EXHIBIT 4.21
[CONFORMED COPY]
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TRANS WORLD AIRLINES, INC.
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of December 9, 1997
$140,000,000
11 1/2% Senior Secured Notes due 2004
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TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions................................................ 1
Section 1.2 Rules of Construction...................................... 1
ARTICLE 2.
THE SECURITIES
Section 2.1 Designation, Form and Dating............................... 1
Section 2.2 Execution, Amount, Authentication and Delivery............. 2
Section 2.3 Registrar and Paying Agent................................. 5
Section 2.4 Paying Agent to Hold Payments In Trust..................... 5
Section 2.5 Securityholder Lists....................................... 7
Section 2.6 Transfer and Exchange...................................... 7
Section 2.7 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.. 8
Section 2.8 Treasury Securities........................................ 9
Section 2.9 Temporary Securities....................................... 10
Section 2.10 Cancellation............................................... 10
Section 2.11 Defaulted Interest......................................... 11
Section 2.12 CUSIP Numbers.............................................. 11
ARTICLE 3.
REDEMPTIONS AND CERTAIN REPURCHASES
Section 3.1 Optional Redemption General.............................. 11
Section 3.2 Redemption Notice to Trustee............................. 12
Section 3.3 Selection of Securities to be Redeemed................... 12
Section 3.4 Notice of Redemption..................................... 12
Section 3.5 Effect of Notice of Redemption........................... 13
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Section 3.6 Deposit of Redemption Price.............................. 13
Section 3.7 Securities Redeemed in Part.............................. 13
Section 3.8 Optional Redemption upon Public Equity Offering.......... 14
Section 3.9 Use of Temporary Cash Collateral or Cash Collateral for
Purchase................................................ 14
ARTICLE 4.
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 4.1 Payment of Securities.................................... 15
Section 4.2 Maintenance of Office or Agency.......................... 15
Section 4.3 Limitation on Restricted Payments........................ 16
Section 4.4 Corporate Existence...................................... 19
Section 4.5 Payment of Taxes and other Claims........................ 19
Section 4.6 Notices.................................................. 20
Section 4.7 Maintenance of Properties and Insurance.................. 20
Section 4.8 Default Notices and Compliance Certificates.............. 21
Section 4.9 SEC Reports.............................................. 21
Section 4.10 Waiver of Stay, Extension or Usury Laws.................. 22
Section 4.11 Amendment to Certain Agreements.......................... 22
Section 4.12 Title to Collateral; Limitations on Liens................ 23
Section 4.13 Books, Records, Access; Confidentiality.................. 23
Section 4.14 Security Interests....................................... 24
Section 4.15 Repurchase of Securities Upon a Change in Control........ 24
Section 4.16 Restrictions on Becoming an Investment Company........... 25
Section 4.17 Limitation on Indebtedness............................... 25
Section 4.18 Limitation on Restrictions on Distributions from
Restricted Subsidiaries................................. 28
Section 4.19 Limitation on Sales of Assets and Subsidiary Stock....... 30
Section 4.20 Limitation on Affiliate Transactions..................... 31
Section 4.21 Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries................................. 32
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Section 4.22 Limitation on Guarantees by Restricted Subsidiaries...... 33
Section 4.23 Limitation on Sale/Leaseback Transactions................ 33
Section 4.24 Application for Rating................................... 34
Section 4.25 Listing.................................................. 34
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.1 Covenant Not to Consolidate, Merge, Convey or Transfer
Except Under Certain Conditions......................... 34
Section 5.2 Successor Person Substituted............................. 35
Section 5.3 Optional Right of Redemption............................. 36
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default........................................ 36
Section 6.2 Acceleration............................................. 38
Section 6.3 Other Remedies........................................... 39
Section 6.4 Waiver of Past Defaults.................................. 39
Section 6.5 Control by Majority...................................... 39
Section 6.6 Limitation on Suits...................................... 40
Section 6.7 Rights of Holders to Receive Payment..................... 40
Section 6.8 Collection Suit by Trustee............................... 41
Section 6.9 Trustee May File Proofs of Claim......................... 41
Section 6.10 Application of Proceeds.................................. 42
Section 6.11 Undertaking for Costs.................................... 43
Section 6.12 Restoration of Rights on Abandonment of Proceedings...... 43
Section 6.13 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default....................................... 43
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ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee........................................ 44
Section 7.2 Rights of Trustee........................................ 45
Section 7.3 Individual Rights of Trustee............................. 45
Section 7.4 Trustee's Disclaimer..................................... 45
Section 7.5 Notice of Defaults....................................... 46
Section 7.6 Reports by Trustee to Holders............................ 46
Section 7.7 Compensation and Indemnity............................... 46
Section 7.8 Replacement of Trustee................................... 47
Section 7.9 Successor Trustee by Merger, etc......................... 48
Section 7.10 Eligibility; Disqualification............................ 48
Section 7.11 Preferential Collection of Claims Against Company........ 49
Section 7.12 Other Capacities......................................... 49
ARTICLE 8.
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1 Discharge of Liability on Securities; Defeasance......... 49
Section 8.2 Conditions to Defeasance................................. 50
Section 8.3 Application of Trust Money............................... 51
Section 8.4 Repayment to Company..................................... 52
Section 8.5 Indemnity for Government Obligations..................... 52
Section 8.6 Reinstatement............................................ 52
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders............................... 53
Section 9.2 With Consent of Holders.................................. 53
Section 9.3 Compliance with Trust Indenture Act...................... 54
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Section 9.4 Revocation and Effect of Consents........................ 54
Section 9.5 Notation on or Exchange of Securities.................... 55
Section 9.6 Trustee to Sign Amendments, etc.......................... 55
Section 9.7 Effect of Supplement and/or Amendment.................... 56
ARTICLE 10.
SECURITY
Section 10.1 Other Operative Documents................................ 56
Section 10.2 Pledged Securities....................................... 56
Section 10.3 Opinions, Certificates and Appraisals.................... 58
Section 10.4 Authorization of Actions to be Taken by the Trustee
Under the Operative Documents........................... 59
Section 10.5 Payment of Expenses...................................... 60
Section 10.6 Authorization of Receipt of Funds by the Trustee Under
the Operative Documents................................. 60
Section 10.7 Agreement as to Appraised Value and Fair Market Value.... 60
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Conflict with Trust Indenture Act of 1939................ 61
Section 11.2 Notices; Waivers......................................... 61
Section 11.3 Communications By Holders With Other Holders............. 62
Section 11.4 Certificate and Opinion as to Conditions Precedent....... 62
Section 11.5 Statements Required In Certificate or Opinion............ 62
Section 11.6 Rules By Trustee, Paying Agent, Registrar................ 64
Section 11.7 Holidays................................................. 64
Section 11.8 Governing Law; Waiver of Jury Trial...................... 64
Section 11.9 No Adverse Interpretation of Other Agreements............ 64
Section 11.10 No Recourse Against Others............................... 64
Section 11.11 Benefits of Indenture and the Securities Restricted...... 65
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Section 11.12 Successors and Assigns................................... 65
Section 11.13 Counterpart Originals.................................... 65
Section 11.14 Severability............................................. 65
Section 11.15 Rating Agencies.......................................... 65
Section 11.16 Effect of Headings....................................... 66
ARTICLE 12.
RELEASE OF COLLATERAL
Section 12.1 Release of Collateral.................................... 66
APPENDIX I Definitions
APPENDIX II Rule 144A/Regulation S Appendix (including form of 11 1/2% Senior
Secured Note as Exhibit 2 thereto)
EXHIBIT A Form of Acquired Slot Trust Agreement with Form of Subsequent
Deed of Conveyance attached thereto as Exhibit A thereto and Form
of Master Sub-License Agreement attached thereto as Exhibit C
thereto
EXHIBIT B Form of Pledge and Security Agreement
EXHIBIT C Form of Subsidiary Guaranty
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INDENTURE dated as of December 9, 1997 between TRANS WORLD AIRLINES, INC.,
a Delaware corporation (the "Company"), and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 11 1/2% Senior Secured
Notes due 2004 (the "Initial Securities") and, if and when issued pursuant to a
registered exchange for Initial Securities, the Company's 11 1/2%
Senior Secured Notes due 2004 (the "Exchange Securities", and, if and when
issued pursuant to a private exchange for Initial Securities, the Company's 11
1/2% Senior Secured Notes due 2004 (the "Private Exchange Securities", together
with the Exchange Securities and the Initial Securities, the "Securities").
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions.
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Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to such terms in Section 1 of the Definitions Appendix
attached hereto as Appendix I, which shall be a part of this Indenture as if
fully set forth in this place.
Section 1.2 Rules of Construction.
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The rules of construction for this Indenture are set forth in Section 2 of
the Definitions Appendix.
ARTICLE 2.
THE SECURITIES
Section 2.1 Designation, Form and Dating.
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Provisions relating to the Initial Securities, the Private Exchange
Securities and the Exchange Securities are set forth in the Rule 144A/Regulation
S Appendix attached hereto as Appendix II (the "Rule 144A Appendix") which is
hereby incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Rule 144A Appendix (with such
appropriate insertions, omissions, substitutions and other variations as are
required by this Indenture) and are hereby incorporated in and expressly made a
part of this Indenture. The Exchange Securities, the Private Exchange
Securities, and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit 2 to
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the Rule 144A Appendix and are hereby incorporated in and expressly made a part
of this Indenture. The Exchange Securities and the Private Exchange Securities
may be issued with the appropriate insertions, omissions, substitutions and
other, variations. The Securities may have imprinted or otherwise reproduced
thereon such notations, legends or endorsements, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto, or with the rules of any securities
market in which the Securities are admitted to trading, or to conform to general
usage. The Company shall approve the form of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated the date of its
authentication and shall bear interest from the applicable date set forth in the
form of security and shall be payable, unless previously Tendered, on the dates
as specified on the face of the form of the Security.
The terms and provisions contained in the Securities, annexed hereto as
Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture.
The Person in whose name any Security is registered at the close of
business on any Record Date with respect to any Interest Payment Date shall be
entitled to receive the interest and Special Interest, if any, payable on such
Interest Payment Date to the extent provided by such Security, except if and to
the extent the Company shall default in the payment of the interest or Special
Interest due on such Interest Payment Date, in which case defaulted interest or
Special Interest, as the case may be, shall be paid to the Person in whose name
the Outstanding Security is registered at the close of business on the
subsequent record date (which shall be not less than five (5) Business Days
prior to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Company to the Holders of Securities not
less than fifteen (15) days preceding such subsequent record date (a "Special
Record Date").
Section 2.2 Execution, Amount, Authentication and Delivery.
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The Securities shall be signed for the Company by the manual or facsimile
signatures of an Officer and a Certifying Officer. The Company's seal shall be
affixed to or reproduced on the Securities. Typographical or other errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
If an officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to $140,000,000 except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu
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of, other Securities pursuant to Sections 2.6, 2.7, 2.9, 4.15, or 9.5 or in
conjunction with a Registered Exchange Offer or any Private Exchange.
The Securities shall be known and designated as the "11 1/2% Senior Secured
Notes due 2004" of the Company. Their Stated Maturity shall be December 15,
2004, and they shall bear interest at the rate of 11 1/2% per annum, from
December 9 1997 or from the most recent Interest Payment Date to which interest
and Special Interest, if any, have been paid or duly provided for, as the case
may be, payable semi-annually in arrears on June 15 and December 15, commencing
June 15, 1998, until the principal thereof is paid or made available for
payment.
Subject to the limits set forth in the second preceding paragraph of this
Indenture, the Trustee shall authenticate Securities for original issue upon
written order of the Company signed by an Officer and by a Certifying Officer of
the Company. The order shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated, shall provide instructions with respect to the delivery thereof
and shall be accompanied by the documents specified in Sections 10.3 and 11.4
and by the following (each to the extent and in form acceptable to the Trustee,
who is authorized conclusively to rely upon the documents specified in Section
11.4):
(a) the grant to the Collateral Agent and the Trustee, by assignment,
pledge, or otherwise pursuant to the Pledge Agreement and the Note Pledge
Agreement, respectively, of a security interest in the Collateral and the
Pledged Collateral, as the case may be, and the conveyance to or otherwise
vesting in the Slot Trust of the Acquired Slots;
(b) (i) Officers' Certificates or other satisfactory confirmation (i) with
respect to the Pledge Agreement and the Collateral and the Note Pledge Agreement
and the Pledged Collateral, that the Company is the legal and beneficial owner
of the Collateral and the Pledged Collateral, free and clear of all Liens
except, in the case of the Collateral, Permitted Collateral Liens; (ii) that the
Acquired Slots are vested in the Slot Trustee; and (iii) describing the actions
taken to make, obtain and accomplish all necessary filings, confirmations and
identifications referred to in Section 4.14 hereof and Section 7.01(b)(i) of the
Master Sub-License Agreement;
(c) compliance with all applicable provisions of Sections 4.12 and 4.14
hereof;
(d) an Officers' Certificate (i) listing (A) (by reference to exhibits or
schedules to the Operative Documents or otherwise) as of the last day of the
month preceding the date hereof the locations of and the value of the Pledged
Spare Parts as reflected in the Inventory Control System, and (B) as of the date
of such Certificate, the Acquired Slots then held by the Slot Trust; and (ii)
stating that (1) no dispositions of Pledged Spare Parts outside of the Ordinary
Course except in compliance with the terms of the Operative Documents have
occurred since the date of such list nor has any amount of Pledged Spare
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Parts, as described on such list, been moved from the location indicated other
than in the Ordinary Course Of Business nor is the sum of such dispositions or
movements, considered in the aggregate, material in relation to the Property set
forth on such list, 2) no material changes in the information provided have
occurred from the last day of the preceding month to the date hereof; (3) each
Pledged Spare Part described on such list is either a "spare part" or an
"appliance" as such terms are defined in the Federal Aviation Act; and (4)
confirming all representations and warranties of the Company contained in the
Indenture and the other Operative Documents as of the date of authentication;
(e) an Officers' Certificate containing representations and warranties of
the type usual and customary to the issuance of the Securities such as, but not
limited to, representations regarding due authorization of the Indenture; due
authorization of the issuance, sale and delivery of the Securities; that the
Securities, when so issued, sold and delivered against payment therefor will be
duly and validly issued, fully paid and non-assessable; that no consent,
approval or authorization of, or designation, declaration, or filing with, any
governmental authority or any other person or entity is required of the Company
in connection with the execution and delivery of the Indenture or the issuance,
sale and delivery of the Securities; and that the Securities have been
registered under the Securities Act or that registration is not required in
connection with the offer, sale and delivery of the Securities;
(f) an Opinion of Counsel to the effect that the Company has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Indenture and the other Operative Documents; that the Securities have
been duly authorized and validly issued; and that the offer and sale of the
Securities have been registered or will be exempt from the registration
requirements under the Securities Act; and
(g) execution and delivery by the Company of the Securities and by all
parties thereto of this Indenture and all other Operative Documents;
provided, however, that any Securities in fact authenticated by the Trustee upon
written order of the Company as set forth in the first sentence of this
paragraph shall be deemed to have been duly authenticated hereunder and to
constitute an enforceable contractual obligation of the Company and shall be
entitled to all the benefits of this Indenture and the other Operative Documents
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder, in each case, notwithstanding any failure of the
Company to deliver any of the documents specified in Sections 10.2 and 11.4 or
above in this sentence;
The Securities shall be issuable only in registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof, except that the
Global Securities may be issued in a different denomination.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever
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the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any guarantor or any Affiliate
of the Company.
Section 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Securities eligible
for transfer or exchange may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Securities may be presented
for payment or repurchase ("Paying Agent"). The Registrar shall keep a register
of the Securities and of their transfer and exchange ("Register"). Such
Register shall be in written form in the English language or any other form
capable of being converted into such form within a reasonable time. At all
reasonable times such Register shall be open for inspection by the Trustee. The
Company may have one or more co-Registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company may enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall notify the Trustee
of the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints First Security Bank, National Association,
as Registrar and Paying Agent.
