Indemnitee or Lessee (as
applicable) in written directives to the payor, or, if no such direction has
been given, by check of the payor payable to the order of, and mailed to, such
Indemnitee or Tax Indemnitee or Lessee (as applicable) by certified mail,
postage prepaid, at its address as set forth in this Agreement.
9.5 INTEREST
If any amount, payable by Lessee, any Indemnitee, or any Tax Indemnitee
under ss. 9.1 or ss. 9.3 is not paid when due, the Person obligated to mAke such
payment shall pay on demand, to the extent permitted by Law, to the Person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the amount is paid, at
the Past-Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
9.6 BENEFIT OF INDEMNITIES
Lessee's obligations for indemnities, obligations, adjustments, and
payments in ss. 9.1 or ss. 9.3 are expressly made for the benefit of, and shAll
be enforceable by, the Indemnitee or Tax Indemnitee entitled thereto, without
declaring the Lease to be in default or taking other action thereunder, and
notwithstanding any provision of the Mortgage.
10. ASSIGNMENT OR TRANSFER OF INTERESTS
10.1 PARTICIPANTS, OWNER TRUSTEE, AND NOTE HOLDERS
10.1.1 OWNER PARTICIPANT
(a) During the Term, Owner Participant shall not Transfer any or all of its
right, title, or interest in the Trust Estate or the Trust Agreement or to this
Agreement unless:
(1) the Transferee has full power, authority, and legal right to execute,
deliver, and perform the obligations of Owner Participant under the Owner
Participant Agreements and provides reasonably satisfactory evidence of such
power and authority to Lessee, Owner Trustee, and Mortgagee;
(2) the Transferee enters into a legal, valid, binding, and enforceable
agreement, substantially in the form of Exhibit I hereto (or otherwise in form
and substance reasonably satisfactory to Lessee and Mortgagee), effective to
confirm that such Transferee agrees to be bound by all the terms of, and to
undertake all of the obligations arising after such transfer of, the
transferring Owner Participant in the Owner Participant Agreements, and in which
it makes representations and warranties substantially the same as those in ss.
6.2 of thiS Agreement;
(3) upon such Transfer Lessee shall not be obligated to pay any greater
amount or incur any greater obligation than that which it would have been
obliged to pay or incur under the Lease or other Lessee Operative Agreement if
no transfer or assignment had taken place, and upon such Transfer the terms and
conditions of the Lessee Operative Agreements insofar as they relate to the
rights and obligations of Lessee or the Loan Participant are not altered;
(4) Owner Participant shall deliver to Lessee, Owner Trustee, and Mortgagee
an opinion of counsel reasonably satisfactory to each of them to the effect that
such agreement or agreements referred to in ss. 10.1.1(a)(2) and, if applicable,
ss. 10.1.1(a)(6) or (a)(7) Are legal, binding, and enforceable in accordance
with its or their terms and that such transfer will not violate the
Transportation Code, the registration provisions of the Securities Act, or any
other applicable Federal law;
(5) the Transfer shall relate to Owner Participant's entire interest as
Owner Participant; or, if it relates to less than its entire interest as Owner
Participant, then (aa) Lessee shall have given its prior written consent to the
partial Transfer, and (bb) all amendments to the Operative Agreements,
reasonably requested by Lessee or Owner Participant, that are necessary or
appropriate to accommodate the existence of multiple Owner Participants, shall
be agreed to and executed by the parties thereto, all at the expense of the
Owner Participants under ss. 10.1.1(c);
(6) the Transferee is a Citizen of the United States (such status to be
determined without considering FAR ss. 47.9 or anY other provision that may
restrict Lessee's use or operation of the Aircraft), or shall use a voting
powers trust or similar arrangement in order to hold an interest in the Trust
Estate such that the Aircraft can be registered in the United States (without
considering FAR ss. 47.9 oR any other provision that may restrict Lessee's use
or operation of the Aircraft); and
(7) the Transferee is a single Person and is either (aa) a Permitted
Institution, (bb) or an Affiliate of a Permitted Institution, if such
Affiliate's obligations under the Owner Participant Agreements are guaranteed by
such Permitted Institution pursuant to a written guaranty, substantially in the
form of Exhibit J hereto (or otherwise in form and substance reasonably
satisfactory to Lessee, Owner Trustee and Mortgagee), or (cc) with Lessee's
prior written consent, any other Person the obligations of whom under the Owner
Participant Agreements are guaranteed by a Permitted Institution pursuant to a
written guaranty, in form and substance reasonably satisfactory to Lessee, Owner
Trustee, and Mortgagee.
