EX-99(H)
EXHIBIT 99(H)
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
Dated as of [_______________]
Between
NORTHWEST AIRLINES, INC.,
Owner
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,
Indenture Trustee
SECURED CERTIFICATES COVERING
ONE [AIRBUS A319-114] [BOEING 757-251] AIRCRAFT
BEARING U.S. REGISTRATION XXXX N[______]
OWNED BY NORTHWEST AIRLINES, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates . . . . . . . . . . 5
SECTION 2.02. Issuance and Terms of Secured Certificates . . . 10
SECTION 2.03. [Intentionally Omitted] . . . . . . . . . . . . . 12
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . 12
SECTION 2.05. Application of Payments . . . . . . . . . . . . . 15
SECTION 2.06. Termination of Interest in Collateral . . . . . . 16
SECTION 2.07. Registration, Transfer and Exchange of
Secured Certificates . . . . . . . . . . . . . 16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates . . . . . . . . . . . . . . . . . 17
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . 18
SECTION 2.10. Mandatory Redemptions of Secured Certificates . . 18
SECTION 2.11. Voluntary Redemptions of Secured Certificates . . 19
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . 19
SECTION 2.13. Assumption of Secured Certificates . . . . . . . 20
SECTION 2.14. [Intentionally Omitted] . . . . . . . . . . . . . 20
SECTION 2.15. Subordination . . . . . . . . . . . . . . . . . . 20
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. Basic Distributions . . . . . . . . . . . . . . . 21
SECTION 3.02. Event of Loss; Replacement; Optional
Redemption . . . . . . . . . . . . . . . . . . 22
SECTION 3.03. Payments After Event of Default . . . . . . . . . 23
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . 25
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . 25
SECTION 3.06. Payments to the Owner . . . . . . . . . . . . . . 25
SECTION 3.07. Application of Payments Under Guarantee . . . . . 26
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ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Event of Default . . . . . . . . . . . . . . . . 26
SECTION 4.02. Remedies . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.03. Return of Aircraft, Etc. . . . . . . . . . . . . 30
SECTION 4.04. Remedies Cumulative . . . . . . . . . . . . . . . 31
SECTION 4.05. Discontinuance of Proceedings . . . . . . . . . . 32
SECTION 4.06. Waiver of Past Defaults . . . . . . . . . . . . . 32
SECTION 4.07. Appointment of Receiver . . . . . . . . . . . . . 32
SECTION 4.08. Indenture Trustee Authorized to Execute Bills
of Sale, Etc. . . . . . . . . . . . . . . . . . 33
SECTION 4.09. Rights of Certificate Holders to Receive
Payment . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default . . . . . . . . . . . 33
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . . . 34
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . 35
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions . . . . . . . . . . . 35
SECTION 5.05. No Action Except Under Trust Indenture or
Instructions. . . . . . . . . . . . . . . . . . 35
SECTION 5.06. Investment of Amounts Held by Indenture
Trustee . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties . . . . . . . . . 36
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . . . . 37
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents . . . . . . . . . . . . . 37
SECTION 6.04. No Segregation of Monies; No Interest . . . . . . 37
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . . . . 38
SECTION 6.06. Compensation . . . . . . . . . . . . . . . . . . 38
SECTION 6.07. Instructions from Certificate Holders . . . . . . 39
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ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. Liens . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia . . . . . . . . 40
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions . . . 46
SECTION 7.04. Insurance . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.05. Inspection . . . . . . . . . . . . . . . . . . . 55
SECTION 7.06. Loss, Destruction, Requisition, etc. . . . . . . 56
SECTION 7.07. Interests in the Purchase Agreement . . . . . . . 62
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Scope of Indemnification . . . . . . . . . . . . 67
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. Resignation of Indenture Trustee; Appointment
of Successor . . . . . . . . . . . . . . . . . 69
SECTION 9.02. Appointment of Additional and Separate
Trustees . . . . . . . . . . . . . . . . . . . 70
ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations . . . . . 72
SECTION 10.02. Indenture Trustee Protected . . . . . . . . . . 73
SECTION 10.03. Documents Mailed to Certificate Holders . . . . 74
SECTION 10.04. No Request Necessary for Trust Indenture
Supplement . . . . . . . . . . . . . . . . . . 74
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Trust Indenture . . . . . . . . . 74
SECTION 11.02. No Legal Title to Collateral in Certificate
Holders . . . . . . . . . . . . . . . . . . . 75
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding . . . . . . . . . . . . . . . . . . . 75
SECTION 11.04. Trust Indenture for Benefit of the Owner,
Indenture Trustee, and Certificate Holders . . 75
SECTION 11.05. Notices . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.06. Severability . . . . . . . . . . . . . . . . . . 76
SECTION 11.07. No Oral Modification or Continuing Waivers . . . 76
SECTION 11.08. Successors and Assigns . . . . . . . . . . . . . 76
SECTION 11.09. Headings . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.10. Normal Commercial Relations . . . . . . . . . . 77
SECTION 11.11. Governing Law; Counterpart Form . . . . . . . . 77
SECTION 11.12. Voting By Certificate Holders . . . . . . . . . 77
SECTION 11.13. Bankruptcy . . . . . . . . . . . . . . . . . . . 77
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ANNEX A Definitions
EXHIBIT A Form of Trust Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
SCHEDULE III Schedule of Permitted Lessees
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TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _]
TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _], dated as
of [_______________] ("Trust Indenture") between NORTHWEST AIRLINES, INC., a
Minnesota corporation (the "Owner") and STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company, not in its individual capacity, except as
expressly stated herein, but solely as Indenture Trustee hereunder (together
with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, the parties desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner to the Pass
Through Trustees (or their designee) of the Secured Certificates specified on
Schedule I hereto (it being understood that not all Series may be issued, in
which case, references in this Trust Indenture to Series not issued shall be
disregarded) and (ii) to provide for the assignment, mortgage and pledge by
the Owner to the Indenture Trustee, as part of the Collateral hereunder,
among other things, of all of the Owner's right, title and interest in and to
the Aircraft and, except as hereinafter expressly provided, all payments and
other amounts received hereunder in accordance with the terms hereof, as
security for, among other things, the Owner's obligations to the Indenture
Trustee, for the ratable benefit and security of the Certificate Holders,
subject to Section 2.15 and Article III hereof;
WHEREAS, all things have been done to make the Secured
Certificates, when executed by the Owner and authenticated and delivered by
the Indenture Trustee hereunder, the valid, binding and enforceable
obligations of the Owner; and
WHEREAS, all things necessary to make this Trust Indenture
the valid, binding and legal obligation of the Owner for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the Principal Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Secured Certificates from time to time outstanding hereunder
and the performance and observance by the Owner of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Secured Certificates contained, for the benefit of the Certificate Holders
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and the Indenture Indemnitees and the prompt payment of all amounts from time
to time owing hereunder and under the Participation Agreement to the
Certificate Holders and the Indenture Indemnitees by the Owner and for the
uses and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of
the acceptance of the Secured Certificates by the holders thereof, and for
other good and valuable consideration the receipt and adequacy whereof are
hereby acknowledged, the Owner has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby
grant, bargain, sell, assign, transfer, convey, mortgage, pledge and confirm,
unto the Indenture Trustee, its successors in trust and assigns, for the
security and benefit of the Certificate Holders, a first priority security
interest in and mortgage lien on all right, title and interest of the Owner
in, to and under the following described property, rights and privileges,
(including all property hereafter specifically subjected to the Lien of this
Trust Indenture by the Trust Indenture Supplement or any mortgage
supplemental hereto), to wit:
(a) the Aircraft (including the Airframe and the Engines
and all replacements thereof and substitutions therefor as provided herein),
all as more particularly described in the Trust Indenture Supplement executed
and delivered with respect to the Aircraft or any such replacements or
substitutions therefor, as provided in this Trust Indenture;
(b) the Contract Rights, but subject always to the
provisions of Section 7.07 hereof;
(c) all insurance and requisition proceeds with respect
to the Aircraft, including but not limited to the insurance required under
Section 7.04 hereof, but excluding any insurance maintained by the Owner and
not required under Section 7.04 hereof;
(d) all monies and securities from time to time
deposited or required to be deposited with the Indenture Trustee pursuant to
any terms of this Indenture or required hereby to be held by the Indenture
Trustee hereunder; and
(e) all proceeds of the foregoing.
SUBJECT TO all of the terms and conditions of this Trust
Indenture and the rights of the Owner hereunder.
Concurrently with the delivery hereof, the Owner is
delivering to the Indenture Trustee executed copies of the Participation
Agreement and the Consent and Agreement.
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TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for the
benefit and security of the Certificate Holders, except as provided in
Section 2.15 and Article III hereof without any preference, distinction or
priority of any one Secured Certificate over any other by reason of priority
of time of issue, sale, negotiation, date of maturity thereof or otherwise
for any reason whatsoever, and for the uses and purposes and in all cases and
as to all property specified in paragraphs (a) through (e) inclusive above,
subject to the terms and provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the obligations
assumed by it thereunder, except to the extent prohibited or excluded from
doing so pursuant to the terms and provisions thereof, and the Indenture
Trustee and the Certificate Holders shall have no obligation or liability
under the Indenture Agreements, by reason of or arising out of the assignment
hereunder, nor shall the Indenture Trustee or the Certificate Holders be
required or obligated in any manner to perform or fulfill any obligations of
the Owner under or pursuant to any of the Indenture Agreements to which it is
a party, or, except as herein expressly provided, to make any payment, or to
make any inquiry as to the nature or sufficiency of any payment received by
it, or present or file any claim, or take any action to collect or enforce
the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
The Owner does hereby constitute the Indenture Trustee the
true and lawful attorney of the Owner, irrevocably, granted for good and
valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any and
all monies and claims for monies (in each case including insurance and
requisition proceeds) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Collateral, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings which the Indenture Trustee
may deem to be necessary or advisable in the premises. Without limiting the
generality of the foregoing, but subject to the rights of the Owner
hereunder, during the continuance of any Event of Default under this Trust
Indenture, the Indenture Trustee shall have the right under such power of
attorney to accept any offer in connection with the exercise of remedies as
set forth herein of any purchaser to purchase the Airframe and Engines and
upon such purchase to execute and deliver in the name of and on behalf of the
Owner an appropriate xxxx of sale and other instruments of transfer relating
to the Airframe and Engines, when purchased by such purchaser, and to perform
all other necessary or appropriate acts with respect to any such purchase,
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and in its discretion to file any claim or take any other action or
proceedings, either in its own name or in the name of the Owner or otherwise,
which the Indenture Trustee may deem necessary or appropriate to protect and
preserve the right, title and interest of the Indenture Trustee in and to
such other sums and the security intended to be afforded hereby; provided,
however, that no action of the Indenture Trustee pursuant to this paragraph
shall increase the obligations or liabilities of the Owner to any Person
beyond those obligations and liabilities specifically set forth in this Trust
Indenture and in the other Operative Documents.
The Owner agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner will promptly
and duly execute and deliver or cause to be duly executed and delivered any
and all such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect the
mortgage, security interests and assignments created or intended to be
created hereby or to obtain for the Indenture Trustee the full benefits of
the assignment hereunder and of the rights and powers herein granted.
The Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign
or pledge, so long as the assignment hereunder shall remain in effect, and
the Lien hereof shall not have been released pursuant to Section 11.01
hereof, any of its right, title or interest hereby assigned, to anyone other
than the Indenture Trustee and its predecessor(s) in this transaction.
IT IS HEREBY COVENANTED AND AGREED by and between the
parties hereto as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein or the context requires
otherwise, capitalized terms utilized but not defined herein shall have the
respective meanings set forth or incorporated by reference in Annex A hereto
for all purposes of the Trust Indenture.
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ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates.
The Secured Certificates shall be substantially in the form
set forth below:
THIS SECURED CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF
ANY STATE. ACCORDINGLY, THIS SECURED CERTIFICATE MAY NOT BE SOLD UNLESS
EITHER REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN
EXEMPTION FROM SUCH REGISTRATIONS IS AVAILABLE.
NORTHWEST AIRLINES, INC. SERIES [___] SECURED CERTIFICATE DUE [_____] ISSUED
IN CONNECTION WITH THE [AIRBUS A319-114] [BOEING 757-251] AIRCRAFT BEARING
UNITED STATES REGISTRATION NUMBER N[_____].
No.____ Date: [________]
$__________________
INTEREST RATE MATURITY DATE
[________]
[________,_______]
NORTHWEST AIRLINES, INC. (the "Owner"), hereby promises to
pay to ___________, or the registered assignee thereof, the principal sum of
$_________ (the "Principal Amount"), together with interest on the amount of
the Principal Amount remaining unpaid from time to time (calculated on the
basis of a year of 360 days comprised of twelve 30-day months) from the date
hereof until paid in full at a rate per annum equal to the interest rate
indicated above. The Principal Amount of this Secured Certificate shall be
payable in installments on the dates set forth in Schedule I hereto equal to
the corresponding percentage of the Principal Amount of this Secured
Certificate set forth in Schedule I hereto. Accrued but unpaid interest
shall be due and payable in semi-annual installments commencing
[April/October 1, _____], and thereafter on [October 1] and [April 1] of
each year, to and including [____________]. Notwithstanding the foregoing,
the final payment made on this Secured Certificate shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Secured
Certificate. Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Secured Certificate becomes due and
payable is not a Business Day then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day and if
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such payment is made on such next succeeding Business Day, no interest shall
accrue on the amount of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means the
Trust Indenture and Security Agreement [NW ____ _], dated as of
[_______________], between the Owner and State Street Bank and Trust Company
(the "Indenture Trustee"), as the same may be amended or supplemented from
time to time. All other capitalized terms used in this Secured Certificate
and not defined herein shall have the respective meanings assigned in the
Trust Indenture.
This Secured Certificate shall bear interest, payable on
demand, at the Past Due Rate (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on any overdue Principal Amount, any
overdue Make-Whole Amount, if any, and (to the extent permitted by applicable
law) any overdue interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue. Amounts shall be
overdue if not paid when due (whether at stated maturity, by acceleration or
otherwise).
There shall be maintained a Secured Certificate Register for
the purpose of registering transfers and exchanges of Secured Certificates at
the Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, or as otherwise provided in
the Trust Indenture. Each such payment shall be made on the date such
payment is due and without any presentment or surrender of this Secured
Certificate, except that in the case of any final payment with respect to
this Secured Certificate, the Secured Certificate shall be surrendered
promptly thereafter to the Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Secured
Certificate, agrees that, except as provided in the Trust Indenture, each
payment received by it hereunder shall be applied, first, to the payment of
accrued interest on this Secured Certificate (as well as any interest on any
overdue Principal Amount, any overdue Make-Whole Amount, if any, or, to the
extent permitted by Law, any overdue interest and other amounts hereunder) to
the date of such payment, second, to the payment of the Principal Amount of
this Secured Certificate then due, third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and fourth, the balance, if any, remaining thereafter, to the
payment of Principal Amount of this Secured Certificate remaining unpaid in
the inverse order of their normal maturity.
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This Secured Certificate is one of the Secured Certificates
referred to in the Trust Indenture which have been or are to be issued by the
Owner pursuant to the terms of the Trust Indenture. The Collateral is held
by the Indenture Trustee as security, in part, for the Secured Certificates.
The provisions of this Secured Certificate are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture and the
Participation Agreement for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Secured Certificate and the rights and obligations of the holders of,
and the nature and extent of the security for, any other Secured Certificates
executed and delivered under the Trust Indenture, as well as for a statement
of the terms and conditions of the trust created by the Trust Indenture, to
all of which terms and conditions in the Trust Indenture and the
Participation Agreement each holder hereof agrees by its acceptance of this
Secured Certificate.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Secured Certificate is exchangeable for a
like aggregate Principal Amount of Secured Certificates of different
authorized denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of
this Secured Certificate, the Owner and the Indenture Trustee shall treat the
person in whose name this Secured Certificate is registered as the owner
hereof for all purposes whether or not this Secured Certificate be overdue,
and neither of the Owner nor the Indenture Trustee shall be affected by
notice to the contrary.
This Secured Certificate is subject to redemption as
provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not
otherwise. This Secured Certificate is also subject to assumption by an
owner trustee as provided in Section 2.13 of the Trust Indenture.
[The indebtedness evidenced by this Secured Certificate is,
to the extent and in the manner provided in the Trust Indenture, subordinate
and subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of Series G
Secured Certificates, and this Secured Certificate is issued subject to such
provisions. The Certificate Holder of this Secured Certificate, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Indenture Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Trust Indenture and (c) appoints the Indenture Trustee his attorney-in-fact
for such purpose.]
To be inserted for each Secured Certificate other than any Series G
Secured Certificate.
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Unless the certificate of authentication hereon has been
executed by or on behalf of the Indenture Trustee by manual signature, this
Secured Certificate shall not be entitled to any benefit under the Trust
Indenture or be valid or obligatory for any purpose.
THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
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IN WITNESS WHEREOF, the Owner has caused this Secured
Certificate to be executed in its corporate name by its officer thereunto
duly authorized on the date hereof.
NORTHWEST AIRLINES, INC.,
By ___________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Secured Certificates referred to in the
within-mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By ___________________________________
Name:
Title:
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SCHEDULE I
SECURED CERTIFICATES AMORTIZATION
Percentage of
Principal Amount
Payment Date to be Paid
------------ ------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Secured Certificates.
The Secured Certificates shall be dated the date of issuance
thereof, shall be issued in two separate series consisting of Series G and
Series C and in the maturities and principal amounts and shall bear interest
as specified in Schedule I hereto. On the Closing Date, each Secured
Certificate shall be issued to the Pass Through Trustees (or their designee)
under the Pass Through Agreements as set forth in Schedule II hereto. The
Secured Certificates shall be issued in registered form only. The Secured
Certificates shall be issued in denominations of $1,000 and integral
multiples thereof, except that one Secured Certificate of each Series may be
in an amount that is not an integral multiple of $1,000.
Each Secured Certificate shall bear interest at the Debt
Rate (calculated on the basis of a year of 360 days comprised of twelve 30-
day months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on [April/October 1, _____], and on each
[October 1] and [April 1] thereafter until maturity. The Principal Amount of
each Secured Certificate shall be payable on the dates and in the
installments equal to the corresponding percentage of the Principal Amount as
set forth in Schedule I hereto which shall be attached as Schedule I to the
Secured Certificates. Notwithstanding the foregoing, the final payment made
under each Secured Certificate shall be in an amount sufficient to discharge
in full the unpaid Principal Amount and all accrued and unpaid interest on,
and any other amounts due under, such Secured Certificate. Each Secured
Certificate shall bear interest at the Past Due Rate (calculated on the basis
of a year of 360 days comprised of twelve 30-day months) on any part of the
Principal Amount, Make-Whole Amount, if any, and to the extent permitted by
applicable law, interest and any other amounts payable thereunder not paid
when due for any period during which the same shall be overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid
when due (whether at stated maturity, by acceleration or otherwise).
Notwithstanding anything to the contrary contained herein, if any date on
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which a payment under any Secured Certificate becomes due and payable is not
a Business Day then such payment shall not be made on such scheduled date but
shall be made on the next succeeding Business Day and if such payment is made
on such next succeeding Business Day, no interest shall accrue on the amount
of such payment during such extension.
The Owner agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (a) the Owner's pro rata
share of all amounts owed to the Liquidity Provider by the Subordination
Agent under each Liquidity Facility other than amounts due as (i) repayments
of the principal of advances thereunder, (ii) interest on Interest Drawings,
Final Drawings, and Applied Downgrade Advances and Applied Non-Extension
Advances (as defined in the Liquidity Facilities) under any Liquidity
Facility except to the extent included in Net Interest and Related Charges,
and (iii) fees payable to the Liquidity Provider payable (whether or not in
fact paid) under Section 7(a) of the Note Purchase Agreement (as originally
in effect or amended) and (b) the Owner's pro rata share of all compensation
and reimbursement of fees, expenses and disbursements (including payment of
indemnities) owed to the Policy Provider under the Policy Provider Agreement
other than fees payable to the Policy Provider payable (whether or not in
fact paid) under Section 7(a) of the Note Purchase Agreement (as originally
in effect or amended). As used in this Section, "Owner's pro rata share"
means as of any time:
(A) with respect to all amounts other than Net Interest
and Related Charges, a fraction the numerator of which is the
aggregate principal balance then outstanding of the Secured
Certificates and the denominator of which is the aggregate principal
balance then outstanding of all Equipment Notes, plus
(B) with respect to all Net Interest and Related Charges
(x) if there exists a Payment Default under any Secured Certificate a
fraction, the numerator of which is the aggregate principal balance
then outstanding of the Secured Certificates and the denominator of
which is the aggregate principal balance then outstanding of all
Equipment Notes issued under Indentures under which there exists a
Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of
(i) the amount, if any, by which interest payable to the Liquidity Provider
on any Interest Drawing, Final Drawing, Applied Downgrade Advance and/or
Applied Non-Extension Advance (as defined in the Liquidity Facilities)
exceeds the amount which would be payable if such drawings bore interest at
the Designated Interest Rate plus (ii) any amounts payable under Section
3.01, Section 3.02, Section 3.03 or Section 7.07 of each Liquidity Facility
(or similar provisions of any succeeding Liquidity Facility) which result
from any Interest Drawing, Final Drawing, Applied Downgrade Advance or
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Applied Non-Extension Advance (as defined in the Liquidity Facilities). As
used in this Section "Designated Interest Rate" means the weighted average
Past Due Rate (as defined in the applicable Indentures) except with respect
to that portion of any Final Drawing (or Applied Downgrade Advance or Applied
Non-Extension Advance which becomes a Final Drawing) which remains in a Cash
Collateral Account, Designated Interest Rate means the weighted average
Investment Earnings of funds in the Cash Collateral Accounts. As used in
this Section, a Payment Default when used in connection with a Secured
Certificate or Equipment Note means a default in the payment of principal
thereof or interest thereon which has not been cured other than solely
because of acceleration. The following terms are used in this Section as
defined in the Intercreditor Agreement without regard to any amendment,
modification or supplement thereto after the Closing Date: Cash Collateral
Accounts, Equipment Notes, Final Drawing, Indentures, Interest Drawing and
Investment Earnings.
The Secured Certificates shall be executed on behalf of the
Owner by its President or one of its Vice Presidents, its Treasurer or
Assistant Secretaries or other authorized officer. Secured Certificates
bearing the signatures of individuals who were at any time the proper
officers of the Owner shall bind the Owner, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Secured Certificates or did not hold such
offices at the respective dates of such Secured Certificates. The Owner may
from time to time execute and deliver Secured Certificates with respect to
the Aircraft to the Indenture Trustee for authentication upon original issue
and such Secured Certificates shall thereupon be authenticated and delivered
by the Indenture Trustee upon the written request of the Owner signed by a
Vice President, its Treasurer or other authorized officer of the Owner;
provided, however, that each such request shall specify the aggregate
Principal Amount of all Secured Certificates to be authenticated hereunder on
original issue with respect to the Aircraft. No Secured Certificate shall be
secured by or entitled to any benefit under this Trust Indenture or be valid
or obligatory for any purposes, unless there appears on such Secured
Certificate a certificate of authentication in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized officers and such certificate upon any Secured Certificates shall
be conclusive evidence, and the only evidence, that such Secured Certificate
has been duly authenticated and delivered hereunder.