Section 2.4 Paying Agent to Hold Payments In Trust.
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Each Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all Payments held by the Paying Agent for the payment of principal
of, repurchase or redemption price, if any, of, interest on, and Special
Interest, if any, with respect to, the Securities (whether such Payment has been
paid to it by the Company or any other obligor on the Securities), and shall
notify the Trustee of any default by the Company (or any other obligor on the
Securities) in making any such Payment. The Company at any time may require a
Paying Agent to Pay all Payments held by it to the Trustee and account for any
funds disbursed and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to Pay all Payments held by it to the Trustee and to account for any
Payments distributed. Upon doing so the Paying Agent shall have no further
liability for the Payments.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, repurchase or redemption price, if
any, of, interest on, or Special Interest, if any, with respect to, any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto Payments sufficient to pay the principal, repurchase or redemption
price, if any, of, interest or Special Interest, if any, so becoming
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due until such Payments shall be Paid to such Persons or otherwise disposed of
as herein provided, and will promptly notify the Trustee of such action or any
failure so to act.
The Company will, on or before each due date for the payment of the
principal of, repurchase or redemption price, if any, of, interest on, or
Special Interest, if any, with respect to any of the Securities, deposit with a
Paying Agent Payments (in same day funds) sufficient to pay the principal,
repurchase or redemption price, if any, of, interest or Special Interest, if
any, so becoming due, such Payments to be held in trust for the benefit of the
Persons entitled to such principal, repurchase or redemption price, if any, of,
interest, or Special Interest, if any, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all Payments received by it as such agent for the payment of the
principal of, repurchase or redemption price, if any, of, interest on, or
Special Interest, if any, with respect to the Securities (whether such Payments
have been paid to it by the Company or by any other obligor on the Securities)
in trust for the benefit of the Persons entitled thereto until such Payments
shall be paid to such Persons or otherwise disposed of as herein provided;
(b) promptly give the Trustee notice of any failure by the Company (or any
other obligor upon the Securities) to make any payment of the principal of,
repurchase or redemption price, if any, of, interest on, or Special Interest, if
any, with respect to, the Securities when the same shall be due and payable; and
(c) at any time during the continuance of any such failure, upon the
written request of the Trustee, forthwith pay to the Trustee all Payments so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, Pay, or direct any
Paying Agent to Pay, to the Trustee all Payments held in trust by the Company or
such Paying Agent, such Payments to be held by the Trustee upon the same trusts
as those upon which such Payments were held by the Company or such Paying Agent;
and, upon such Payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such Payments held
by it as Paying Agent.
Any Payments deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, redemption or
repurchase price, if any, of, interest on or Special Interest, if any, with
respect to, any Security and unclaimed for two (2) years after such principal,
redemption or repurchase price, if any, of, interest or Special Interest, if
any, has become due and payable shall be paid to the Company on its request, or
(if then held by the Company) shall be discharged from such trust, unless
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otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof and all
liability of the Trustee or such Paying Agent with regard to such Payments, and
all liability of the Company as trustee thereof, shall thereupon cease.
Section 2.5 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders identified as to series. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee on or before each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
Section 2.6 Transfer and Exchange.
---------------------
When Securities are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements, for
such transactions are met. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Company or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or his attorney duly authorized in writing. The
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any registration of transfer or
exchange, but not for any exchange pursuant to Sections 2.9, 3.7, 4.15 or 9.5 or
any other Tender not involving any transfer of Securities (other than to the
Company). No service charge shall be made for any such transaction.
In the case of any Security which is Tendered in part only, upon such
Tender the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Holder thereof, without service charge, a new
Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to the non-Tendered portion of the
principal of such Security. No Securities will be issued in denominations of
less than $1000 upon tender of the Securities.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt of the same series
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
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Section 2.7 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
---------------------------------------------------------
In case any temporary or definitive Security shall become mutilated,
defaced or be apparently destroyed, lost or stolen, subject to compliance with
the following sentence and in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and the Trustee shall authenticate and deliver, a new
Security, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and
substitution for the Security so apparently destroyed, lost or stolen. In every
case the applicant for a substitute Security shall furnish to the Company and to
the Trustee and any agent of the Company or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each of
them harmless and, in every case of destruction, loss or theft, evidence to
their satisfaction of the apparent destruction, loss or theft of such Security
and of the ownership thereof.
Upon the issuance of any substitute Security pursuant to the preceding
paragraph, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security which has matured or is about to mature, or has
been tendered for repurchase pursuant to any of the provisions hereof (as
evidenced by an irrevocable written notice from the Holder to the Company and
the Trustee), shall become mutilated or defaced or be apparently destroyed, lost
or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of such Security (without surrender of such Security
except in the case of a mutilated or defaced Security), as applicable, if the
applicant for such payment shall furnish to the Company and to the Trustee and
any agent of the Company or the Trustee such security or indemnity as any of
them may require to save each of them harmless from all risks, however remote,
and, in every case of apparent destruction, loss or theft, the applicant shall
also furnish to the Company and the Trustee and any agent of the Company or the
Trustee evidence to their satisfaction of the apparent destruction, loss or
theft of such Security and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of this Section
by virtue of the fact that any Security is apparently destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the apparently destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall
also be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder. Every substitute Security issued pursuant to the
provisions of this Section by virtue of the fact that any Security is mutilated
or defaced shall constitute an additional contractual obligation of the Company
and shall be entitled to all the benefits of (but shall also be subject to all
the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of the same series duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of mutilated
or defaced or
9
apparently destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
Section 2.8 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have given or concurred in any amendment, request, demand,
authorization, direction, notice, consent or waiver under this Indenture or any
other Operative Document, Securities owned by the Company (including Securities
Tendered), an Affiliate of the Company, any other obligor upon the Securities,
any Affiliate of such obligor upon the Securities or any Person who has given or
concurred in any such amendment, request, demand, authorization, direction,
notice, consent or waiver under the direction of, by agreement with, or as a
condition or in consideration of any exchange offer by or transfer of such
Person's Securities to the Company, an Affiliate of the Company, any other
obligor, any Affiliate of such obligor or any such Person, shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such amendment, request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows
are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee that neither the Company nor any such other
obligor, Affiliate or Person is affiliated with the pledgee or any Affiliate of
the pledgee and that the pledgee has the present right (subject to no contrary
obligation or understanding) so to act with respect to the Securities on the
basis of its best interests as a Holder independently of any direction by or
interest of the Company. In case of a dispute as to such right, the Trustee in
good faith shall be entitled to rely upon the advice of counsel, including
counsel for the Company. Upon request of the Trustee, the Company shall
promptly furnish to the Trustee a certificate of a Certifying Officer listing
and identifying all Securities, if any, known by the Company to be owned or held
by or for the account of any of the above-described Persons; and subject to
Sections 7.1 and 7.2 herein, the Trustee shall be entitled to accept such
certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for the purpose of
any such determination. The Company shall not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any additional security, to any Holder of
Securities as consideration for or as an inducement to giving or concurring in
any amendment, request, demand, authorization, direction, notice, consent or
waiver under this Indenture or any other Operative Document unless such
remuneration is concurrently paid, or such security is concurrently granted, as
the case may be, on the same terms ratably to the Holders of all Securities then
Outstanding (regardless of whether any such Holder has given or concurred in
such amendment, request, demand, authorization, direction, notice, consent or
waiver under this Indenture or any other Operative Document).
10
For purposes of this Section and without limiting the generality of the
foregoing, Securities which are subject to a binding contract or irrevocable
tender offer (including an offer which is in any way conditioned upon or
simultaneous with, or requires as a condition precedent (whether by contract or
otherwise) or which cannot be effected without, the agreement or consent of the
transferor to any amendment, request, demand, authorization, direction, notice,
consent or waiver hereunder) pursuant to which ownership (direct or indirect) is
to be transferred (including for example, Securities tendered to the Company or
any other Person in an exchange transaction) shall be deemed owned by such
transferee, and therefore, any such simultaneous agreement or consent by the
transferor shall be invalid.
Section 2.9 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare, and, upon written order of the Company, the Trustee shall authenticate,
temporary Securities in any authorized denominations. Temporary Securities
shall be substantially in the form of definitive Securities of the same series
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities. Until so exchanged, the temporary Securities shall be
entitled to the same benefits under this Indenture as definitive Securities of
the same series.
Section 2.10 Cancellation.
------------
The Company may at any time deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange (including without
limitation, Initial Securities exchanged for Exchanged Securities, Private
Exchange Securities or both), repurchase or payment. All Securities purchased
pursuant to Section 3.9 or pursuant to any Offer to Purchase shall be canceled.
The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, repurchase or cancellation. The Company may not issue new
Securities to replace Securities it has paid (upon Tender or otherwise) or which
have been delivered to the Trustee for cancellation. The Trustee shall destroy
all canceled Securities and, if requested, deliver a certificate of such
destruction to the Company. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee for cancellation.
Section 2.11 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on, or Special Interest,
if any, with respect to, the Securities, it shall pay the defaulted interest,
plus interest on the defaulted interest or Special Interest, as the case may be,
at the rate then borne on the Securities to the extent permitted by law and the
terms thereof, to the persons who are Securityholders on a subsequent Special
Record Date. The Company shall fix the Special
11
Record Date and payment date. At least fifteen (15) days before the Special
Record Date, the Company shall mail to each Securityholder a notice that states
the Special Record Date, the payment date and the amount of defaulted interest
or Special Interest, as the case may be, to be paid.
Section 2.12 CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE 3.
REDEMPTIONS AND CERTAIN REPURCHASES
Section 3.1 Optional Redemption-General.
---------------------------
Except as set forth in Sections 3.8 and 5.3, the Securities Outstanding
shall not be subject to redemption in whole or in part at the option of the
Company prior to December 15, 2001. On or after December 15, 2001, the
Securities may be redeemed at any time in whole or in part (in any integral
multiple of $1,000) by the Company at its sole option at redemption prices
(expressed as a percentage of principal amount) as set forth below during the
twelve month periods beginning December 15 of the years shown below, plus in
each case an amount equal to accrued and unpaid interest and Special Interest,
if any, with respect to, the Securities to and including the redemption date:
REDEMPTION
YEAR PRICE
----
2001 105.750%
2002 102.875%
2003 and thereafter 100.000%
Section 3.2 Redemption Notice to Trustee.
----------------------------
If the Company elects to redeem Securities as provided in Section 3.1, 3.8
or 5.3, it shall notify the Trustee of the redemption date, the principal amount
of Securities and all other information needed for the notice to be given by the
Trustee pursuant to Section 3.4.
12
The Company shall give the notice provided for in this Section at least ten
(10) days (unless a shorter notice shall be satisfactory to the Trustee) prior
to the date the Trustee must give notice pursuant to Section 3.4.
Section 3.3 Selection of Securities to be Redeemed.
--------------------------------------
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed on either a pro rata basis or by lot or by
any other equitable manner determined by the Trustee in its sole discretion.
The Trustee shall make the selection from Securities outstanding not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them it selects shall be in amounts of $1,000 or whole multiples
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
Section 3.4 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail by first-class mail a notice of redemption to each Holder
whose Securities are to be redeemed.
The notice shall identify the Securities and the principal amount thereof
to be redeemed and shall state:
(1) the principal amount of each Security held by each such Holder to
be redeemed;
(2) the redemption date;
(3) the redemption price (including the amount of accrued and unpaid
interest, Special Interest and Applicable Premium, if any, to be paid on
the Securities called for redemption);
(4) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued;
(5) the name and address of the Paying Agent;
(6) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(7) that, unless the Company defaults in making the redemption
payment, interest on the Securities to be redeemed ceases to accrue on and
after the redemption date and the only remaining right of the Holders of
such Securities
13
is to receive payment of the redemption price upon
surrender to the Paying Agent of the Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.
Section 3.5 Effect of Notice of Redemption.
------------------------------
Once a notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the redemption price and, on
and after such date (unless the Company shall default in the payment of the
redemption price), such Securities shall cease to bear interest. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price plus
accrued interest, Special Interest and Applicable Premium, if any, to the
redemption date.
Section 3.6 Deposit of Redemption Price.
---------------------------
On or before 10:00 a.m., Eastern Time, on the redemption date, the Company
shall deposit with the Paying Agent money in funds immediately available on the
redemption date sufficient to pay the redemption price of and accrued interest
on and Special Interest and Applicable Premium, if any, with respect to, all
Securities to be redeemed on that date.
Section 3.7 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is redeemed in part, the Trustee shall
authenticate for the Holder a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
Section 3.8 Optional Redemption upon Public Equity Offering.
-----------------------------------------------
The Securities may be redeemed in part by the Company at its sole option
if, on or before December 15, 2000, the Company receives Net Cash Proceeds of
one or more Public Equity Offerings. The Company may use all or a portion of
any such Net Cash Proceeds to redeem up to $49,000,000 aggregate principal
amount of the Securities, within 90 days of such Public Equity Offering, at a
redemption price (expressed as a percentage of the aggregate principal amount of
Securities Outstanding) of 111 1/2% plus accrued and unpaid interest and Special
Interest, if any, to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest and Special Interest, if
any, due on the relevant Interest Payment Date); provided, however, that at
least $91,000,000 million aggregate principal amount of the Securities shall
remain Outstanding after each such redemption. Any such redemption shall be
subject to the provisions of Sections 3.2 - 3.7, inclusive.
14
Section 3.9 Use of Temporary Cash Collateral or Cash Collateral for
-------------------------------------------------------
Purchase.
--------
So long as no Event of Default shall have occurred and be continuing, the
Company may at any time direct the Trustee by Request to apply moneys held by
the Collateral Agent as Temporary Cash Collateral to the purchase of Securities
for cancellation at prices not exceeding their face amount plus accrued and
unpaid interest and Special Interest, if any, provided that (a) the Request
shall specify the principal amount of Securities to be purchased, the date by
which and maximum price at which the purchase of any Securities is directed, and
the arrangements (which shall be satisfactory to the Trustee) the Company will
make to assure payment of accrued interest and Special Interest, if any, to the
date of purchase on the Securities to be purchased from sources other than
Temporary Cash Collateral; (b) the Trustee shall direct the Collateral Agent to
hold for the account of or transfer to the Trustee Temporary Cash Collateral in
the amounts and to be available at the times specified in the Request, and such
Temporary Cash Collateral shall thereupon be held by the Trustee or Collateral
Agent (together with accrued interest and Special Interest, if any provided by
the Company) for the exclusive purpose of paying, and shall be applied by them
to pay, the principal amount of, accrued and unpaid interest on, and Special
Interest, if any, with respect to, the Securities purchased on the applicable
date of purchase; (c) the Trustee may enter into such purchase contracts for
Securities as are necessary to comply with the Request; and shall notify the
Company and the Collateral Agent as to the face amount of Securities (including
accrued and unpaid interest and Special Interest, if any) purchased from time to
time; and (d) Temporary Cash Collateral held exclusively for purposes of this
Section may be returned to the Collateral Agent as Temporary Cash Collateral
upon Request except to the extent it is needed by the Trustee to honor its
contracts for the purchase of Securities or to pay the repurchase price of
Securities tendered for repurchase pursuant to an Offer to Purchase. So long as
no Event of Default shall have occurred and be continuing, the Company may at
any time direct the Trustee by Request to apply moneys held by the Collateral
Agent as Cash Collateral to the purchase of Securities for cancellation under
the terms and subject to the provisions of clauses (a) through (c) of the
preceding sentence applicable to Temporary Cash Collateral.
ARTICLE 4.
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 4.1 Payment of Securities.
---------------------
The Company shall pay the principal of, interest on and Special Interest,
if any, with respect to, the Securities on the dates and in the manner provided
in this Indenture and in the Securities.