(b) Owner Participant shall give written notice to Lessee,
Mortgagee, and Owner Trustee at least 10 days before any such Transfer,
specifying the name and address of the proposed Transferee, and providing
financial statements of the proposed Transferee or guarantor evidencing
satisfaction of the requirements described in ss. 10.1.1(a)(7)(aa) or (bb).
(c) Any reasonable fees, charges, and expenses, including the
reasonable legal fees, charges, and expenses incurred by Lessee, Owner
Participant, Mortgagee, any Note Holder, or Owner Trustee in connection with any
Transfer by Owner Participant permitted by this ss. 10.1.1, or by thE Transferee
in any such case, will be paid for by Owner Participant.
10.1.2 OWNER TRUSTEE
Owner Trustee may transfer its interests in the Trust Agreement pursuant to
ss. 9 thereof.
10.1.3 NOTE HOLDERS
Subject to ss. 7.5.2 hereof and ss. 2.07 of the Mortgage, any Note Holder
may, at any time, Transfer or grant participations in all or any portIon of the
Equipment Notes or all or any portion of its beneficial interest in its
Equipment Notes and the Collateral to any Person (the sale or issuance of
Pass-Through Certificates by a Pass-Through Trustee not being considered a
Transfer or participation); PROVIDED, that any participant in any such
participations shall not have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft or Collateral, and Lessee shall
not have any increased liability or obligations as a result of any such
participation. In the case of any such Transfer, the Transferee, by acceptance
of Equipment Notes in connection with such Transfer, shall be bound by all of
the covenants of Note Holders in the Operative Agreements.
10.2 EFFECT OF TRANSFER
Upon any Transfer in accordance with ss. 10.1.1, ss. 10.1.2, or ss. 10.1.3
(other than any Transfer by any Note Holder, to the extent it only gRants
participations in Equipment Notes or in its beneficial interest therein), the
Transferee shall be deemed "Owner Participant", "Owner Trustee", or a "Note
Holder", respectively, for all purposes of the Operative Agreements and, in the
case of a Transferee of Owner Participant or any Note Holder, shall be deemed to
have paid its ratable portion of Lessor's Cost previously made by Owner
Participant or Loan Participant, respectively, making such conveyance and
represented by the interest being conveyed, and each reference herein to Owner
Participant, Owner Trustee, or Note Holder, respectively, shall thereafter be
deemed a reference to such Transferee for all purposes, and the transferring
Owner Participant, Owner Trustee, Loan Participant, or Note Holder shall be
released (including, in the case of Owner Participant, any Guarantor with
respect to any guaranty provided by it under ss. 10.1.1(a)(7)) from all of itS
liabilities and obligations under the Operative Agreements to the extent such
liabilities and obligations arise after such Transfer and, in each case, to the
extent such liabilities and obligations are assumed by the Transferee; PROVIDED,
that such transferring Owner Participant, Owner Trustee, or Note Holder (and its
Affiliates, successors, assigns, agents, representatives, directors, and
officers) will continue to have the benefit of any rights or indemnities under
any Operative Agreement vested or relating to circumstances, conditions, acts,
or events before such Transfer.
11. RE-FUNDING AND CERTAIN OTHER MATTERS
11.1 RE-FUNDING GENERALLY
Subject to ss. 11.2 and ss. 11.4, if at any time Lessee notifies Owner
Participant, Owner Trustee, and Mortgagee that Lessee requests that OwNer
Trustee voluntary redeem all (but not less than all) of the outstanding
Equipment Notes (in compliance with ss. 2.11 and ss. 2.12 of the Mortgage) as
part oF a re-funding transaction, Owner Participant will negotiate in good faith
and promptly conclude an agreement with Lessee as to the terms of such
re-funding transaction (including the terms of any debt to be issued in
connection with such re-funding transaction and the documentation to be executed
in connection therewith), and after Lessee and Owner Participant shall have
concluded such an agreement:
11.1.1 RE-FUNDING CERTIFICATE
Within 10 Business Days after reaching such agreement, Owner Participant
will deliver a Re-Funding Certificate to Lessee. Within 10 Business Days after
receiving the Re-Funding Certificate, Lessee may demand a verification (pursuant
to ss. 3.2.1(d) of the Lease) of the information in thE Re-Funding Certificate.
Upon Lessee's acceptance of the accuracy of the information in the Re-Funding
Certificate or the determination pursuant to such verification procedures of the
Re-Funding Information, the appropriate parties will take the actions specified
in ss. 11.1.2 through ss. 11.1.7.