SECTION 2.03. [Intentionally Omitted]
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole
Amount, if any, and other amounts due under each Secured Certificate or
hereunder will be payable in Dollars by wire transfer of immediately
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available funds not later than 12:00 noon, New York City time, on the due
date of payment to the Indenture Trustee at the Corporate Trust Office for
distribution among the Certificate Holders in the manner provided herein.
The Owner shall not have any responsibility for the distribution of such
payment to any Certificate Holder. Notwithstanding the foregoing or any
provision in any Secured Certificate to the contrary, the Indenture Trustee
will use reasonable efforts to pay or cause to be paid, if so directed in
writing by any Certificate Holder (with a copy to the Owner), all amounts
paid by the Owner hereunder and under such holder's Secured Certificate or
Secured Certificates to such holder or a nominee therefor (including all
amounts distributed pursuant to Article III of this Trust Indenture) by
transferring, or causing to be transferred, by wire transfer of immediately
available funds in Dollars, prior to 2:00 p.m., New York City time, on the
due date of payment, to an account maintained by such holder with a bank
located in the continental United States the amount to be distributed to such
holder, for credit to the account of such holder maintained at such bank. If
the Indenture Trustee shall fail to make any such payment as provided in the
immediately preceding sentence after its receipt of funds at the place and
prior to the time specified above, the Indenture Trustee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss of
use of funds at the Debt Rate until such payment is made and the Indenture
Trustee shall be entitled to any interest earned on such funds until such
payment is made. Any payment made hereunder shall be made without any
presentment or surrender of any Secured Certificate, except that, in the case
of the final payment in respect of any Secured Certificate, such Secured
Certificate shall be surrendered to the Indenture Trustee for cancellation
promptly after such payment. Notwithstanding any other provision of this
Trust Indenture to the contrary, the Indenture Trustee shall not be required
to make, or cause to be made, wire transfers as aforesaid prior to the first
Business Day on which it is practicable for the Indenture Trustee to do so in
view of the time of day when the funds to be so transferred were received by
it if such funds were received after 12:00 noon, New York City time, at the
place of payment. Prior to the due presentment for registration of transfer
of any Secured Certificate, the Owner and the Indenture Trustee shall deem
and treat the Person in whose name any Secured Certificate is registered on
the Secured Certificate Register as the absolute owner and holder of such
Secured Certificate for the purpose of receiving payment of all amounts
payable with respect to such Secured Certificate and for all other purposes,
and none of the Owner or the Indenture Trustee shall be affected by any
notice to the contrary. So long as any signatory to the Participation
Agreement or nominee thereof shall be a registered Certificate Holder, all
payments to it shall be made to the account of such Certificate Holder
specified in Schedule I thereto and otherwise in the manner provided in or
pursuant to the Participation Agreement unless it shall have specified some
other account or manner of payment by notice to the Indenture Trustee
consistent with this Section 2.04.
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(b) The Indenture Trustee, as agent for the Owner, shall
exclude and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Secured Certificate (and such exclusion and
withholding shall constitute payment in respect of such Secured Certificate)
any and all United States withholding taxes applicable thereto as required by
Law. The Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Secured Certificates, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Secured Certificate) and timely pay the same to the appropriate authority in
the name of and on behalf of the Certificate Holders, that it will file any
necessary United States withholding tax returns or statements when due, and
that as promptly as possible after the payment thereof it will deliver to
each Certificate Holder (with a copy to the Owner) appropriate receipts
showing the payment thereof, together with such additional documentary
evidence as any such Certificate Holder may reasonably request from time to
time.
If a Certificate Holder which is a Non-U.S. Person has
furnished to the Indenture Trustee a properly completed and currently
effective U.S. Internal Revenue Service Form 1001 or W-8 (or such successor
form or forms as may be required by the United States Treasury Department)
during the calendar year in which the payment hereunder or under the Secured
Certificate(s) held by such holder is made (but prior to the making of such
payment), or in either of the two preceding calendar years, and has not
notified the Indenture Trustee of the withdrawal or inaccuracy of such form
prior to the date of such payment (and the Indenture Trustee has no reason to
know that any information set forth in such form is inaccurate), the
Indenture Trustee shall withhold only the amount, if any, required by Law
(after taking into account any applicable exemptions claimed by the
Certificate Holder) to be withheld from payments hereunder or under the
Secured Certificates held by such holder in respect of United States federal
income tax (and such withholding shall constitute payment in respect of such
Secured Certificate). If a Certificate Holder (x) which is a Non-U.S. Person
has furnished to the Indenture Trustee a properly completed and currently
effective U.S. Internal Revenue Service Form 4224 in duplicate (or such
successor certificate, form or forms as may be required by the United States
Treasury Department as necessary in order to avoid withholding of United
States federal income tax), during the calendar year in which the payment is
made (but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or form
prior to the date of such payment (and the Indenture Trustee has no reason to
know that any information set forth in such form is inaccurate) or (y) which
is a U.S. Person has furnished to the Indenture Trustee a properly completed
and currently effective U.S. Internal Revenue Service Form W-9, if
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applicable, prior to a payment hereunder or under the Secured Certificates
held by such holder, no amount shall be withheld from payments in respect of
United States federal income tax. If any Certificate Holder has notified the
Indenture Trustee that any of the foregoing forms or certificates is
withdrawn or inaccurate, or if such holder has not filed a form claiming an
exemption from United States withholding tax or if the Code or the
regulations thereunder or the administrative interpretation thereof are at
any time after the date hereof amended to require such withholding of United
States federal income taxes from payments under the Secured Certificates held
by such holder, the Indenture Trustee agrees to withhold from each payment
due to the relevant Certificate Holder withholding taxes at the appropriate
rate under Law and will, on a timely basis as more fully provided above,
deposit such amounts with an authorized depository and make such returns,
statements, receipts and other documentary evidence in connection therewith
as required by applicable law.
The Owner shall not have any liability for the failure of
the Indenture Trustee to withhold taxes in the manner provided for herein or
if any Certificate Holder provides false or inaccurate information on any
form required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Secured Certificate, each payment of
Principal Amount, Make-Whole Amount, if any, and interest or other amounts
due thereon shall be applied:
First: to the payment of accrued interest on such Secured
Certificate (as well as any interest on any overdue Principal Amount,
any overdue Make-Whole Amount, if any, and to the extent permitted by
Law, any overdue interest and any other overdue amounts thereunder)
to the date of such payment;
Second: to the payment of the Principal Amount of such
Secured Certificate (or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Secured Certificate; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Secured Certificate remaining
unpaid (provided that such Secured Certificate shall not be subject
to redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
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The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.
SECTION 2.06. Termination of Interest in Collateral.
A Certificate Holder shall not, as such, have any further
interest in, or other right with respect to, the Collateral when and if the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Secured Certificates held by such Certificate Holder
and all other sums then payable to such Certificate Holder hereunder and
under the other Operative Documents by the Owner (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of
Secured Certificates.
The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and
until registration hereunder shall have occurred. The Secured Certificate
Register shall be kept at the Corporate Trust Office of the Indenture
Trustee. The Indenture Trustee is hereby appointed "Secured Certificate
Registrar" for the purpose of registering Secured Certificates and transfers
of Secured Certificates as herein provided. A holder of any Secured
Certificate intending to exchange such Secured Certificate shall surrender
such Secured Certificate to the Indenture Trustee at the Corporate Trust
Office, together with a written request from the registered holder thereof
for the issuance of a new Secured Certificate, specifying, in the case of a
surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Secured Certificate, the
Owner shall execute, and the Indenture Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Secured Certificates of a like aggregate Principal Amount and of the same
series. At the option of the Certificate Holder, Secured Certificates may be
exchanged for other Secured Certificates of any authorized denominations of a
like aggregate Principal Amount, upon surrender of the Secured Certificates
to be exchanged to the Indenture Trustee at the Corporate Trust Office.
Whenever any Secured Certificates are so surrendered for exchange, the Owner
shall execute, and the Indenture Trustee shall authenticate and deliver, the
Secured Certificates which the Certificate Holder making the exchange is
entitled to receive. All Secured Certificates issued upon any registration
of transfer or exchange of Secured Certificates (whether under this Section
2.07 or under Section 2.08 hereof or otherwise under this Trust Indenture)
shall be the valid obligations of the Owner evidencing the same respective
obligations, and entitled to the same security and benefits under this Trust
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Indenture, as the Secured Certificates surrendered upon such registration of
transfer or exchange. Every Secured Certificate presented or surrendered for
registration of transfer, shall (if so required by the Indenture Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by the Certificate Holder
or such holder's attorney duly authorized in writing, and the Indenture
Trustee shall require evidence satisfactory to it as to the compliance of any
such transfer with the Securities Act, and the securities Laws of any
applicable state. The Indenture Trustee shall make a notation on each new
Secured Certificate of the amount of all payments of Principal Amount
previously made on the old Secured Certificate or Secured Certificates with
respect to which such new Secured Certificate is issued and the date to which
interest on such old Secured Certificate or Secured Certificates has been
paid. Interest shall be deemed to have been paid on such new Secured
Certificate to the date on which interest shall have been paid on such old
Secured Certificate, and all payments of the Principal Amount marked on such
new Secured Certificate, as provided above, shall be deemed to have been made
thereon. The Owner shall not be required to exchange any surrendered Secured
Certificates as provided above during the ten-day period preceding the due
date of any payment on such Secured Certificate. The Owner shall in all
cases deem the Person in whose name any Secured Certificate shall have been
issued and registered as the absolute owner and holder of such Secured
Certificate for the purpose of receiving payment of all amounts payable by
the Owner with respect to such Secured Certificate and for all purposes until
a notice stating otherwise is received from the Indenture Trustee and such
change is reflected on the Secured Certificate Register. The Indenture
Trustee will promptly notify the Owner of each registration of a transfer of
a Secured Certificate. Any such transferee of a Secured Certificate, by its
acceptance of a Secured Certificate, agrees to the provisions of the
Participation Agreement applicable to Certificate Holders, including Sections
6, 8(e), 8(k), 8(l), 8(q), 8(r), 8(t), 8(cc), 10, 13(b), 13(c), 15(b), 15(c)
and 16, and shall be deemed to have represented and warranted (except as
provided above), and covenanted, to the parties to the Participation
Agreement as to the matters represented, warranted and covenanted by the
Purchasers in the Participation Agreement. Subject to compliance by the
Certificate Holder and its transferee (if any) of the requirements set forth
in this Section 2.07, the Indenture Trustee and the Owner shall use all
reasonable efforts to issue new Secured Certificates upon transfer or
exchange within 10 Business Days of the date a Secured Certificate is
surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates.
If any Secured Certificate shall become mutilated,
destroyed, lost or stolen, the Owner shall, upon the written request of the
holder of such Secured Certificate, execute and the Indenture Trustee shall
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authenticate and deliver in replacement thereof a new Secured Certificate,
payable in the same Principal Amount dated the same date and captioned as
issued in connection with the Aircraft. If the Secured Certificate being
replaced has become mutilated, such Secured Certificate shall be surrendered
to the Indenture Trustee and a photocopy thereof shall be furnished to the
Owner. If the Secured Certificate being replaced has been destroyed, lost or
stolen, the holder of such Secured Certificate shall furnish to the Owner and
the Indenture Trustee such security or indemnity as may be required by them
to save the Owner and the Indenture Trustee harmless and evidence
satisfactory to the Owner and the Indenture Trustee of the destruction, loss
or theft of such Secured Certificate and of the ownership thereof. If a
"qualified institutional buyer" of the type referred to in paragraph
(a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a "QIB")
is the holder of any such destroyed, lost or stolen Secured Certificate, then
the written indemnity of such QIB, signed by an authorized officer thereof,
in favor of, delivered to and in form reasonably satisfactory to the Owner
and the Indenture Trustee shall be accepted as satisfactory indemnity and
security and no further indemnity or security shall be required as a
condition to the execution and delivery of such new Secured Certificate.
Subject to compliance by the Certificate Holder of the requirements set forth
in this Section 2.08, the Indenture Trustee and the Owner shall use all
reasonable efforts to issue new Secured Certificates within 10 Business Days
of the date of the written request therefor from the Certificate Holder.
SECTION 2.09. Payment of Expenses on Transfer;
Cancellation.
(a) No service charge shall be made to a Certificate
Holder for any registration of transfer or exchange of Secured Certificates,
but the Indenture Trustee, as Secured Certificate Registrar, may require
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or
exchange of Secured Certificates.
(b) The Indenture Trustee shall cancel all Secured
Certificates surrendered for replacement, redemption, transfer, exchange,
payment or cancellation and shall destroy the canceled Secured Certificates.
SECTION 2.10. Mandatory Redemptions of Secured
Certificates.
On the date on which the Owner is required pursuant to
Section 7.06(a)(i) hereof to make payment for an Event of Loss with respect
to the Aircraft, all of the Secured Certificates shall be redeemed in whole
at a redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption and all
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other amounts payable hereunder or under the Participation Agreement to the
Certificate Holders but without Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Secured
Certificates.
Any or all of the Secured Certificates may be redeemed by
the Owner upon at least 30 days' revocable prior written notice to the
Indenture Trustee and the Certificate Holders, and the Secured Certificates
shall be redeemed in whole at a redemption price equal to 100% of the unpaid
Principal Amount thereof, together with accrued interest thereon to the date
of redemption and all other amounts payable hereunder or under the
Participation Agreement to the Certificate Holders plus Make-Whole Amount, if
any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) No redemption of any Secured Certificate may be made
except to the extent and in the manner expressly permitted by this Trust
Indenture. No purchase of any Secured Certificate may be made by the
Indenture Trustee.
(b) Notice of redemption with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed, at such Certificate Holder's address appearing
in the Secured Certificate Register; provided that, in the case of a
redemption to be made pursuant to Section 2.11, such notice shall be
revocable and shall be deemed revoked if the Indenture Trustee receives
written notice of such revocation from the Owner not later than three days
prior to the redemption date. All notices of redemption shall state: (1)
the redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become due
and payable upon each such Secured Certificate, and that, if any such Secured
Certificates are then outstanding, interest on such Secured Certificates
shall cease to accrue on and after such redemption date, and (4) the place or
places where such Secured Certificates are to be surrendered for payment of
the redemption price.
(c) On or before the redemption date, the Owner (or any
person on behalf of the Owner) shall, to the extent an amount equal to the
redemption price for the Secured Certificates to be redeemed on the
redemption date shall not then be held in the Collateral, deposit or cause to
be deposited with the Indenture Trustee by 12:00 noon on the redemption date
in immediately available funds the redemption price of the Secured
Certificates to be redeemed.
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(d) Notice of redemption having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 2.12(b)),
the Secured Certificates to be redeemed shall, on the redemption date, become
due and payable at the Corporate Trust Office of the Indenture Trustee or at
any office or agency maintained for such purposes pursuant to Section 2.07,
and from and after such redemption date (unless there shall be a default in
the payment of the redemption price) any such Secured Certificates then
outstanding shall cease to bear interest. Upon surrender of any such Secured
Certificate for redemption in accordance with said notice, such Secured
Certificate shall be redeemed at the redemption price. If any Secured
Certificate called for redemption shall not be so paid upon surrender thereof
for redemption, the Principal Amount thereof shall, until paid, continue to
bear interest from the applicable redemption date at the interest rate in
effect for such Secured Certificate as of such redemption date.
SECTION 2.13. Assumption of Secured Certificates.
Pursuant to the provisions of Section 16 of the
Participation Agreement, an owner trustee shall be entitled to assume on a
non-recourse basis all of the obligations of the Owner hereunder and under
the Secured Certificates by an amended and restated trust indenture, an
amended and restated participation agreement, and the issuance of new secured
certificates having substantially the same tenor as the Secured Certificates.
If an owner trustee shall assume such obligations of the Owner, the Owner
shall be released and discharged from any further obligations hereunder and
under the Secured Certificates (except with respect to any such obligations
that accrued prior thereto) and the Secured Certificates shall be delivered
to the Indenture Trustee for cancellation.
SECTION 2.14. [Intentionally Omitted]
SECTION 2.15. Subordination.
(a) The Owner and, by acceptance of its Secured
Certificates of any Series, each Certificate Holder of such Series, hereby
agree that no payment or distribution shall be made on or in respect of the
Secured Obligations owed to such Certificate Holder of such Series, including
any payment or distribution of cash, property or securities after the
commencement of a proceeding of the type referred to in Section 4.01(e) or
(f) hereof, except as expressly provided in Article III hereof.
(b) By the acceptance of its Secured Certificates, each
Certificate Holder of Series C agrees that in the event that such Certificate
Holder, in its capacity as a Certificate Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series C which it
is not entitled to receive under this Section 2.15 or Article III hereof, it
will hold any amount so received in trust for the Senior Holder (as defined
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in Section 2.15(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article
III hereof.
(c) As used in this Section 2.15, the term "Senior
Holder" shall mean the Certificate Holders of Series G until the Secured
Obligations in respect of Series G Secured Certificates have been paid in
full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. Basic Distributions.
Except as otherwise provided in Section 3.03 hereof, each
periodic payment of principal or interest on the Secured Certificates
received by the Indenture Trustee shall be promptly distributed in the
following order of priority:
(i) so much of such payment as shall be required to pay
in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any
other overdue amounts) then due under all Series G
Secured Certificates shall be distributed to the
Certificate Holders of Series G ratably, without
priority of one over the other, in the proportion
that the amount of such payment or payments then due
under each Series G Secured Certificate bears to the
aggregate amount of the payments then due under all
Series G Secured Certificates; and
(ii) after giving effect to paragraph (i) above, so much
of such payment remaining as shall be required to
pay in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any
other overdue amounts) then due under all Series C
Secured Certificates shall be distributed to the
Certificate Holders of Series C ratably, without
priority of one over the other, in the proportion
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that the amount of such payment or payments then due
under each Series C Secured Certificate bears to the
aggregate amount of the payments then due under all
Series C Secured Certificates.
SECTION 3.02. Event of Loss; Replacement; Optional
Redemption.
Except as otherwise provided in Section 3.03 hereof, any
payments received by the Indenture Trustee (i) with respect to the Aircraft
as the result of an Event of Loss or (ii) pursuant to the optional redemption
of the Secured Certificates pursuant to Section 2.11 hereof shall be applied
to redemption of the Secured Certificates and to all other amounts payable
hereunder or to the Indenture Trustee or any Certificate Holder under the
Participation Agreement by applying such funds in the following order of
priority:
First, (a) to reimburse the Indenture Trustee and the
Certificate Holders for any reasonable costs or expenses
incurred in connection with such redemption for which they
are entitled to reimbursement, or indemnity by the Owner,
under the Operative Documents and then (b) to pay any other
amounts then due to the Indenture Trustee and the
Certificate Holders under this Trust Indenture, the
Participation Agreement or the Secured Certificates (other
than amounts specified in clause Second below);
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus
Make-Whole Amount, if any, then due and payable in
respect of the Series G Secured Certificates; and
(ii) after giving effect to paragraph (i) above, to pay
the amounts specified in paragraph (ii) of clause
"Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of
the Series C Secured Certificates; and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine shall
be substituted for the Airframe or Engine subject to such Event of Loss as
provided in accordance with Section 7.06 hereof, any insurance, condemnation
or similar proceeds which result from such Event of Loss and are paid over to
the Indenture Trustee shall be held by the Indenture Trustee as permitted by
Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.06 hereof) as additional security for the obligations of the
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Owner under the Operative Documents and such proceeds (and such investment
earnings), to the extent not theretofore applied as provided herein, shall be
released to the Owner at the Owner's written request upon the release of such
damaged Airframe or Engine and the replacement thereof as provided herein.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all
payments received and amounts held or realized by the Indenture Trustee
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Article IV hereof) after both an Event of Default
shall have occurred and be continuing and the Secured Certificates shall have
become due and payable pursuant to Section 4.02(b) hereof, as well as all
payments or amounts then held by the Indenture Trustee as part of the
Collateral, shall be promptly distributed by the Indenture Trustee in the
following order of priority:
First, so much of such payments or amounts as shall be required to
reimburse the Indenture Trustee for any tax, expense or
other loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon the tolls,
rents, revenues, issues, products and profits of, the
property included in the Collateral (all such property being
herein called the "Mortgaged Property") pursuant to Section
4.03(b) hereof) incurred by the Indenture Trustee (to the
extent not previously reimbursed), the expenses of any sale,
taking or other proceeding, reasonable attorneys' fees and
expenses, court costs, and any other expenditures incurred
or expenditures or advances made by the Indenture Trustee or
the Certificate Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages
sustained by the Indenture Trustee or any Certificate
Holder, liquidated or otherwise, upon such Event of Default
shall be applied by the Indenture Trustee as between itself
and the Certificate Holders in reimbursement of such
expenses and any other expenses for which the Indenture
Trustee or the Certificate Holders are entitled to
reimbursement under any Operative Document and in the case
the aggregate amount to be so distributed is insufficient to
pay as aforesaid, then ratably, without priority of one over
the other, in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Certificate
Holders for payments made pursuant to Section 5.03 hereof
(to the extent not previously reimbursed) shall be
distributed to such then existing or prior Certificate
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Holders ratably, without priority of one over the other, in
accordance with the amount of the payment or payments made
by each such then existing or prior Certificate Holder
pursuant to said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate
unpaid Principal Amount of all Series G Secured
Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured
Obligations in respect of the Series G Secured
Certificates to the date of distribution, shall be
distributed to the Certificate Holders of Series G,
and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one
over the other, in the proportion that the aggregate
unpaid Principal Amount of all Series G Secured
Certificates held by each holder plus the accrued
but unpaid interest and other amounts due hereunder
or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series
G Secured Certificates held by all such holders plus
the accrued but unpaid interest and other amounts
due thereon to the date of distribution; and
(ii) after giving effect to paragraph (i) above, so much
of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid
Principal Amount of all Series C Secured
Certificates, and the accrued but unpaid interest
and other amounts due thereon and all other Secured
Obligations in respect of the Series C Secured
Certificates to the date of distribution, shall be
distributed to the Certificate Holders of Series C,
and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one
over the other, in the proportion that the aggregate
unpaid Principal Amount of all Series C Secured
Certificates held by each holder plus the accrued
but unpaid interest and other amounts due hereunder
or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series
C Secured Certificates held by all such holders plus
the accrued but unpaid interest and other amounts
due thereon to the date of distribution; and
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Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner.
No Make-Whole Amount shall be due and payable on the Secured
Certificates as a consequence of the acceleration of the Secured
Certificates.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for
which no provision as to the application thereof is made in this Trust
Indenture and for which such provision is made in the Participation Agreement
or any other Operative Document shall be applied forthwith to the purpose for
which such payment was made in accordance with the terms of the Participation
Agreement or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from the Owner in respect of the
Indenture Trustee in its individual capacity, any Certificate Holder or any
other Indenture Indemnitee, in each case pursuant to Section 7 of the
Participation Agreement, directly to the Person entitled thereto. Any
payment received by the Indenture Trustee under the third paragraph of
Section 2.02 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Trust Indenture or in any other Operative
Document shall be distributed by the Indenture Trustee to the extent received
or realized at any time in the order of priority specified in Section 3.01
hereof and after payment in full of all amounts then due in accordance with
Section 3.01 hereof, in the manner provided in clause "Fourth" of Section
3.03 hereof.
SECTION 3.06. Payments to the Owner.
Any amounts distributed hereunder by the Indenture Trustee
to the Owner shall be paid to the Owner (within the time limits contemplated
by Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from the Owner to the
Indenture Trustee from time to time.
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SECTION 3.07. Application of Payments Under Guarantee.