The Company shall pay interest semi-annually in arrears on each Interest
Payment Date, commencing June 15, 1998. Interest shall be paid on each Interest
Payment Date in an amount equal to the interest accrued for the period beginning
from the Issue Date, or
15
from the most recent date to which interest and Special Interest, if any, have
been paid. All interest and Special Interest, if any, due and payable on the
Securities shall be paid in cash, except that the Company may at its option,
make such Payments by check mailed to the address of the Person entitled thereto
as it appears in the Register.
An installment of principal, interest or Special Interest, if any, shall be
considered paid on the date due if the Trustee or Paying Agent (other than the
Company or any Affiliate thereof) holds on that date Payments designated for and
sufficient to pay such installment and the Trustee or Paying Agent has not
received instructions from the Company not to make such payment or is not
prohibited from Paying such Payments to the Holders of the Securities pursuant
to this Indenture.
The Company shall pay interest at the rate set forth in the Securities and
the Company shall pay interest on unpaid interest or Special Interest, if any,
at the same rate to the extent legally permitted.
Section 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment or repurchase and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. At the request of the Company, said office or agency
may be the office of an agent appointed by the Trustee for such purpose. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency not designated or appointed by
the Trustee. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 4.3 Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to make a Restricted Payment if at the time the Company
or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall
have occurred and be continuing (or would result therefrom); (2) the Company is
not able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a)
of Section 4.17; or (3) the
16
aggregate amount of such Restricted Payment and all other Restricted Payments
since the Issue Date (the amount of any such Restricted Payment, if other than
cash, as determined in good faith by the Company, whose determination shall be
conclusive and evidenced by a resolution of the Board of Directors or a
certificate of the chief financial or accounting officer of the Company
delivered to the Trustee prior to the making of such Restricted Payment) would
exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal quarter
immediately following the fiscal quarter during which the Securities are
originally issued to the end of the most recent fiscal quarter for which
financial statements are publicly available prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100%
of such deficit);
(B) the aggregate net proceeds (including 50% of the fair market value
of property other than cash (as determined in good faith by the Company, whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors or a certificate of the chief financial or accounting officer of the
Company delivered to the Trustee prior to the making of such Restricted
Payment)) received by the Company or any Restricted Subsidiary from the issuance
or sale, subsequent to the Issue Date, of its Capital Stock (other than
Disqualified Stock) and Indebtedness of the Company or any Restricted Subsidiary
that has been converted into or exchanged for its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale
to a Restricted Subsidiary and other than an issuance or sale to an employee
stock ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees); and
(C) an amount equal to the sum of (i) the net reduction in Investments
in Unrestricted Subsidiaries resulting from dividends, repayments of loans or
advances or other transfers of assets, in each case to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries, and (ii) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made (and treated
as a Restricted Payment) by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any Restricted Payment made by exchange for, or out of the net
proceeds (including 50% of the fair market value of property other than
cash (as determined in good faith by the Company, whose determination shall
be conclusive and evidenced by a resolution of the Board of Directors or a
certificate of the chief financial or accounting officer of the Company
delivered to the Trustee prior to the making of such Restricted Payment))
of the substantially
17
concurrent sale of, Capital Stock of the Company (other than Disqualified
Stock and other than Capital Stock issued or sold to a Subsidiary of the
Company or an employee stock ownership plan or to a trust established by
the Company or any of its Subsidiaries for the benefit of their employees);
provided, however, that (A) such Restricted Payment shall be excluded in
the calculation of the amount of Restricted Payments and (B) to the extent
used to make such Restricted Payment, the net proceeds from such sale shall
be excluded from the calculation of amounts under clause (3)(B) of
paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to Section 4.17; provided, however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall
be excluded in the calculation of the amount of Restricted Payments;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section 4.3; provided, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(iv) the declaration or payment of dividends on or payment of
liquidated damages with respect to (A) any Preferred Stock outstanding on
the Issue Date or (B) any Preferred Stock (other than Disqualified Stock)
issued after the Issue Date that ranks on parity with or junior to
Preferred Stock outstanding on the Issue Date; provided, however, that any
dividend referred to in the foregoing clause (A) or, subject to the
following proviso, clause (B), shall be included in the calculation of the
amount of Restricted Payments and provided further, that the Company may
elect to exclude from the calculation of amounts under clause 3(B) of
paragraph (a) above any Net Cash Proceeds received by the Company from the
issue or sale of Preferred Stock pursuant to the foregoing clause (B)
(which election must be made by written notice to the Trustee within ten
(10) Business Days of the receipt of such Net Cash Proceeds) and, if such
election is made, any dividend, distribution, purchase, redemption,
acquisition or retirement on or of the Preferred Stock for which such
election is made shall not be a Restricted Payment;
(v) (A) the payment of cash in lieu of issuing fractional shares of
Capital Stock of the Company in connection with the exercise of options or
warrants, the conversion of convertible securities or the redemption of
interests in employee stock ownership or benefits plans, (B) the purchase
or redemption of its Capital Stock by the Company from employee stock
ownership or benefit plans subject to ERISA to the extent required by
ERISA, (C) repurchases of its Capital Stock which occur upon the exercise
of stock options if such Capital Stock represents a portion of the exercise
price of such options, (D) the purchase,
18
redemption, acquisition, cancellation or other retirement for value of
shares of Capital Stock of the Company or any Restricted Subsidiary,
options on any such shares or related stock appreciation rights or similar
securities held by officers or employees or former officers or employees
(or their estates or beneficiaries under their estates), upon their death,
disability, retirement, termination of employment or pursuant to any
agreement under which such shares of stock or related rights were issued;
provided that the aggregate cash consideration paid pursuant to this clause
(D) for such purchase, redemption, acquisition, cancellation or other
retirement of such shares of Capital Stock or related rights after the
Issue Date does not exceed an aggregate amount of $10,000,000; provided
further that the amount of any payment, purchase, redemption, repurchase,
acquisition, cancellation or other retirement paid pursuant to this clause
(D) shall be included in the amount of Restricted Payments;
(vi) any purchase or redemption of Capital Stock of the Company
resulting from the consolidation or merger with or into any Person or
conveyance, transfer or lease of all or substantially all of the Company's
or any Restricted Subsidiary's property to one or more Persons
substantially as an entirety not prohibited by Section 5.1 (other than any
consolidation, merger or other transactions involving only the Company and
a Restricted Subsidiary of the Company or involving only Restricted
Subsidiaries of the Company); provided that the amount of such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments; or
(vii) the exchange of Preferred Stock (other than Disqualified
Capital Stock) for Indebtedness of the Company permitted to be incurred
under Section 4.17; provided that the liquidation value of the Preferred
Stock exchanged shall be included in the calculation of the amount of
Restricted Payments but only to the extent of the Net Cash Proceeds of such
Preferred Stock received after the Issue Date.
Section 4.4 Corporate Existence.
-------------------
(a) Except as otherwise provided in Article 5, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate existence of each Restricted
Subsidiary and the corporate existence of each other Subsidiary engaged in
substantial business activity each in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), licenses, permits, approvals and governmental
franchises of the Company and each such Subsidiary necessary to the conduct of
its respective business; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or (other than with
respect to the Restricted Subsidiaries) to preserve the corporate existence of
any such Subsidiary, if the Board of Directors shall determine that the
preservation thereof is no longer in the interest of the Company and that
termination of the corporate existence is not disadvantageous to the Holders in
any material respect.
19
(b) The Company shall continue to be an air carrier certificated under
Section 604(b) of the Federal Aviation Act.
(c) The Company is and, to the extent required to operate its business as
presently conducted and to perform its obligations under this Indenture and the
Operative Documents, shall remain a "citizen of the United States" as defined in
Section 101(16) of the Federal Aviation Act.
Section 4.5 Payment of Taxes and other Claims.
---------------------------------
The Company shall, and shall cause each Subsidiary to, pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
and each Subsidiary or upon the income, profits or Property of the Company and
each Subsidiary or upon the Collateral, the Slot Trust or the Acquired Slots and
(b) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the Collateral, the Slot Trust, the Acquired Slots or
the other Property of the Company or a Subsidiary; provided, however, that the
Company or a Subsidiary, as the case may be, shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim (i) the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings as permitted by and in accordance with the
provisions of the Operative Documents, to the extent applicable, and for which
adequate reserves have been established in accordance with GAAP, as in effect
from time to time, or (ii) if the Company delivers to the Trustee a Certificate
of an Officer stating that such non-payment and non-discharge is in the interest
of the Company and not prejudicial in any material respect to the Holders.
Nothing contained herein or in the Securities shall be deemed to impose on
the Trustee or on the Company any obligation to pay on behalf of the Holder of
any Securities any tax, assessment or governmental charge required by any
present or future law of the U.S. or of any state, county, municipality or other
taxing authority thereof to be paid on behalf of, or withheld from the amount
payable to, the Holder of any Securities; rather any tax, assessment or
governmental charge shall, to the extent required by law, be withheld from the
amounts provided for herein.
Section 4.6 Notices.
-------
The Company shall notify the Trustee in writing of any of the following
promptly (and in any event within five (5) Business Days after an Officer learns
of the occurrence thereof) describing the same and, if applicable, the steps
being taken by the Person(s) affected with respect thereto:
(a) In the event that any other Indebtedness of the Company or any
Significant Subsidiary of the Company in a principal amount in excess of
$15,000,000 (i) is declared due and payable before its stated maturity because
of the occurrence of any default (or
20
any event which, with notice or the lapse of time, or both, shall constitute
such default) under such Indebtedness or (ii) is not paid at its stated
maturity; or
(b) Any litigation, arbitration proceeding or governmental proceeding
involving damages or potential liability in excess of $15,000,000 is instituted
against the Company or any of its Subsidiaries which, if adversely determined,
would have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
Section 4.7 Maintenance of Properties and Insurance.
---------------------------------------
Except as otherwise provided in this Indenture, the Company shall, and
shall cause each of its Subsidiaries to, cause all Collateral and Properties
owned by or leased to it and used or useful in the conduct of the business of
the Company or any such Subsidiary, as the case may be, to be maintained and
kept in good repair, working order and condition, except for reasonable wear and
use, and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, except, in every case, as and to the extent that the Company or
any such Subsidiary may be prevented by fire, strikes, lockouts, acts of God,
inability to obtain labor or materials, governmental restrictions, enemy action,
civil commotion or unavoidable casualty or similar causes beyond the control of
the Company or such Subsidiary; provided, however, that subject to all
requirements of the Operative Documents, nothing in this Section 4.7 shall
prevent the Company or any such Subsidiary from discontinuing the use, operation
or maintenance of any such Properties, or disposing of any of them, if such
Property or Properties are, in the good faith judgment of an Officer of the
Company (or other agent employed by the Company) having managerial
responsibility for any such Property (or, in the case of any materially
important item, with respect to operations or value, in the good faith judgment
of the Company as expressed in a resolution of the Board of Directors), no
longer necessary or useful in the conduct of the Company's business or that of
its Subsidiaries.
For so long as any Collateral or Property is deemed to be useful to the
conduct of the business of the Company or its Subsidiaries, the Company shall,
or shall cause such Subsidiaries to, maintain appropriate insurance, in
accordance with industry practice, on such Collateral and Properties and as
required under the provisions of the applicable Operative Documents.
Section 4.8 Default Notices and Compliance Certificates.
-------------------------------------------
Contemporaneously with furnishing reports to the Trustee pursuant to
Section 4.9, the Company shall furnish to the Trustee a Certifying Officer's
Certificate to the effect that such officer has conducted or supervised a review
of the activities of the Company and of performance under the Indenture and
that, to the knowledge of such officer, based
21
on such review, the Company has fulfilled all of its obligations under the
Indenture or, if there has been a Default, specifying each Default known to him,
its nature and status.
The Company shall deliver to the Trustee within one hundred twenty (120)
days after the end of each fiscal year in which any of the Securities remain
Outstanding a certificate of the principal executive officer, principal
financial officer or principal accounting officer of the Company (which need not
comply with the provisions of Section 11.5) stating whether or not, to the
knowledge of the signer, the Company is in compliance with all conditions and
covenants under this Indenture and the Operative Documents (determined without
regard to any period of grace or requirement of notice), and if the Company is
not in compliance with all such conditions and covenants, describing each
Default or Event of Default and its status. The first certificate to be
delivered by the Company pursuant to this Section 4.8 shall be for the fiscal
year ending December 31, 1997.
Section 4.9 SEC Reports.
-----------
(a) The Company shall file with the Trustee and provide, or cause the
Trustee to provide, Holders of Securities, within 30 days after it files with,
or furnishes to, the SEC, copies of its annual report and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act or is
required to furnish to the SEC pursuant to Section 4.9(b). The Company shall
also comply with the other provisions of TIA (S) 314(a).
(b) Notwithstanding that the Company may not be required to remain subject
to the reporting requirements of Section 13 or l5(d) of the Exchange Act or
otherwise report on an annual and quarterly basis on forms provided for such
annual and quarterly reporting pursuant to rules and regulations promulgated by
the SEC, the Company shall continue to file with, or furnish to, the SEC (i)
within 90 days after the end of each fiscal year (or such shorter period as the
SEC may in the future prescribe), annual reports on Form 10-K (or any successor
form) containing the information required to be contained therein (or required
in such successor form), including annual financial statements audited by an
internationally recognized independent public accountant with respect to such
year and prepared in accordance with GAAP and all applicable exhibits, (ii)
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year (or such shorter period as the SEC may in the future prescribe),
reports on Form 10-Q (or any successor form) containing substantially the same
information required to be contained therein prepared in accordance with GAAP
and (iii) promptly from time to time after the occurrence of an event required
to be therein reported, such other reports on Form 8-K (or any successor form)
containing substantially the same information required to be contained therein.
22
Section 4.10 Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of, interest on, or Special Interest, if any, with respect to, the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Operative Documents; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power granted to
the Trustee herein and in the Operative Documents, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.11 Amendment to Certain Agreements.
-------------------------------
The Company shall not enter into or consent to any amendment, supplement or
other modification of the Operative Documents except as permitted under Article
9 hereof.
Section 4.12 Title to Collateral; Limitation on Liens.
----------------------------------------
The Company represents and warrants that it has, and covenants that it
shall continue to have, full power and lawful authority to grant, release,
convey, assign, transfer, mortgage, pledge, hypothecate and otherwise create the
security interests in the Collateral referred to in Article 10; the Company
shall warrant, preserve and defend the interest and title of the Collateral
Agent to the Collateral, against the claims of all persons and will maintain and
preserve the security interests contemplated by Article 10; and the Company
shall not, and not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur or suffer to exist any Lien of any nature whatsoever upon or
with respect to (i) any of its properties other than the Collateral and the
Pledged Collateral (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired, other than Permitted Liens,
without effectively providing that the Securities shall be secured equally and
ratably with (or prior to) the obligations so secured for so long as such
obligations are so secured or (ii) any Pledged Collateral or Collateral, other
than, with respect to Collateral, Permitted Collateral Liens. The Company shall
cause the Operative Documents, including all necessary financing statements,
notifications of secured transactions and other assurances or instruments to be
properly recorded, registered and filed and to be kept, recorded, registered and
filed in such manner and in such places as may be required by law and shall take
all such other actions as may be required in order to make effective the
security interests intended to be created in connection with this Indenture.
The Company shall furnish to the Trustee the Opinions of Counsel required by
Section 10.2 to confirm such action.
23
Section 4.13 Books, Records, Access; Confidentiality.