11.1.2 FINANCING AGREEMENTS
The appropriate parties will enter into appropriate documentation (which
may include an underwriting agreement or similar private placement agreement)
with the institution or institutions to be named therein providing for (a) Owner
Trustee's issuance and sale of the New Debt to such institution(s) on the
Re-Funding Date, and (b) the application of the proceeds of the sale of the New
Debt to the redemption of all such Equipment Notes on the Re-Funding Date.
Lessee, acting on behalf of Owner Trustee, shall give Mortgagee at least 30
days' revocable prior written notice of the proposed date of the optional
redemption.
11.1.3 LEASE AMENDMENTS
As a condition to the closing of the re-funding transaction, Lessee and
Owner Trustee will amend the Lease, as contemplated by ss. 3.2.1(b) oF the
Lease, to provide that (a) Basic Rent payments and allocations for the period
from and after the Re-Funding Date shall be as provided in the Re-Funding
Information, and (b) Stipulated Loss Values, Termination Values, and the EBO
Price, from and after the Re-Funding Date, shall be as provided in the
Re-Funding Information.
11.1.4 SECURITY AGREEMENTS
Owner Trustee will enter into an agreement to provide for securing the New
Debt similarly to the Equipment Notes, and will enter into such amendments and
supplements to the Mortgage (or such new indenture or other security agreement)
and the other Operative Agreements as are appropriate to effect such re-funding.
11.1.5 EXPENSES
Whether or not such re-funding transaction is consummated, Lessee shall pay
or reimburse on a net after tax basis all of the reasonable out-of-pocket
expenses of all parties to such re-funding transaction, including any
underwriting or placement fees and the reasonable fees and expenses of such
parties' counsel and any related loan or commitment fees.
11.1.6 MAKE WHOLE AMOUNT
At the closing of such re-funding, Owner Trustee shall pay to Mortgagee
(for the account of each Note Holder), upon receipt of the same from Lessee
(which Lessee shall pay as Supplemental Rent, as a condition to the closing to
the re-funding transaction, at no after-tax cost to Owner Trustee or Owner
Participant), any Make-Whole Amount payable to such Note Holder under ss. 2.11
of the Mortgage.
11.1.7 RETURN OF EQUIPMENT NOTES
Subject to Owner Trustee's and Lessee's compliance with all applicable
terms and conditions for voluntary prepayment under the Mortgage and this
Agreement, each Note Holder will transfer to Owner Trustee the Equipment Notes
held by such Note Holder for cancellation (and Owner Trustee shall cancel them),
against receipt by such Note Holder of the then-outstanding principal amount of
such Equipment Notes, accrued and unpaid interest and any Make-Whole Amount
thereon, and all other amounts then payable to such Note Holder and Mortgagee
hereunder or under the Mortgage.
11.2 LIMITATIONS ON OBLIGATION TO REFUND
Notwithstanding the foregoing, Owner Participant shall have no obligation
to proceed with any re-funding transaction as contemplated by this ss. 11:
(a) if such transaction would have, or creates a risk of, an adverse tax
consequence to Owner Participant (as determined by Owner Participant in good
faith), unless Lessee agrees to indemnify Owner Participant, or to cause Owner
Participant to be indemnified, against such adverse tax consequence by a written
agreement in form and substance and from a Person (if not Lessee) reasonably
satisfactory to Owner Participant, and such indemnification would not give rise
to a Materially Adverse Change with respect to Lessee;
(b) unless Lessee indemnifies Owner Participant for any liability,
obligation (other than the obligation to pay principal and interest and related
payments in respect of the New Debt), cost, or expense (including reasonable
attorneys' fees) related to or arising out of any such re-funding, and such
indemnification would not give rise to a Materially Adverse Change with respect
to Lessee;
(c) if a Special Default or Lease Event of Default exists;
(d) if two re-funding transactions have previously been consummated at
Lessee's request pursuant to thisss. 11;
(e) if such re-funding would cause (i) the principal amount of the New Debt
to exceed the then-outstanding principal amount of the Equipment Notes, or (ii)
the Weighted Average Life to Maturity of the New Debt to exceed the Weighted
Average Life to Maturity of the Equipment Notes, or (iii) the final maturity to
the New Debt to be later than the final maturity of the Equipment Notes; or
(f) if the structure or documentation for such re-funding results in
greater obligations or liabilities, or lesser rights, of Owner Trustee or Owner
Participant, compared to those contained in the structure and documentation for
the original Equipment Notes.
11.3 EXECUTION OF FACILITATING DOCUMENTS
Lessee, Owner Participant, Owner Trustee, and Mortgagee will execute any
document necessary or advisable to implement this ss. 11 (includinG executing,
delivering, or providing any appropriate additional or modified amendment,
representation, warranty, certificate, opinion, or other document that Lessee or
any other Person reasonably requests).