All payments received by the Indenture Trustee pursuant to
the Guarantee shall be distributed forthwith by the Indenture Trustee in the
same order of priority, and in the same manner, as it would have distributed
the payment in respect of which such payment under the Guarantee was
received.
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Event of Default.
"Event of Default" means any of the following events
(whatever the reason for such Event of Default and whether such event shall
be voluntary or involuntary or come about or be effected by operation of Law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the failure of the Owner to pay (i)
Principal Amount of, interest on, or Make-Whole Amount,
under any Secured Certificate when due, and such failure
shall have continued unremedied for a period of ten (10)
Business Days, or (ii) any other amount payable by it to the
Certificate Holders under this Trust Indenture (other than
any such failure arising by virtue of a tax withheld
pursuant to Section 2.04(b) hereof) or under the
Participation Agreement, and such failure shall have
continued unremedied for ten (10) Business Days after
receipt by the Owner of written demand therefor from the
Indenture Trustee or any Certificate Holder; or
(b) the Owner shall fail to carry and maintain,
or cause to be carried and maintained, insurance on and in
respect of the Aircraft in accordance with the provisions of
Section 7.04; or
(c) the Owner shall fail to observe or perform
(or caused to be observed or performed), in any material
respect, any covenant or agreement to be performed or
observed by it under any Operative Document, and such
failure shall continue unremedied for a period of thirty
(30) days after receipt by the Owner of written notice
thereof from the Indenture Trustee provided, however, that
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if the Owner shall have undertaken to cure any such failure
which arises under clause (ii) or clause (iii) of the first
sentence of Section 7.02(a), or under the second sentence of
Section 7.02(a) as it relates to maintenance, service,
repair or overhaul or under Section 7.03 and,
notwithstanding the diligence of the Owner in attempting to
cure such failure, such failure is not cured within said
thirty day period but is curable with future due diligence,
there shall exist no Event of Default under this Section
4.01 so long as the Owner is proceeding with due diligence
to cure such failure and such failure is remedied not later
than three hundred sixty-five (365) days after receipt by
the Owner of such written notice; or
(d) any representation or warranty made by the
Owner herein or in the Participation Agreement or any
document or certificate furnished by the Owner in connection
herewith or therewith or pursuant hereto or thereto (except
the representations and warranties set forth in the Pass
Through Trust Agreement, the Underwriting Agreement or the
Note Purchase Agreement or any document or instrument
furnished pursuant to any thereof) shall prove to have been
incorrect in any material respect at the time made and such
incorrectness shall not have been cured (to the extent of
the adverse impact of such incorrectness on the interests of
the Indenture Trustee or the Certificate Holders) within
thirty (30) days after the receipt by the Owner of a written
notice from the Indenture Trustee advising the Owner of the
existence of such incorrectness; or
(e) the commencement of an involuntary case or
other proceeding in respect of the Owner in an involuntary
case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United
States or seeking the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar
official) of the Owner or for all or substantially all of
its property, or seeking the winding-up or liquidation of
its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety
(90) consecutive days or an order, judgment or decree shall
be entered in any proceeding by any court of competent
jurisdiction appointing, without the consent of the Owner, a
receiver, trustee or liquidator of the Owner, or of any
substantial part of its property, or sequestering any
substantial part of the property of the Owner and any such
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order, judgment or decree or appointment or sequestration
shall be final or shall remain in force undismissed,
unstayed or unvacated for a period of ninety (90) days after
the date of entry thereof; or
(f) the commencement by the Owner of a
voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar law
in the United States, or the consent by the Owner to the
appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) of the Owner or for all or
substantially all of its property, or the making by the
Owner of any assignment for the benefit of creditors, or the
Owner shall take any corporate action to authorize any of
the foregoing.
provided, however, that, notwithstanding anything to the contrary contained
in this Section 4.01, any failure of the Owner to perform or observe any
covenant, condition, agreement or any error in a representation or warranty
shall not constitute an Event of Default if such failure or error is caused
solely by reason of an event that constitutes an Event of Loss so long as the
Owner is continuing to comply with all of the terms of Section 7.06 hereof.
SECTION 4.02. Remedies.
(a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then in every
such case, the Indenture Trustee may do one or more of the following, to the
extent permitted by, and subject to compliance with any mandatory
requirements of, applicable law then in effect; provided, however, that
during any period the Aircraft is subject to the Civil Reserve Air Fleet
Program in accordance with the provisions of Section 7.02(b) hereof and in
possession of the United States Government or an agency or instrumentality of
the United States, the Indenture Trustee shall not, on account of any Event
of Default, be entitled to do any of the following in such manner as to limit
the Owner's control under this Trust Indenture (or any Lessee's control under
any Lease) of any Airframe or any Engines installed thereon, unless at least
sixty (60) days' (or such lesser period as may then be applicable under the
Air Mobility Command program of the United States Government) written notice
of default hereunder shall have been given by the Indenture Trustee by
registered or certified mail to the Owner (and any Lessee) with a copy
addressed to the Contracting Office Representative for the Air Mobility
Command of the United States Air Force under any contract with the Owner (or
any Lessee) relating to the Aircraft; provided further, that the Indenture
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Trustee shall give the Owner twenty (20) days' prior written notice of its
intention to sell the Aircraft:
subject to the provisions of the Granting Clause hereof:
(i) cause the Owner upon the written demand of
the Indenture Trustee and at the Owner's expense, to deliver
promptly, and the Owner shall deliver promptly, the Airframe
or any Engine as the Indenture Trustee may so demand to the
Indenture Trustee;
(ii) sell the Airframe and/or any Engine at
public or private sale, whether or not the Indenture Trustee
shall at the time have possession thereof, as the Indenture
Trustee may determine, or lease or otherwise dispose of, all
or any part of the Airframe or any Engine as the Indenture
Trustee, in its sole discretion, may determine, all free and
clear of any rights of the Owner, except as hereinafter set
forth in this Section 4.02; or
(iii) exercise any or all of the rights and
powers and pursue any and all remedies of a secured party
under the Uniform Commercial Code of the State of New York.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and shall,
upon receipt of a written demand therefor from a Majority in Interest of
Certificate Holders) at any time, by delivery of written notice or notices to
the Owner, declare all the Secured Certificates to be due and payable,
whereupon the unpaid Principal Amount of all Secured Certificates then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately become
due and payable without presentment, demand, protest or notice, all of which
are hereby waived.
This Section 4.02(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Secured Certificates
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Secured Certificates and all other
amounts payable under the Secured Certificates (except the Principal Amount
of the Secured Certificates which by such declaration shall have become
payable) shall have been duly paid, and every other Default and Event of
Default with respect to any covenant or provision of this Trust Indenture
shall have been cured, then and in every such case a Majority in Interest of
Certificate Holders may (but shall not be obligated to), by written
instrument filed with the Indenture Trustee, rescind and annul the Indenture
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Trustee's declaration and its consequences; but no such rescission or
annulment shall extend to or affect any subsequent Default or Event of
Default or impair any right consequent thereon.
(c) Any Certificate Holder shall be entitled, at any
sale pursuant to this Section 4.02, to credit against any purchase price bid
at such sale by such holder all or any part of the unpaid obligations owing
to such Certificate Holder and secured by the Lien of this Trust Indenture
(but only to the extent that such purchase price would have been paid to such
Certificate Holder pursuant to Article III hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (c) were not
given effect).
(d) In the event of any sale of the Collateral, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture,
the unpaid Principal Amount of all Secured Certificates then outstanding,
together with accrued interest thereon, and other amounts due thereunder,
shall immediately become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long
as the Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Certificate Holder, the Indenture
Trustee will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 4.03. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing and the Secured Certificates have been accelerated, subject to
Section 4.02 hereof, at the request of the Indenture Trustee, the Owner shall
promptly execute and deliver to the Indenture Trustee such instruments of
title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or
places as the Indenture Trustee may specify, to obtain possession of all or
any part of the Mortgaged Property included in the Collateral to which the
Indenture Trustee shall at the time be entitled hereunder. If the Owner
shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee, the Indenture Trustee
may (i) obtain a judgment conferring on the Indenture Trustee the right to
immediate possession and requiring the Owner to execute and deliver such
instruments and documents to the Indenture Trustee, to the entry of which
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judgment the Owner hereby specifically consents to the fullest extent
permitted by applicable law, and (ii) pursue all or part of such Mortgaged
Property wherever it may be found and may enter any of the premises of the
Owner wherever such Mortgaged Property may be or be supposed to be and search
for such Mortgaged Property and take possession of and remove such Mortgaged
Property. All expenses of obtaining such judgment or of pursuing, searching
for and taking such property shall, until paid, be secured by the Lien of
this Trust Indenture.
(b) Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property,
make all such expenditures for maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modifications or
alterations to and of the Mortgaged Property, as it may deem proper. In each
such case, the Indenture Trustee shall have the right to maintain, use,
operate, store, insure, lease, control, manage, dispose of, modify or alter
the Mortgaged Property and to carry on the business and to exercise all
rights and powers of the Owner relating to the Mortgaged Property, as the
Indenture Trustee shall deem best, including the right to enter into any and
all such agreements with respect to the maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modification or
alteration of the Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture Trustee shall be entitled to collect
and receive directly all tolls, rents, revenues, issues, income, products and
profits of the Mortgaged Property and every part thereof, without prejudice,
however, to the right of the Indenture Trustee under any provision of this
Trust Indenture to collect and receive all cash held by, or required to be
deposited with, the Indenture Trustee hereunder. Such tolls, rents,
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration of
the Mortgaged Property and of conducting the business thereof, and to make
all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges upon
the Mortgaged Property or any part thereof (including the employment of
engineers and accountants to examine, inspect and make reports upon the
properties and books and records of the Owner), and all other payments which
the Indenture Trustee may be required or authorized to make under any
provision of this Trust Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all persons
properly engaged and employed by the Indenture Trustee with respect hereto.
SECTION 4.04. Remedies Cumulative.
Each and every right, power and remedy given to the
Indenture Trustee specifically or otherwise in this Trust Indenture shall be
cumulative and shall be in addition to every other right, power and remedy
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herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Indenture Trustee,
and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same
time or thereafter any other right, power or remedy. No delay or omission by
the Indenture Trustee in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner or to be an
acquiescence therein.
SECTION 4.05. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Trust Indenture
by foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder with
respect to the Mortgaged Property, and all rights, remedies and powers of the
Owner or the Indenture Trustee shall continue as if no such proceedings had
been instituted.
SECTION 4.06. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of
Certificate Holders, the Indenture Trustee shall waive any past Default
hereunder and its consequences and upon any such waiver such Default shall
cease to exist and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Trust Indenture, but no such waiver
shall extend to any subsequent or other Default or impair any right
consequent thereon; provided, that in the absence of written instructions
from all the Certificate Holders, the Indenture Trustee shall not waive any
Default (i) in the payment of the Principal Amount, Make-Whole Amount, if
any, and interest and other amounts due under any Secured Certificate then
outstanding, or (ii) in respect of a covenant or provision hereof which,
under Article X hereof, cannot be modified or amended without the consent of
each Certificate Holder.
SECTION 4.07. Appointment of Receiver.
The Indenture Trustee shall, as a matter of right, be
entitled to the appointment of a receiver (who may be the Indenture Trustee
or any successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
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Mortgaged Property or the taking of possession thereof or otherwise, and the
Owner hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of
the Mortgaged Property shall be entitled to exercise all the rights and
powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.08. Indenture Trustee Authorized to Execute Bills
of Sale, Etc.
The Owner irrevocably appoints the Indenture Trustee the
true and lawful attorney-in-fact of the Owner in its name and stead and on
its behalf, for the purpose, if an Event of Default shall have occurred and
be continuing, of effectuating any sale, assignment, transfer or delivery for
the enforcement of the Lien of this Trust Indenture, whether pursuant to
foreclosure or power of sale, assignments and other instruments as may be
necessary or appropriate, with full power of substitution, the Owner hereby
ratifying and confirming all that such attorney or any substitute shall do by
virtue hereof in accordance with applicable law. Nevertheless, if so
requested by the Indenture Trustee or any purchaser, the Owner shall ratify
and confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.09. Rights of Certificate Holders to Receive
Payment.
Notwithstanding any other provision of this Trust Indenture,
the right of any Certificate Holder to receive payment of principal of, and
premium, if any, and interest on a Secured Certificate on or after the
respective due dates expressed in such Secured Certificate, or to bring suit
for the enforcement of any such payment on or after such respective dates in
accordance with the terms hereof, shall not be impaired or affected without
the consent of such Certificate Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure to pay any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, due and payable
under any Secured Certificates, the Indenture Trustee shall give prompt
written notice thereof to the Owner and each Certificate Holder. Subject to
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the terms of Sections 4.02, 4.06, 5.02 and 5.03 hereof, the Indenture Trustee
shall take such action, or refrain from taking such action, with respect to
such Event of Default or Default (including with respect to the exercise of
any rights or remedies hereunder) as the Indenture Trustee shall be
instructed in writing by a Majority in Interest of Certificate Holders.
Subject to the provisions of Section 5.03, if the Indenture Trustee shall not
have received instructions as above provided within twenty (20) days after
mailing notice of such Event of Default to the Certificate Holders the
Indenture Trustee may, subject to instructions thereafter received pursuant
to the preceding provisions of this Section 5.01, take such action, or
refrain from taking such action, but shall be under no duty to take or
refrain from taking any action, with respect to such Event of Default or
Default as it shall determine advisable in the best interests of the
Certificate Holders; provided, however, that the Indenture Trustee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest
of Certificate Holders. For all purposes of this Trust Indenture, in the
absence of Actual Knowledge on the part of the Indenture Trustee, the
Indenture Trustee shall not be deemed to have knowledge of a Default or an
Event of Default (except the failure of the Owner to pay any payment of
Principal Amount or interest within one (1) Business Day after the same shall
become due, which failure shall constitute knowledge of a Default) unless
notified in writing by the Owner or one or more Certificate Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.02(a), 4.06, 5.01 and
5.03 hereof, upon the written instructions at any time and from time to time
of a Majority in Interest of Certificate Holders, the Indenture Trustee
shall, subject to the terms of this Section 5.02, take such of the following
actions as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder as shall be
specified in such instructions; and (ii) give such notice or direction or
exercise such right, remedy or power hereunder with respect to any part of
the Collateral as shall be specified in such instructions.
The Indenture Trustee will execute and the Owner will file
or cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Collateral as specified from time to time in written instructions of a
Majority in Interest of Certificate Holders (which instructions may, by their
terms, be operative only at a future date and which shall be accompanied by
the form of such continuation statement so to be filed). The Indenture
Trustee will furnish to each Certificate Holder promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to the Indenture Trustee
hereunder.
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SECTION 5.03. Indemnification.
The Indenture Trustee shall not be under any obligation to
take any action under this Trust Indenture and nothing herein or therein
shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur the risk of any financial liability in the performance of any
of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it (the written indemnity of any
Certificate Holder who is a QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Indenture
Trustee shall be accepted as reasonable assurance of adequate indemnity).
The Indenture Trustee shall not be required to take any action under Section
5.01 (other than the first sentence thereof) or 5.02 or Article IV hereof,
nor shall any other provision of this Trust Indenture or any other Operative
Document be deemed to impose a duty on the Indenture Trustee to take any
action, if the Indenture Trustee shall have been advised by counsel that such
action is contrary to the terms hereof or is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions.
The Indenture Trustee shall not have any duty or obligation
to use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Collateral, or to otherwise
take or refrain from taking any action under, or in connection with, this
Trust Indenture or any part of the Collateral, except as expressly provided
by the terms of this Trust Indenture or as expressly provided in written
instructions from Certificate Holders as provided in this Trust Indenture;
and no implied duties or obligations shall be read into this Trust Indenture
against the Indenture Trustee. The Indenture Trustee agrees that it will in
its individual capacity and at its own cost and expense (but without any
right of indemnity in respect of any such cost or expense under Section 8.01
hereof), promptly take such action as may be necessary duly to discharge all
liens and encumbrances on any part of the Collateral which result from claims
against it in its individual capacity not related to the ownership of the
Aircraft or the administration of the Collateral or any other transaction
pursuant to this Trust Indenture or any document included in the Collateral.
SECTION 5.05. No Action Except Under Trust Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Collateral except in accordance with the
powers granted to, or the authority conferred upon, the Indenture Trustee
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pursuant to this Trust Indenture and in accordance with the express terms
hereof.
SECTION 5.06. Investment of Amounts Held by Indenture
Trustee.
Any amounts held by the Indenture Trustee pursuant to
Section 3.02, or pursuant to any provision of any other Operative Document
providing for amounts to be held by the Indenture Trustee which are not
distributed pursuant to the other provisions of Article III hereof shall be
invested by the Indenture Trustee from time to time in Cash Equivalents as
directed by the Owner so long as the Indenture Trustee may acquire the same
using its best efforts. Unless otherwise expressly provided in this Trust
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Indenture Trustee shall not be liable for any
loss resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence,
and any such investment may be sold (without regard to its maturity) by the
Indenture Trustee without instructions whenever such sale is necessary to
make a distribution required by this Trust Indenture. Any of the investments
permitted hereunder may be made with or through, as applicable, the entity
acting as Indenture Trustee or its Affiliates.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Trust Indenture and agrees to receive and disburse all monies
constituting part of the Collateral in accordance with the terms hereof. The
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for its own willful
misconduct or gross negligence (other than for the handling of funds, for
which the standard of accountability shall be willful misconduct or
negligence), and (ii) as provided in the fourth sentence of Section 2.04(a)
hereof and the last sentence of Section 5.04 hereof.
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SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance
with written instructions furnished pursuant to Section 5.01 or 5.02 hereof,
and except as provided in, and without limiting the generality of, Sections
5.03 and 5.04 hereof, the Indenture Trustee shall have no duty (i) to see to
any registration of the Aircraft or any recording or filing of this Trust
Indenture or any other document, or to see to the maintenance of any such
registration, recording or filing, (ii) to see to any insurance on the
Aircraft or to effect or maintain any such insurance, whether or not the
Owner shall be in default with respect thereto, (iii) to see to the payment
or discharge of any lien or encumbrance of any kind against any part of the
Collateral, (iv) to confirm, verify or inquire into the failure to receive
any financial statements from the Owner, or (v) to inspect the Aircraft at
any time or ascertain or inquire as to the performance or observance of any
of the Owner's covenants herein with respect to the Aircraft.
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
DOES NOT MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF
ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER. The Indenture Trustee, in its individual or trust
capacities, does not make, nor shall it be deemed to have made, any
representation or warranty as to the validity, legality or enforceability of
this Trust Indenture, the Participation Agreement, the Secured Certificates,
the Purchase Agreement, the Consent and Agreement or the Guarantee, or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Indenture Trustee, in each case
expressly made in this Trust Indenture or in the Participation Agreement.
The Loan Participants and the Certificate Holders make no representation or
warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed to
the Certificate Holders, or the Owner as provided in Article III hereof need
not be segregated in any manner except to the extent required by Law or
Section 5.06, 7.04(g), 7.06(f) or 7.07(c) hereof, and may be deposited under
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such general conditions as may be prescribed by Law, and the Indenture
Trustee shall not be liable for any interest thereon (except that the
Indenture Trustee shall invest all monies held as directed by the Owner so
long as no Default or Event of Default has occurred and is continuing (or in
the absence of such direction, by the Majority In Interest of Certificate
Holders) in Cash Equivalents; provided, however, that any payments received,
or applied hereunder, by the Indenture Trustee shall be accounted for by the
Indenture Trustee so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties. The Indenture Trustee may accept a copy of a resolution of
the Board of Directors (or Executive Committee thereof) of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid Principal Amount of Secured
Certificates outstanding as of any date, the Owner may for all purposes
hereof rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or matter
relating to the Owner the manner of ascertainment of which is not
specifically described herein, the Indenture Trustee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of the
Owner, as to such fact or matter, and such certificate shall constitute full
protection to the Indenture Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of the
trusts hereunder, the Indenture Trustee may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may at the expense of the Collateral, consult with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Indenture Trustee shall not be liable for anything done, suffered
or omitted in good faith by them in accordance with the written advice or
written opinion of any such counsel, accountants or other skilled persons.
SECTION 6.06. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the reasonable
fees and expenses of counsel), for all services rendered hereunder and shall,
on and subsequent to an Event of Default hereunder, have a priority claim on
the Collateral for the payment of such compensation, to the extent that such
compensation shall not be paid by the Owner, and shall have the right, on and
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subsequent to an Event of Default hereunder, to use or apply any monies held
by it hereunder in the Collateral toward such payments. The Indenture
Trustee agrees that it shall have no right against the Loan Participants or
the Certificate Holders for any fee as compensation for its services as
trustee under this Trust Indenture.
SECTION 6.07. Instructions from Certificate Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Certificate Holders should any provision of this Trust
Indenture appear to conflict with any other provision herein or should the
Indenture Trustee's duties or obligations hereunder be unclear, and the
Indenture Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.07.
ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. Liens.
The Owner will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to the Aircraft, title
thereto or any interest therein, except (i) the Lien of this Trust Indenture,
and any other rights existing pursuant to the Operative Documents, (ii) the
rights of others under agreements or arrangements to the extent permitted by
the terms of Sections 7.02(b) and 7.03(b) hereof, (iii) Loan Participant
Liens and Indenture Trustee's Liens, (iv) Liens for taxes of the Owner (or
any Lessee) either not yet due or being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, or, so long as any Secured Certificates shall be
outstanding, adversely affect the Lien of this Trust Indenture,
(v) materialmen's, mechanics', workmen's, repairmen's, employees' or other
like Liens arising in the ordinary course of the Owner's (or, if a Lease is
then in effect, Lessee's business (including those arising under maintenance
agreements entered into in the ordinary course of business) securing
obligations that are not overdue for a period of more than sixty (60) days or
are being contested in good faith by appropriate proceedings so long as such
proceedings do not involve any material danger of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein or, so long as any
Secured Certificates shall be outstanding, adversely affect the Lien of this
Trust Indenture, (vi) Liens arising out of any judgment or award against the
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Owner (or any Lessee), unless the judgment secured shall not, within sixty
(60) days after the entry thereof, have been discharged, vacated, reversed or
execution thereof stayed pending appeal or shall not have been discharged,
vacated or reversed within sixty (60) days after the expiration of such stay,
(vii) any other Lien with respect to which the Owner (or any Lessee) shall
have provided a bond, cash collateral or other security adequate in the
reasonable opinion of the Indenture Trustee, and (viii) Liens approved in
writing by the Indenture Trustee. The Owner will promptly, at its own
expense, take (or cause to be taken) such actions as may be necessary duly to
discharge any such Lien not excepted above if the same shall arise at any
time.
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia.