---------------------------------------
(a) The Company shall, and shall cause each of its Subsidiaries to, (i)
maintain complete and accurate books and records in which full and correct
entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its respective business and activities, (ii) permit authorized
representatives of the Trustee, the Collateral Agent and/or the Slot Trustee to
visit and inspect the Properties of the Company or its Subsidiaries, and any or
all books, records and documents in the possession of the Company relating to
the Collateral or the Pledged Collateral and the Acquired Slots, including the
records, logs, and other materials referred to in Section 4.08 of the Pledge
Agreement, and to make copies and take extracts therefrom and to visit and
inspect the Collateral, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may be reasonably requested, and
(iii) permit the authorized representatives of any Trustee Appraiser or Third-
Party Appraiser to visit and inspect the Properties, books, records and
documents described in clause (ii) and any Properties to be provided as
Substitute Collateral (including comparable books, records and documents
relating thereto), at such times and to such extent as may be necessary to allow
timely completion of any Independent Appraiser's Certificate to be prepared by
such Trustee Appraiser or Third Party Appraiser.
(b) The Trustee, the Collateral Agent, the Slot Trustee and their
respective authorized representatives referred to in clause (a) above agree not
to use any information obtained pursuant to this Section 4.13 for any purpose
other than as required in order to discharge their respective duties hereunder
and under the Operative Documents and except as otherwise required for such
purpose to keep confidential and not to disclose any such information to any
person except that (i) the recipient of the information may disclose any
information which becomes publicly available other than as a result of
disclosure by such recipient, (ii) the recipient of the information may disclose
any information which its counsel reasonably concludes is necessary to be
disclosed by law, pursuant to any court or administrative order or ruling or in
any pending legal or administrative proceeding or investigation after notice to
the Company adequate, subject to applicable laws, to allow the Company to obtain
a protective order or other appropriate remedy, provided that the recipient of
the information will (if not otherwise required in order to discharge its duties
as aforesaid) cooperate with the Company's efforts to obtain a protective order
or other reliable assurance that confidential treatment will be accorded any
such information required to be so disclosed, and (iii) the recipient of the
information may disclose any information necessary to be disclosed pursuant to
any provision of the TIA.
Section 4.14 Security Interests.
------------------
The Company and its Subsidiaries shall perform any and all acts and execute
any and all documents (including, without limitation, the execution, amendment
or supplementation of any financing statement and continuation statement or
other statement) for filing under the provisions of the Federal Aviation Act and
the applicable Uniform Commercial Code and the rules and regulations thereunder
or any other statute,
24
rule or regulation of any applicable federal, state or local jurisdiction, which
are necessary or advisable, from time to time, in order to grant and maintain in
favor of the Collateral Agent for the benefit of the Holders a valid, perfected
Lien on the Collateral.
The Company and its Subsidiaries shall deliver or cause to be delivered to
the Collateral Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance satisfactory to the
Collateral Agent as it shall deem reasonably necessary or advisable to perfect
or maintain the Liens for the benefit of the Holders.
Section 4.15 Repurchase of Securities Upon a Change in Control.
-------------------------------------------------
(a) In the event that there shall occur a Change in Control, the Company
shall make an Offer to Purchase all of the Outstanding Securities, at a purchase
price equal to 101% of the aggregate principal amount of the Securities
Outstanding, plus accrued and unpaid interest and Special Interest, if any, to
and including the repurchase date. The right to require such repurchase of
Securities shall not continue after a discharge of the Company from its
obligations with respect to the Securities in accordance with Article 8.
(b) The Company shall commence such Offer to Purchase within thirty (30)
days after the occurrence of a Change in Control.
Section 4.16 Restrictions on Becoming an Investment Company.
----------------------------------------------
The Company shall not become an investment company within the meaning of
the Investment Company Act of 1940 as such statute and the regulations
thereunder and any successor statute or regulations thereto may from time to
time be in effect.
Section 4.17 Limitation on Indebtedness.
--------------------------
(a) Neither the Company nor the Restricted Subsidiaries shall Incur,
directly or indirectly, any Indebtedness; provided, however, that the Company
may Incur Indebtedness so long as, on the date of such Incurrence and after
giving effect thereto, the Consolidated Coverage Ratio exceeds (i) 2.00 to 1 for
Indebtedness Incurred on or prior to December 31, 1999, (ii) 2.25 to 1 for
Indebtedness Incurred after December 31, 1999 and on or prior to December 31,
2001 and (iii) 2.50 to 1 for Indebtedness Incurred after December 31, 2001.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(1) Indebtedness of the Company Incurred subsequent to the Issue Date;
provided, however, that (A) after giving effect to any such Incurrence, the
aggregate principal amount of such Indebtedness then outstanding does not
exceed $400,000,000, (B) the Stated Maturity of any such Indebtedness is at
least one year after the Stated Maturity of the Securities, (C) the Average
Life of any such Indebtedness at the time that it is Incurred is not less
than the Average Life of the
25
Securities at such time and (D) except for Liens permitted by clause (p) of
the definition of Permitted Liens, such Indebtedness is not secured by a
Lien on any asset of the Company or its Restricted Subsidiaries;
(2) Aircraft Acquisition Debt;
(3) Indebtedness of the Company owed to and held by a Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
the Company or a Restricted Subsidiary; provided, however, that any
subsequent issuance or transfer of any Capital Stock which results in any
such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
another Restricted Subsidiary) shall be deemed in each case, to constitute
the Incurrence of such Indebtedness by the Company;
(4) the Securities and the Exchange Securities;
(5) Indebtedness Incurred to finance the cost (including the cost of
design, development, acquisition, construction, installation, improvement,
transportation or integration) of plant, property and equipment used or to
be used in the airline business or any other business that is substantially
related, ancillary or complementary thereto (including any Capital Lease
Obligation and the cost of the Capital Stock of a Person that becomes a
Restricted Subsidiary to the extent of the fair market value of the plant,
property and equipment of such Person at the time it becomes a Restricted
Subsidiary) to be acquired by the Company or a Restricted Subsidiary after
the Issue Date; provided that such Indebtedness is incurred within 270 days
after such plant, property and equipment has been placed into service; and
provided further that (A) the principal amount of such Indebtedness does
not exceed 80% of the cost of such plant, property or equipment financed
thereby and (B) the aggregate principal amount of all Indebtedness Incurred
pursuant to the provisions described under this clause (5) shall not exceed
$70,000,000 at any time outstanding; and provided further that the
limitations described in clauses (A) and (B) of the immediately preceding
proviso shall not apply to Indebtedness Incurred to finance the cost of (i)
airport facilities, reservations centers or maintenance facilities or (ii)
information technology systems, including all related hardware and
software;
(6) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3), (4) or (5) of this Section
4.17);
(7) Indebtedness of the Company not to exceed, at any time
outstanding, 2.0 times the Net Cash Proceeds received by the Company after
the Issue Date from the issuance and sale of its Capital Stock (other than
Disqualified Stock) to a Person that is not a Subsidiary of the Company, to
the extent such Net Cash Proceeds are not included in the calculation of
amounts under clause (3)(B) of Section 4.3(a) or used to make a Restricted
Payment pursuant to clause (i) of
26
Section 4.3(b); provided that such Indebtedness (A) is Incurred within 180
days following receipt of such Net Cash Proceeds and (B) does not have a
Stated Maturity that is prior to the first anniversary of the Stated
Maturity of the Securities and has an Average Life longer than the
Securities at the time of Incurrence of such Indebtedness;
(8) Acquired Indebtedness; provided that prior to the Incurrence
thereof the Company shall have (i) made an Offer to Purchase all of the
Outstanding Securities at a purchase price equal to 100% of the principal
amount thereof, plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest, if any, to, the Payment Date, and (ii) such
Payment Date shall have occurred and money sufficient to pay the purchase
price of all Securities or portions thereof tendered for purchase pursuant
to such Offer to Purchase shall have been deposited with the Trustee. Any
such Offer to Purchase shall contain information concerning the business of
the Company which the Company in good faith believes will enable the
Holders of the Securities to make an informed decision with respect to such
Offer to Purchase and will include (A) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to
be filed with the Trustee pursuant to Section 4.9 (which requirements may
be satisfied by delivery of such documents together with the Offer to
Purchase), (B) a description of material developments, if any, in the
Company's business subsequent to the date of the latest of such financial
statements referred to in clause (A) (including a description of the events
requiring the Company to make such Offer to Purchase), (C) if applicable,
appropriate pro forma financial information concerning such Offer to
Purchase and the events requiring the Company to make the Offer to Purchase
and (D) any other information required by applicable law to be included
therein.
(9) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) or pursuant to clause (1), (2), (3), (4), (5),
(6), (7), (8) above or this clause (9);
(10) Indebtedness (A) in respect of performance, surety, appeal or
similar bonds provided in the ordinary course of business, and (B) arising
from agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any
of the Restricted Subsidiaries pursuant to such agreements, in any case
Incurred in connection with the disposition of any business, assets of the
Company or any of the Restricted Subsidiaries, including all or any
interest in any Restricted Subsidiary, and not exceeding the gross proceeds
therefrom, other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary or any of the Restricted Subsidiaries for the purpose of
financing such acquisition;
27
(11) Hedging Obligations consisting of Interest Rate Agreements, Fuel
Protection Agreements or Currency Agreements;
(12) Indebtedness Incurred in satisfaction of payment obligations
arising out of collective bargaining agreements with labor unions
representing employees of the Company or its Restricted Subsidiaries;
(13) Indebtedness arising from aircraft lessor financing of
improvements to or maintenance of aircraft, engines or related parts and
equipment leased by the Company or its Restricted Subsidiaries;
(14) Indebtedness Incurred in satisfaction of "return condition"
obligations of the Company or its Restricted Subsidiaries under aircraft
leases in an aggregate principal amount not to exceed $25,000,000 at any
time outstanding;
(15) Indebtedness under working capital and/or Receivables financing
facilities in an aggregate principal amount not to exceed $150,000,000 at
any time outstanding and Guarantees thereof by Restricted Subsidiaries not
prohibited under Section 4.22; provided that such Indebtedness is not
secured by a Lien on any assets of the Company or its Restricted
Subsidiaries other than Receivables and Capital Stock of special purpose
Subsidiaries of the Company formed to effect a Receivables-based financing;
(16) Indebtedness issued in satisfaction of trade payables arising in
the ordinary course of business; provided that (A) the principal amount of
such Indebtedness does not exceed the amount of such trade payables
(including accrued interest or finance charges), (B) the Stated Maturity of
such Indebtedness is no more than 180 days after the date of Incurrence
thereof and (C) the aggregate principal amount of such Indebtedness does
not exceed $50,000,000 at any time outstanding; and
(17) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount which, together with all other Indebtedness of
the Company and the Restricted Subsidiaries outstanding on the date of such
Incurrence (other than Indebtedness permitted by clauses (1) through (16)
above or paragraph (a) of this Section 4.17) does not exceed $100,000,000.
(c) Notwithstanding the foregoing, neither the Company nor any Restricted
Subsidiary shall Incur any Indebtedness pursuant to the foregoing paragraph (b)
if the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations unless such Indebtedness shall be subordinated to the
Securities, to at least the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.17, (i) in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness described above, the Company, in its sole discretion,
will classify such item
28
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of the above clauses and (ii) an item of Indebtedness may be
divided and classified in more than one of the types of Indebtedness described
above.
Section 4.18 Limitation on Restrictions on Distributions from Restricted
-----------------------------------------------------------
Subsidiaries.
------------
The Company shall not, and shall not permit any Restricted Subsidiary to
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to (a)
pay dividends or make any other distributions on its Capital Stock to the
Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company,
(b) make any loans or advances to the Company or (c) transfer any of its
property or assets to the Company except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary or its property or assets pursuant to an agreement relating to
any Indebtedness or Preferred Stock Incurred by such Restricted Subsidiary
on or prior to the date on which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company (other than
Indebtedness or Preferred Stock Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to consummate,
the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness or Preferred Stock Incurred
pursuant to an agreement referred to in clause (i) or (ii) of this Section
4.18 or this clause (iii) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 4.18 or this clause
(iii); provided, however, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any such refinancing
agreement or amendment are in the aggregate no less favorable to the
Securityholders than encumbrances and restrictions with respect to such
Restricted Subsidiary contained in such predecessor agreements;
(iv) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition;
(v) any encumbrances and restrictions existing under or by reason
of applicable law or regulation;
29
(vi) any encumbrances and restrictions (A) that restrict in a
customary manner the subletting, assignment or transfer of any property or
asset that is a lease, license, conveyance or contract or similar property
or asset, (B) existing by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of the
Company or any Restricted Subsidiary not otherwise prohibited by the
Indenture or the other Operative Documents or (C) arising or agreed to in
the ordinary course of business not relating to any Indebtedness, and that
do not (as determined by the Company and certified in a resolution of the
Board of Directors or a certificate of the chief financial or chief
accounting officer of the Company delivered to the Trustee prior to or
promptly following such encumbrance or restriction becoming effective),
individually or in the aggregate, (1) detract from the value of property or
assets of the Company or any Restricted Subsidiary in any manner material
to the Company or any Restricted Subsidiary or (2) materially adversely
affect the Company's ability to make principal or interest (including
Special Interest, if any) payments on the Securities;
(vii) any encumbrance or restriction contained in the terms of any
Indebtedness or any agreement pursuant to which such Indebtedness was
issued if (A) the encumbrance or restriction applies only in the event of a
payment default or default with respect to a financial covenant contained
in such Indebtedness or agreement, (B) the encumbrance or restriction is
not materially more disadvantageous to the Holders of the Securities than
is customary in comparable financings (as determined by the Company and
certified in a resolution of the Board of Directors or a certificate of the
chief financial or chief accounting officer of the Company delivered to the
Trustee prior to or promptly following such encumbrance or restriction
becoming effective), and (C) such encumbrance or restriction will not
materially adversely affect the Company's ability to make principal or
interest (including Special Interest, if any) payments on the Securities
(as determined by the Company and certified in a resolution of the Board of
Directors or a certificate of the chief financial or chief accounting
officer of the Company delivered to the Trustee prior to or promptly
following such encumbrance or restriction becoming effective); and
(viii) any encumbrance or restriction resulting from any financing
transaction involving the sale of Receivables or aircraft and/or related
engines, spare parts and equipment to a special purpose Subsidiary of the
Company formed to effect such financing and which applies only to such
special purpose Subsidiary and its assets.
Nothing contained in this Section 4.18 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.12 or (2) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
30
Section 4.19 Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate (x) any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or other
dispositions) of any Collateral or Pledged Collateral, except as permitted under
the other Operative Documents or (y) any Asset Disposition unless the Company or
such Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration), as determined in good faith by the Board of
Directors or by the chief financial or accounting officer of the Company, of the
shares and assets subject to such Asset Disposition and at least 80% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash or cash equivalents. If the Company or any Restricted
Subsidiary engages in an Asset Disposition, the Company may use the Net
Available Cash from such Asset Disposition, within one year after the later of
such Asset Disposition and the receipt of such Net Available Cash (such later
date, the "Trigger Date"), to (i) permanently repay or prepay any then
outstanding Senior Indebtedness of the Company or any Restricted Subsidiary or
(ii) invest in or acquire (or enter into a legally binding commitment to invest
in or acquire) Additional Assets; provided that the transaction subject to any
such commitment be consummated within 180 days after the date of such
commitment. If any such legally binding commitment to invest in or acquire such
Additional Assets is terminated, then the Company may, within 90 days of such
termination or the Trigger Date, whichever is later, use such Net Available Cash
as provided in clause (i) or (ii) (without giving effect to the parenthetical
contained in such clause (ii)) above. The amount of such Net Cash Proceeds not
so used as set forth above in this paragraph constitutes "Excess Proceeds."
(b) When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall, within 30 days thereof, apply such aggregate Excess Proceeds (1)
first, to make an Offer to Purchase Outstanding Securities at 100% of their
principal amount plus accrued and unpaid interest and Special Interest, if any,
to the Purchase Date and, to the extent required by the terms thereof, any other
Indebtedness of the Company that is pari passu with the Securities at a price no
greater than 100% of the principal amount thereof plus accrued interest to the
date of purchase and (2) second, to the extent of any remaining Excess Proceeds
following the completion of the Offer to Purchase, to any other use as
determined by the Company which is not otherwise prohibited by the Indenture.