11.4 ERISA
Owner Participant shall not be obligated to conclude the proposed
re-funding transaction unless the agreements used to effect it contain an
agreement by the initial holders of the New Debt substantially the same as ss.
7.5.2(b) of this Agreement (unless the New Debt is sold in a public offerinG
under the Securities Act or a private placement intended for resale pursuant to
Rule 144A under the Securities Act, in which case the holders of the New Debt
shall be subject to the restrictions relating to ERISA substantially the same as
those generally applicable to purchasers of pass-through certificates issued by
U.S. airlines and sold to the public in SEC-registered form).
11.5 CONSENT TO OPTIONAL REDEMPTIONS
Each of Owner Participant, Owner Trustee, and Mortgagee agrees for Lessee's
benefit not to cause an optional redemption of the Equipment Notes without
Lessee's consent except as set forth in ss. 2.13 of the Mortgage or elsewhere
herein.
11.6 LESSEE'S ASSUMPTION OF EQUIPMENT NOTES
11.6.1 LESSEE'S ELECTION; DOCUMENTATION
If no Special Default exists, upon exercising a purchase option under ss.
17.3 of the Lease, Lessee may elect to assume and apply as part of thE Purchase
Price the debt evidenced by all of the outstanding Equipment Notes, subject to
this ss. 11.6 and ss. 2.15 of the Mortgage. Lessee shall notify OwNer Trustee,
each Participant, and Mortgagee of such election no later than 30 days before
the effective date of such assumption. Subject to this ss. 11.6 anD ss. 2.15 of
the Mortgage, the parties agree to cooperate and to enter into such amendments
or supplemental agreements as may be necessary to effectuate thE transaction
contemplated by this ss. 11.6.
If Lessee so elects, then, upon compliance with ss. 17.3 of the Lease,
Owner Trustee will transfer to Lessee, without recourse or warrantY (except as
to the absence of Lessor Liens) but subject to the Lien of the Mortgage, all of
Owner Trustee's right, title, and interest in and to the Aircraft, and each of
the parties hereto shall execute and deliver appropriate documentation
permitting Lessee to assume such obligations on the basis of full recourse to
Lessee, maintaining for the benefit of the Note Holders the security interest in
the Aircraft created by the Mortgage, and upon compliance with this ss. 11.6 and
ss. 2.15 of the Mortgage, such documentation shall become effective and Owner
Participant and Owner Trustee shall be released from All future obligations in
respect of the Equipment Notes, the Mortgage, and all other Operative
Agreements, except any obligations arising (or with respect to events occurring)
before such assumption, and take all such other actions as are reasonably
necessary to permit such assumption by Lessee.
11.6.2 CLOSING CONDITIONS
In connection with such assumption:
(1) Lessee shall execute and deliver an instrument, reasonably satisfactory
in form and substance to Mortgagee and Owner Trustee, (aa) pursuant to which
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to Lessee, to pay when due (at the stated maturity thereof, by
acceleration, or otherwise) the principal of, and any Make-Whole Amount,
interest, and other Secured Obligations owing on, all Equipment Notes then
outstanding in accordance with their terms and punctually to perform and observe
all of the covenants and obligations (monetary or otherwise) hereunder and under
the Mortgage and the Equipment Notes (as amended in connection with such
assumption) to be performed or observed by Owner Trustee, which obligations
shall be secured by a first-priority lien under the Mortgage, and (bb) which
contains amendments to the Mortgage, in form and substance reasonably
satisfactory to Mortgagee and Owner Trustee, that incorporate therein such
provisions from the Lease and this Agreement as are appropriate, including
events of default substantially identical in scope and effect to those in the
Lease but including any such additional defaults as Mortgagee reasonably
requests to provide the same level of protection as in the Mortgage and
covenants substantially identical to the covenants of Lessee hereunder and under
the Lease.
(2) The instrument referred to in clause (1), any Uniform Commercial Code
financing statements relating thereto, and any other documents that are
necessary (or reasonably requested by Mortgagee) to establish Lessee's title to
and interest in the Aircraft or to reflect the substitution of Lessee for Owner
Trustee under the Operative Agreements or to continue the perfection of the
security interests in the Aircraft and the other rights and interests of the
registered owners of the Equipment Notes (or Lessee's substituted obligations)
shall be filed in such form, manner, and places as are necessary or, in
Mortgagee's or Owner Trustee's reasonable opinion, advisable for such purpose.