(a) (I) Registration and Maintenance. The Owner, at
its own cost and expense, shall (or shall cause any Lessee to): (i) cause the
Aircraft to be duly registered in its name, and, subject to the second
paragraph of this Section 7.02(a) and Section 8(f) of the Participation
Agreement, to remain duly registered in the name of the Owner under the
Federal Aviation Act, provided that the Owner shall not register the Aircraft
or permit the Aircraft to be registered under any laws other than the Federal
Aviation Act at any time except as provided in Section 8(f) of the
Participation Agreement and shall cause this Trust Indenture to be duly
recorded and maintained of record as a first mortgage on the Aircraft;
(ii) maintain, service, repair and overhaul (or cause to be maintained,
serviced, repaired and overhauled) the Aircraft so as to keep the Aircraft in
as good an operating condition as when initially subjected to the Lien
hereof, ordinary wear and tear excepted, and as may be necessary to enable
the applicable airworthiness certification for the Aircraft to be maintained
in good standing at all times (other than during temporary periods of storage
in accordance with applicable regulations or during maintenance or
modification permitted hereunder) under the Federal Aviation Act, except when
all [Airbus Model A319-100] [Boeing Model 757-200] aircraft powered by
engines of the same type as those with which the Airframe shall be equipped
at the time of such grounding and registered in the United States have been
grounded by the FAA (although such certification need actually be maintained
only during such periods as the Aircraft is registered in the United States),
or the applicable laws of any other jurisdiction in which the Aircraft may
then be registered from time to time in accordance with Section 8(f) of the
Participation Agreement, and utilizing, except during any period that a Lease
is in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Owner with respect to similar aircraft operated by the
Owner in similar circumstances and utilizing, during any period that a Lease
is in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Lessee with respect to similar aircraft operated by the
Lessee in similar circumstances; provided, however, that in all circumstances
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the Aircraft shall be maintained by the Owner (or any Lessee) in accordance
with maintenance standards required by, or substantially equivalent to those
required by, the FAA or the central civil aviation authority of Canada,
France, Germany, Japan, the Netherlands or the United Kingdom; and
(iii) maintain or cause to be maintained all records, logs and other
materials required to be maintained in respect of the Aircraft by the FAA or
the applicable regulatory agency or body of any other jurisdiction in which
the Aircraft may then be registered. (II) Operation. The Owner will not
maintain, use, service, repair, overhaul or operate the Aircraft (or permit
any Lessee to maintain, use, service, repair, overhaul or operate the
Aircraft) in violation of any law or any rule, regulation, order or
certificate of any government or governmental authority (domestic or foreign)
having jurisdiction, or in violation of any airworthiness certificate,
license or registration relating to the Aircraft issued by any such
authority, except to the extent the Owner (or, if a Lease is then in effect,
any Lessee) is contesting in good faith the validity or application of any
such law, rule, regulation or order in any reasonable manner which does not
materially adversely affect the first priority Lien of this Trust Indenture
and does not involve any material risk of sale, forfeiture or loss of the
Aircraft. The Owner will not operate the Aircraft, or permit any Lessee to
operate the Aircraft, in any area excluded from coverage by any insurance
required by the terms of Section 7.04; provided, however, that the failure of
the Owner to comply with the provisions of this sentence shall not give rise
to an Event of Default hereunder where such failure is attributable to causes
beyond the reasonable control of the Owner (or any Lessee) or to
extraordinary circumstances involving an isolated occurrence or series of
incidents not in the ordinary course of the regular operations of the Owner
(or any Lessee) and in each such case the Owner (or such Lessee, as the case
may be) is taking all reasonable steps to remedy such failure as soon as is
reasonably practicable.
The Indenture Trustee, upon compliance with all of the terms
of Section 8(f) of the Participation Agreement, shall, at the request and
sole expense of the Owner, cooperate with the Owner to take all actions
required to change the registration of the Aircraft to another country.
(b) Possession and Leases. The Owner will not, without
the prior written consent of the Indenture Trustee, lease or otherwise in any
manner deliver, transfer or relinquish possession of the Airframe or any
Engine or install or permit any Engine to be installed on any airframe other
than the Airframe or enter into any Wet Lease; provided that, so long as no
Default of the type referred to in Section 4.01(a) or 4.01(e) or Event of
Default shall have occurred and be continuing at the time of such lease,
delivery, transfer or relinquishment of possession or installation or such
Wet Lease, and so long as the action to be taken shall not deprive the
Indenture Trustee of the perfected first priority Lien of this Trust
Indenture on the Airframe or (subject to the further proviso (B) to clause
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(i) of this Section 7.02(b)) any Engine, and so long as the Owner (or any
Lessee) shall comply with the provisions of Sections 7.02(a) and 7.04 hereof,
the Owner (or, except with respect to clause (x) below, any Lessee) may,
without the prior written consent of the Indenture Trustee:
(i) subject the Airframe and the Engines or
engines then installed thereon to normal interchange
agreements or any Engine to normal pooling or similar
arrangements, in each case customary in the airline industry
and entered into by the Owner (or, if a Lease is then in
effect, by Lessee) in the ordinary course of its business;
provided that (A) no such agreement or arrangement
contemplates or requires the transfer of title to the
Airframe, (B) if the Owner's title to any Engine shall be
divested under any such agreement or arrangement, such
divestiture shall be deemed to be an Event of Loss with
respect to such Engine and the Owner shall (or shall cause
Lessee to) comply with Section 7.06(b) hereof in respect
thereof, and (C) any interchange agreement to which the
Airframe may be subject shall be with a U.S. Air Carrier or
a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any
Engine to the manufacturer thereof (or for delivery thereto)
or to any organization (or for delivery thereto) for
testing, service, repair, maintenance or overhaul work on
the Airframe or Engine or any part of any thereof or for
alterations or modifications in or additions to such
Airframe or Engine to the extent required or permitted by
the terms of Section 7.03(c) hereof;
(iii) install an Engine on an airframe which is
owned by the Owner (or any Lessee) free and clear of all
Liens, except: (A) Permitted Liens and those which apply
only to the engines (other than Engines), appliances, parts,
instruments, appurtenances, accessories, furnishings and
other equipment (other than Parts) installed on such
airframe (but not to the airframe as an entirety), (B) the
rights of third parties under interchange agreements which
would be permitted under clause (i) above, provided that the
Owner's title to such Engine and the first priority Lien of
this Trust Indenture shall not be divested or impaired as a
result thereof and (C) mortgage liens or other security
interests, provided that (as regards this clause (C)) such
mortgage liens or other security interests effectively
provide that such Engine shall not become subject to the
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lien of such mortgage or security interest, notwithstanding
the installation thereof on such airframe;
(iv) install an Engine on an airframe leased to
the Owner (or any Lessee) or purchased by the Owner (or any
Lessee) subject to a conditional sale or other security
agreement, provided that (x) such airframe is free and clear
of all Liens, except: (A) the rights of the parties to the
lease or conditional sale or other security agreement
covering such airframe, or their assignees, and (B) Liens of
the type permitted by subparagraph (iii) of this paragraph
(b) and (y) such lease, conditional sale or other security
agreement effectively provides that such Engine shall not
become subject to the lien of such lease, conditional sale
or other security agreement, notwithstanding the
installation thereof on such airframe;
(v) install an Engine on an airframe owned by
the Owner (or any Lessee), leased to the Owner (or any
Lessee) or purchased by the Owner (or any Lessee) subject to
a conditional sale or other security agreement under
circumstances where neither subparagraph (iii) nor
subparagraph (iv) of this paragraph (b) is applicable,
provided that such installation shall be deemed an Event of
Loss with respect to such Engine and the Owner shall (or
shall cause any Lessee to) comply with Section 7.06(b)
hereof in respect thereof, the Indenture Trustee not
intending hereby to waive any right or interest it may have
to or in such Engine under applicable law until compliance
by the Owner with such Section 7.06(b);
(vi) to the extent permitted by Section 7.03(b)
hereof, subject any appliances, Parts or other equipment
owned by the Owner and removed from the Airframe or any
Engine to any pooling arrangement referred to in Section
7.03(b) hereof;
(vii) subject (or permit any Lessee to subject)
the Airframe or any Engine to the Civil Reserve Air Fleet
Program and transfer (or permit any Lessee to transfer)
possession of the Airframe or any Engine to the United
States of America or any instrumentality or agency thereof
pursuant to the Civil Reserve Air Fleet Program, so long as
the Owner (or any Lessee) shall (A) promptly notify the
Indenture Trustee upon subjecting the Airframe or any Engine
to the Civil Reserve Air Fleet Program in any contract year
and provide the Indenture Trustee with the name and address
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of the Contracting Office Representative for the Air
Mobility Command of the United States Air Force to whom
notice must be given pursuant to Section 4.02 hereof, and
(B) promptly notify the Indenture Trustee upon transferring
possession of the Airframe or any Engine to the United
States of America or any agency or instrumentality thereof
pursuant to such program;
(viii) enter into a Wet Lease for the Airframe and
Engines or engines then installed thereon with any third
party provided that if the Owner (or any Lessee) shall enter
into any Wet Lease for a period of more than one year
(including renewal options) the Owner shall provide the
Indenture Trustee written notice of such Wet Lease (such
notice to be given prior to entering into such Wet Lease, if
practicable, but in any event promptly after entering into
such Wet Lease);
(ix) transfer possession of the Airframe or any
Engine to the United States of America or any
instrumentality or agency thereof pursuant to a contract, a
copy of which shall be provided to the Indenture Trustee; or
(x) the Owner may, at any time, enter into any
lease with (1) a U.S. Air Carrier, (2) any Person approved
in writing by the Indenture Trustee, which approval shall
not be unreasonably withheld or (3) any Permitted Lessee if
(A) in any such case, the Lessee under such lease is not
subject to a proceeding or final order under applicable
bankruptcy, insolvency or reorganization laws on the date
such lease is entered into, (B) in the event that the Lessee
under such lease is a foreign air carrier (other than a
foreign air carrier principally based in Taiwan), the United
States maintains diplomatic relations with the country in
which such proposed Lessee is principally based at the time
such lease is entered into (or, in the case of a lease to a
proposed Lessee principally based in Taiwan, maintains
diplomatic relations at least as good as those in effect on
the Closing Date) and (C) in the event that the Lessee under
such lease is a foreign air carrier, the Indenture Trustee
shall have received an opinion of counsel to the Owner to
the effect that (I) the terms of the proposed lease will be
legal, valid, binding and (subject to customary exceptions
in foreign opinions generally) enforceable against the
proposed Lessee in the country in which the proposed Lessee
is principally based, (II) there exist no possessory rights
in favor of the Lessee under such lease under the laws of
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such Lessee's country of domicile that would, upon
bankruptcy or insolvency of or other default by the Owner
and assuming at such time such Lessee is not insolvent or
bankrupt, prevent the return or repossession of the Aircraft
in accordance with the terms of this Trust Indenture, (III)
the laws of such Lessee's country of domicile require fair
compensation by the government of such jurisdiction payable
in currency freely convertible into Dollars for the loss of
use of the Aircraft in the event of the requisition by such
government of such use, and (IV) the laws of such Lessee's
country of domicile would give recognition to the Owner's
title to the Aircraft, to the registry of the Aircraft in
the name of the Owner (or the proposed Lessee, as "lessee",
as appropriate) and to the Lien of this Trust Indenture.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
effectively subject and subordinate to, and any Lease permitted by this
paragraph (b) shall be expressly subject and subordinate to, all the terms of
this Trust Indenture and to the Lien of this Trust Indenture, including,
without limitation, the covenants contained in Section 7.02(a) hereof and the
Indenture Trustee's rights to foreclosure and repossession pursuant to
Section 4.02 hereof and to avoid such Lease upon such repossession, and the
Owner shall remain primarily liable hereunder for the performance of all of
the terms of this Trust Indenture to the same extent as if such Lease or
transfer had not occurred, and, except as otherwise provided herein, the
terms of any such Lease shall not permit any Lessee to take any action not
permitted to be taken by the Owner in this Trust Indenture with respect to
the Aircraft. No pooling agreement, lease or other relinquishment of
possession of the Airframe or any Engine or Wet Lease shall in any way
discharge or diminish any of the Owner's obligations to the Indenture Trustee
hereunder or constitute a waiver of the Indenture Trustee's rights or
remedies hereunder. Any lease permitted under this Section 7.02(b) shall
expressly prohibit any further sublease by the Lessee. The Indenture Trustee
agrees, for the benefit of the Owner (and any Lessee) and for the benefit of
any mortgagee or other holder of a security interest in any engine (other
than an Engine) owned by the Owner (or any Lessee), any lessor of any engine
(other than an Engine) leased to the Owner (or any Lessee) and any
conditional vendor of any engine (other than an Engine) purchased by the
Owner (or any Lessee) subject to a conditional sale agreement or any other
security agreement, that no interest shall be created hereunder in any engine
so owned, leased or purchased and that neither the Indenture Trustee nor its
successors or assigns will acquire or claim, as against the Owner (or any
Lessee) or any such mortgagee, lessor or conditional vendor or other holder
of a security interest or any successor or assignee of any thereof, any
right, title or interest in such engine as the result of such engine being
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installed on the Airframe; provided, however, that such agreement of the
Indenture Trustee shall not be for the benefit of any lessor or secured party
of any airframe (other than the Airframe) leased to the Owner (or any Lessee)
or purchased by the Owner (or any Lessee) subject to a conditional sale or
other security agreement or for the benefit of any mortgagee of or any other
holder of a security interest in an airframe owned by the Owner (or any
Lessee), unless such lessor, conditional vendor, other secured party or
mortgagee has expressly agreed (which agreement may be contained in such
lease, conditional sale or other security agreement or mortgage) that neither
it nor its successors or assigns will acquire, as against the Indenture
Trustee, any right, title or interest in an Engine as a result of such Engine
being installed on such airframe. The Owner shall provide to the Indenture
Trustee (i) written notice of any Lease hereunder (such notice to be given
not later than five days prior to entering into such Lease, if practicable,
but in any event promptly after entering into any such Lease) and (ii) a copy
of each Lease which has a term of more than three months.
(c) Insignia. On or prior to the Closing Date, or as
soon as practicable thereafter, the Owner agrees to affix and maintain (or
cause to be affixed and maintained), at its expense, in the cockpit of the
Airframe adjacent to the airworthiness certificate therein and on each
Engine, a nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Indenture Trustee as permitted herein). Except as
above provided, the Owner will not allow the name of any Person (other than
the Owner) to be placed on the Airframe or on any Engine as a designation
that might be interpreted as a claim of ownership; provided that nothing
herein contained shall prohibit the Owner (or any Lessee) from placing its
customary colors and insignia on the Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions.
(a) Replacement of Parts. The Owner, at its own cost
and expense, will so long as the Airframe or an Engine is subject to the Lien
of this Trust Indenture promptly replace or cause to be replaced all Parts
which may from time to time be incorporated or installed in or attached to
the Airframe or any Engine and which may from time to time become worn out,
lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever, except as
otherwise provided in paragraph (c) of this Section 7.03 or if the Airframe
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or an Engine to which a Part relates has suffered an Event of Loss. In
addition, the Owner (or any Lessee) may, at its own cost and expense, remove
in the ordinary course of maintenance, service, repair, overhaul or testing,
any Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that the Owner (or any Lessee), except as otherwise provided in
paragraph (c) of this Section 7.03, will, at its own cost and expense,
replace such Parts as promptly as practicable. All replacement Parts shall
be free and clear of all Liens (except for Permitted Liens and pooling
arrangements to the extent permitted by paragraph (b) of this Section 7.03
and except in the case of replacement property temporarily installed on an
emergency basis) and shall be in as good operating condition as, and shall
have a value and utility at least equal to, the Parts replaced assuming such
replaced Parts were in the condition and repair required to be maintained by
the terms hereof. Except as otherwise provided in paragraph (c) of this
Section 7.03, all Parts at any time removed from the Airframe or any Engine
shall remain subject to the Lien of this Trust Indenture, no matter where
located, until such time as such Parts shall be replaced by Parts which have
been incorporated or installed in or attached to the Airframe or such Engine
and which meet the requirements for replacement Parts specified above.
Immediately upon any replacement part becoming incorporated or installed in
or attached to the Airframe or any Engine as above provided, without further
act (subject only to Permitted Liens and any pooling arrangement to the
extent permitted by paragraph (b) of this Section 7.03 and except in the case
of replacement property temporarily installed on an emergency basis), (i)
title to such replacement Part shall be owned by the Owner, (ii) such
replacement Part shall become subject to the Lien of this Trust Indenture and
be deemed part of the Airframe or such Engine for all purposes hereof to the
same extent as the Parts originally incorporated or installed in or attached
to the Airframe or such Engine, and (iii) the replaced Part shall thereupon
be free and clear of all rights of the Indenture Trustee, and shall no longer
be subject to the Lien of this Trust Indenture or be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the
Airframe or any Engine as provided in paragraph (a) of this Section 7.03 may
be subjected by the Owner (or any Lessee) to a normal pooling arrangement
customary in the airline industry of which the Owner (or, if a Lease is then
in effect, any Lessee) is a party entered into in the ordinary course of the
Owner's (or any Lessee's) business; provided that the Part replacing such
removed Part shall be incorporated or installed in or attached to such
Airframe or Engine in accordance with such paragraph (a) as promptly as
practicable after the removal of such removed Part. In addition, any
replacement Part when incorporated or installed in or attached to the
Airframe or any Engine in accordance with such paragraph (a) may be owned by
any third party subject to such a normal pooling arrangement, provided that
the Owner (or any Lessee), at its expense, as promptly thereafter as
practicable, either (i) causes such replacement Part to become subject to the
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Lien of this Trust Indenture free and clear of all Liens except Permitted
Liens (other than pooling arrangements), at which time such temporary
replacement Part shall become a Part or (ii) replaces such replacement Part
by incorporating or installing in or attaching to the Airframe or Engine a
further replacement Part which is subject to the Lien of this Trust
Indenture, free and clear of all Liens except Permitted Liens (other than
pooling arrangements).
(c) Alterations, Modifications and Additions. The
Owner, at its own expense, will make (or cause to be made) such alterations
and modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or any
other governmental authority having jurisdiction; provided, however, that the
Owner (or, if a Lease is then in effect, any Lessee) may, in good faith,
contest the validity or application of any such law, rule, regulation or
order in any reasonable manner which does not adversely affect the Indenture
Trustee. In addition, the Owner (or any Lessee), at its own expense, may
from time to time add further parts or accessories and make such alterations
and modifications in and additions to the Airframe or any Engine as the Owner
(or any Lessee) may deem desirable in the proper conduct of its business,
including, without limitation, removal of Parts which the Owner (or any
Lessee) has determined in its reasonable judgment to be obsolete or no longer
suitable or appropriate for use on the Airframe or such Engine (such parts,
"Obsolete Parts"); provided that no such alteration, modification or addition
shall materially diminish the value, utility or remaining useful life of the
Airframe or such Engine below the value, utility or remaining useful life
thereof immediately prior to such alteration, modification or addition,
assuming the Airframe or such Engine was then in the condition required to be
maintained by the terms of this Trust Indenture, except that the value (but
not the utility or remaining useful life) of the Airframe or any Engine may
be reduced by the value of Obsolete Parts which shall have been removed so
long as the aggregate value of all Obsolete Parts which shall have been
removed and not replaced shall not exceed [$400,000 for A319's] [$500,000 for
757's]. All Parts incorporated or installed in or attached or added to the
Airframe or an Engine as the result of such alteration, modification or
addition (the "Additional Parts") shall, without further act, become subject
to the Lien of this Trust Indenture. Notwithstanding the foregoing sentence,
the Owner (or any Lessee) may remove or suffer to be removed any Additional
Part, provided that such Additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine on the Closing Date or
any Part in replacement of, or substitution for, any such Part, (ii) is not
required to be incorporated or installed in or attached or added to the
Airframe or any Engine pursuant to the terms of Section 7.02 hereof or the
first sentence of this paragraph (c) and (iii) can be removed from the
Airframe or such Engine without diminishing or impairing the value, utility
or remaining useful life which the Airframe or such Engine would have had at
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the time of removal had such alteration, modification or addition not
occurred, assuming that such Airframe or Engine was in the condition and
repair required to be maintained by the terms hereof. Upon the removal by
the Owner (or any Lessee) of any Part as provided above, such Part shall,
without further act, be free and clear of all rights of the Indenture
Trustee, such Part shall not be subject to the Lien of this Trust Indenture
and such Part shall no longer be deemed part of the Airframe or Engine from
which it was removed.
SECTION 7.04. Insurance.
(a) Public Liability and Property Damage Insurance.
(I) Except as provided in clause (II) of this Section 7.04(a), the Owner
will carry or cause to be carried at its or any Lessee's expense (i)
aircraft public liability (including, without limitation, passenger legal
liability) (and including aircraft war risk and hijacking insurance, if and
to the extent the same is maintained by the Owner (or, if a Lease is then in
effect, if and to the extent maintained by Lessee) with respect to other
aircraft owned or leased, and operated by the Owner (or such Lessee) on the
same routes) insurance and property damage insurance (exclusive of
manufacturer's product liability insurance) with respect to the Aircraft, in
an amount not less than the greater of (x) the amount of public liability and
property damage insurance from time to time applicable to aircraft owned or
operated by the Owner (or, if a Lease is then in effect, by Lessee) of the
same type as the Aircraft and (y) $[250,000,000 for A319's and $300,000,000
for 757's] per occurrence and (ii) cargo liability insurance, in the case of
both clause (i) and clause (ii), (A) of the type and covering the same risks
as from time to time applicable to aircraft operated by the Owner (or, if a
Lease is then in effect, by Lessee) of the same type as the Aircraft and (B)
which is maintained in effect with insurers of recognized responsibility.
Any policies of insurance carried in accordance with this paragraph (a) and
any policies taken out in substitution or replacement for any of such
policies (A) shall be amended to name the Indenture Trustee and the Policy
Provider (but without imposing on any such parties liability to pay the
premiums for such insurance) (and, if any Lease shall be in effect, the Owner
in its capacity as lessor under the Lease) as additional insureds as their
respective interests may appear, (B) shall provide that in respect of the
interest of the Indenture Trustee and the Policy Provider (and, if any Lease
shall be in effect, the Owner in its capacity as lessor under the Lease) in
such policies the insurance shall not be invalidated by any action or
inaction of the Owner (or, if any Lease is then in effect, any Lessee) or any
other Person and shall insure the Indenture Trustee and the Policy Provider
(and, if any Lease shall be in effect, the Owner in its capacity as lessor
under the Lease) regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by the Owner (or, if any
Lease is then in effect, any Lessee), (C) may provide for self-insurance to
the extent permitted by Section 7.04(d) and (D) shall provide that if the
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insurers cancel such insurance for any reason whatever or if any material
change is made in such insurance which adversely affects the interest of the
Indenture Trustee or the Policy Provider (or, if any Lease shall be in
effect, the Owner in its capacity as lessor under the Lease), or such
insurance shall lapse for non-payment of premium, such cancellation, lapse or
change shall not be effective as to the Indenture Trustee or the Policy
Provider (or, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease) for thirty (30) days (seven (7) days in the case of
war risk and allied perils coverage) after issuance to the Indenture Trustee
or the Policy Provider (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease), respectively, of written notice by such
insurers of such cancellation, lapse or change; provided, however, that if
any notice period specified above is not reasonably obtainable, such policies
shall provide for as long a period of prior notice as shall then be
reasonably obtainable. Each liability policy (1) shall be primary without
right of contribution from any other insurance which is carried by the
Indenture Trustee or the Policy Provider (or, if any Lease shall be in
effect, the Owner in its capacity as lessor under the Lease), (2) shall
expressly provide that all of the provisions thereof, except the limits of
liability, shall operate in the same manner as if there were a separate
policy covering each insured, and (3) shall waive any right of the insurers
to any set-off or counterclaim or any other deduction, whether by attachment
or otherwise, in respect of any liability of the Indenture Trustee or the
Policy Provider (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease) to the extent of any moneys due to the
Indenture Trustee or the Policy Provider (or, if any Lease shall be in
effect, the Owner in its capacity as lessor under the Lease).