Upon the completion of an Offer to Purchase pursuant to this paragraph (b), the
amount of Excess Proceeds shall be reset to zero.
(c) For purposes of this Section 4.19, the following are deemed to be cash
or cash equivalents: (x) the assumption of Indebtedness of the Company or any
Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (y) securities received by the Company or any Restricted
Subsidiary from the transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash.
31
Section 4.20 Limitation on Affiliate Transactions.
------------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or employee compensation arrangements) with
any Affiliate of the Company (an "Affiliate Transaction") unless the terms
thereof (1) are no less favorable to the Company or such Restricted Subsidiary
than those that could be obtained at the time of such transaction in arm's-
length dealings with a Person who is not such an Affiliate and (2) if such
Affiliate Transaction involves an amount in excess of $2,000,000 (i) are set
forth in writing and (ii) have been approved by a majority of the members of the
Board of Directors having no personal stake in such Affiliate Transaction. If
such Affiliate Transaction involves an amount in excess of $10,000,000, a
fairness opinion must be obtained from an internationally recognized investment
banking firm, appraisal firm or auditing firm with respect to the financial
terms of such Affiliate Transaction.
(b) The provisions of the foregoing paragraph (a) shall not prohibit or
apply to (i) any Restricted Payment permitted to be paid pursuant to Section
4.3, (ii) loans or advances to employees in the ordinary course of business and
in an amount that does not exceed $1,000,000 in the aggregate outstanding at any
one time, (iii) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its
Restricted Subsidiaries, (iv) any Affiliate Transaction between the Company and
a Restricted Subsidiary or between Restricted Subsidiaries, (v) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors, (vi) the grant of stock
options or similar rights to employees and directors of the Company pursuant to
plans approved by the Board of Directors and (vii) any Affiliate Transaction
entered into pursuant to agreements with labor unions.
Section 4.21 Limitation on the Sale or Issuance of Capital Stock of
------------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company shall not sell or otherwise dispose of any Capital Stock of a
Restricted Subsidiary, and shall not permit any such Restricted Subsidiary,
direct or indirectly, to issue or sell or otherwise dispose of any of its
Capital Stock except (i) to the Company or a Wholly Owned Subsidiary, (ii) the
issuance and sale of directors' qualifying shares, (iii) if, immediately after
giving effect to any such issuance, sale or other disposition, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect thereto would have been permitted
to be made under Section 4.3 if made on the date of such issuance, sale or other
disposition, (iv) if such sale or other disposition is of all or any portion of
the Capital Stock of a Restricted Subsidiary and the Net Available Cash received
from such sale or other disposition are applied in accordance with Section 4.19,
or (v) to the extent the ownership by a Person other than the Company or a
Wholly Owned Subsidiary is required by applicable law and except that any
Restricted Subsidiary may issue or permit to exist (x) Preferred Stock issued to
and held by the Company or a Wholly Owned
32
Subsidiary; provided, however, that upon either (A) the transfer or other
disposition by the Company or such Wholly Owned Subsidiary of any Preferred
Stock so permitted to a Person other than the Company or another Wholly Owned
Subsidiary or (B) such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary, the provisions of this clause (x) will no longer be applicable to
such Preferred Stock and such Preferred Stock will be deemed to have been issued
at the time of such transfer or other disposition or such cessation; and (y)
Preferred Stock issued by a Person prior to the time such Person becomes a
Restricted Subsidiary (including by way of a merger or consolidation with
another Restricted Subsidiary), which Preferred Stock was not issued in
anticipation of and was outstanding prior to such transaction; provided,
however, that on the date of such acquisition and after giving effect thereto,
the Company would have been able to Incur at least $1.00 of additional
Indebtedness pursuant to Section 4.17(a).
Section 4.22 Limitation on Guarantees by Restricted Subsidiaries.
---------------------------------------------------
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is pari passu
with or subordinate in right of payment to the Securities ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a Subsidiary Guaranty of payment of the Securities by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guaranty; provided that this paragraph shall not
be applicable to (1) any Guarantee by any Restricted Subsidiary that existed at
the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or (2) Guarantees of Indebtedness under working capital facilities of
the Company in an aggregate principal amount not exceeding $50,000,000 at any
time outstanding or, if less, the amount by which $150,000,000 exceeds the
aggregate outstanding principal amount of Indebtedness of the Company under
clause (15) of paragraph (b) of Section 4.17 which is secured by a Lien. If the
Guaranteed Indebtedness is (A) pari passu with the Securities, then the
Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guaranty or (B) subordinated to the Securities,
then the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guaranty at least to the extent that the Guaranteed Indebtedness is
subordinated to the Securities.
Notwithstanding the foregoing, any Subsidiary Guaranty by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of the Company's and each
Restricted Subsidiary's Capital Stock in, or all or substantially all the assets
of, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by the Indenture) or (ii) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guaranty, except a discharge
or release by, or as a result of, payment under such Guarantee.
33
Section 4.23 Limitation on Sale/Leaseback Transactions.
-----------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary to,
enter into any Sale/Leaseback Transaction with respect to any property unless
(i) the Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.17 and (B) create a Lien on
such property securing such Attributable Debt without equally and ratably
securing the Securities pursuant to Section 4.12, or (ii) the Sale/Leaseback
Transaction is treated as an Asset Disposition and the Company applies the
proceeds of such transaction in compliance with Section 4.19.
Section 4.24 Application for Rating.
----------------------
The Company shall, within 180 days after the Issue Date, apply to Xxxxx'x
Investors Service, Inc. and Standard & Poor's Ratings Group, to obtain a rating
for the Securities.
Section 4.25 Listing.
-------
No later than the earliest to occur of (i) the effectiveness of the initial
Exchange Offer Registration Statement and (ii) the effectiveness of the initial
Shelf Registration Statement, in either case, filed under (and as defined in)
the Registration Rights Agreement, the Company shall cause the Exchange
Securities to be listed on the American Stock Exchange, or such other stock
exchange or market as the Common Stock of the Company is then principally traded
provided, that such Securities meet the minimum requirements for listing on any
such exchange or market, and, if applicable, to maintain such listing for so
long as any of the Exchange Securities is Outstanding.
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.1 Covenant Not to Consolidate, Merge, Convey or Transfer Except
-------------------------------------------------------------
Under Certain Conditions.
------------------------
The Company shall not consolidate with, or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all of its assets to, any Person unless:
(i) The resulting, surviving or transferee Person (the "Successor Company")
shall be a Person organized and existing under the laws of the U.S., any state
thereof or the District of Columbia and the Successor Company (if not the
Company) shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities, the Indenture and the other
Operative Documents;
34
(ii) Immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or any
Subsidiary of the Company as a result of such transaction as having been
Incurred by such Successor Company or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(iii) Immediately after giving effect to such transaction, the Successor
Company would be able to Incur an additional $1.00 of Indebtedness pursuant to
paragraph (a) of Section 4.17;
(iv) Immediately after giving effect to such transaction, the Successor
Company shall have Consolidated Net Worth in an amount that is not less than the
Consolidated Net Worth of the Company immediately prior to such transaction; and
(v) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) such consolidation,
merger or transfer and such supplemental indenture (if any) comply with the
terms of this Indenture, (ii) this Indenture and the Securities constitute the
valid and legally binding obligations of the Successor Company, and (iii) the
Indenture and the other Operative Documents are enforceable against the
Successor Company in accordance with their terms.
Section 5.2 Successor Person Substituted.
----------------------------
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and be bound by and obligated to pay the
obligations of, and may exercise every right and power of, the Company under the
Indenture, but the predecessor Company in the case of a conveyance, transfer or
lease shall not be released from the obligation to pay the principal of,
interest on, and Special Interest, if any, with respect to, the Securities.
The Successor Company may cause to be signed, and may issue either in its
own name or in the name of the Company prior to such succession any or all of
the Securities issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and upon the order of the Successor
Company, instead of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and
any Securities which such Successor Company thereafter shall cause to be signed
and delivered to the Trustee for that purpose. All of the Securities so issued
shall in all respects have the same legal rank and benefit under this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, transfer or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
35
Section 5.3 Optional Right of Redemption.
----------------------------
The Company shall have the right, without the consent of the Holders, to
redeem the Securities in whole, but not in part, at a redemption price equal to
100% of the unpaid principal amount of the Outstanding Securities plus the
Applicable Premium as of, and accrued and unpaid interest and Special Interest
if any, to, the date of redemption in the event that the Company enters into a
binding agreement to consummate any transaction which would be prohibited by
Section 5.1. Such redemption date must occur prior to or simultaneously with
the consummation of such prohibited transaction. Any such redemption shall be
subject to the provisions of Sections 3.2-3.7, inclusive.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
-------------------
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on, or Special
Interest, if any, with respect to, any Security when the same becomes due and
payable and the default continues for thirty (30) days;
(b) the Company defaults in the payment of the principal of, premium, if
any, on, or purchase price, if any, with respect to, any Security when the same
becomes due and payable at maturity, upon acceleration, redemption or otherwise;
(c) the Company fails to comply with any of the covenants contained in
Sections 4.04(a), 4.04(c), 4.09, or 4.14 of the Pledge Agreement or Section
5.01(e) of the Master Sub-License Agreement within the time periods, if any,
provided therein, or fails to pay over amounts required under Section 4.12(c) of
the Pledge Agreement;
(d) the Company takes any action prohibited by Section 5.1;
(e) the Company fails to comply with any of the covenants contained in
Sections 4.3, 4.7, 4.9, 4.12, 4.18, 4.20-4.25, inclusive, or (except, in each
case, for a failure to Pay the purchase price of Securities in connection with
an Offer to Purchase) 4.15, 4.17 or 4.19, and in any such case such default
continues for the period and after the notice specified below;
(f) any representation or warranty of the Company in this Indenture, any of
the other Operative Documents, any Subsequent Deed of Conveyance or any
Supplemental Pledge Agreement or in any certificate of the Company delivered
hereunder or under any such document shall prove to have been untrue in any
material respect when made, or the Company fails in any material respect to
comply with any covenant or agreement (other than as specified in clauses (a)-
(e) above) contained in the Securities,
36
the Indenture or any of the other Operative Documents, and in any such case such
default continues for the period and after the notice specified below;
(g) an event of default shall have occurred and be continuing under any
other evidence of Indebtedness of the Company or any Significant Subsidiary of
the Company, whether such Indebtedness now exists or is created hereafter, which
event of default results in the acceleration of such Indebtedness which,
together with any such other Indebtedness so accelerated, aggregates more than
$15,000,000;
(h) the Company or any Restricted Subsidiary pursuant to or within the
meaning of any Bankruptcy Law (as hereinafter defined):
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(iii) consents to the appointment of a Custodian (as hereinafter
defined) of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is unable to pay its debts as the same become due;
(i) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any Restricted Subsidiary
in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary for all or substantially all of its properties, or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary,
and in each case the order and decree remains unstayed and in effect
for sixty (60) consecutive days;
(j) final, non-appealable judgments for the payment of money which
judgments in the aggregate exceed $15,000,000 shall be rendered against the
Company or any Restricted Subsidiary by a court of competent jurisdiction and
remain undischarged, unstayed and unsatisfied for the period and after the
notice specified below; or
(k) any of the Operative Documents ceases, without the consent of the
Trustee, to be in full force and effect; provided, however, that if an Operative
Document ceases to be in full force and effect by virtue of, or arising out of,
any action by the Federal Aviation Administration terminating proprietary rights
to airport takeoff and
37
landing access or otherwise eliminating Slots that such occurrence shall not
give rise to a Default or Event of Default.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.
A Default under clause (e), (f), (j) or, with respect to a Restricted
Subsidiary that is not a Significant Subsidiary, (h) or (i) of this Section 6.1
is not an Event of Default until the Trustee notifies the Company, or the
Holders of at least twenty-five percent (25%) in aggregate principal amount of
the Securities Outstanding notify the Company and the Trustee, of the Default
and the Company does not cure the Default within sixty (60) days with respect to
clauses (f) and (j), or within thirty (30) days with respect to clauses (e) and,
with respect to a Restricted Subsidiary that is not a Significant Subsidiary,
(h) and (i), after receipt of the notice; provided, however, that the Company
shall be permitted such longer period of time, if any, as may be provided for
under the other Operative Documents in respect of any particular Default. The
notice must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default." When a Default is cured, it ceases.
Section 6.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in Section
6.1(h) or (i) with respect to the Company or a Restricted Subsidiary that is a
Significant Subsidiary) occurs, and is continuing, the Trustee may, by notice to
the Company, or the Holders of at least twenty-five percent (25%) in aggregate
principal amount of the Securities Outstanding may, by notice to the Company and
the Trustee, and the Trustee shall, upon the request of such Holders, declare
all unpaid principal of, premium, if any, accrued interest and Special Interest,
if any, to the date of acceleration on the Securities Outstanding (if not then
due and payable) to be due and payable and upon any such declaration, the same
shall become and be immediately due and payable. If an Event of Default
specified in Section 6.1(h) or (i) occurs with respect to the Company or a
Restricted Subsidiary that is a Significant Subsidiary, all unpaid principal of,
premium, if any, accrued interest on and Special Interest, if any, with respect
to, the Securities Outstanding shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Securityholder. Upon payment of such principal amount, interest, and
Special Interest, if any, all of the Company's obligations under the Securities
and this Indenture, other than obligations under Sections 7.7, 8.5 and 8.6,
shall terminate. The Holders of a majority in principal amount of the
Securities then Outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (a) all existing Events of Default, other than the non-
payment as to the Securities of the principal, interest or Special Interest, if
any, which has become due solely by such declaration of acceleration, have been
cured or waived, (b) to the extent the payment of such interest is permitted by
law, interest on overdue installments of interest and on overdue principal which
has become due otherwise than by such declaration of acceleration, has been
paid, (c) the rescission would not conflict with any judgment or
38
decree of a court of competent jurisdiction, and (d) all payments due to the
Trustee and any predecessor Trustee under Section 7.7 have been made.
Section 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, interest on or Special Interest, if any, with respect to the
Securities or to enforce the performance of any provision of the Securities or
this Indenture including, without limitation, instituting proceedings and
exercising and enforcing, or directing exercise and enforcement of, all rights
and remedies of the Trustee, the Collateral Agent and the Slot Trustee under the
other Operative Documents (provided that the Collateral Agent shall only be
permitted to become the record Holder of the Beneficial Interest and the
Beneficial Interest Certificate as and when described in Section 6.01 of the
Pledge Agreement) and directing the Collateral Agent to deposit with the Trustee
all cash and/or Investment Securities held by the Collateral Agent.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.4 Waiver of Past Defaults.
-----------------------
Subject to Sections 6.7, 9.2 and 9.6, the Holders of a majority in
aggregate principal amount of the Securities Outstanding by notice to the
Trustee may authorize the Trustee to waive an existing Default or Event of
Default and its consequences, except a Default (a) in the payment of principal
of, or interest on, or Special Interest with respect to, any Security as
specified in clauses (a) and (b) of Section 6.1 or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
the Holder of each Security affected. When a Default or Event of Default is
waived, it is cured and ceases, and the Company, the Holders and the Trustee
shall be restored to their former positions and rights hereunder respectively;
but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon.
Section 6.5 Control by Majority.
-------------------
The Holders of a majority in aggregate principal amount of the Securities
Outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee (as Trustee, Collateral Agent or Slot
Trustee, subject, in the case of any actions based on the status of the Trustee
as Collateral Agent or Slot Trustee, to any limitations otherwise expressly
provided for in the other Operative Documents) or exercising any trust or power
conferred on it; provided that the Trustee
39
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction. The Trustee may refuse to follow any direction hereunder
or authorization under Section 6.4 that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that the Trustee determines may subject the Trustee to
personal liability. However, the Trustee shall have no liability for any
actions or omissions to act which are in accordance with any such direction or
authorization.