(3) Mortgagee and Owner Trustee shall receive an insurance report, dated
the effective date of such assumption, of an independent insurance broker, and
certificates of insurance, each in form and substance reasonably satisfactory to
such Person, as to the due compliance as of the effective date of such
assumption with ss. 11 of the Lease (as incorporated into the instrument
referred to in (1) of this ss. 11.6.2) as it relates to the Note Holders, each
Certificate Holder, and Mortgagee relating to the insurance with respect to the
Aircraft.
(4) Mortgagee and Owner Trustee shall receive evidence that, as of the
effectiveness of such assumption, the Aircraft is free and clear of all Liens
other than the Lien of the Mortgage and other
Permitted Liens (other than Lessor Liens).
(5) Mortgagee and Owner Trustee shall receive a certificate from Lessee
that no Special Default exists on the effective date of such assumption.
(6) Mortgagee receives (aa) a Guarantor Confirmation under which Holdings
expressly acknowledges and agrees that each of the Assumed Obligations
constitute Guaranteed Obligations (as defined in the Guarantee) for all purposes
of the Guarantee, and (bb) restated Equipment Notes showing Lessee as issuer
(which Mortgagee shall also authenticate) evidencing such assumption and the
full recourse nature of Lessee's obligations thereunder.
(7) Mortgagee receives such other documentation or evidence reasonably
requested by Mortgagee to establish the authority of Lessee, Owner Trustee, and
Owner Participant to consummate the transactions contemplated by the assumption
and the taking of all corporate proceedings in connection therewith.
(8) Each Loan Participant and Pass-Through Certificate holder ("HOLDER")
shall receive (by delivery to its Pass-Though Trustee, in the case of each
Holder) (aa) an opinion of Xxxxxxxx Xxxxxxx LLP, or other independent tax
counsel chosen by Lessee and reasonably acceptable to each Loan Participant
(Xxxxxxxx Xxxxxxx LLP or such other counsel being the "TAX COUNSEL"), to the
effect that the Pass-Through Trusts will not be subject to U.S. federal income
tax as a result of Lessee's assumption of the Equipment Notes, and (bb) either
(i) an opinion of Tax Counsel to the effect that the Loan Participants and
Holders will not recognize income, gain, or loss for federal income tax purposes
as a result of Lessee's assumption of the Equipment Notes, and will be subject
to federal income tax in the same amounts, in the same manner, and at the same
time as would have been the case if such assumption had not occurred, or (ii)
(x) an opinion of Tax Counsel to the effect that the Loan Participants and
Holders should not recognize income, gain, or loss for federal income tax
purposes as a result of Lessee's assumption of the Equipment Notes, and should
be subject to federal income tax in the same amounts, in the same manner, and at
the same time as would have been the case if such assumption had not occurred,
and (y) an indemnity on an After-Tax Basis from Lessee for any adverse tax
consequences to each Loan Participant and Holder resulting from such assumption,
such indemnity to be in form and substance reasonably acceptable to each Loan
Participant.
(9) Each Note Holder, each Pass-Through Certificate holder, Mortgagee, and
Owner Trustee shall receive (by delivery to its Pass-Though Trustee, in the case
of each Holder): (aa) a legal opinion from counsel for Lessee (which may be
in-house counsel), in form and substance reasonably satisfactory to each Note
Holder, Mortgagee, and Owner Trustee, to the effect that the assumption
contemplated by this ss. 11.6 does noT contravene Lessee's certificate of
incorporation or by-laws, or any agreement or instrument known to such counsel
to which Lessee is a party or by which it is bound, and as to (x) the compliance
of the assumption contemplated by this ss. 11.6 with the terms and conditions of
this ss. 11.6 and ss. 2.15 oF the Mortgage, (y) the due authorization,
execution, delivery, validity, and enforceability of the instruments referred to
in clauses (1) and (6), and (z) the continued perfection of the first-priority
Lien on the Aircraft for the benefit of the registered owners of the Equipment
Notes, and the due filing of the Uniform Commercial Code financing statements
and the other documents referred to in clause (2), (bb) from counsel to
Mortgagee, counsel to Lessee and Guarantor, counsel to Owner Trustee, and
special aviation counsel, a legal opinion comparable to the respective opinions
delivered on the Delivery Date (including, in the case of Lessee's counsel, a
favorable opinion regarding the availability of the protections available under
Section 1110 of the Bankruptcy Code), with such changes therein as may be
appropriate in light of such assumption, and (cc) in the case of each opinion
described in subclause (aa) or (bb) of this clause (9), covering such additional
matters as Mortgagee, Owner Trustee, or any Note Holder reasonably requests.
(10) Each Note Holder and Mortgagee receive a copy of the
Application for Aircraft Registration filed with the FAA (or any other
registration application filed with the applicable Aviation Authority) in
connection with such assumption.