(II) During any period that the Aircraft is on the ground
and not in operation, the Owner may carry or cause to be carried, in lieu of
the insurance required by clause (I) above, insurance otherwise conforming
with the provisions of said clause (I) except that (A) the amounts of
coverage shall not be required to exceed the amounts of public liability and
property damage insurance from time to time applicable to aircraft owned or
operated by the Owner (or, if a Lease is then in effect, by Lessee) of the
same type as the Aircraft which are on the ground and not in operation; and
(B) the scope of the risks covered and the type of insurance shall be the
same as from time to time shall be applicable to aircraft owned or operated
by the Owner (or, if a Lease is then in effect, by Lessee) of the same type
which are on the ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(I) Except as provided in clause (II) of this Section 7.04(b), the Owner
shall maintain or cause to be maintained in effect, at its or any Lessee's
expense, with insurers of recognized responsibility, all-risk ground and
flight aircraft hull insurance covering the Aircraft and all-risk ground and
flight coverage of Engines and Parts while temporarily removed from the
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Aircraft and not replaced by similar components (including, without
limitation, war risk and governmental confiscation and expropriation (other
than by the government of registry of the Aircraft) and hijacking insurance,
if and to the extent the same is maintained by the Owner (or, if a Lease is
then in effect, by Lessee) with respect to other aircraft owned or operated
by the Owner (or such Lessee) on the same routes, except that the Owner (or
such Lessee) shall maintain war risk and governmental confiscation and
expropriation (other than by the government of registry of the Aircraft) and
hijacking insurance if the Aircraft is operated on routes where the custom is
for major international air carriers flying comparable routes to carry such
insurance) which is of the type as from time to time applicable to aircraft
owned or operated by the Owner (or, if a Lease is then in effect, by Lessee)
of the same type as the Aircraft; provided that such insurance shall at all
times while the Aircraft is subject to this Trust Indenture be for an amount
(subject to self-insurance to the extent permitted by Section 7.04(d)) not
less than the 100% of the then aggregate unpaid Principal Amount of the
Secured Certificates (the "Loan Loss Value"). Any policies carried in
accordance with this paragraph (b) covering the Aircraft and any policies
taken out in substitution or replacement for any such policies (i) shall name
the Indenture Trustee (and, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease) as an additional insured, as its interest
may appear (but without imposing on such party liability to pay premiums with
respect to such insurance), (ii) may provide for self-insurance to the extent
permitted in Section 7.04(d), (iii) shall provide that (A) in the event of a
loss involving proceeds in excess of $5,000,000 (or, if the Aircraft is then
under a Lease, in excess of $3,000,000), the proceeds in respect of such loss
up to an amount equal to the aggregate unpaid Principal Amount of the Secured
Certificates plus all accrued and unpaid interest thereon (the "Balance Due")
shall be payable to the Indenture Trustee (except in the case of a loss with
respect to an Engine installed on an airframe other than the Airframe, in
which case the Owner (or any Lessee) shall arrange for any payment of
insurance proceeds in respect of such loss to be held for the account of the
Indenture Trustee whether such payment is made to the Owner (or any Lessee)
or any third party), it being understood and agreed that in the case of any
payment to the Indenture Trustee otherwise than in respect of an Event of
Loss, the Indenture Trustee shall, upon receipt of evidence satisfactory to
it that the damage giving rise to such payment shall have been repaired or
that such payment shall then be required to pay for repairs then being made,
pay the amount of such payment to the Owner or its order, and (B) the entire
amount of any loss involving proceeds of $5,000,000 (or, if the Aircraft is
then under a Lease, of $3,000,000) or less or the amount of any proceeds of
any loss in excess of the Balance Due shall be paid to the Owner or its order
unless an Event of Default shall have occurred and be continuing and the
insurers have been notified thereof by the Indenture Trustee, (iv) shall
provide that if the insurers cancel such insurance for any reason whatever,
or such insurance lapses for non-payment of premium or if any material change
is made in the insurance which adversely affects the interest of the
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Indenture Trustee, such cancellation, lapse or change shall not be effective
as to the Indenture Trustee (or, if any Lease shall be in effect, the Owner
in its capacity as lessor under the Lease) for thirty (30) days (seven (7)
days in the case of hull war risk and allied perils coverage) after issuance
to the Indenture Trustee (or, if any Lease shall be in effect, the Owner in
its capacity as lessor under the Lease), respectively, of written notice by
such insurers of such cancellation, lapse or change, provided, however, that
if any notice period specified above is not reasonably obtainable, such
policies shall provide for as long a period of prior notice as shall then be
reasonably obtainable, (v) shall provide that in respect of the interest of
the Indenture Trustee (and, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease) in such policies the insurance shall not
be invalidated by any action or inaction of the Owner (or, if a Lease is then
in effect, any Lessee) or any other Person and shall insure the Indenture
Trustee (and, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease) regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Owner
(or, if a Lease is then in effect, any Lessee), (vi) shall be primary without
any right of contribution from any other insurance which is carried by the
Indenture Trustee (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease), (vii) shall waive any right of
subrogation of the insurers against the Indenture Trustee (and, if any Lease
shall be in effect, the Owner in its capacity as lessor under the Lease), and
(viii) shall waive any right of the insurers to set-off or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of the Indenture Trustee or the Owner (or any Lessee) to the extent
of any moneys due to the Indenture Trustee. In the case of a loss with
respect to an engine (other than an Engine) installed on the Airframe, the
Indenture Trustee shall hold any payment to it of any insurance proceeds in
respect of such loss for the account of any third party that is entitled to
receive such proceeds.
As between the Indenture Trustee and the Owner, it is agreed
that all insurance payments received as the result of the occurrence of an
Event of Loss will be applied as follows:
(x) if such payments are received as a result
of an Event of Loss with respect to the Airframe (or the
Airframe and the Engines installed thereon) that has been or
is being replaced by the Owner as contemplated by Section
7.06(a) hereof, such payments shall be paid over to, or
retained by, the Indenture Trustee as security and upon
completion of such replacement shall be paid over to the
Owner;
(y) if such payments are received with respect
to the Airframe (or the Airframe and the Engines installed
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thereon) that has not been or is not being replaced by the
Owner as contemplated by Section 7.06(a) hereof, so much of
such payments remaining, after reimbursement of the
Indenture Trustee for reasonable costs and expenses, as
shall not exceed the Balance Due shall be applied in
reduction of the Owner's obligation to pay such Balance Due,
if not already paid by the Owner, or, if already paid by the
Owner, shall be applied to reimburse the Owner for its
payment of such Balance Due, and the balance, if any, of
such payments remaining thereafter will be paid over to, or
retained by, the Owner (or if directed by the Owner, any
Lessee); and
(z) if such payments are received with respect
to an Engine or Part under the circumstances contemplated by
Section 7.06(b) hereof, so much of such payments remaining,
after reimbursement of the Indenture Trustee for reasonable
costs and expenses, shall be paid over to, or retained by,
the Owner (or if directed by the Owner, any Lessee),
provided that the Owner shall have fully performed, or
concurrently therewith will fully perform, the terms of
Section 7.06(b) hereof with respect to the Event of Loss for
which such payments are made.
As between the Indenture Trustee and the Owner, the
insurance payments for any property damage loss to the Airframe or any Engine
not constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the terms
of Sections 7.02 and 7.03, if not already paid for by the Owner (or any
Lessee), and any balance (or if already paid for by the Owner (or any
Lessee), all such insurance proceeds) remaining after compliance with such
Sections with respect to such loss shall be paid to the Owner (or any Lessee
if directed by the Owner).
(II) During any period that the Aircraft is on the ground
and not in operation, the Owner may carry or cause to be carried, in lieu of
the insurance required by clause (I) above, insurance otherwise conforming
with the provisions of said clause (I) except that the scope of the risks and
the type of insurance shall be the same as from time to time applicable to
aircraft owned or operated by the Owner (or, if a Lease is then in effect, by
Lessee) of the same type similarly on the ground and not in operation,
provided that the Owner shall maintain insurance against risk of loss or
damage to the Aircraft in an amount equal to the Loan Loss Value of the
Aircraft during such period that the Aircraft is on the ground and not in
operation.
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(c) Reports, etc. The Owner will furnish, or cause to
be furnished, to the Indenture Trustee, on or before the Closing Date and on
or before July 1 in each year thereafter during the Term commencing July,
_____, a report, signed by Aon Risk Services, Inc., Aon Risk Services of
Minnesota, Inc. or any other independent firm of insurance brokers reasonably
acceptable to the Indenture Trustee (the "Insurance Brokers"), describing in
reasonable detail the insurance and reinsurance then carried and maintained
with respect to the Aircraft and stating the opinion of such firm that the
insurance then carried and maintained with respect to the Aircraft complies
with the terms hereof; provided, however, that all information contained in
the foregoing report shall not be made available by the Indenture Trustee or
the Loan Participants to anyone except (A) to permitted transferees of the
Loan Participants' or the Indenture Trustee who agree to hold such
information confidential, (B) to the Loan Participants' or the Indenture
Trustee's counsel or independent certified public accountants or independent
insurance advisors who agree to hold such information confidential or (C) as
may be required by any statute, court or administrative order or decree or
governmental ruling or regulation. The Owner will cause such Insurance
Brokers to agree to advise the Indenture Trustee in writing of any default in
the payment of any premium and of any other act or omission on the part of
the Owner of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Aircraft. To the
extent such agreement is reasonably obtainable, the Owner will also cause
such Insurance Brokers to agree to advise the Indenture Trustee in writing at
least thirty (30) days (seven (7) days in the case of war risk and allied
perils coverage), prior to the expiration or termination date of any
insurance carried and maintained on the Aircraft pursuant to this
Section 7.04. In addition, the Owner will also cause such Insurance Brokers
to deliver to the Indenture Trustee, on or prior to the date of expiration of
any insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form as
delivered by the Owner to such party on the Closing Date. In the event that
the Owner or any Lessee shall fail to maintain or cause to be maintained
insurance as herein provided, the Indenture Trustee may at its sole option
provide such insurance and, in such event, the Owner shall, upon demand,
reimburse the Indenture Trustee for the cost thereof to Indenture Trustee,
without waiver of any other rights Indenture Trustee may have.
(d) Self-Insurance. The Owner may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to Section 7.04(b),
insuring for a maximum amount which is less than the Loan Loss Value of the
Aircraft) in the insurance covering the risks required to be insured against
pursuant to this Section 7.04 under a program applicable to all aircraft in
the Owner's fleet, but in no case shall the aggregate amount of self-
insurance in regard to Section 7.04(a) and Section 7.04(b) exceed during any
policy year, with respect to all of the aircraft in the Owner's fleet
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(including, without limitation, the Aircraft), the lesser of (a) 50% of the
largest replacement value of any single aircraft in the Owner's fleet or (b)
1-1/2% of the average aggregate insurable value (during the preceding policy
year) of all aircraft (including, without limitation, the Aircraft) on which
the Owner carries insurance. In addition, the Owner (and any Lessee) may
self-insure to the extent of any applicable mandatory minimum per aircraft
(or, if applicable, per annum or other period) hull or liability insurance
deductible imposed by the aircraft hull or liability insurers.
(e) Additional Insurance by the Owner. The Owner (and
any Lessee) may at its own expense carry insurance with respect to its
interest in the Aircraft in amounts in excess of that required to be
maintained by this Section 7.04.
(f) Indemnification by Government in Lieu of
Insurance. Notwithstanding any provisions of this Section 7.04 requiring
insurance, the Indenture Trustee agrees to accept, in lieu of insurance
against any risk with respect to the Aircraft, indemnification from, or
insurance provided by, the United States Government or any agency or
instrumentality thereof or, upon the written consent of the Indenture
Trustee, other government of registry of the Aircraft or any agency or
instrumentality thereof, against such risk in an amount which, when added to
the amount of insurance against such risk maintained by the Owner (or any
Lessee) with respect to the Aircraft (including permitted self-insurance)
shall be at least equal to the amount of insurance against such risk
otherwise required by this Section 7.04.
(g) Application of Payments During Existence of an Event
of Default. Any amount referred to in paragraph (b) of this Section 7.04
which is payable to or retainable by the Owner (or any Lessee) shall not be
paid to or retained by the Owner (or any Lessee) if at the time of such
payment or retention an Event of Default shall have occurred and be
continuing, but shall be held by or paid over to the Indenture Trustee as
security for the obligations of the Owner (or any Lessee) under this Trust
Indenture and applied against the Owner's obligations hereunder as and when
due. Upon the earlier of (a) such time as there shall not be continuing any
such Event of Default or (b) the termination of this Trust Indenture in
accordance with Section 11.01 hereof, such amount shall be paid to the Owner
(or such Lessee) to the extent not previously applied in accordance with the
preceding sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior
written notice to the Owner, the Indenture Trustee or its authorized
representative may (not more than once every calendar year (unless an Event
of Default has occurred and is continuing when such inspection right shall
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not be so limited)) inspect the Aircraft and inspect and make copies (at the
Indenture Trustee's expense) of the books and records of the Owner relating
to the maintenance of the Aircraft, and upon any such inspection by the
Indenture Trustee or its authorized representatives of the books and records
of the Owner relating to the maintenance of the Aircraft, the Policy Provider
or its authorized representatives may also inspect and make copies (at the
Policy Provider's expense) of the books and records of the Owner relating to
the maintenance of the Aircraft; any such inspection of the Aircraft shall be
limited to a visual, walk-around inspection and shall not include opening any
panels, bays or the like without the express consent of the Owner; provided
that no exercise of such inspection right shall interfere with the operation
or maintenance of the Aircraft by, or the business of, the Owner (or any
Lessee). Neither the Indenture Trustee nor the Policy Provider shall have
any duty to make any such inspection nor shall either of them incur any
liability or obligation by reason of not making such inspection.
SECTION 7.06. Loss, Destruction, Requisition, etc.
(a) Event of Loss with Respect to the Aircraft. Upon
the occurrence of an Event of Loss with respect to the Airframe or the
Airframe and the Engines and/or engines then installed thereon, the Owner
shall forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of Loss,
and within forty-five (45) days after such Event of Loss the Owner shall give
the Indenture Trustee written notice of its election to perform one of the
following options (it being agreed that if the Owner shall not have given
such notice of election within such period, the Owner shall be deemed to have
elected the option set forth in clause (i) below). The Owner may elect
either to:
(i) redeem the Secured Certificates in
accordance with Section 2.10 hereof not later than the
earlier of (x) the Business Day next succeeding the 120th
day following the occurrence of such Event of Loss or (y) an
earlier Business Day irrevocably specified fifteen (15) days
in advance by notice from the Owner to the Indenture
Trustee; or
(ii) substitute an aircraft or an airframe or an
airframe and one or more engines, as the case may be;
provided that, if the Owner does not perform its obligation to effect such
substitution in accordance with this Section 7.06(a) during the period of
time provided herein, then the Owner shall pay or cause to be paid to the
Indenture Trustee on the Business Day next succeeding the 120th day following
the occurrence of such Event of Loss the amount specified in clause (i)
above.
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In the event the Owner shall elect to substitute an aircraft
(or an airframe or an airframe and one or more engines, as the case may be),
the Owner shall at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss, (x)
cause to be subjected to the Lien of this Trust Indenture, in replacement of
the Airframe with respect to which the Event of Loss occurred, a Replacement
Airframe and, if any Engine shall have been installed on the Airframe when it
suffered an Event of Loss, a Replacement Engine therefor, such Replacement
Airframe and Replacement Engines, if any, to be free and clear of all Liens
(other than Permitted Liens) and having a value, utility and remaining useful
life (without regard to hours or cycles) at least equal to the Airframe or
Engine, as the case may be, subject to such Event of Loss assuming no Event
of Loss had occurred and that the Aircraft had been maintained in accordance
with this Trust Indenture; provided that the Replacement Airframe and the
Replacement Engines, if any, shall be of the same or improved model as the
Airframe or Engine, as the case may be, that are replaced and (y) prior to or
at the time of any such substitution, the Owner (or any Lessee), at its own
expense, will (1) furnish the Indenture Trustee a copy of the original xxxx
of sale respecting such Replacement Airframe and the Replacement Engines, if
any, and appropriate instruments assigning to the Indenture Trustee the
benefits, if any, of all manufacturer's and vendor's warranties generally
available and permitted to be assigned by the Owner with respect to such
Replacement Airframe and Replacement Engines, if any, (2) cause a Trust
Indenture Supplement to be duly executed by the Owner and filed for recording
pursuant to the Federal Aviation Act, or the applicable laws, rules and
regulations of any other jurisdiction in which the Replacement Airframe and
Replacement Engines, if any, may then be registered as permitted by Section
8(f) of the Participation Agreement, (3) cause a financing statement or
statements with respect to such Replacement Airframe and Replacement Engines,
if any, to be filed in such place or places as are deemed necessary or
desirable by counsel for the Indenture Trustee to perfect the Indenture
Trustee's interest therein, (4) furnish the Indenture Trustee with such
evidence of compliance with the insurance provisions of Section 7.04 with
respect to such Replacement Airframe and Replacement Engines, if any, as the
Indenture Trustee's counsel may reasonably request, (5) furnish the Indenture
Trustee with (A) an opinion of in-house counsel to the Owner, or other
counsel satisfactory to the Indenture Trustee, stating that the Replacement
Airframe and Replacement Engines, if any, has or have been validly subjected
to the Lien of this Trust Indenture, the instruments subjecting such
Replacement Airframe and Replacement Engines, if any, to the Lien of this
Trust Indenture, have been duly filed for recordation pursuant to the Federal
Aviation Act or any other law then applicable to the registration of the
Replacement Airframe and Replacement Engines, if any, and no further action,
filing or recording of any document is necessary or advisable in order to
establish and perfect the Lien of this Trust Indenture on such Replacement
Airframe and Replacement Engines, if any (B) a certificate signed by a duly
authorized officer of the Owner stating the following: (i) a description of
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the replaced Airframe and Engines, if any, which shall be identified by
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number; (ii) a
description of the Replacement Airframe and Replacement Engines, if any, to
be received (including the manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's serial number)
as consideration for the replaced Airframe and Engines, if any; (iii) that
the Replacement Airframe and Replacement Engines, if any, is or are of the
same or an improved model as the Airframe and Engines, if any, requested to
be released from this Trust Indenture; (iv) the value, utility and remaining
useful life (without regard to hours or cycles) of the Replacement Airframe
and Replacement Engines, if any, as of the date of such certificate (which in
the judgment of the Owner shall be not less than the value, utility and
remaining useful life (without regard to hours or cycles) of the Airframe and
Engines, if any, requested to be released (assuming no Event of Loss and that
such Airframe and Engines, if any, was or were in the condition and repair
required to be maintained under this Trust Indenture)); and (v) that no Event
of Default or Default has occurred which has not been remedied or waived, and
that the Owner will not be in default, by the making and granting of the
request for release and the addition of a Replacement Airframe and
Replacement Engines, if any, in the performance of any of the terms and
covenants of the Owner, and (C) a certificate from either an aircraft
engineer (who may be an employee of the Owner) or a firm of independent
aircraft appraisers selected by the Owner confirming the accuracy of the
information set forth in sub-clause (iv) of the immediately preceding clause
(5)(B) of this Section 7.06(a), and (6) furnish the Indenture Trustee with an
opinion of counsel (which shall be Cadwalader, Xxxxxxxxxx & Xxxx and, if not,
other counsel chosen by the Owner and reasonably acceptable to the Indenture
Trustee) reasonably satisfactory to the Indenture Trustee to the effect that
the Indenture Trustee will be entitled to the benefits of Section 1110 of the
U.S. Bankruptcy Code with respect to the Replacement Airframe, provided that
such opinion need not be delivered to the extent that immediately prior to
such substitution the benefits of Section 1110 of the U.S. Bankruptcy Code
were not, solely by reason of a change in law or governmental interpretation
thereof, available to the Indenture Trustee. For all purposes hereof, the
property so substituted shall after such transfer be deemed part of the
property subject to the Lien of this Trust Indenture and shall be deemed an
"Aircraft", "Airframe" and "Engine", as the case may be, as defined herein.
Upon the Owner having provided a Replacement Airframe and
Replacement Engines, if any, as provided for in this Section 7.06(a), (x) the
Lien of this Trust Indenture shall continue with respect to such Replacement
Airframe and Replacement Engines, if any, as though no Event of Loss had
occurred; the Indenture Trustee shall, at the cost and expense of the Owner,
release from the Lien of this Trust Indenture the replaced Airframe and
Engines, if any, with respect to which such Event of Loss occurred, by
executing and delivering to the Owner such documents and instruments,
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prepared at the Owner's expense, as the Owner may reasonably request to
evidence such release; and (y) the Indenture Trustee shall assign to the
Owner all claims it may have against any other Person arising from the Event
of Loss and the Owner shall receive all insurance proceeds and proceeds from
any award in respect of condemnation, confiscation, seizure or requisition,
including any investment interest thereon, to the extent not previously
applied to the purchase price of the Replacement Airframe and Replacement
Engines, if any, as provided in Sections 7.04(b) and 7.06(c)(i) hereof.
(b) Substitution with Respect to an Engine. The Owner
shall (i) so long as no Default or Event of Default has occurred which has
not been remedied or waived, have the right to substitute a Replacement
Engine for any Engine at its option at any time, on at least thirty (30)
days' prior written notice to the Indenture Trustee and (ii) substitute a
Replacement Engine for an Engine if an Event of Loss shall have occurred with
respect to such Engine (under circumstances in which there has not occurred
an Event of Loss with respect to the Airframe) within sixty (60) days after
the occurrence of such Event of Loss (such Replacement Engine to be of the
same or another manufacturer of the same, an equivalent or an improved model
and suitable for installation and use on the Airframe without impairing the
value, utility or remaining useful life of the Aircraft; provided that both
Engines shall be of the same make and model) free and clear of all Liens
(other than Permitted Liens) and having a value, utility and remaining useful
life (without regard to hours or cycles) at least equal to the replaced
Engine assuming no Event of Loss had occurred and that such replaced Engine
had been maintained in accordance with the provisions of this Trust
Indenture. Prior to or at the time of any such substitution, the Owner, at
its own expense, will (1) furnish the Indenture Trustee with (A) a copy of
the original xxxx of sale with respect to such Replacement Engine and (B)
appropriate instruments assigning to the Indenture Trustee the benefits, if
any, of all manufacturer's and vendor's warranties generally available and
permitted to be assigned by the Owner with respect to such Replacement
Engine, (2) cause a Trust Indenture Supplement to be duly executed by the
Owner and to be filed for recording pursuant to the Federal Aviation Act, or
the applicable laws, rules and regulations of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 8(f) of the
Participation Agreement, (3) cause a financing statement or statements
covering the Lien created by this Trust Indenture with respect to the
Replacement Engine to be filed in such place or places as are deemed
necessary or desirable by counsel for the Indenture Trustee to perfect the
Indenture Trustee's interest therein, (4) furnish the Indenture Trustee with
such evidence of compliance with the insurance provisions of Section 7.04
hereof with respect to such Replacement Engine as the Indenture Trustee may
reasonably request, and (5) furnish the Indenture Trustee with (A) an opinion
of in-house counsel to the Owner, or other counsel satisfactory to the
Indenture Trustee, stating that the Replacement Engine has been validly
subjected to the Lien of this Trust Indenture, the instruments subjecting
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such Replacement Engine to the Lien of this Trust Indenture have been duly
filed for recordation pursuant to the Federal Aviation Act or any other law
then applicable to the registration of the Aircraft, and no further action,
filing or recording of any document is necessary or advisable in order to
establish and perfect the Lien of this Trust Indenture on such Replacement
Engine and (B) a certificate signed by a duly authorized officer of the Owner
stating the following: (i) a description of the replaced Engine which shall
be identified by manufacturer's serial number; (ii) a description of the
Replacement Engine (including the manufacturer's name and serial number) as
consideration for the replaced Engine; (iii) that such Replacement Engine is
substantially the same as the replaced Engine (or an improved model); and
(iv) the value, utility and remaining useful life (without regard to hours or
cycles) of the Replacement Engine as of the date of such certificate (which
in the judgment of the Owner shall not be less than the value, utility and
remaining useful life (without regard to hours or cycles) of the Engine
requested to be released (assuming no Event of Loss and that such Engine was
in the condition and repair required to be maintained under this Trust
Indenture).