Section 6.6 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing Event of
Default;
(b) the Holders of at least twenty-five percent (25%) in principal amount
of the Securities Outstanding make a written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within sixty (60) days
after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in aggregate
principal amount of the Securities Outstanding do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with such
request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 6.7 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, interest on, and
Special Interest, if any, with respect to, the Security in cash, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
It is hereby expressly understood, intended and agreed that any and all
actions which a Holder of the Securities may take to enforce the provisions of
this Indenture and/or collect Payments due hereunder or under the Securities,
except to the extent that such action is determined to be on behalf of all
Holders of the Securities, shall be in addition to and shall not in any way
change, adversely affect or impair the rights and remedies of the Trustee or any
other Holder of the Securities thereunder or under this Indenture and the other
Operative Documents, including the right to foreclose upon and
40
sell the Collateral or any part thereof and to apply any proceeds realized in
accordance with the provisions of this Indenture.
Section 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of interest or principal specified in
clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of
principal, accrued interest and Special Interest, if any, remaining unpaid,
together with interest on overdue principal and on overdue installments of
interest to the extent that payment of such interest is permitted by law, in
each case at the rate per annum provided for by the Securities, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.7, and unless
prohibited by law or applicable regulations to vote on behalf of the Holders of
Securities for the election of a trustee in bankruptcy or other person
performing similar functions. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding except, as aforesaid, for the election of a trustee in
bankruptcy or person performing similar functions.
Section 6.10 Application of Proceeds.
-----------------------
Any moneys collected by the Trustee pursuant to this Article shall be
applied in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal, interest, or
Special Interest, if any, upon presentation of the several Securities and
stamping (or otherwise noting) thereon the
41
payment, or issuing Securities in reduced principal amounts in exchange for the
presented Securities if only partially paid, or upon surrender thereof if fully
paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee, the Collateral Agent, the Slot Trustee, each
of their predecessors and their respective agents and attorneys (including
amounts due and unpaid under Section 7.7), and of all costs, fees, expenses
and liabilities incurred, and all advances made, by any and all of the
foregoing (including amounts due and unpaid under Section 7.7), except as a
result of negligence or bad faith;
SECOND: In case the entire principal of the Securities shall not have
become and be then due and payable, as to any Securities (a) first to the
payment of interest and Special Interest, if any, in default in the order
of the maturity of the installments of such interest and Special Interest,
if any, with interest (to the extent that such interest has been collected
by the Trustee) upon the overdue installments of interest or Special
Interest, if any, at the rate of interest specified in the Securities and
(b) second to the payment of principal of the Securities as the same shall
become due and payable, such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
THIRD: In case the entire principal of the Securities shall have
become and shall be then due and payable, as to any Securities, to the
payment of the whole amount then owing and unpaid upon all the Securities
for principal, interest and Special Interest, with interest upon the
overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest or Special Interest,
if any, at the same rate as the rate of interest specified in the
Securities; and in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities, then to the payment
of such principal, interest and Special Interest, if any, without
preference or priority of any of principal, interest or Special Interest,
if any, over the other, or any installment of interest or Special Interest,
if any, over any other installment of interest or Special Interest, if any,
or of any Security over any other Security, ratably to the aggregate of
such principal, and accrued and unpaid interest and Special Interest; and
FOURTH: To the payment of the remainder, if any, after payment in
full of the entire principal balance, if any, of the Securities and all
interest, Special Interest and other amounts due upon or in respect of such
Securities, to the Company or any other Person lawfully entitled thereto.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
42
Section 6.11 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court in its
discretion may require in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by Holders of more than ten percent (10%) in principal amount of the Securities
Outstanding.
Section 6.12 Restoration of Rights on Abandonment of Proceedings.
---------------------------------------------------
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company, the Trustee and the Securityholders shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
Section 6.13 Powers and Remedies Cumulative; Delay or Omission Not Waiver
------------------------------------------------------------
of Default.
----------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Securityholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to the other applicable provisions of this
Indenture, every power and remedy given by this Indenture or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.
Any right or remedy herein conferred upon or reserved to the Trustee may be
exercised by it in its capacity as Trustee, as Collateral Agent and/or as Slot
Trustee, as it may deem most efficacious, if it is then acting in such capacity.
43
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are specifically
set forth in this Indenture and the other Operative Documents and no
others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) This paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.1 or of Section 7.2.
(ii) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) Funds held in trust for the benefit of the Holders of the Securities
by the Trustee or any Paying Agent on deposit with itself or elsewhere, and
Investment Securities held in trust for the benefit of the Holders of the
Securities by the Trustee, shall be held in distinct, identifiable accounts, and
other funds or investments of any nature or
44
from any source whatsoever may be held in such accounts, except, in each case,
to the extent required by law. The Trustee shall not be liable for interest on
any money received by it except as the Trustee may agree with the Company.
Section 7.2 Rights of Trustee.
-----------------
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to Section
11.5. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and the Trustee shall not be responsible for the misconduct or negligence
of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
Section 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or Affiliates of the Company with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities or in this Indenture other than its certificate of
authentication.
Section 7.5 Notice of Defaults.
------------------
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Securityholder notice of the Default within
ninety (90) days after the occurrence thereof except as otherwise permitted by
the TIA. Except in the case of a Default in payment of principal of, premium,
if any, or interest on, or Special Interest, if any, with respect to, any
Security, the Trustee may withhold the notice if and so long as it, in good
faith, determines that withholding the notice is in the interests of the
Securityholders.
45
Section 7.6 Reports by Trustee to Holders.
-----------------------------
If circumstances require any report to Holders under TIA (S) 313(a), it
shall be mailed to Securityholders within sixty (60) days after each May 15
(beginning with the May 15 following the date of this Indenture) as of which
such circumstances exist. The Trustee also shall comply with the remainder of
TIA (S) 313.
The Company shall notify the Trustee if the Securities become listed on or
delisted from any stock exchange or other recognized trading market.
The Trustee shall, upon the written request of any Holder of Securities but
subject to applicable laws and contractual limitations, provide to such Holder
copies of any reports, certificates, opinions or other materials of any kind or
nature required to be delivered to the Trustee (including in its capacity as
Collateral Agent and Slot Trustee) under this Indenture or any of the other
Operative Documents or otherwise delivered by or on behalf of the Company to the
Trustee (including in its capacity as Collateral Agent and Slot Trustee).
Section 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation, as agreed upon from time to time, for its services, including as
Collateral Agent and as Slot Trustee. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in any such
capacities. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel and all agents
and other persons not regularly in its employ.
The Company shall indemnify the Trustee (in its capacities as Trustee,
Collateral Agent and Slot Trustee) and each predecessor Trustee for, and hold
each of them harmless against, any loss or liability incurred by each of them in
connection with the administration of this trust and its duties hereunder. In
connection with any defense of such a claim, the Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or any predecessor Trustee through the
negligence or bad faith of such Trustee or each such predecessor Trustee.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien (legal and equitable) prior to the Securities on all
money or property held or collected by the Trustee, in its capacity as Trustee,
or otherwise distributable to Securityholders, except money, securities or
property held in trust to pay principal of or interest on particular Securities
(including, without limitation, pursuant to Section 8.1(b) hereof).
46
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(h) or (i) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
----------------------
The Trustee (in its capacities as Trustee, Collateral Agent and Slot
Trustee) may resign by so notifying the Company in writing. The Holders of a
majority in aggregate principal amount of the Securities Outstanding may remove
the Trustee (in its capacities as Trustee, Collateral Agent and Slot Trustee) by
so notifying the Trustee in writing and may appoint a successor Trustee with the
Company's consent, which consent shall not be unreasonably refused or delayed.
The Company may remove the Trustee (in its capacities as Trustee, Collateral
Agent and Slot Trustee) if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) no Default or Event of Default has occurred and is continuing and the
Company determines in good faith to remove the Trustee.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the Securities Outstanding may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
No resignation or removal of the Trustee and no appointment of a successor
Trustee, pursuant to this Article, shall become effective until the acceptance
of appointment by the successor Trustee under this Section 7.8. If a successor
Trustee does not take office within sixty (60) days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least ten percent (10%) in principal amount of the Securities Outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
47
If the Trustee fails to comply with Section 7.10, any Holder of Securities
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee which shall retain its claim pursuant to Section 7.7.
Section 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act shall
be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent, published annual report of
condition. The Trustee shall comply with TIA (S) 310(b); provided, however,
that there shall be excluded from the operation of TIA (S) 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding,
if the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
Section 7.12 Other Capacities.
----------------
At all times during which any Securities are Outstanding, unless otherwise
permitted under the Operative Documents, the Trustee shall serve as the
Collateral Agent and (unless otherwise required under or for the purposes of the
Slot Trust) as the Slot Trustee, and any resignation, removal or
disqualification from any one such office (except as aforesaid as Slot Trustee)
shall, without action on the part of any Person, result in the resignation,
removal, or disqualification from all such offices. Any Person serving in such
capacities shall have and may effectively exercise all the rights, remedies and
powers, and be entitled to all protections and indemnifications, provided to
such Person in whatever capacities such Person then serves under any and all of
the Indenture and the other Operative Documents, regardless of the capacity or
capacities in which such Person may purport to take or omit any action. The
Trustee agrees to and shall have the benefit of all provisions of the Operative
Documents stated therein to be applicable to the Trustee.
48
ARTICLE 8.
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1 Discharge of Liability on Securities; Defeasance.
------------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds sufficient to
pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.7), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture by executing and delivering to the
Company on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel, a written instrument to such effect prepared by the Company
at its sole cost and expense.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Article 3, Sections
4.3, 4.7, 4.9, 4.12, 4.15 and 4.17 through 4.25, inclusive, and the operation of
Sections 6.1(g), 6.1(h), 6.1(i), 6.1(j) (but, in the case of Sections 6.1(h) and
(i), with respect only to Restricted Subsidiaries) and the limitations contained
in Sections 5.1(iii) and (iv) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default specified
in Sections 6.1(c), 6.1(e), 6.1(f), 6.1(g), 6.1(h), 6.1(i) and 6.1(j) (but, in
the case of Sections 6.1(h) and (i), with respect only to Restricted
Subsidiaries) or because of the failure of the Company to comply with Section
5.1(iii) or (iv).
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in a writing prepared by the Company
at its sole cost and expense the discharge of those obligations that the Company
terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's obligations in
Sections 2.3 through 2.8, inclusive, 7.7 and 7.8 and in this Article 8 shall
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.7, 8.4 and 8.5 shall survive.
49
Section 8.2 Conditions to Defeasance. The Company may exercise its
------------------------
legal defeasance option or its covenant defeasance option only if:
(a) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations for the payment of principal and interest and
Special Interest, if any, on the Securities to redemption or maturity, as the
case may be;
(b) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay when due all of the principal of, interest on and Special
Interest, if any, on all the Securities to redemption or maturity, as the case
may be;
(c) 123 days pass after the deposit is made and during the 123-day period
no Default specified in Sections 6.1(h) or (i) with respect to the Company or
any Restricted Subsidiary that is a Significant Subsidiary occurs which is
continuing at the end of the period;
(d) the deposit does not constitute a default under any other agreement
binding on the Company;
(e) the Company delivers to the Trustee an Opinion of Counsel to the effect
that the trust resulting from the deposit does not constitute, or is qualified
as, a regulated investment company under the Investment Company Act of 1940;
(f) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that , the Securityholders will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(g) in the case of the covenant defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
(h) the Company shall have delivered an Opinion of Counsel to the effect
that the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency,
50
reorganization or similar law affecting creditors rights generally under any
United States federal or state law and that the Trustee has a perfected security
interest in such trust funds for the ratable benefit of the Holders;
(i) the Company shall have delivered an Opinion of Counsel in the Company's
jurisdiction of incorporation to the effect that the Securityholders will not
recognize income, gain or loss for such jurisdiction's tax purposes as a result
of such defeasance and will be subject to taxes in such jurisdiction on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred; and
(j) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Securities as contemplated by this Article 8 have been
complied with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Securities at a future date in accordance
with Article 3.
Section 8.3 Application of Trust Money. The Trustee shall hold in trust
--------------------------
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of, interest on, and Special Interest, if any, on the
Securities.
Section 8.4 Repayment to Company. The Trustee and the Paying Agent
--------------------
shall promptly turn over to the Company, upon request accompanied by a
certificate from a nationally recognized firm of independent accountants
expressing their opinion that any money or U.S. Government Obligations are in
excess of the amounts sufficient to pay when due all of the principal of,
interest on, and Special Interest, if any, on the Securities to redemption or
maturity, as the case may be, any such excess money or securities held by them.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal, interest or Special Interest that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
Section 8.5 Indemnity for Government Obligations. The Company shall pay
------------------------------------
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
Section 8.6 Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or
51
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if the Company has made any payment of
-------- -------
principal of, premium, if any, interest or Special Interest, if any, on, any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment form the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee, the Collateral Agent or the Slot Trustee, as
the case may be, may amend or supplement this Indenture, the Securities or the
other Operative Documents without notice to or consent of any Securityholder:
(a) to provide for uncertified Securities in addition to or in place of
certificated Securities;
(b) to provide for the assumption of the Company's obligations to the
Holders of the Securities in the case of a merger or consolidation or transfer
of all or substantially all of the assets of the Company or otherwise to comply
with Article 5;
(c) to comply with any requirements of the SEC in connection with the
qualification of this Indenture under the TIA; or
(d) to cure any ambiguity, defect or inconsistency or to make any other
change, in each case, provided that such action does not materially adversely
affect the interests of any Securityholder.
Section 9.2 With Consent of Holders.
-----------------------
Subject to Section 6.7, the Company (by resolution of its Board of
Directors if required) and the Trustee, the Collateral Agent or the Slot
Trustee, as the case may be, may amend or supplement this Indenture, the
Securities or the other Operative Documents without notice to any Securityholder
but with the written consent of the Required Holders. Subject to Sections 6.4,
6.5 and 6.7, the Required Holders may authorize the Trustee to, and the Trustee,
subject to Section 9.6, upon such authorization shall, waive compliance by the
Company with any provision of this Indenture, the Securities or the other
Operative Documents. However, an amendment, supplement or waiver, including a
waiver pursuant to any provision of Section 6.4, may not without the consent of
each Securityholder affected:
52
(a) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate or extend the time for payment of interest on, or
Special Interest, if any, with respect to, any Security;
(c) reduce the principal of, or the amount of Special Interest, if any,
with respect to (in each case, whether on redemption, repurchase or otherwise),
or change the fixed maturity of any Security;
(d) change the place of payment where, or the coin or currency in which,
any Security (or the repurchase or redemption price thereof), interest thereon,
or Special Interest, if any, with respect thereto is payable;
(e) waive a default in the payment of the principal of, or interest on, or
Special Interest with respect to any Security;
(f) make any changes in Sections 2.8, 6.4, 6.7 or 6.10 or the third
sentence of this Section 9.2 or change the time at which any Security may be
redeemed hereunder;
(g) reduce any amount payable upon exercise of any repurchase rights
thereof or otherwise change any repurchase right provision or impair the right
of any Holder to institute suit for the enforcement of any such payment on any
Security when due or adversely effect any repurchase rights hereunder; or
(h) make any change in any Subsidiary Guaranty that would adversely affect
any Holder.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby a brief notice
describing such amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however in any way impair or
affect the validity of any such amendment, supplement or waiver.
Section 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Security
or portion of
53
a Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his Security or portion
of a Security. Such revocation shall be effective only if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (a)
through (h) of Section 9.2. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, however, that no amendment,
supplement or waiver relating to any impairment of the right to receive
principal and interest when due and payable consented to by a Holder shall be
binding upon any subsequent Holder of a Security or a portion of a Security that
evidences the same debt as the consenting Holder's Security unless notation with
regard thereto is made upon such Security or the Security representing such
portion.
Section 9.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 9.6 Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall be entitled to receive and rely upon an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article 9 has been
duly authorized by the Company and is authorized or permitted by this Indenture
and the other applicable Operative Documents. The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.7 Effect of Supplement and/or Amendment.