12. SECTION 1110
Lessee, Owner Participant, Loan Participants, the Note Holders (such
intention being evidenced by each of their acceptance of an Equipment Note),
Owner Trustee, and Mortgagee intend that Owner Trustee, as lessor under the
Lease (and Mortgagee as assignee of Owner Trustee under the Mortgage), shall be
entitled to the benefits of Section 1110 in the event of a case under Chapter 11
of the Bankruptcy Code in which Lessee is a debtor.
13. CHANGE OF CITIZENSHIP
13.1 GENERALLY
Without prejudice to the representations, warranties, or covenants as to
any party's status as a Citizen of the United States:
(a) Each of Lessee, FSB, WTC, and Mortgagee agrees that, immediately upon
obtaining knowledge of any facts that would cast doubt upon its continuing
status as a Citizen of the United States, and promptly upon public disclosure of
negotiations in respect of any transaction which would or might adversely affect
such status, it will notify all parties hereto of all relevant matters in
connection therewith; and
(b) Owner Participant agrees that, if its status is to change or has
changed as a Citizen of the United States, or it makes public disclosure of
circumstances as a result of which it believes that such status is likely to
change, it will notify all the other parties to this Participation Agreement of
(1) such change in status promptly after obtaining Actual Knowledge thereof, and
(2) such belief as soon as practicable after such public disclosure (but in any
event within 10 Business Days after such public disclosure).
13.2 OWNER PARTICIPANT
Owner Participant agrees, solely for the benefit of Lessee and the Note
Holders, that if, when the Aircraft is registered in the United States, (a)
Owner Participant is not be a Citizen of the United States, and (b) the Aircraft
shall be, or would therefore become, ineligible for registration in the name of
Owner Trustee under the Transportation Code and regulations then applicable
thereunder (without considering FAR ss. 47.9 or any other provisioN that may
restrict Lessee's or any Permitted Sublessee's use or operation of the
Aircraft), then Owner Participant shall as soon as is reasonably practicable
(but in any event within 30 days after obtaining Actual Knowledge of such
ineligibility and of such loss of citizenship), (y) effect voting trust or other
similar arrangements (in which case any provisions contained in the Operative
Agreements restricting Owner Participant's or Owner Trustee's ability to amend
the Trust Agreement shall not apply to the extent necessary to permit the use of
such a voting trust or other similar arrangement) or take any other action
necessary to prevent any deregistration or maintain the United States
registration of the Aircraft, or (z) transfer in accordance with the terms of
this Agreement all its right, title, and interest in and to this Agreement, the
Trust Estate, and the Trust Agreement in accordance with ss. 10.1.
13.3 OWNER TRUSTEE
Upon FSB's giving any notice in accordance with ss. 13.1(a), Owner Trustee
shall, subject to ss. 9.1.1 of the Trust Agreement, resign as OwNer Trustee.
Upon its receipt of such notice, Owner Participant shall as promptly as
practicable appoint a Citizen of the United States as successor Owner Trustee
pursuant to ss. 9.1 of the Trust Agreement.
13.4 MORTGAGEE
If WTC gives any notice under ss. 13.1(a), WTC shall (if such citizenship
is necessary under the Transportation Code or, if it is not necessary, if
Mortgagee's citizenship could have any adverse effect on Lessee, any
Participant, or any Note Holder), subject to ss. 8.02 of the Mortgage, resign aS
Mortgagee promptly upon its ceasing to be such a citizen.
14. CONCERNING OWNER TRUSTEE
Except as otherwise expressly provided herein, in the Trust Agreement, or
in the Mortgage, Owner Trustee is entering into this Agreement solely in its
capacity as trustee as provided in the Trust Agreement and not in its individual
capacity, and in no case whatsoever will it be liable or accountable in its
individual capacity for any of the statements, representations, warranties,
agreements, or obligations of Owner Trustee hereunder, or for any loss in
respect thereof, as to all of which the parties agree to look solely to the
Trust Estate; PROVIDED, that nothing in this ss. 14 shall limiT in scope or
substance the personal liability of FSB (a) to Owner Participant as expressly
set forth in the Trust Agreement, (b) in respect of the representations,
warranties, and agreements of FSB expressly made as such herein or in any other
Operative Agreement to which it is a party, and (c) for the consequences of its
own gross negligence, willful misconduct, and, in receiving, handling or
remitting of funds only, its willful misconduct or simple negligence as a
trustee.