Upon the Owner having provided a Replacement Engine, as
provided for in this Section 7.06(b), (x) the Lien of this Trust Indenture
shall continue with respect to such Replacement Engine; the Indenture Trustee
shall, at the cost and expense of the Owner, release from the Lien of this
Trust Indenture the replaced Engine by executing and delivering to the Owner
such documents and instruments, prepared at the Owner's expense, as the Owner
may reasonably request to evidence such release; and (y) the Indenture
Trustee shall assign to the Owner all claims it may have against any other
Person arising from an Event of Loss of such replaced Engine giving rise to
such substitution and the Owner shall receive all insurance proceeds and
proceeds from any award in respect of condemnation, confiscation, seizure or
requisition, including any investment interest thereon, to the extent not
previously applied to the purchase price of the Replacement Engine, as
provided in Sections 7.04(b) and 7.06(c)(ii) hereof. For all purposes
hereof, each such Replacement Engine shall, after such conveyance, be deemed
part of the property subject to the Lien of this Trust Indenture, and shall
be deemed an "Engine".
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc. Any payments (other than
insurance proceeds the application of which is provided for in Section 7.04)
received at any time by the Indenture Trustee or by the Owner from any
governmental authority or other Person with respect to an Event of Loss will
be applied as follows:
(i) if payments are received with respect to
the Airframe (or the Airframe and any Engine then installed
thereon), that has been or is being replaced by the Owner as
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contemplated by Section 7.06(a) hereof, such payments shall
be paid over to, or retained by the Indenture Trustee as
security and upon completion of such replacement and
compliance by the Owner with the provisions of Section
7.06(a) with respect to the Event of Loss for which such
payments are made, be paid over to the Owner;
(ii) if such payments are received with respect
to the Airframe (or the Airframe and any Engines installed
thereon) or an Engine or Part (not involving an Event of
Loss as to the Airframe) that has been or is being replaced
by the Owner pursuant to Section 7.06(b) hereof, such
payments shall be paid over to, or retained by, the Owner;
and
(iii) if such payments are received with respect
to the Airframe (or the Airframe and any Engines installed
thereon) that has not been replaced by the Owner as
contemplated by Section 7.06(a) hereof, so much of such
payments remaining, after reimbursement of the Indenture
Trustee for reasonable costs and expenses as shall not
exceed the Balance Due, shall be applied in reduction of the
Owner's obligation to pay such Balance Due, if not already
paid by the Owner, or, if already paid by the Owner, shall
be applied to reimburse the Owner for its payment of such
Balance Due, and the balance, if any, of such payments
remaining thereafter will be paid over to, or retained by,
the Owner (or if directed by the Owner, any Lessee).
(d) Requisition for Use of the Aircraft. In the event
of the requisition for use by any government or any instrumentality or agency
thereof, so long as it does not constitute an Event of Loss, of the Airframe
and the Engines or engines installed on the Airframe, so long as the Airframe
or an Engine is subject to the Lien of this Trust Indenture, the Owner shall
promptly notify the Indenture Trustee of such requisition, and all of the
Owner's obligations under this Trust Indenture with respect to the Aircraft
shall continue to the same extent as if such requisition had not occurred.
All payments received by the Indenture Trustee or the Owner from such
government or instrumentality or agency thereof for the use of such Airframe
and Engines or engines shall be paid over to, or retained by, the Owner (or,
if directed by the Owner, any Lessee).
(e) Requisition for Use of an Engine. In the event of
an Event of Loss of an Engine resulting from the requisition for use of such
Engine (but not the Airframe) by any government or agency or instrumentality
the Owner will replace such Engine hereunder by complying (or causing any
Lessee to comply) with the terms of Section 7.06(b) hereof and any payments
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received by the Indenture Trustee or the Owner from such government with
respect to such requisition shall be paid over to, or retained by, the Owner.
(f) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 7.06 which is payable to or
retainable by the Owner (or any Lessee) shall not be paid to or retained by
the Owner (or such Lessee) if at the time of such payment or retention an
Event of Default shall have occurred and be continuing, but shall be held by
or paid over to the Indenture Trustee as security for the obligations of the
Owner (or such Lessee) under this Trust Indenture and applied against the
Owner's obligations hereunder as and when due. Upon the earlier of (a) such
time as there shall not be continuing any such Event of Default or (b) the
termination of this Trust Indenture in accordance with Section 11.01 hereof,
such amount shall be paid to the Owner (or such Lessee) to the extent not
previously applied in accordance with the preceding sentence.
SECTION 7.07. Interests in the Purchase Agreement.
[A319's -- The grant by the Owner to the Indenture Trustee
of the Owner's interests in and to the Contract Rights as set forth in clause
(b) of the Granting Clause hereof is subject to the following:
(a) With respect to the assignment contained in clause
(b) of the Granting Clause, if and so long as (A) the Aircraft shall be
subject to this Trust Indenture and (B) no Event of Default under this Trust
Indenture has occurred and is continuing, (1) the Indenture Trustee
authorizes the Owner, on behalf of but to the exclusion of the Indenture
Trustee, to exercise in the Owner's own name (i) all rights and powers
related to the Assigned Warranties and the Guaranty as it relates to the
Assigned Warranties and (ii) subject to paragraph 7.07(c) hereof, to retain
any recovery or benefit resulting from the enforcement of any Assigned
Warranties in respect of the Aircraft or resulting from the enforcement of
the Guaranty in respect of the same, and (2) the Indenture Trustee shall, at
the Owner's expense, cooperate with the Owner and take such actions as the
Owner reasonably deems necessary to enable the Owner to enforce such rights
and claims.
(b) In the event that an Event of Default under this
Trust Indenture has occurred and is continuing and thereafter until such
Event of Default has been cured or waived: (i) at the Indenture Trustee's
option, the authorization given to the Owner under paragraph 7.07(a) hereof
to enforce such rights and claims shall henceforth cease to be effective and
the Indenture Trustee and its successors and permitted assigns shall, to the
exclusion of the Owner, be entitled to assert and enforce such rights and
claims as substitute party plaintiff or otherwise, and the Owner shall, at
the request of the Indenture Trustee or its successors or permitted assigns
and at the Owner's expense, cooperate with and take such action as reasonably
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necessary to enable the Indenture Trustee and its successors and permitted
assigns to enforce such rights and claims, and the Indenture Trustee, if it
shall elect to enforce such rights or claims, shall use its best efforts to
assert and enforce such rights and claims, and (ii) the Owner will be deemed
to have irrevocably constituted the Indenture Trustee and its successors and
permitted assigns the Owner's true and lawful attorney (it being acknowledged
that such appointment is coupled with an interest, namely the Indenture
Trustee's rights acquired and to be acquired hereunder) with full power (in
the name of the Owner or otherwise) to ask, require, demand, receive, settle,
compromise, compound and give acquittance for any and all monies and claims
for monies due and to become due under, or arising out of, the Purchase
Agreement in respect of the Aircraft, to the extent that the same have been
assigned pursuant to clause (b) of the Granting Clause hereof, and for such
period as the Indenture Trustee may exercise rights with respect thereto
under this clause (ii), to endorse any checks or other instruments or orders
in connection therewith and to file any claims or take any action or
institute (or, if previously commenced, assume control of) any proceedings
and to obtain any recovery in connection therewith which the Indenture
Trustee may deem to be necessary or advisable in the premises.
(c) Notwithstanding clause (b) of the Granting Clause
hereof, this Section 7.07 and anything in this Trust Indenture to the
contrary (but subject to all the terms of the Purchase Agreement), all
amounts that the Supplier or the Manufacturer is obligated to pay to the
Owner under Clauses 12, 13 and, to the extent relating to acts to be
performed following the date of enforcement of this Indenture, 17 of the
Purchase Agreement with respect to the Aircraft or the Guaranty as it relates
to such Clauses (a "Supplier Payment"), will be payable and applicable as
follows: so long as the Aircraft is subject to this Trust Indenture, all
Supplier Payments shall be paid to the Owner unless and until an Event of
Default under this Trust Indenture has occurred and is continuing, whereupon
the Indenture Trustee shall direct the Supplier to make all Supplier Payments
directly to the Indenture Trustee until all Events of Default under this
Trust Indenture have been cured or waived. Any amounts received by the
Indenture Trustee pursuant to the immediately preceding sentence shall, to
the extent not theretofore applied in satisfaction of the Secured
Obligations, be returned to the Owner promptly after all Events of Default
under this Trust Indenture have been cured or waived.
(d) Anything herein contained to the contrary
notwithstanding: (i) the Owner shall at all times remain liable to the
Manufacturer under the Purchase Agreement in respect of the Aircraft to
perform all of the duties and obligations of "Northwest" thereunder to the
same extent as if this Trust Indenture had not been executed; (ii) the
exercise by the Indenture Trustee of any of the rights assigned hereunder
shall not release the Owner from any of its duties or obligations to the
Supplier under the Purchase Agreement in respect of the Aircraft except to
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the extent that such exercise by the Indenture Trustee shall constitute
performance of such duties and obligations; and (iii) except as provided in
paragraph (e) of this Section 7.07, the Indenture Trustee shall not have any
obligation or liability under the Purchase Agreement by reason of, or arising
out of, this Trust Indenture or be obligated to perform any of the
obligations or duties of the Owner under the Purchase Agreement or to make
any payment or make any inquiry as to the sufficiency of any payment received
by it or to present or to file any claim or to take any other action to
collect or enforce any claim for any payment assigned hereunder.
(e) Without in any way releasing the Owner from any of
its duties or obligations under the Purchase Agreement, the Indenture Trustee
confirms for the benefit of the Supplier and the Manufacturer that, insofar
as the provisions of the Purchase Agreement relate to the Aircraft, in
exercising any rights under the Purchase Agreement or the Guaranty, or in
making any claim with respect to the Aircraft or other things delivered or to
be delivered pursuant to the Purchase Agreement or the Guaranty, the terms
and conditions of the Purchase Agreement and the Guaranty shall apply to, and
be binding upon, the Indenture Trustee to the same extent as the Owner. The
Indenture Trustee hereby confirms that it shall be deemed for all purposes to
have read and be familiar with the Purchase Agreement and the Guaranty and to
understand thoroughly the terms and conditions thereof.
(f) Nothing contained in this Trust Indenture shall (i)
subject the Supplier or the Manufacturer to any liability to which it would
not otherwise be subject under the Purchase Agreement or the Guaranty or
(ii) modify in any respect the Supplier's or the Manufacturer's contract
rights thereunder, except as provided in the Consent and Agreement.
(g) For all purposes of the assignment contained in
clause (b) of the Granting Clause, the Supplier and the Manufacturer shall
not be deemed to have knowledge of and need not recognize any Event of
Default, unless and until the Supplier shall have received written notice
thereof from the Indenture Trustee at the address for the Supplier set forth
in Section 11.05 hereof and, in acting in accordance with the terms of the
Purchase Agreement, the Guaranty and the assignment contained in clause (b)
of the Granting Clause, the Supplier and the Manufacturer may act with
acquittance and conclusively rely upon such notice. -- A319's]
[757's -- The grant by the Owner to the Indenture Trustee of
the Owner's interests in and to the Contract Rights as set forth in clause
(b) of the Granting Clause hereof is subject to the following:
(a) If and so long as (A) the Aircraft shall be subject
to this Trust Indenture and (B) the Manufacturer shall not have received
written notice from the Indenture Trustee (including by mail, courier, telex,
or telecopy thereof from the Indenture Trustee addressed to the
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Manufacturer's Vice President - Contracts at X.X. Xxx 0000, Mail Code 21-34,
Xxxxxxx, XX 00000 if by mail; 0000 Xxxxxxxxx Xxx. X.X., X/X 00-00, Xxxxxx, XX
00000, if by courier; 000-000-0000 if by telecopy and 32-9430 (answerback
BOEINGREN), if by telex) that an Event of Default under this Trust Indenture
has occurred and is continuing, (1) the Indenture Trustee authorizes the
Owner, on behalf of but to the exclusion of the Indenture Trustee, to
exercise in the Owner's own name (i) such rights and powers of the "Buyer"
under the Purchase Agreement and (ii) such rights as the Indenture Trustee
may have with respect to the Aircraft under any warranty, covenant,
representation, service life policy, aircraft performance guarantee,
indemnity or product support agreement of the Manufacturer or any
subcontractor or vendor with respect thereto and, subject to paragraph
7.07(c) hereof, to retain any recovery or benefit resulting from the
enforcement of any warranty, covenant, representation, service life policy,
aircraft performance guarantee, indemnity, or product support agreement of
the Manufacturer or any subcontractor or vendor under the Purchase Agreement
in respect of the Aircraft, and (2) the Indenture Trustee shall, at the
Owner's expense, cooperate with the Owner and take such actions as the Owner
reasonably deems necessary to enable the Owner to enforce such rights and
claims.
(b) Effective upon the receipt by the Manufacturer of
written notice from the Indenture Trustee that an Event of Default under this
Trust Indenture has occurred and is continuing and thereafter until the
Manufacturer shall have received written notice from the Indenture Trustee
that such Event of Default has been cured or waived: (i) at the Indenture
Trustee's option, the authorization given to the Owner under paragraph
7.07(a) hereof to enforce such rights and claims shall henceforth cease to be
effective and the Indenture Trustee and its successors and permitted assigns
shall, to the exclusion of the Owner, be entitled to assert and enforce such
rights and claims as substitute party plaintiff or otherwise, and the Owner
shall, at the request of the Indenture Trustee or its successors or permitted
assigns and at the Owner's expense, cooperate with and take such action as
reasonably necessary to enable the Indenture Trustee and its successors and
permitted assigns to enforce such rights and claims, and the Indenture
Trustee, if it shall elect to enforce such rights or claims, shall use its
best efforts to assert and enforce such rights and claims, and (ii) the Owner
will be deemed to have irrevocably constituted the Indenture Trustee and its
successors and permitted assigns the Owner's true and lawful attorney (it
being acknowledged that such appointment is coupled with an interest, namely
the Indenture Trustee's rights acquired and to be acquired hereunder) with
full power (in the name of the Owner or otherwise) to ask, require, demand,
receive, settle, compromise, compound and give acquittance for any and all
monies and claims for monies due and to become due under, or arising out of,
the Purchase Agreement in respect of the Aircraft, to the extent that the
same have been assigned pursuant to clause (b) of the Granting Clause hereof,
and for such period as the Indenture Trustee may exercise rights with respect
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thereto under this clause (ii), to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute (or, if previously commenced, assume control of) any proceedings
and to obtain any recovery in connection therewith which the Indenture
Trustee may deem to be necessary or advisable in the premises.
(c) Notwithstanding clause (b) of the Granting Clause
hereof, this Section 7.07 and anything in this Trust Indenture to the
contrary, all amounts that the Manufacturer is obligated to pay to the Owner
under the Purchase Agreement with respect to the Aircraft, including, without
limitation, in respect of refunds thereunder or resulting from the
enforcement of any warranty, service life policy, aircraft performance
guarantee or indemnity or product support agreement thereunder or the
enforcement or exercise of any right or power under the Purchase Agreement or
hereunder (a "Manufacturer Payment") (excluding, however, from the
Manufacturer Payments any amounts the Manufacturer is obligated to pay to the
Owner with respect to the rights reserved to the Owner in clauses (i) through
(v) of the definition of Contract Rights, which shall at all times be paid to
the Owner), will be payable and applicable as follows: all the Manufacturer
Payments shall be paid to the Owner unless and until the Manufacturer shall
have received written notice from the Indenture Trustee that an Event of
Default under this Trust Indenture has occurred and is continuing, whereupon
the Manufacturer will, until the Manufacturer shall have received written
notice from the Indenture Trustee that all Events of Default under this Trust
Indenture have been cured or waived, make any and all such payments directly
to the Indenture Trustee. Any amounts received by the Indenture Trustee
pursuant to the immediately preceding sentence shall, to the extent not
theretofore applied in satisfaction of the Secured Obligations, be returned
to the Owner promptly after all Events of Default under this Trust Indenture
have been cured or waived.
(d) For all purposes of this Trust Indenture, the
Manufacturer shall not be deemed to have knowledge of an Event of Default
under this Trust Indenture or of the discontinuance or waiver of an Event of
Default unless and until the Manufacturer shall have received written notice
thereof from the Indenture Trustee (including by mail, courier, telex, or
telecopy thereof from the Indenture Trustee addressed to the Manufacturer's
Vice President - Contracts at X.X. Xxx 0000, Mail Code 21-34, Xxxxxxx, XX
00000 if by mail; 0000 Xxxxxxxxx Xxx. X.X., X/X 00-00, Xxxxxx, XX 00000, if
by courier; 000-000-0000 if by telecopy and 32-9430 (answerback BOEINGREN),
if by telex) and, in acting in accordance with the terms and conditions of
the Purchase Agreement and this Trust Indenture, the Manufacturer may rely
conclusively upon any such notice.
(e) Anything herein contained to the contrary
notwithstanding: (i) the Owner shall at all times remain liable to the
Manufacturer under the Purchase Agreement in respect of the Aircraft to
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perform all of the duties and obligations of "Buyer" thereunder to the same
extent as if this Trust Indenture had not been executed; (ii) the exercise by
the Indenture Trustee of any of the rights assigned hereunder shall not
release the Owner from any of its duties or obligations to the Manufacturer
under the Purchase Agreement in respect of the Aircraft except to the extent
that such exercise by the Indenture Trustee shall constitute performance of
such duties and obligations; and (iii) except as provided in paragraph (f) of
this Section 7.07, the Indenture Trustee shall not have any obligation or
liability under the Purchase Agreement by reason of, or arising out of, this
Trust Indenture or be obligated to perform any of the obligations or duties
of the Owner under the Purchase Agreement or to make any payment or make any
inquiry as to the sufficiency of any payment received by it or to present or
to file any claim or to take any other action to collect or enforce any claim
for any payment assigned hereunder.
(f) Without in any way releasing the Owner from any of
its duties or obligations under the Purchase Agreement, the Indenture Trustee
confirms for the benefit of the Manufacturer that, insofar as the provisions
of the Purchase Agreement relate to the Aircraft, in exercising any rights
under the Purchase Agreement, or in making any claim with respect to the
Aircraft or other things delivered or to be delivered pursuant to the
Purchase Agreement, the terms and conditions of the Purchase Agreement
(including, without limitation, the warranty disclaimer and indemnity
provisions in the product assurance and customer support documents, Exhibits
B and C, respectively, to the Purchase Agreement) shall apply to, and be
binding upon, the Indenture Trustee to the same extent as the Owner. The
Indenture Trustee hereby confirms that it shall be deemed for all purposes to
have read and be familiar with the Purchase Agreement (insofar as it relates
to the Aircraft) and to understand thoroughly the terms and conditions
thereof.
(g) Nothing contained in this Trust Indenture shall (i)
subject the Manufacturer to any liability to which it would not otherwise be
subject under the Purchase Agreement or (ii) modify in any respect the
Manufacturer's contract rights thereunder, except as provided in the Consent
and Agreement. -- 757's]
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Scope of Indemnification.
The Owner hereby agrees, except as otherwise provided in
Section 2.03 hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual and
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trust capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture Trustee on or measured by
any compensation received by the Indenture Trustee for its services under
this Trust Indenture), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever, which may be imposed on, incurred by or asserted against
the Indenture Trustee (whether or not also indemnified against by any other
Person under any other document) in any way relating to or arising out of
this Trust Indenture or any other Operative Document to which it is a party
or the enforcement of any of the terms of any thereof, or in any way relating
to or arising out of the manufacture, purchase, acceptance, non-acceptance,
rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of the Aircraft or any Engine (including,
without limitation, latent or other defects, whether or not discoverable, and
any claim for patent, trademark or copyright infringement), or in any way
relating to or arising out of the administration of the Collateral or the
action or inaction of the Indenture Trustee hereunder. Without limiting the
foregoing, the Indenture Trustee agrees that, prior to seeking
indemnification from the Collateral, it will demand, and take such action as
it may in its discretion determine to be reasonable to pursue,
indemnification available to the Indenture Trustee under the Participation
Agreement. Notwithstanding the foregoing, the Indenture Trustee shall not be
entitled to any indemnification for any Taxes or Expenses to the extent
relating to or arising from the willful misconduct or gross negligence (or
negligence in the case of handling funds) of the Indenture Trustee in the
performance of its duties hereunder or resulting from the inaccuracy of any
representation or warranty of the Indenture Trustee (in its individual
capacity) referred to in Section 6.03 hereof, or as provided in Section 6.01
hereof or in the last sentence of Section 5.04 hereof, or as otherwise
excluded by the terms of Sections 7(b) and 7(c) of the Participation
Agreement from the Owner's indemnities under such Sections. In addition, if
necessary, the Indenture Trustee shall be entitled to indemnification from
the Collateral for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Section 8.01 to the extent not reimbursed by others, but without
releasing any of them from their respective agreements of reimbursement; and
to secure the same the Indenture Trustee shall have a prior Lien on the
Collateral.
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ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. Resignation of Indenture Trustee; Appointment
of Successor.
(a) The Indenture Trustee or any successor thereto may
resign at any time without cause by giving at least 30 days' prior written
notice to the Owner and each Certificate Holder, such resignation to be
effective upon the acceptance of the trusteeship by a successor Indenture
Trustee. In addition, a Majority in Interest of Certificate Holders may at
any time (but only with the consent of the Owner, which consent shall not be
unreasonably withheld, except that such consent shall not be necessary if an
Event of Default is continuing) remove the Indenture Trustee without cause by
an instrument in writing delivered to the Owner and the Indenture Trustee,
and the Indenture Trustee shall promptly notify each Certificate Holder
thereof in writing, such removal to be effective upon the acceptance of the
trusteeship by a successor Indenture Trustee. In the case of the resignation
or removal of the Indenture Trustee, a Majority in Interest of Certificate
Holders may appoint a successor Indenture Trustee by an instrument signed by
such holders, which successor, so long as no Event of Default shall have
occurred and be continuing, shall be subject to the Owner's reasonable
approval. If a successor Indenture Trustee shall not have been appointed
within 30 days after such notice of resignation or removal, the Indenture
Trustee, the Owner or any Certificate Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act until
such time, if any, as a successor shall have been appointed as above
provided. The successor Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Indenture
Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed,
shall execute and deliver to the Owner and the predecessor Indenture Trustee
an instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after
the time of such appointment, and thereupon such successor Indenture Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Indenture Trustee hereunder in
the trust hereunder applicable to it with like effect as if originally named
the Indenture Trustee herein; but nevertheless upon the written request of
such successor Indenture Trustee, such predecessor Indenture Trustee shall
execute and deliver an instrument transferring to such successor Indenture
Trustee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Indenture Trustee, and such
predecessor Indenture Trustee shall duly assign, transfer, deliver and pay
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over to such successor Indenture Trustee all monies or other property then
held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed,
shall be a bank or trust company having its principal place of business in
the Borough of Manhattan, City and State of New York; Minneapolis, Minnesota;
Chicago, Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston,
Massachusetts and having (or whose obligations under the Operative Documents
are guaranteed by an affiliated entity having) a combined capital and surplus
of at least $100,000,000, if there be such an institution willing, able and
legally qualified to perform the duties of the Indenture Trustee hereunder
upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this Section
9.01, be a successor Indenture Trustee and the Indenture Trustee under this
Trust Indenture without further act.