-------------------------------------
Upon the execution of any supplemental indenture and/or any such amendment
or supplement to the Operative Documents pursuant to the provisions of this
Article 9, this Indenture and such Operative Documents shall be and be deemed to
be modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
and the other Operative Documents of the Trustee, the Collateral Agent, the Slot
Trustee, the Company and the Holders of Securities shall thereafter be
determined, exercised and enforced hereunder and thereunder subject in all
respects to such modifications and amendments, and all
54
terms and conditions of any such supplemental indenture and/or any such
amendment or supplement to the other Operative Documents shall be and be deemed
to be part of the terms and conditions of this Indenture and the other Operative
Documents for any and all purposes.
ARTICLE 10.
SECURITY
Section 10.1 Other Operative Documents.
-------------------------
To secure the due and punctual payment, performance and observance of the
Obligations, and the Obligations under (and as defined in) the Note Pledge
Agreement, the Company has simultaneously with the execution of this Indenture
entered into or caused to be assigned to the Collateral Agent, the Trustee
and/or Slot Trustee the other Operative Documents and has made an assignment and
pledge of or otherwise transferred or caused to be transferred its right, title
and interest in and to the Collateral, the Pledged Collateral and the Acquired
Slots to the Collateral Agent, the Trustee, and the Slot Trustee, respectively,
pursuant to the other Operative Documents and in the manner and to the extent
therein provided. Each Securityholder, by accepting a Security, agrees to all of
the terms and provisions of each Operative Document (including, without
limitation, the provisions providing for the release of Collateral, the Pledged
Collateral and/or Slot Trust Assets), as the same may be in effect or may be
amended from time to time pursuant to its terms and the terms hereof. The
Company will execute, acknowledge and deliver to the Trustee, the Collateral
Agent or the Slot Trustee such further assignments, transfers, assurances or
other instruments as the Trustee may require or request, and will do or cause to
be done all such acts and things as may be necessary or proper, or as may be
reasonably required by the Trustee, the Collateral Agent or the Slot Trustee to
assure and confirm to the Trustee, the Collateral Agent or the Slot Trustee the
security interest in the Collateral and the Pledged Collateral and the ownership
of the Acquired Slots contemplated hereby and by the other Operative Documents
or any part thereof, as from time to time constituted, so as to render the same
available for the security and benefit of this Indenture and of the Securities
secured hereby, according to the intent and purposes herein expressed.
Section 10.2 Pledged Securities.
------------------
Upon the Issue Date the Company shall deposit with the Trustee for the
benefit of the Holders of the Securities, cash and/or purchase and pledge to the
Trustee for the benefit of the Holders of the Securities, Pledged Securities, in
such amount as will when combined be sufficient (upon receipt of scheduled
interest and principal payments of such Pledged Securities, if any, in the
opinion (expressed in a written certification thereof delivered to the Trustee)
of a nationally recognized firm of independent public accountants selected by
the Company), provide for payment in full of the first three scheduled interest
payments due on the Securities. The Company may at any time
55
thereafter substitute Pledged Securities for all or any part of such cash, or
cash for all or any part of such Pledged Securities, provided that the Pledged
Securities and/or cash, as the case may be, so substituted are in such amount as
will, together with the other Pledged Collateral, be sufficient (upon receipt of
scheduled interest and principal payments of Pledged Securities, if any, in the
opinion (expressed in written certification thereof delivered to the Trustee) of
a nationally recognized firm of independent public accountants selected by the
Company), to provide for payment in full of the first three scheduled interest
payments due on the Securities. Upon any substitution, the Pledged Securities
and/or cash so substituted shall be pledged by the Company to the Trustee for
the benefit of the Holders of Securities, and the Trustee shall release from the
Interest Escrow Account, to or upon the order of the Company, all or the
appropriate portion as set forth in a Request, of the cash or Pledged
Securities, as the case may be, initially deposited by the Company. The Pledged
Securities or cash required by this Section 10.2 shall be pledged by the Company
to the Trustee for the benefit of the Holders of Securities pursuant to the Note
Pledge Agreement and will be held by the Trustee in the Interest Escrow Account,
subject to and in accordance with the Note Pledge Agreement. Pursuant to the
Note Pledge Agreement, immediately prior to an interest payment date on the
Securities, the Company may either (i) deposit with the Trustee from funds
otherwise available to the Company cash sufficient to pay the interest scheduled
to be paid on such date or (ii) may direct the Trustee to release from the
Interest Escrow Account proceeds sufficient to pay interest then due. In the
event that the Company exercises the former option, the Company may thereafter
direct the Trustee to release to the Company proceeds from the Interest Escrow
Account in like amount.
Interest earned on the Pledged Securities will be added to the Interest
Escrow Account. In the event that the funds held in the Interest Escrow Account
exceed the amount sufficient, in the opinion (expressed in a written
certification thereof delivered to the Trustee) of a nationally recognized firm
of independent public accountants selected by the Company, to provide for
payment in full of the first three scheduled interest payments due on the
Securities (or, in the event the first such interest payment has been made, an
amount sufficient to provide for payment in full of the second and third
scheduled interest payment on the Securities and so on) the Trustee will be
permitted to release to the Company at the Company's request any such excess
amount. The Securities will be secured by a first priority security interest in
the Pledged Securities and Interest Escrow Account.
Pursuant to the Note Pledge Agreement, provided that the Company makes the
first three scheduled interest payments on the Securities in a timely manner,
all of the cash or Pledged Securities held in the Interest Escrow Account will
be released from the Interest Escrow Account.
Section 10.3 Opinions, Certificates and Appraisals.
-------------------------------------
(a) The Company shall furnish to the Trustee promptly after the execution
and delivery of this Indenture but prior to authentication of any Securities
Opinions of Counsel covering such jurisdictions as the listed Purchasers may
reasonably request
56
(A) either (i) stating that in the opinion of such Counsel the actions necessary
to be taken under the Federal Aviation Act, the Uniform Commercial Code of all
applicable jurisdictions, or otherwise with respect to the recording,
registering and filing of this Indenture, the other Operative Documents,
financing statements or other instruments to make effective and to perfect the
Liens intended to be created by the Pledge Agreement and the Note Pledge
Agreement have been taken and reciting with respect to the security interests in
the Collateral and the Pledged Collateral, the details of such actions, or (ii)
stating that, in the opinion of such Counsel, no such action is necessary to
make such Liens effective and perfected, and (B) either (i) stating that, in the
opinion of such Counsel, action has been taken with respect to the recordation
of all instruments required to be executed or filed to establish and maintain
the Slot Trust as the holder of record at the FAA of the Acquired Slots and
reciting with respect to such recordation the details of such action, or (ii)
stating that, in the opinion of such Counsel, no such action, execution or
filing is necessary to establish and maintain the Slot Trust.
(b) The Company shall furnish to the Collateral Agent and the Trustee one
hundred and twenty (120) days after January 1 in each year beginning with
January 1, 1999, an Opinion of Counsel, dated as of such date, either (a)(i)
stating that, in the opinion of such Counsel, action has been taken with respect
to the recording, registering, filing, rerecording, re-registering and refiling
(in this section, "recordation") of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Lien intended to be created by the Pledge Agreement
and the Note Pledge Agreement (if not then terminated pursuant to its terms) and
the perfection thereof and reciting with respect to the security interests in
the Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, and (ii) stating that all financing
statements and continuation statements have been executed and filed that are
necessary as of such date and during the succeeding seventeen (17) months fully
to maintain the Lien of the Securityholders and the Collateral Agent and the
Trustee intended to be created hereunder and under the Pledge Agreement and the
Note Pledge Agreement with respect to the security interest in the Collateral
and the Pledged Collateral and the perfection thereof, or (b) stating that, in
the opinion of such Counsel, no such action is necessary to maintain such Lien
and the perfection thereof.
The Company shall also furnish to the Slot Trustee and the Trustee within
one hundred and twenty (120) days after January 1 in each year beginning with
January 1, 1999, an Opinion of Counsel, dated as of such date, either (a)(i)
stating that, in the opinion of such Counsel, action has been taken with respect
to the recordation of all instruments as are necessary to maintain the Slot
Trust as the Holder of record at the FAA of the Acquired Slots and reciting with
respect to the recordation of such Acquired Slots the details of such action or
referring to prior Opinions of Counsel in which such details are given, and (ii)
stating that all instruments have been executed and filed that are necessary as
of such date and during the succeeding seventeen (17) months fully to continue
in effect such recordation as will maintain the Slot Trust as such Holder of
record for the benefit of the Securityholders, the Slot Trustee, the Holder of
the Beneficial Interest and the Beneficial Interest Certificate and the Trustee
as intended hereunder and
57
under the Acquired Slot Trust Agreement and the Master Sub-License Agreement
with respect to the Acquired Slots, or (b) stating that, in the opinion of such
Counsel, no such action, execution or filing is necessary to maintain the
necessary recordation.
(c) The release of any Collateral or Pledged Collateral from the terms of
the Pledge Agreement or the Note Pledge Agreement, as the case may be, or of
Slot Trust Assets from the Slot Trust will not be deemed to impair the security
under this Indenture in contravention of the provisions hereof if and to the
extent the Collateral, Pledged Collateral and the Slot Trust Assets are released
pursuant to the Pledge Agreement, the Note Pledge Agreement, the Acquired Slot
Trust Agreement or the Master Sub-License Agreement, as applicable. To the
extent applicable, the Company shall cause TIA (S) 314(d) relating to the
release of property or securities from the Lien of the Pledge Agreement or the
Note Pledge Agreement, as the case may be, or the possession of the Slot Trust
pursuant to the Master Sub-License Agreement and relating to the substitution
therefor of any property or securities to be subjected to the Lien of the Pledge
Agreement or the Note Pledge Agreement, as the case may be, to be complied with.
With respect to any such substitution, the Company shall furnish to the Trustee
an Independent Appraiser's Certificate if required by TIA (S) 314(d). Any
certificate or opinion required by TIA (S) 314(d) may be made by an Officer of
the Company, except in cases where TIA (S) 314(d) requires that such certificate
or opinion be made by an independent person, which person shall meet the
requirements set forth in clauses (a) through (c) of the definition of the term
"Independent Appraiser."
Section 10.4 Authorization of Actions to be Taken by the Trustee Under the
-------------------------------------------------------------
Operative Documents.
-------------------
The Trustee (in its capacities as such and/or as Collateral Agent and/or
Slot Trustee) may, in its sole discretion and without the consent of the
Securityholders, take all actions it deems necessary or appropriate to (a)
enforce any of the terms of the Operative Documents and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company
hereunder. Subject to the provisions of this Indenture and the other Operative
Documents, the Trustee (in such capacities) shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral, the Pledged Collateral and the Acquired Slots by
any acts which may be unlawful or in violation of the other Operative Documents
or this Indenture, and such suits and proceedings as it may deem expedient to
preserve or protect its interest and the interests of the Securityholders in the
Collateral, the Pledged Collateral and the Acquired Slots (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Securityholders or
of the Trustee in any such capacity).
58
Section 10.5 Payment of Expenses.
-------------------
On demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article 10, and all such sums shall be a Lien upon the Collateral and shall be
secured thereby.
Section 10.6 Authorization of Receipt of Funds by the Trustee Under the
----------------------------------------------------------
Operative Documents.
-------------------
The Trustee is authorized to receive any funds for the benefit of
Securityholders distributed under the other Operative Documents, and to make
further distributions of such funds to the Holders according to the provisions
of this Indenture.
Section 10.7 Agreement as to Appraised Value and Fair Market Value.
-----------------------------------------------------
The Company and the Trustee acknowledge that the use of Appraised Value and
Fair Market Value herein or in the other Operative Documents is strictly and
solely for convenience in establishing relative value equivalencies of Permitted
Substitutes permitted to be substituted under limited circumstances for
Collateral and/or Acquired Slots under the other Operative Documents.
Accordingly, the Appraised Value or Fair Market Value of any Collateral,
Permitted Substitutes, Acquired Slots or Slots subjected to the Lien of the
Pledge Agreement or conveyed to the Slot Trust is not an indication of and shall
not be deemed an agreement by the parties as the basis for valuation of such
Collateral, Permitted Substitutes, Acquired Slots, or Slots for purposes of
determining the value of the Trustee's secured claim against the Company,
adequate protection of the Trustee's interest in the Collateral, Permitted
Substitutes, Acquired Slots or Slots or for any other purpose in any bankruptcy,
receivership or insolvency proceeding involving the Company or any remedial
action brought by the Trustee, Collateral Agent or Slot Trustee, except to the
extent such valuations are mandated by applicable law, or any court with
jurisdiction over such proceedings, in either case without regard to the use of
the concept of Appraised Value or Fair Market Value by the parties hereto.
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Conflict with Trust Indenture Act of 1939.
------------------------------------------
If and to the extent that any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the TIA, such imposed duties shall control.
59
Section 11.2 Notices; Waivers.
----------------
Any request, demand, authorization, direction, notice, consent, waiver or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with
(a) the Company shall be sufficient for every purpose hereunder if in
writing (including telecopied communications) and made, given, furnished or
filed by personal delivery or mailed by first-class mail or by nationally
recognized overnight courier, postage or courier charges, as the case may be,
prepaid, to the Company at:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President & General Counsel
Telecopier No.: (000) 000-0000
(b) the Trustee shall be sufficient for every purpose hereunder if in
writing (including telecopied communications) and made, given, furnished or
filed by personal delivery or mailed by registered or certified mail or by
nationally recognized overnight courier, postage or courier charges, as the case
may be, prepaid, to or with the Trustee at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: Corporate Trust Services
Telecopier No.: (000) 000-0000
or to any of the above parties at any other address or telecopier number
subsequently furnished in writing by it to each of the other parties listed
above. An affidavit by any person representing or acting on behalf of the
Company or the Trustee as to such mailing, having any registry receipt required
by this Section attached, shall be conclusive evidence of the giving of such
demand, notice or communication.
Any notice or communication mailed to a Holder shall be mailed to such
holder by first-class mail or by nationally recognized overnight courier,
postage or courier charges, as the case may be, prepaid, at such holder's
address as it appears on the Register and shall be sufficiently given to such
holder if so mailed within the time prescribed.
Failure to mail a notice or send a communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Notices to
the Trustee or to the Company are deemed given only when received. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the
60
equivalent of such notice. Waivers of notice by the Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
Section 11.3 Communications By Holders With Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA (S) 312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any Request or application by the Company to the Trustee to take any
action under this Indenture or the other Operative Documents, the Company shall
furnish to the Trustee: (a) an Officers' Certificate, and (b) an Opinion of
Counsel, each stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, provided, that in the case of any such
application or Request as to which the furnishing of an Officers' Certificate or
Opinion of Counsel is specifically required by any provision of this Indenture
or the other Operative Documents relating to such particular application or
Request, no additional certificate or opinion, as the case may be, need be
furnished.
Section 11.5 Statements Required In Certificate or Opinion.
---------------------------------------------
Each certificate or opinion provided for and delivered to the Trustee, the
Collateral Agent or the Slot Trustee with respect to compliance with a condition
or covenant provided for in this Indenture or the other Operative Documents
shall include: (a) a statement that the Person signing such certificate or
opinion has read such condition or covenant and the definitions herein or
therein relating thereto; (b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; (c) a statement that, in the opinion
of such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such condition or
covenant has been complied with; and (d) a statement as to whether or not in the
opinion of such Person, such condition or covenant has been complied with.
Any certificate or opinion of an Officer or an engineer, insurance broker,
accountant or other expert may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or upon representations by counsel, unless such
officer, engineer, insurance broker, accountant or other expert knows that the
certificate or opinion or representations with respect to the matters upon which
his opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
61
Any certificate or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon the certificate or opinion of or representations by an
officer or officers of the Company stating that the information with respect to
such factual matters is in possession of the Company, unless such counsel knows
that the certificate or opinion or representations with respect to the matters
upon which his opinion may be based as aforesaid are erroneous and insofar as it
relates to legal matters in a jurisdiction or area of law beyond the expertise
of such counsel, such counsel may rely upon the opinion of counsel qualified in
such other jurisdiction or area of law.