15. MISCELLANEOUS
15.1 AMENDMENTS
No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated, or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate, or otherwise vary and is signed by the party against whom the
enforcement of the amendment, supplement, waiver, modification, discharge,
termination, or variance is sought. Each such amendment, supplement, waiver,
modification, discharge, termination, or variance shall be effective only in the
specific instance and for the specific purpose for which it is given. No
provision of this Agreement shall be varied or contradicted by oral
communication, course of dealing or performance, or other manner not set forth
in writing and signed by the party against whom enforcement of the same is
sought.
15.2 SEVERABILITY
If any provision of this Agreement is 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, the parties hereto
hereby waive that Law to the full extent permitted, to the end that this
Agreement shall be a valid and binding agreement in all respects, enforceable in
accordance with its terms.
15.3 SURVIVAL
The indemnities in this Agreement shall survive the delivery or return of
the Aircraft, the Transfer of any interest of Owner Participant in this
Agreement, the Trust Estate, and the Trust Agreement, the Transfer of any
interest by any Note Holder of its Equipment Note, and the expiration or other
termination of any Operative Agreement, except to the extent otherwise provided
therein.
15.4 REPRODUCTION OF DOCUMENTS
This Agreement (including all annexes, schedules, and exhibits hereto) and
all documents relating hereto, including (a) future consents, waivers, and
modifications, and (b) past and future financial statements, certificates, and
other information furnished to any party hereto, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic, or
other similar process, and any party may destroy any original documents so
reproduced. Any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original exists and whether or not such party made the reproduction in the
regular course of business), and any enlargement, facsimile, or further
reproduction of such reproduction also shall be so admissible in evidence.
15.5 COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each fully-executed set of which
shall be deemed to be an original.
15.6 NO WAIVER
No failure on the part of any party hereto to exercise, and no delay by any
party hereto in exercising, any of its rights, powers, remedies, or privileges
under this Agreement or otherwise available shall impair, prejudice, or waive
any such right, power, remedy, or privilege or be construed as a waiver of any
breach hereof or default hereunder or as an acquiescence therein, nor shall any
single or partial exercise of any such right, power, remedy, or privilege
preclude any other or further exercise thereof by it or the exercise of any
other right, power, remedy, or privilege by it. No notice to or demand on any
party hereto in any case shall, unless otherwise required under this Agreement,
entitle such party to any other or further notice or demand in similar or other
circumstances, or waive the rights of any party hereto to any other or further
action in any circumstances without notice or demand.
15.7 NOTICES
Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers, and other
communications required or permitted to be made, given, furnished, or filed
hereunder shall be in writing (and the specification of a writing in certain
instances and not in others does not imply an intention that a writing is not
required as to the latter), shall refer specifically to this Agreement, and
shall be personally delivered, sent by fax or telecommunication transmission
(which in either case provides written confirmation to the sender of its
delivery), sent by registered mail or certified mail, return receipt requested,
or sent by next-business-day courier service, in each case to the address or fax
number set forth for such party in Schedule 1, or to such other address or
number as such party hereafter specifies 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 by fax or telecommunication transmission, when confirmed.
15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
(A) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, AND PERFORMANCE.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS, AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT, OR PROCEEDING
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THE OPERATIVE AGREEMENTS.
(C) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES, AND DOCUMENTS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION, OR PROCEEDING MAY BE MADE BY
DELIVERING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT
THE ADDRESS SET FORTH PURSUANT TO SS. 15.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS SS.
15.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH PARTY,
AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS TO
GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT IN
ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED IN
ANY ACTION OR PROCEEDING BASED THEREON.
(D) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY
OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS.
(E) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING
OUT OF OR RELATING TO THE OPERATIVE AGREEMENTS.
15.9 THIRD-PARTY BENEFICIARY
This Agreement is not intended to provide (and shall not provide) any
Person not a party hereto (other than each Liquidity Provider, Policy Provider,
Escrow Agent, and Paying Agent, each of which is an intended third-party
beneficiary with respect to the provisions of ss. 9.1 (and any otheR provision
hereunder pursuant to which any such party is expressly granted rights
hereunder) with any rights of any nature whatsoever against any of the parties
hereto, and no Person not a party hereto (other than each Liquidity Provider,
Policy Provider, Escrow Agent, and Paying Agent, with respect to the provisions
of ss. 9.1 (and any other provision hereunder pursuant to which any such party
is expressly granted rights hereunder) shall have any right, power, or privilege
in respect of any party hereto, or have any benefit or interest, arising out of
this Agreement.
15.10 ENTIRE AGREEMENT
This Agreement, together with the other Operative Agreements, on and as of
the date hereof, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior understandings or
agreements, whether written or oral, among any of the parties hereto with
respect to such subject matter are hereby superseded in their entireties.