SECTION 9.02. Appointment of Additional and Separate
Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it
necessary or desirable in order to conform to any law of any jurisdiction in
which all or any part of the Collateral shall be situated or to make any
claim or bring any suit with respect to or in connection with the Collateral,
this Trust Indenture, any other Indenture Agreement, the Secured Certificates
or any of the transactions contemplated by the Participation Agreement, (ii)
the Indenture Trustee shall be advised by counsel satisfactory to it that it
is so necessary or prudent in the interests of the Certificate Holders (and
the Indenture Trustee shall so advise the Owner), or (iii) the Indenture
Trustee shall have been requested to do so by a Majority in Interest of
Certificate Holders, then in any such case, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner, shall execute and
deliver an indenture supplemental hereto and such other instruments as may
from time to time be necessary or advisable either (1) to constitute one or
more bank or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Collateral, or to act as
separate trustee or trustees of all or any part of the Collateral, in each
case with such rights, powers, duties and obligations consistent with this
Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Indenture Trustee or a Majority in Interest of Certificate
Holders may deem necessary or advisable, or (2) to clarify, add to or
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subtract from the rights, powers, duties and obligations theretofore granted
any such additional and separate trustee, subject in each case to the
remaining provisions of this Section 9.02. If the Owner shall not have taken
any action requested of it under this Section 9.02(a) that is permitted or
required by its terms within 15 days after the receipt of a written request
from the Indenture Trustee so to do, or if an Event of Default shall have
occurred and be continuing, the Indenture Trustee may act under the foregoing
provisions of this Section 9.02(a) without the concurrence of the Owner; and
the Owner hereby irrevocably appoints (which appointment is coupled with an
interest) the Indenture Trustee, its agent and attorney-in-fact to act for it
under the foregoing provisions of this Section 9.02(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute, deliver
and perform any such supplemental indenture, or any such instrument, as may
be required for the appointment of any such additional or separate trustee or
for the clarification of, addition to or subtraction from the rights, powers,
duties or obligations theretofore granted to any such additional or separate
trustee. In case any additional or separate trustee appointed under this
Section 9.02(a) shall die, become incapable of acting, resign or be removed,
all the assets, property, rights, powers, trusts, duties and obligations of
such additional or separate trustee shall revert to the Indenture Trustee
until a successor additional or separate trustee is appointed as provided in
this Section 9.02(a).
(b) No additional or separate trustee shall be entitled
to exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Collateral or otherwise payable under any
Operative Document to the Indenture Trustee shall be promptly paid over by it
to the Indenture Trustee. All other rights, powers, duties and obligations
conferred or imposed upon any additional or separate trustee shall be
exercised or performed by the Indenture Trustee and such additional or
separate trustee jointly except to the extent that applicable Law of any
jurisdiction in which any particular act is to be performed renders the
Indenture Trustee incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations (including the holding of
title to all or part of the Collateral in any such jurisdiction) shall be
exercised and performed by such additional or separate trustee. No
additional or separate trustee shall take any discretionary action except on
the instructions of the Indenture Trustee or a Majority in Interest of
Certificate Holders. No trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder, except that the
Indenture Trustee shall be liable for the consequences of its lack of
reasonable care in selecting, and Indenture Trustee's own actions in acting
with, any additional or separate trustee. Each additional or separate
trustee appointed pursuant to this Section 9.02 shall be subject to, and
shall have the benefit of Articles IV, V, VI, VIII, IX and XI hereof insofar
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as they apply to the Indenture Trustee. The powers of any additional or
separate trustee appointed pursuant to this Section 9.02 shall not in any
case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it
no longer necessary or desirable in order to conform to any such law or take
any such action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Certificate Holders, or in the
event that the Indenture Trustee shall have been requested to do so in
writing by a Majority in Interest of Certificate Holders, the Indenture
Trustee and, upon the written request of the Indenture Trustee, the Owner,
shall execute and deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to remove any additional or
separate trustee. The Indenture Trustee may act on behalf of the Owner under
this Section 9.02(c) when and to the extent it could so act under Section
9.02(a) hereof.
ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) The Indenture Trustee agrees with the Certificate
Holders that it shall not enter into any amendment, waiver or modification
of, supplement or consent to the Purchase Agreement, the Consent and
Agreement, this Trust Indenture, the Guarantee or the Participation
Agreement, or any other agreement included in the Collateral, unless such
supplement, amendment, waiver, modification or consent is consented to in
writing by a Majority in Interest of Certificate Holders, or does not
adversely affect the Certificate Holders, but upon the written request of a
Majority in Interest of Certificate Holders, the Indenture Trustee shall from
time to time enter into any such supplement or amendment, or execute and
deliver any such waiver, modification or consent, as may be specified in such
request and as may be (in the case of any such amendment, supplement or
modification), to the extent such agreement is required, agreed to by the
Owner or, as may be appropriate, the Manufacturer; provided, however, that,
without the consent of each holder of an affected Secured Certificate then
outstanding, no such amendment of or supplement to this Trust Indenture, the
Purchase Agreement, the Consent and Agreement, the Guarantee or the
Participation Agreement or waiver or modification of the terms of, or consent
under, any thereof, shall (i) modify any of the provisions of this Section
10.01, or of Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.02(c), 4.02(d), 5.02,
7.06(a) or 7.06(b) hereof, the definitions of "Event of Default", "Default",
"Majority in Interest of Certificate Holders", "Make-Whole Amount" or
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"Certificate Holder", or the percentage of Certificate Holders required to
take or approve any action hereunder, (ii) reduce the amount, or change the
time of payment or method of calculation of any amount, of Principal Amount,
Make-Whole Amount, if any, or interest with respect to any Secured
Certificate, or alter or modify the provisions of Article III hereof with
respect to the order of priorities in which distribution thereunder shall be
made as among the Certificate Holders and the Owner, (iii) reduce, modify or
amend any indemnities in favor of the Certificate Holders or (iv) permit the
creation of any Lien on the Collateral or any part thereof other than
Permitted Liens or deprive any Certificate Holder of the benefit of the Lien
of this Trust Indenture on the Collateral, except as provided in connection
with the exercise of remedies under Article IV hereof.
(b) The Owner and the Indenture Trustee may enter into
one or more agreements supplemental hereto without the consent of any
Certificate Holder for any of the following purposes: (i) (a) to cure any
defect or inconsistency herein or in the Secured Certificates, or to make any
change not inconsistent with the provisions hereof (provided that such change
does not adversely affect the interests of any Certificate Holder in its
capacity solely as Certificate Holder) or (b) to cure any ambiguity or
correct any mistake; (ii) to evidence the succession of another party as the
Owner in accordance with the terms of the hereof or to evidence the
succession of a new trustee hereunder pursuant hereto, the removal of the
trustee hereunder or the appointment of any co-trustee or co-trustees or any
separate or additional trustee or trustees; (iii) to convey, transfer,
assign, mortgage or pledge any property to or with the Indenture Trustee or
to make any other provisions with respect to matters or questions arising
hereunder so long as such action shall not adversely affect the interests of
the Certificate Holders in its capacity solely as Certificate Holder; (iv) to
correct or amplify the description of any property at any time subject to the
Lien of this Trust Indenture or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subject to the Lien
of this Trust Indenture, the Airframe or Engines or any Replacement Airframe
or Replacement Engine; (v) to add to the covenants of the Owner for the
benefit of the Certificate Holders, or to surrender any rights or power
herein conferred upon the Owner; (vi) to add to the rights of the Certificate
Holders; and (vii) to include on the Secured Certificates any legend as may
be required by law.
SECTION 10.02. Indenture Trustee Protected.
If, in the opinion of the institution acting as Indenture
Trustee hereunder, any document required to be executed by it pursuant to the
terms of Section 10.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Trust Indenture, such
institution may in its discretion decline to execute such document.
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SECTION 10.03. Documents Mailed to Certificate Holders.
Promptly after the execution by the Owner or the Indenture
Trustee of any document entered into pursuant to Section 10.01 hereof, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to the Owner and to each Certificate Holder at its address last set
forth in the Secured Certificate Register, but the failure of the Indenture
Trustee to mail such copies shall not impair or affect the validity of such
document.
SECTION 10.04. No Request Necessary for Trust Indenture
Supplement.
No written request or consent of the Indenture Trustee or
the Certificate Holders pursuant to Section 10.01 hereof shall be required to
enable the Owner to execute and deliver a Trust Indenture Supplement
specifically required by the terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Secured Certificates and provided that there shall then be no
other Secured Obligations due to the Certificate Holders and the Indenture
Trustee hereunder or under the Participation Agreement, the Owner shall
direct the Indenture Trustee to execute and deliver to or as directed in
writing by the Owner an appropriate instrument releasing the Aircraft and the
Engines from the Lien of this Trust Indenture and releasing the Guarantee and
the Purchase Agreement from the assignment and pledge thereof hereunder and
the Indenture Trustee shall execute and deliver such instrument as aforesaid
and give written notice thereof to the Owner; provided, however, that this
Trust Indenture and the trusts created hereby shall earlier terminate and
this Trust Indenture shall be of no further force or effect upon any sale or
other final disposition by the Indenture Trustee of all property constituting
part of the Collateral and the final distribution by the Indenture Trustee of
all monies or other property or proceeds constituting part of the Collateral
in accordance with the terms hereof. Except as aforesaid otherwise provided,
this Trust Indenture and the trusts created hereby shall continue in full
force and effect in accordance with the terms hereof.
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SECTION 11.02. No Legal Title to Collateral in Certificate
Holders.
No holder of a Secured Certificate shall have legal title to
any part of the Collateral. No transfer, by operation of law or otherwise,
of any Secured Certificate or other right, title and interest of any
Certificate Holder in and to the Collateral or hereunder shall operate to
terminate this Trust Indenture or entitle such holder or any successor or
transferee of such holder to an accounting or to the transfer to it of any
legal title to any part of the Collateral.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Collateral, or any part
thereof (including any part thereof or interest therein), by the Indenture
Trustee made pursuant to the terms of this Trust Indenture shall bind the
Certificate Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, the Owner and such holders in
and to such Collateral or part thereof. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Indenture Trustee.
SECTION 11.04. Trust Indenture for Benefit of the Owner,
Indenture Trustee, and Certificate Holders.
Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner, the Indenture
Trustee and the Certificate Holders, any legal or equitable right, remedy or
claim under or in respect of this Trust Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Trust Indenture
to be made, given, furnished or filed shall be in writing, personally
delivered or mailed by certified mail, postage prepaid, or by facsimile or
confirmed telex, and (i) if to the Owner, addressed to it at its office at
0000 Xxxxxxxxx Xxxxx, Xx. Xxxx, XX 00000-0000, Attention: Treasurer (Telecopy
No. (000) 000-0000), (ii) if to the Indenture Trustee, addressed to it at its
office at, for U.S. mail at Corporate Trust Department, X.X. Xxx 000, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000, and for overnight courier at Corporate Trust
Department, 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (Telecopy
No. (000) 000-0000), (iii) if to any Certificate Holder, addressed to such
party at such address as such party shall have furnished by notice to the
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Owner and the Indenture Trustee or, until an address is so furnished,
addressed to the address of such party (if any) set forth on the signature
pages to the Participation Agreement or in the Secured Certificate Register.
[Any notice to the Supplier shall be addressed to its Chief Executive
Officer, 0 Xxxx Xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (telex 521155F)
(fax: 011-33-5-61-93-49-77). -- A319's only] Whenever any notice in writing
is required to be given by the Owner or the Indenture Trustee or any
Certificate Holder to any of the other of them, such notice shall be deemed
given and such requirement satisfied when such notice is received, or if such
notice is mailed by certified mail, postage prepaid, three Business Days
after being mailed, addressed as provided above. Any party hereto may change
the address to which notices to such party will be sent by giving notice of
such change to the other parties to this Trust Indenture.
SECTION 11.06. Severability.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Secured
Certificates may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the Owner and the Indenture
Trustee, in compliance with Section 10.01 hereof. Any waiver of the terms
hereof or of any Secured Certificate shall be effective only in the specific
instance and for the specific purpose given.
SECTION 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action by
any Certificate Holder shall bind the successors and assigns of such holder.
Each Certificate Holder by its acceptance of a Secured Certificate agrees to
be bound by this Trust Indenture and all provisions of the Participation
Agreement applicable to a Loan Participant or a Certificate Holder.
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SECTION 11.09. Headings.
The headings of the various Articles and sections herein and
in the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner, the Indenture Trustee, any Certificate Holder or
any bank or other Affiliate of such Certificate Holder may conduct any
banking or other financial transactions, and have banking or other commercial
relationships, with the Owner fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of
loans or other extensions of credit to the Owner for any purpose whatsoever,
whether related to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture
may be executed by the parties hereto in separate counterparts (or upon
separate signature pages bound together into one or more counterparts), each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 11.12. Voting By Certificate Holders.
All votes of the Certificate Holders shall be governed by a
vote of a Majority in Interest of Certificate Holders, except as otherwise
provided herein.
SECTION 11.13. Bankruptcy.
It is the intention of the parties that the Indenture
Trustee, shall be entitled to the benefits of Section 1110 with respect to
the right to take possession of the Aircraft, Airframe, Engines and Parts as
provided herein in the event of a case under Chapter 11 of the Bankruptcy
Code in which the Owner is a debtor, and in any instance where more than one
construction is possible of the terms and conditions hereof or any other
pertinent Operative Document, each such party agrees that a construction
which would preserve such benefits shall control over any construction which
would not preserve such benefits.
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IN WITNESS WHEREOF, the parties hereto have caused this
Trust Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
NORTHWEST AIRLINES, INC.,
By: __________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly provided herein,
but solely as Indenture Trustee,
Indenture Trustee
By: __________________________________
Name:
Title:
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ANNEX A
DEFINITIONS
Unless the context otherwise requires, the following terms
shall have the following meanings for all purposes of the Trust Indenture and
Security Agreement [NW ____ _] and shall be equally applicable to both the
singular and the plural forms of the terms herein defined:
"Actual Knowledge" shall mean, as it applies to the
Indenture Trustee, actual knowledge of a Responsible Officer
in the Corporate Trust Office of the Indenture Trustee.
"Affiliate" means, with respect to any person, any
other person directly or indirectly controlling, controlled
by or under common control with such person. For the
purposes of this definition, "control" (including
"controlled by" and "under common control with") shall mean
the power, directly or indirectly, to direct or cause the
direction of the management and policies of such person
whether through the ownership of voting securities or by
contract or otherwise.
"Aircraft" means the Airframe (or any airframe from
time to time substituted for such Airframe pursuant to
Section 7.06 of the Trust Indenture) together with the
initial Engines (or any engine substituted for either of
such Engines pursuant to the terms of the Trust Indenture),
whether or not any such initial or substituted Engines may
from time to time be installed on such initial or
substituted Airframe or may be installed on any other
airframe or on any other aircraft.
"Airframe" means: (i) the [Airbus A319-114] [Boeing
757-251] aircraft (except Engines or engines from time to
time installed thereon) identified by U.S. registration xxxx
and manufacturer's serial number in the initial Trust
Indenture Supplement and any aircraft (except Engines or
engines from time to time installed thereon) which may from
time to time be substituted for such aircraft (except
Engines or engines from time to time installed thereon)
pursuant to clause (ii) of the first paragraph of Section
7.06(a) of the Trust Indenture; and (ii) any and all Parts
so long as the same shall be incorporated or installed in or
attached to such aircraft (except Engines or engines from
time to time installed thereon).
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"Amortization Amount" shall mean, with respect to
any Principal Amount Repayment Date, the amount set forth
opposite such Date on the Amortization Schedule.
"Amortization Schedule" shall mean the amortization
schedule for the Secured Certificates delivered pursuant to
Section 2.02 of the Trust Indenture.
"Applicable Rate" means as of any date the weighted
average of the interest rates borne by the Secured
Certificates then outstanding and, if no Secured
Certificates shall be outstanding, the Base Rate.
["Assigned Warranties" has the meaning set forth in
the definition of "Contract Rights". -- A319's only]
"Average Life Date" for each Secured Certificate to
be redeemed shall be the date which follows the redemption
date by a period equal to the Remaining Weighted Average
Life at the redemption date of such Secured Certificate.
"Remaining Weighted Average Life" of such Secured
Certificate, at the redemption date of such Secured
Certificate, shall be the number of days equal to the
quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then
remaining installment of principal, including the payment
due on the maturity date of such Secured Certificate, by
(ii) the number of days from and including the redemption
date to but excluding the scheduled payment date of such
principal installment; by (b) the then unpaid principal
amount of such Secured Certificate.
"Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"Base Rate" means the rate of interest announced
publicly by Citibank, N.A. in New York, New York from time
to time as its base rate.
"Business Day" means any day other than a Saturday
or Sunday or a day on which commercial banks are required or
authorized to close in the City of New York, New York;
Boston, Massachusetts; or Minneapolis, Minnesota.
"Cash Equivalents" shall mean (i) direct obligations
of the United States of America and agencies guaranteed by
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the United States government having a final maturity of
ninety (90) days or less from date of purchase thereof; (ii)
certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national
banking association incorporated under the laws of the
United States of America or one of the states thereof having
combined capital and surplus and retained earnings as of its
last report of condition of at least $500,000,000 and having
a rating of Aa or better by Xxxxx'x Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx Companies, Inc. ("S&P")
and having a final maturity of ninety (90) days or less from
date of purchase thereof; and (iii) commercial paper of any
holding company of a bank, trust company or national banking
association described in (ii) and commercial paper of any
corporation or finance company incorporated or doing
business under the laws of the United States of America or
any state thereof having a rating assigned to such
commercial paper of A1 by S&P or P1 by Moody's and having a
final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate
amount at any one time so invested in certificates of
deposit issued by any one bank shall not be in excess of 5%
of such bank's capital and surplus.
"Certificate Holder" shall mean any holder from time
to time of one or more Secured Certificates.
"Certificated Air Carrier" means a Citizen of the
United States holding a carrier operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447
of Title 49, United States Code, for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of
cargo or that otherwise is certified or registered to the
extent required to fall within the purview of 11 U.S.C.
Section 1110 or any analogous successor provision of the
Bankruptcy Code.
"Citizen of the United States" has the meaning
specified in Section 40102(a)(15) of Title 49 of the United
States Code or any similar legislation of the United States
of America enacted in substitution or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil
Reserve Air Fleet Program currently administered by the
United States Air Force Air Mobility Command pursuant to
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Executive Order No. 11490, as amended, or any substantially
similar program.
"Class G Trustee" means the Pass Through Trustee
under the Pass Through Trust Agreement, dated as of June 3,
1999, among Northwest Airlines Corporation, Northwest
Airlines, Inc., and State Street Bank and Trust Company of
Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of June 28, 2000 among
Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
"Closing" means the closing of the transactions
contemplated by the Participation Agreement.
"Closing Date" means the date on which the Closing
occurs.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Collateral" shall mean all estate, right, title and
interest of the Indenture Trustee in and to the properties
referred to in the Granting Clause of the Trust Indenture.
"Commitment" means the amount the payment of each
Pass Through Trustee to be made as provided in Section 1 of
the Participation Agreement.
"Consent and Agreement" means[, collectively, the
Manufacturer Consent and Agreement to Assignment of
Warranties and the Supplier Consent and Agreement to
Assignment of Warranties. -- A319's] [that certain Consent
and Agreement [NW ____ _], dated as of the date hereof,
executed by the Manufacturer, as the same may be amended,
modified or supplemented in accordance with the applicable
provisions thereof -- 757's]
"Contract Rights" means all of the Owner's rights
and interests in and to [(i) Clauses 12, 13 and, to the
extent relating to acts to be performed following the date
of enforcement of the Trust Indenture, 17 of the Purchase
Agreement (but not any other provision of the Purchase
Agreement or any letter agreement referred to therein) as
such Clauses relate to the Aircraft (the "Assigned
Warranties"), and (ii) the Guaranty as it relates to the
-4-
Assigned Warranties, reserving to the Owner, however, all of
the Owner's rights and interests in and to Clauses 12, 13
and, to the extent relating to acts to be performed
following the date of enforcement of the Trust Indenture, 17
of the Purchase Agreement and the Guaranty as and to the
extent that such Clauses of the Purchase Agreement and the
Guaranty relate to aircraft other than the Aircraft and to
the extent that the Purchase Agreement and the Guaranty
relate to any other matters not directly pertaining to the
Aircraft. -- A319's] [the Purchase Agreement, as and to the
extent that the same relate to the Aircraft and the
operation thereof, including, without limitation, (a) all
claims for damages in respect of the Aircraft arising as a
result of any default by the Manufacturer under the Purchase
Agreement, including, without limitation, all warranty,
service life policy, aircraft performance guarantee and
indemnity provisions in the Purchase Agreement in respect of
the Aircraft and all claims thereunder and (b) any and all
rights of the Owner to compel performance of the terms of
the Purchase Agreement in respect of the Aircraft; reserving
to the Owner, however, (i) all of the Owner's rights and
interests in and to the Purchase Agreement as and to the
extent that it relates to any matters not in respect of the
Aircraft, (ii) all of the Owner's rights and interests under
the Purchase Agreement (other than under Exhibit B (Product
Assurance Document) thereof), (iii) all of the Owner's
rights and interests in or arising out of any payments or
deposits made or to be made by the Owner or amounts credited
or to be credited or paid or to be paid by the Manufacturer
to the Owner in respect of the Aircraft under the Purchase
Agreement, (iv) all of the Owner's rights and interests in
and to any Spare Parts General Terms Agreement and (v) with
respect to the Aircraft, all rights to demand, accept and
retain all rights in and to property (other than the
Aircraft), data, documents, training and services of any
kind which the Manufacturer is obligated to provide or does
provide pursuant to the Purchase Agreement with respect to
the Aircraft. -- 757's]
"Corporate Trust Office" shall mean the principal
office of the Indenture Trustee located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate
Trust Department, or such other office at which the
Indenture Trustee's corporate trust business shall be
administered which the Indenture Trustee shall have
specified by notice in writing to the Owner, the Loan
Participants and each Certificate Holder.
-5-
"Debt" shall mean any liability for borrowed money,
or any liability for the payment of money in connection with
any letter of credit transaction, or other liabilities
evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments or for the deferred purchase price
of property, goods or services.
"Debt Rate" shall mean, with respect to any Series,
the rate per annum specified for such Series under the
heading "Interest Rate" in Schedule I to the Trust
Indenture.
"Default" means any event which with the giving of
notice or the lapse of time or both would become an Event of
Default.
"Dollars" and "$" means the lawful currency of the
United States of America.
"Engine" means (i) each of the two [CFM
International, Inc. Model CFM56-5A5] [Xxxxx & Xxxxxxx
PW2037] engines listed by manufacturer's serial number in
the initial Trust Indenture Supplement, whether or not from
time to time thereafter installed on the Airframe or
installed on any other airframe or on any other aircraft;
and (ii) any engine which may from time to time be
substituted, pursuant to the terms of the Trust Indenture,
for any of such two engines, together in each case with any
and all Parts incorporated or installed in or attached
thereto.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
Section references to ERISA are to ERISA, as in effect at
the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental
thereto or substituted therefor.
"Event of Default" shall have the meaning specified
in Section 4.01 of the Trust Indenture.
"Event of Loss" with respect to the Aircraft,
Airframe or any Engine means any of the following events
with respect to such property: (i) the loss of such
property or of the use thereof due to the destruction of or
damage to such property which renders repair uneconomic or
-6-
which renders such property permanently unfit for normal use
by the Owner (or any Lessee) for any reason whatsoever; (ii)
any damage to such property which results in an insurance
settlement with respect to such property on the basis of a
total loss, or a constructive or compromised total loss;
(iii) the theft or disappearance of such property, or the
confiscation, condemnation, or seizure of, or requisition of
title to, or use of, such property (other than a requisition
for use by the United States Government or any other
government of registry of the Aircraft, or any agency or
instrumentality of any thereof) which in the case of any
event referred to in this clause (iii) (other than a
requisition of title) shall have resulted in the loss of
possession of such property by the Owner (or any Lessee) for
a period in excess of 180 consecutive days or, in the case
of a requisition of title, the requisition of title shall
not have been reversed within 90 days from the date of such
requisition of title; (iv) as a result of any law, rule,
regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government
of registry of the Aircraft having jurisdiction, the use of
such property in the normal course of the business of air
transportation shall have been prohibited for a period of
180 consecutive days, unless the Owner (or any Lessee),
prior to the expiration of such 180 day period, shall have
undertaken and shall be diligently carrying forward all
steps which are necessary or desirable to permit the normal
use of such property by the Owner (or such Lessee), but in
any event if such use shall have been prohibited for a
period of two consecutive years, provided that no Event of
Loss shall be deemed to have occurred if such prohibition
has been applicable to the entire U.S. registered fleet of
[Airbus Model A319-100] [Boeing Model 757-200] aircraft of
the Owner (or any Lessee) and the Owner (or a Lessee), prior
to the expiration of such two-year period, shall have
conformed at least one such aircraft in its fleet to the
requirements of any such law, rule, regulation, order or
other action and commenced regular commercial use of the
same in such jurisdiction and shall be diligently carrying
forward, in a manner which does not discriminate against the
Aircraft in so conforming the Aircraft, all steps which are
necessary or desirable to permit the normal use of the
Aircraft by the Owner (or such Lessee), provided, further
that, notwithstanding any of the foregoing, such prohibition
shall constitute an Event of Loss if such use shall have
been prohibited for a period of three consecutive years; and
(v) any divestiture of title to or interest in an Engine
-7-
treated as an Event of Loss pursuant to Section 7.06(b) of
the Trust Indenture. An Event of Loss with respect to the
Aircraft shall be deemed to have occurred if an Event of
Loss occurs with respect to the Airframe.
"Expenses" shall have the meaning attributed thereto
in Section 7(c) of the Participation Agreement.
"Federal Aviation Act" means that portion of the
United States Code comprising those provisions formerly
referred to as the Federal Aviation Act of 1958, as amended,
or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Federal Aviation Administration" and "FAA" mean the
United States Federal Aviation Administration and any agency
or instrumentality of the United States government
succeeding to their functions.
"Foreign Air Carrier" means any air carrier which is
not a U.S. Air Carrier and which performs maintenance,
preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are
approved by, or which are substantially equivalent to those
required by, the Federal Aviation Administration, the Civil
Aviation Authority of the United Kingdom, the Direction
Generale de l'Aviation Civile of the French Republic, the
Luftfahrt Bundesamt of the Federal Republic of Germany, the
Rijksluchtvaartdienst of the Kingdom of the Netherlands, the
Ministry of Transportation of Japan or the Federal Ministry
of Transport of Canada (and any agency or instrumentality of
the applicable government succeeding to the functions of any
of the foregoing entities).
["French Pledge Agreement" means the French Pledge
Agreement, dated as of [_____________], between the Owner
and the Indenture Trustee. -- A319's only]
"Government Entity" mean (a) any federal, state,
provincial or similar government, and any body, board,
department, commission, court, tribunal, authority, agency
or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or
(b) any other government entity having jurisdiction over any
matter contemplated by the Operative Agreements or relating
-8-
to the observance or performance of the obligations of any
of the parties to the Operative Agreements.
"Guarantee" means that certain Guarantee [NW ____
_], dated as of [________], made by the Guarantor, as such
Guarantee may be amended or supplemented from time to time
pursuant to the applicable provisions thereof.
"Guarantor" means Northwest Airlines Corporation, a
Delaware corporation.
["Guaranty" means that certain Guaranty of the
Manufacturer attached to the Purchase Agreement. -- A319's
only]
"Indemnitee" means (i) the Indenture Trustee, (ii)
the Loan Participants and each other Certificate Holder,
(iii) the Subordination Agent, (iv) the Liquidity Provider
and the Policy Provider, (v) the Pass Through Trustees, (vi)
each Affiliate of the Person described in clause (i), (vii)
each Affiliate of the Persons described in clauses (iii),
(iv) and (v) inclusive, (viii) the respective directors,
officers, employees, agents and servants of each of the
Persons described in clauses (i) through (v), inclusive,
(ix) the successors and permitted assigns of the Person
described in clause (i), and (x) the successors and
permitted assigns of the Persons described in clauses (ii),
(iii), (iv) and (v) inclusive.
"Indenture Agreements" means the Participation
Agreement, the Purchase Agreement, [the Guaranty, -- A319's
only] the Guarantee, and any other contract, agreement or
instrument from time to time assigned or pledged under the
Trust Indenture.
"Indenture Indemnitee" means (i) the Indenture
Trustee, (ii) the Loan Participants and each Certificate
Holder, (iii) the Subordination Agent, (iv) the Liquidity
Provider and the Policy Provider, (v) the Pass Through
Trustee and (vi) the respective directors, officers,
employees, agents and servants of each of the Persons
described in clauses (i) through (v), inclusive.
"Indenture Trustee" means the Indenture Trustee
under the Trust Indenture, and any entity which may from
time to time be acting as indenture trustee under the Trust
Indenture.
-9-
"Indenture Trustee Documents" means the
Participation Agreement and the Trust Indenture.
"Indenture Trustee's Liens" means any Lien which
arises as a result of (A) claims against the Indenture
Trustee not related to its interest in the Aircraft, (B)
acts of the Indenture Trustee not permitted by, or failure
of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such
failure arises from or constitutes gross negligence or
willful misconduct, (C) claims against the Indenture Trustee
relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 of the Participation
Agreement pursuant to said Section 7, or (D) claims against
the Indenture Trustee arising out of the transfer by the
Indenture Trustee of all or any portion of its interest in
the Aircraft, the Collateral or the Operative Documents
other than a transfer of the Aircraft pursuant to Article IV
of the Trust Indenture while an event of default is
continuing and prior to the time that the Indenture Trustee
has received all amounts due pursuant to the Trust
Indenture.
"Intercreditor Agreement" means that certain
Intercreditor Agreement among the Pass Through Trustees, the
Liquidity Provider, the Policy Provider and the
Subordination Agent, as such Intercreditor Agreement may be
amended or supplemented from time to time pursuant to the
applicable provisions thereof.
"Issuance Date" means June 28, 2000.
"Law" shall mean (a) any constitution, treaty,
statute, law, regulation, order, rule or directive of any
Government Entity, and (b) any judicial or administrative
interpretation or application of, or decision under, any of
the foregoing.
"Lease" means any lease permitted by the terms of
Section 7.02 of the Trust Indenture.
"Lessee" means any Person for so long, but only so
long, as such Person is in possession of the Airframe and/or
any Engine pursuant to the terms of a Lease which is then in
effect pursuant to Section 7.02(b)(x) of the Trust
Indenture.
-10-
"Lien" means any mortgage, pledge, lien, charge,
claim, encumbrance, lease, sublease or security interest.
"Liquidity Facilities" means the two Revolving
Credit Agreements between the Subordination Agent, as
borrower, and the Liquidity Provider, including the related
Liquidity Fee Letter referred to therein, and any
replacement thereof, in each case as the same may be
amended, modified or supplemented.
"Liquidity Provider" means Credit Suisse First
Boston, New York branch, as Class G Liquidity Provider and
Class C Liquidity Provider under the Liquidity Facilities,
or any successor thereto.
"Loan Participant" means each Purchaser and its
respective successors and registered assigns, including any
Certificate Holder.
"Loan Participant Liens" means any Lien which arises
from acts or claims against any Loan Participant not related
to the transactions contemplated by the Operative Documents.
"Majority in Interest of Certificate Holders" as of
a particular date of determination shall mean the holders of
more than a majority in aggregate unpaid Principal Amount of
all Secured Certificates outstanding as of such date
(excluding any Secured Certificates held by the Owner or its
affiliates (unless all Secured Certificates then outstanding
shall be held by the Owner or its affiliates)).
"Make-Whole Amount" means, with respect to any
Secured Certificate, the amount (as determined by an
independent investment banker selected by the Owner and
reasonably acceptable to the Indenture Trustee) by which (a)
the present value of the remaining scheduled payments of
principal and interest from the redemption date to maturity
of such Secured Certificate computed by discounting each
such payment on a semiannual basis from its respective
Payment Date (assuming a 360-day year of twelve 30-day
months) using a discount rate equal to the Treasury Yield
exceeds (b) the outstanding principal amount of such Secured
Certificate plus accrued interest. For purposes of
determining the Make-Whole Amount, "Treasury Yield" at the
time of determination with respect to any Secured
Certificate means the interest rate (expressed as a
semiannual equivalent and as a decimal and, in the case of
-11-
United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the
semiannual yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Secured
Certificate and trading in the public securities market
either as determined by interpolation between the most
recent weekly average yield to maturity for two series of
United States Treasury securities, trading in the public
securities markets, (A) one maturing as close as possible
to, but earlier than, the Average Life Date of such Secured
Certificate and (B) the other maturing as close as possible
to, but later than, the Average Life Date of such Secured
Certificate, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for
United States Treasury securities maturing on the Average
Life Date of such Secured Certificate is reported on the
most recent H.15(519), such weekly average yield to maturity
as published in such H.15(519). "H.15(519)" means the
weekly statistical release designated as such, or any
successor publication, published by the Board of Governors
of the Federal Reserve System. The date of determination of
a Make-Whole Amount shall be the third Business Day prior to
the applicable redemption date and the "most recent
H.15(519)" means the H.15(519) published prior to the close
of business on the third Business Day prior to the
applicable redemption date.
"Manufacturer" means [Airbus Industrie, G.I.E., a
Groupment d'Interet Economique established under Ordonnance
67-821, dated September 23, 1967, of the Republic of France]
[The Boeing Company, a Delaware corporation].
["Manufacturer Consent and Agreement to Assignment
of Warranties" means the Manufacturer Consent and Agreement
to Assignment of Warranties [NW ____ __], dated as of the
date hereof, executed by the Manufacturer, as the same may
be amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof. -- A319's
only]
"Manufacturer Documents" means [the Manufacturer
Consent and Agreement to Assignment of Warranties and the
Guaranty. -- A319's] [the Purchase Agreement and the Consent
and Agreement. -- 757's]
["Mortgage" means that certain Mortgage and Security
Agreement, dated as of [________________].]
-12-
"Mortgaged Property" shall have the meaning
specified in Section 3.03 of the Trust Indenture.
"Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of the Issuance Date, among
Northwest Airlines, Inc., the Subordination Agent, First
Security Bank, National Association, as Escrow Agent, State
Street Bank and Trust Company of Connecticut, National
Association, as Paying Agent and the Pass Through Trustee
under each Pass Through Trust Agreement providing for, among
other things, the issuance and sale of certain secured
certificates.
"Operative Documents" and "Operative Document" means
each of the Participation Agreement, the Trust Indenture,
the Trust Indenture Supplement covering the Aircraft, the
Secured Certificates, the Purchase Agreement (insofar as it
relates to the Aircraft), the Consent and Agreement and the
Guarantee.
"Overall Transaction" means all the transactions
contemplated by the Operative Documents.
"Owner Documents" means the Participation Agreement,
the Trust Indenture and the Purchase Agreement (insofar as
it relates to the Aircraft).
"Participants" means and includes the Loan
Participants.
"Participation Agreement" means that certain
Participation Agreement [NW ____ _], dated as of
[_______________], among the Owner, the Subordination Agent,
the Indenture Trustee, the Guarantor, and the Purchasers as
the same may from time to time be supplemented or further
amended, or the terms thereof waived or modified, to the
extent permitted by, and in accordance with, the terms
thereof.
"Parties" means the Indenture Trustee and the
Participants.
"Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
of whatever nature (other than (a) complete Engines or
engines, (b) any items leased by the Owner from a third
party (other than Lessor) and (c) cargo containers) which
-13-
may from time to time be incorporated or installed in or
attached to the Airframe or any Engine.
"Pass Through Certificates" means the pass through
certificates to be issued by the Pass Through Trustee in
connection with the Overall Transaction.
"Pass Through Trust" means each of the two separate
pass through trusts created under the Pass Through Trust
Agreements.
"Pass Through Trust Agreement" means the pass
through trust agreement and each of the two separate pass
through trust supplements referred to on Schedule III to the
Participation Agreement.
"Pass Through Trustee" means State Street Bank and
Trust Company of Connecticut, National Association, a
national banking association, in its capacity as trustee
under each Pass Through Trust Agreement, and each other
person that may from time to time be acting as successor
trustee under any such Pass Through Trust Agreement.
"Past Due Rate" shall mean, with respect to the
Secured Certificates, the rate per annum equal to 2% over
the Debt Rate as in effect from time to time.
"Payment Date" shall mean each [April 1 and October
1], commencing on [April/October 1, ____] (or, if any such
day is not a Business Day, the immediately succeeding
Business Day) until the Secured Certificates have been paid
in full.
"Permitted Lien" means any Lien referred to in
clauses (i) through (viii) of Section 7.01 of the Trust
Indenture.
"Permitted Lessee" means any entity domiciled in a
country listed in Schedule III to the Trust Indenture.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
-14-
"Policy Provider" means MBIA Insurance Corporation,
a New York-domiciled stock insurance company.
"Policy Provider Agreement" means the Insurance and
Indemnity Agreement dated as of June 28, 2000 among the
Subordination Agent for the Class G Trustee, the Owner and
the Policy Provider, including the related Policy Provider
Fee Letter referred to therein, as amended, supplemented or
otherwise modified from time to time in accordance with its
terms.
"Principal Amount" with respect to a Secured
Certificate means the stated original principal amount of
such Secured Certificate and, with respect to all Secured
Certificates, means the aggregate stated original principal
amounts of all Secured Certificates.
"Principal Amount Repayment Date" shall mean each
Payment Date on which any portion of the Principal Amount is
due and payable in accordance with the Amortization
Schedule.
"Purchase Agreement" means that certain [Airbus A319
Purchase Agreement, dated as of September 19, 1997]
[Purchase Agreement No. 1631, dated December 1, 1989],
between the [Supplier] [Manufacturer] and the Owner relating
to the purchase by the Owner of the Aircraft, as originally
executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the
foregoing relates to the Aircraft.
"Purchasers" means the Pass Through Trustees under
each Pass Through Trust Agreement.
"QIB" shall have the meaning specified in Section
2.08 of the Trust Indenture.
"Related Indemnitee Group" means, with respect to
any Indemnitee, any officer, director, servant, employee,
agent or Affiliate thereof.
"Replacement Airframe" shall mean any airframe
substituted for the Airframe pursuant to Section 7.06 of the
Trust Indenture.
-15-
"Replacement Engine" shall mean any engine
substituted for an Engine pursuant to Section 7.06 of the
Trust Indenture.
"Responsible Officer" means a responsible officer in
the Corporate Trust Office of the Indenture Trustee.
"Secured Certificates" shall mean and include any
Secured Certificates issued hereunder, and issued in
exchange therefor or replacement thereof.
"Secured Obligations" shall have the meaning
specified in Section 2.06 of the Trust Indenture.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Senior Holder" shall have the meaning specified in
Section 2.15(c) of the Trust Indenture.
"Series C" or "Series C Secured Certificates" means
Secured Certificates issued and designated as "Series C"
hereunder, in the Principal Amount and maturities and
bearing interest as specified in Schedule I to the Trust
Indenture under the heading "Series C."
"Series G" or "Series G Secured Certificates" means
Secured Certificates issued and designated as "Series G"
hereunder, in the Principal Amount and maturities and
bearing interest as specified in Schedule I to the Trust
Indenture under the heading "Series G."
"State Street" means State Street Bank and Trust
Company, a Massachusetts trust company, not in its capacity
as Indenture Trustee under the Trust Indenture, but in its
individual capacity.
"Subordination Agent" means State Street Bank and
Trust Company, a Massachusetts trust company, as
subordination agent under the Intercreditor Agreement, or
any successor thereto.
["Supplier" means AVSA, S.A.R.L., a French societe a
responsabilite limitee, organized and existing under the
laws of the French Republic, and its successors. -- A319's
only]
-16-
["Supplier Consent and Agreement to Assignment of
Warranties" means the Supplier Consent and Agreement to
Assignment of Warranties [NW ____ _], dated as of the date
hereof, executed by the Supplier, as the same may be
amended, modified or supplemented from time to time in
accordance with the applicable terms thereof. -- A319's
only]
["Supplier Documents" means the Purchase Agreement
and the Supplier Consent and Agreement to Assignment of
Warranties. -- A319's only]
"Tax Indemnitee" means (i) the Indenture Trustee,
its successors and permitted assigns, (ii) the Policy
Provider and (iii) the Trust Indenture Estate.
"Taxes" means any and all fees (including, without
limitation, license, recording, documentation and
registration fees), taxes (including, without limitation,
income, gross receipts, sales, rental, use, turnover, value
added, property (tangible and intangible), excise and stamp
taxes), license, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever,
together with any and all penalties, fines, additions to tax
and interest thereon (each, individually a "Tax").
"Transactions" means the transactions contemplated
by the Participation Agreement and the other Operative
Documents.
"Trust Indenture", "this Indenture"," the Trust
Indenture", "Indenture", and "the Indenture" shall mean the
Trust Indenture and Security Agreement [NW ____ _], dated as
of [______] between the Owner and the Indenture Trustee, as
it may from time to time be supplemented or amended as
herein provided, including supplementing by a Trust
Indenture Supplement pursuant thereto.
"Trust Indenture Estate" shall mean all estate,
right, title and interest of the Indenture Trustee in and to
the properties referred to in the Granting Clause of the
Trust Indenture.
"Trust Indenture Supplement" shall mean a supplement
to the Trust Indenture, in substantially the form of Exhibit
A thereto, which shall particularly describe the Aircraft,
and any Replacement Airframe and Replacement Engine.
-17-
"Underwriting Agreement" means that certain
Underwriting Agreement, dated as of June 21, 2000, among the
Owner, the Guarantor, and the underwriters named therein.
"U.S. Air Carrier" means any Certificated Air
Carrier as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the
regulations under the Federal Aviation Act, or which may
operate as an air carrier by certification or otherwise
under any successor or substitute provisions therefor or in
the absence thereof.
"Wet Lease" means any arrangement whereby the Owner
(or any Lessee) agrees to furnish the Airframe and Engines
or engines installed thereon to a third party pursuant to
which such Airframe and Engines or engines (i) shall be
operated solely by regular employees of the Owner (or any
Lessee) possessing all current certificates and licenses
that would be required under the Federal Aviation Act or, if
the Aircraft is not registered in the United States, all
certificates and licenses required by the laws of the
jurisdiction of registry, for the performance by such
employees of similar functions within the United States of
America or such other jurisdiction of registry (it is
understood that cabin attendants need not be regular
employees of the Owner (or any Lessee)) and (ii) shall be
maintained by the Owner (or any Lessee) in accordance with
its normal maintenance practices.
-18-
EXHIBIT A
TO
TRUST INDENTURE
AND SECURITY AGREEMENT
TRUST INDENTURE SUPPLEMENT
[NW ____ _]
This TRUST INDENTURE SUPPLEMENT [NW ____ _], dated
[_____________] (herein called this "Trust Indenture Supplement") of
NORTHWEST AIRLINES, INC. (the "Owner").
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT [NW ____
_], dated as of [_______________] (as amended and supplemented to the date
hereof, the "Trust Indenture") between the Owner and STATE STREET BANK AND
TRUST COMPANY, as Indenture Trustee (the "Indenture Trustee"), provides for
the execution and delivery of a supplement thereto substantially in the form
hereof, which shall particularly describe the Aircraft, and shall
specifically mortgage such Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and
Engines described below, and a counterpart of the Trust Indenture is attached
hereto and made a part hereof and this Trust Indenture Supplement, together
with such counterpart of the Trust Indenture, is being filed for recordation
on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth
that the Owner hereby confirms that the Lien of the Trust Indenture on the
Collateral covers all of the Owner's right, title and interest in and to the
following described property:
AIRFRAME
One airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ --------------
together with all of the Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said
airframe.
-1-
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more
rated take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's Model Serial Number
------------ -------------------- -------------
together with all of the Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which
are from time to time incorporated or installed in or attached to any of such
engines.
Together with all of the Owner's right, title and interest
in and to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or
hereafter acquired, including all substitutions, renewals and replacements of
and additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations
which constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts).
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
equal and proportionate benefit and security of the Certificate Holders,
except as provided in Section 2.15 and Article III of the Trust Indenture
without any preference, distinction or priority of any one Secured
Certificate over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and subject to the terms and provisions set
forth in the Trust Indenture.
This Trust Indenture Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof. The Trust
Indenture is each hereby incorporated by reference herein and is hereby
ratified, approved and confirmed.
This Trust Indenture Supplement is being delivered in the
State of New York.
AND, FURTHER, the Owner hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement has been delivered to
the Owner and is included in the property of the Owner subject to the pledge
and mortgage thereof under the Trust Indenture.
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IN WITNESS WHEREOF, the Owner has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto
duly authorized, on the day and year first above written.
NORTHWEST AIRLINES, INC.
By: __________________________________
Name:
Title:
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SCHEDULE I
Principal Amount Interest Rate
---------------- -------------
Series G...... $[_________] 8.072%
Series C...... $[_________] 9.179%
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Secured Certificates Amortization
SERIES G
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
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SERIES C
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
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SCHEDULE II
PASS THROUGH TRUST AGREEMENTS
1. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest Airlines Corporation, Northwest Airlines, Inc., and State
Street Bank and Trust Company of Connecticut, National Association,
as supplemented by Trust Supplement No. 2000-1G, dated as of June 28,
2000 among Northwest Airlines, Inc., Northwest Airlines Corporation
and State Street Bank and Trust Company of Connecticut, National
Association.
2. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest Airlines Corporation, Northwest Airlines, Inc., and State
Street Bank and Trust Company of Connecticut, National Association,
as supplemented by Trust Supplement No. 2000-1C, dated as of June 28,
2000 among Northwest Airlines, Inc., Northwest Airlines Corporation
and State Street Bank and Trust Company of Connecticut, National
Association.
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SCHEDULE III
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Xxxxxxxx
Xxxxxxx Xxxxxxxx xx Xxxxx (Xxxxxx)0
Xxxxxx Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
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1 So long as on the date of entering into the proposed lease such
country and the United States have diplomatic relations at least as
good as those in effect on the Closing Date.
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11.1.____________________
11.2.[FN]
To be inserted for each Secured Certificate other than any Series G
Secured Certificate.
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