15.11 FURTHER ASSURANCES
Each party hereto shall execute, acknowledge, and deliver (or cause to be
executed, acknowledged, and delivered) all such further agreements, instruments,
certificates, or other documents, and shall do and cause to be done such further
things, as any other party hereto reasonably requests in connection with the
administration of, or to carry out more effectively the purposes of, or to
assure and confirm better to such other party the rights and benefits to be
provided under, this Agreement and the other Operative Agreements.
[THIS REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Participation
Agreement N___AT.
AMERICAN TRANS AIR, INC., Lessee
By: ____________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, Owner Participant
By: ____________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY
(EXCEPT AS EXPRESSLY PROVIDED HEREIN), e
BUT SOLELY AS TRUSTEE, Owner Truste
By: _____________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
IN ITS INDIVIDUAL CAPACITY
(AS EXPRESSLY PROVIDED HEREIN)
By: _________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY
(EXCEPT AS EXPRESSLY PROVIDED HEREIN),
BUT SOLELY AS TRUSTEE, Mortgagee
By: _________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY
(EXCEPT AS EXPRESSLY PROVIDED HEREIN),
BUT SOLELY AS TRUSTEE, Pass-Through Trustee
under the Pass-Through Trust Agreement
for the American Trans Air, Inc.
Pass-Through Trust, 200_-1G
By: _________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY
(EXCEPT AS EXPRESSLY PROVIDED HEREIN),
BUT SOLELY AS TRUSTEE, Pass-Through Trustee
under the Pass-Through Trust Agreement
for the American Trans Air, Inc.
Pass-Through Trust, 200_-1C
` By: ________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY
(EXCEPT AS EXPRESSLY PROVIDED HEREIN),
BUT SOLELY AS SUBORDINATION AGENT
By: _________________________________________
Name:
Title:
ACCOUNTS; ADDRESSES
Account for Payments Address for Notices
AMERICAN (Confidential Material American Trans Air, Inc.
TRANS AIR, INC Omitted) 0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Exec. VP and CFO
fax: (000) 000-0000
OWNER General Electric Capital
PARTICIPANT Corp.
_______________________
Attention: _________________
fax: (____) __________
THE BOEING The Boeing Company
COMPANY X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Treasurer
M/S 68-34
fax: (000) 000-0000
FIRST SECURITY First Security Bank, N.A.
BANK,NATIONAL 00 Xxxxx Xxxx Xxxxxx
XXXXXXXXXXX Xxxx Xxxx Xxxx, XX 00000
Attention: Corporate Trust
Department
fax: (000) 000-0000
WILMINGTON Wilmington Trust Company
TRUST COMPANY, Xxxxxx Square North
AS MORTGAGEE 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention:Corporate Trust
Administration
fax: (000)000-0000
WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS Xxxxxx Square North
SUBORDINATION AGENT 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust
Administration
fax: (000) 000-0000
WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS Xxxxxx Square North
PASS-THROUGH TRUSTEE 0000 Xxxxx Xxxxxx Xxxxxx
FOR THE 200_-1G Xxxxxxxxxx, XX 00000-0000
PASS-THROUGH TRUST Attention: Corporate Trust
Administration
fax: (000) 000-0000
WILMINGTON TRUST Wilmington Trust Company
COMPANY, AS Xxxxxx Square North
PASS-THROUGH TRUSTEE 0000 Xxxxx Xxxxxx Xxxxxx
FOR THE 200_-1c Xxxxxxxxxx, XX 00000-0000
PASS-THROUGH TRUST Attention: Corporate Trust
Administration
fax: (000) 000-0000
AMBAC ASSURANCE Ambac Assurance Corporation
CORPORATION 0 Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
fax: (000) 000-0000
COMMITMENTS
PARTICIPANT PERCENTAGE OF LESSOR'S COST DOLLAR AMOUNT
OWNER PARTICIPANT OWNER PARTICIPANT'S PERCENTAGE
PERCENTAGE
General Electric Capital __________% $__________
Corporation
PASS-THROUGH TRUSTEE LOAN PARTICIPANT'S PTT PERCENTAGE
200_-1G Pass-Through Trustee __________% $__________
200_-1C Pass-Through Trustee __________% $__________
TOTAL 100% $__________
CERTAIN TERMS
DEFINED TERM DEFINITION
Commitment Termination Date __________, 200_
Lessee's Advisor(s) Capstar Partners, LLC
Lessor's Cost $_______________
OP Jurisdiction New York
Owner Participant's Special Counsel Xxxxx Xxxxxxxxxx LLP
Trust Company Jurisdiction Utah