Wherever in this Indenture or the other Operative Documents in connection
with any application, certificate or report to the Trustee, the Collateral Agent
or the Slot Trustee it is provided that the Company shall deliver any document
as a condition of the granting of such application or as evidence of the
Company's compliance with any term hereof, it is intended that the truth and
accuracy at the time of the granting of such application or at the effective
date of such certificate or report, as the case may be, of the facts and
opinions stated in such document shall in each such case be a condition
precedent to the right of the Company to have such application granted or to the
sufficiency of such certificate or report. Nevertheless, in the case of any
such application, certificate or report, any document required by any provision
of this Indenture or the other Operative Documents to be delivered to the
Trustee, the Collateral Agent or the Slot Trustee as a condition of the granting
of such application or as evidence of such compliance may be received by the
Trustee, the Collateral Agent or the Slot Trustee as conclusive evidence of any
statement therein contained and shall be full warrant, authority and protection
to the Trustee, the Collateral Agent or the Slot Trustee acting on the faith
thereof.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Whenever any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements or opinions or other
instruments under this Indenture or any other Operative Document he may, but
need not, consolidate such instruments into one.
Section 11.6 Rules By Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar, Paying Agent or Tender Agent may make
reasonable rules for their respective functions.
62
Section 11.7 Holidays.
--------
In the event that any date for the payment of any amount due hereunder
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture) such payment need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
due date, and no interest or Special Interest, if any, shall accrue from such
due date to and including the next succeeding Business Day.
Section 11.8 Governing Law; Waiver of Jury Trial.
-----------------------------------
(a) The laws of the State of New York shall govern this Indenture and the
Securities without regard to principles of conflict of laws.
(b) The Company and the Trustee each waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Indenture.
Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
Section 11.9 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any agreement of the Company or
any of its Subsidiaries which is unrelated to this Indenture, the Securities or
the other Operative Documents. Any such agreement may not be used to interpret
this Indenture.
Section 11.10 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
Section 11.11 Benefits of Indenture and the Securities Restricted.
---------------------------------------------------
Subject to the provisions of Section 11.12 hereof, nothing in this
Indenture or the Securities, express or implied, shall give or be construed to
give to any Person, firm or corporation, other than the parties hereto and the
Holders, any legal or equitable right, remedy or claim under or in respect of
this Indenture or under any covenant, condition, or provision herein contained,
all such covenants, conditions and provisions, subject to Section 11.12 hereof,
being for the sole benefit of the parties hereto and of the Holders.
63
Section 11.12 Successors and Assigns.
----------------------
This Indenture and all obligations of the Company hereunder shall be
binding upon the successors and permitted assigns of the Company, and shall,
together with the rights and remedies of the Trustee hereunder, inure to the
benefit of the Trustee, the Holders, and their respective successors and
assigns. Any assignment in violation of this Agreement shall be null and void ab
initio.
Section 11.13 Counterpart Originals.
---------------------
This Indenture may be signed in two or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same agreement.
Section 11.14 Severability.
------------
The provisions of this Indenture are severable, and if any clause or
provision shall be held invalid, illegal or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect in that
jurisdiction only such clause or provision, or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision of this Indenture in any jurisdiction, and a Holder
shall have no claim therefor against any party hereto.
Section 11.15 Rating Agencies.
---------------
Any reference in this Indenture or in the other Operative Documents to
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Group (each a
"rating agency" or an "agency") shall include its successors or successor
publishers of its financial ratings, and references to the ratings of any such
rating agency shall include comparable ratings in the event of one or more
reclassifications of such ratings by such rating agency after the date hereof.
In the event that any of such rating agencies shall cease to publish applicable
ratings, any provision herein requiring ratings of all of such agencies shall be
deemed to require ratings of only the agency or agencies continuing to publish
applicable ratings. If all of such agencies cease to publish applicable ratings,
any provision herein requiring ratings of any of such agencies shall be deemed
to require ratings that are both (a) certified by the Company in an Officers'
Certificate to be equivalent to the ratings of such agency or agencies and (b)
reasonably satisfactory to the Trustee or the Collateral Agent.
Section 11.16 Effect of Headings.
------------------
The Article and Section headings and the Table of Contents contained in
this Indenture have been inserted for convenience of reference only, and are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of this Indenture.
64
ARTICLE 12.
RELEASE OF COLLATERAL
Section 12.1 Release of Collateral.
---------------------
The Collateral and the Pledged Collateral securing the obligations
evidenced by the Securities shall be subject to release from the Lien of this
Indenture and the other Operative Documents from and to the extent provided by
the Operative Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
TRANS WORLD AIRLINES, INC,
By:/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President Corporate Finance
-------------------------------------
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Trustee
By:/s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
--------------------------------
Title: Vice President
-------------------------------
DEFINITIONS APPENDIX
Appendix I
To the Indenture between
Trans World Airlines, Inc.
and
First Security Bank, National Association, as Trustee
dated as of December 9, 1997
for the Company's 11 1/2% Senior Secured Notes due 2004
and the Pledge and Security Agreement
dated an even date therewith
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. DEFINITIONS......................................... 1
Acquired Indebtedness............................ 1
Acquired Securities.............................. 1
Acquired Slot Trust Agreement.................... 1
Acquired Slots................................... 1
Additional Acquired Slots........................ 1
Additional Assets................................ 1
Affiliate........................................ 1
Agent............................................ 2
Aircraft Acquisition Debt........................ 2
Applicable Percentage............................ 2
Applicable Premium............................... 2
Appraised Value.................................. 2
Asset Disposition................................ 4
Attributable Debt................................ 5
Average Life..................................... 5
Bankruptcy Law................................... 5
Beneficial Interest.............................. 5
Beneficial Interest Certificate.................. 5
Board of Directors............................... 5
Business Day..................................... 5
Capital Lease Obligations........................ 5
Capital Stock.................................... 6
Capital Units.................................... 6
Cash Collateral.................................. 6
Certifying Officer............................... 6
Change in Control................................ 6
Code............................................. 7
Collateral....................................... 7
Collateral Agent................................. 7
Common Stock..................................... 7
Company.......................................... 7
Company Appraiser................................ 7
Company Appraiser's Certificate.................. 7
Consolidated Coverage Ratio...................... 7
Consolidated Fixed Charges....................... 9
Consolidated Interest Expense.................... 9
Consolidated Net Income.......................... 9
Consolidated Net Worth........................... 10
Corporate Trust Office........................... 10
Currency Agreement............................... 10
Custodian........................................ 11
(i)
TABLE OF CONTENTS
-----------------
(Continued)
Page
----
Declaration...................................... 11
Deed of Conveyance............................... 11
Default.......................................... 11
Definitions Appendix............................. 11
Designated Locations............................. 11
Dispute Threshold................................ 12
Disqualified Stock............................... 12
EBITDA........................................... 13
ERISA............................................ 13
Event of Default................................. 13
Event of Loss.................................... 13
Exchange Act..................................... 14
Existing L-1011/747 Spare Parts.................. 14
Expendables...................................... 14
FAA.............................................. 14
FAA Slot Regulations............................. 14
Fair Market Value................................ 14
Federal Aviation Act............................. 15
Fuel Protection Agreements....................... 15
GAAP............................................. 15
Global Security.................................. 15
Guarantee........................................ 15
Hedging Obligations.............................. 16
Holder........................................... 16
Holder of Securities............................. 16
Securityholder................................... 16
Noteholder....................................... 16
Incur............................................ 16
Indebtedness..................................... 16
Indenture........................................ 17
Indenture Discharge Date......................... 17
Indenture Trustee................................ 17
Independent Appraiser............................ 17
Independent Appraiser's Certificate.............. 17
Interest Escrow Account.......................... 18
Interest Payment Date............................ 18
Interest Rate Agreement.......................... 18
Inventory Control System......................... 18
Investment....................................... 19
Investment Security.............................. 19
Issue Date....................................... 19
Legal Holiday.................................... 19
Lien............................................. 20
Liquidation Value................................ 20
(ii)
TABLE OF CONTENTS
-----------------
(Continued)
Page
----
Maintenance Ratio................................ 20
Master Sub-License Agreement..................... 20
NASDAQ National Market........................... 20
Net Available Cash............................... 20
Net Cash Proceeds................................ 21
Non-Slot Collateral.............................. 21
Note Pledge Agreement............................ 21
Notes............................................ 21
Obligations...................................... 21
Offer to Purchase................................ 21
Officer.......................................... 23
Officers' Certificate............................ 23
Operative Collateral............................. 23
Operative Documents.............................. 23
Opinion of Counsel............................... 23
Ordinary Course.................................. 23
Ordinary Course Of Business...................... 23
Original Issue Date.............................. 23
Outstanding or outstanding....................... 24
Paying Agent..................................... 24
Payment Date..................................... 24
Payments......................................... 24
Permitted Collateral Liens....................... 24
Permitted Investment............................. 24
Permitted Liens.................................. 25
Permitted Substitutes............................ 27
Person........................................... 27
Pipeline Spares.................................. 27
Pledge Agreement................................. 27
Pledged Collateral............................... 27
Pledged Parts Threshold.......................... 27
Pledged Securities............................... 28
Pledged Spare Parts.............................. 28
Preconditions.................................... 29
Preferred Stock.................................. 29
Primary Locations................................ 29
principal........................................ 29
Prior Third Party License........................ 29
Property......................................... 29
Public Equity Offering........................... 29
Receivables...................................... 29
Record Date...................................... 29
Redemption Date.................................. 29
Refinance........................................ 29
(iii)
TABLE OF CONTENTS
-----------------
(Continued)
Page
----
Refinancing Indebtedness......................... 29
Register......................................... 30
Registrar........................................ 30
Registration Rights Agreement.................... 30
Remaining Term................................... 30
Request.......................................... 30
Required Holders................................. 30
Restricted Payment............................... 30
Restricted Subsidiary............................ 31
Sale/Leaseback Transaction....................... 31
SEC.............................................. 31
Securities....................................... 31
Securities Act................................... 31
Security Interest................................ 31
Security Ratio................................... 31
Senior Indebtedness.............................. 32
Significant Subsidiary........................... 32
Slot............................................. 32
Slot Collateral.................................. 32
Slot Trade....................................... 32
Slot Trust....................................... 33
Slot Trust Assets................................ 33
Slot Trustee..................................... 33
Spare Parts...................................... 33
Special Interest................................. 33
Special Record Date.............................. 33
Stated Maturity.................................. 33
Sublease......................................... 33
Sub-License...................................... 33
Subordinated Obligation.......................... 33
Subsequent Deed of Conveyance.................... 33
Subsidiary....................................... 34
Subsidiary Guaranty.............................. 34
Substitution Requirements........................ 34
Supplemental Pledge Agreement.................... 37
Temporary Cash Collateral........................ 37
Temporary Cash Investments....................... 37
Tender........................................... 38
Third-Party Appraiser............................ 38
Third-Party License.............................. 38
TIA.............................................. 38
Title 14......................................... 38
Trading Day...................................... 38
Treasury Rate.................................... 38
(iv)
TABLE OF CONTENTS
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(Continued)
Page
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Trust Officer.................................... 38
Trustee.......................................... 38
Trustee Appraiser................................ 39
Trustee Appraiser's Certificate.................. 39
TWA.............................................. 39
U.S. or United States............................ 39
U.S. Government Obligations...................... 39
Unrestricted Subsidiary.......................... 39
Voting Stock..................................... 39
Wholly Owned Subsidiary.......................... 39
SECTION 2. RULES OF CONSTRUCTION............................... 39
(v)
DEFINITIONS APPENDIX
SECTION 1. DEFINITIONS. Unless the context otherwise requires, each of the
terms included in Section 1(A) and referred to in Section 1(B) shall have the
respective meanings given in Section 1(A) or in the definitions referred to in
Section 1(B) for all purposes of the Indenture, the Pledge Agreement, the Note
Pledge Agreement, the Acquired Slot Trust Agreement and the Master Sub-License
Agreement (including this appendix and any other exhibits or schedules to any
thereof) and of such other agreements as may incorporate this appendix by
reference except as otherwise specifically provided herein or therein.
A. TERMS DEFINED IN APPENDIX
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person became a Restricted Subsidiary and not Incurred in connection with,
or in contemplation of, such Person becoming a Restricted Subsidiary.
"Acquired Securities" means Outstanding Securities acquired by the Company
or any Affiliate of the Company (other than Initial Securities acquired in
exchange for Private Exchange Securities or Exchange Securities, as such terms
are defined in the Indenture).
"Acquired Slot Trust Agreement" means the Acquired Slot Trust Agreement
Declaration of Trust, dated as of December 9, 1997, between the Company and the
Slot Trustee.
"Acquired Slots" means all Slots assigned, transferred and conveyed by the
Company to the Slot Trust pursuant to the Deed of Conveyance, and all Additional
Acquired Slots acquired by the Slot Trustee thereafter but shall not include any
Acquired Slots which shall have been released from the Slot Trust as permitted
under the Master Sub-License Agreement (unless later reassigned, retransferred
and reconveyed to the Slot Trust).
"Additional Acquired Slots" means all Slots which may subsequently be
designated by the Company from time to time as Acquired Slots which are
assigned, transferred and conveyed by the Company to the Slot Trust pursuant to
one or more Subsequent Deeds of Conveyance.
"Additional Assets" means (i) any property or assets utilized in the
airline business or any business that is substantially related, ancillary or
complementary thereto (including an Investment in any Person engaged in any such
business); (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (iii) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of
2
Sections 4.3, 4.19 and 4.20 of the Indenture only, "Affiliate" shall also mean
any beneficial owner of Capital Stock representing 10% or more of the total
voting power of the Voting Stock (on a fully diluted basis) of the Company or of
rights or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Agent" means any Registrar, Paying Agent or co-Registrar or co-Paying
Agent.
"Aircraft Acquisition Debt" means Indebtedness Incurred by the Company or
any of its Restricted Subsidiaries in connection with an acquisition of
aircraft, related engines or spare engines, spare parts or other related
equipment (including ground equipment) which Indebtedness either constitutes all
or part of the purchase price thereof, or is Incurred prior to, at the time of
or within one year after the acquisition thereof for the purpose of financing or
refinancing part of the purchase price thereof, and which equipment was not
owned by the Company or a Restricted Subsidiary of the Company prior to such
purchase; provided, however, that in either case the proportion (expressed as a
percentage) of such Indebtedness to the purchase price or Appraised Value of
such equipment at the time of such financing does not exceed 90% (except that
the foregoing limitation shall not apply to aircraft under order or option on
the Issue Date for which vendor financing (including by way of vendor guarantee)
is initially obtained).
"Applicable Percentage" means (i) with respect to any amendment, supplement
or waiver of the Indenture or any other Operative Document that would (A)
terminate the Lien of the Pledge Agreement with respect to any Collateral or the
Note Pledge Agreement with respect to the Pledged Collateral or permit the
release of any Collateral or Pledged Collateral (other than releases permitted
by the applicable Operative Document, which releases shall not require any
consent of the Holders) or permit the creation of any Lien on any Collateral
(other than Permitted Collateral Liens) or Pledged Collateral, (B) increase the
aggregate principal amount of Securities that may be issued under the Indenture
or (C) modify this definition, 66 2/3%, and (ii) otherwise, a majority.
"Applicable Premium" means, with respect to a Note at any redemption or
repurchase date, the greater of (i) 1.0% of the principal amount of such Note
and (ii) the excess of (A) the present value on such redemption or repurchase
date of the principal amount of such Note plus all required interest and Special
Interest payments due on such Note through its Stated Maturity, such present
value computed using a discount rate equal to the Treasury Rate plus 50 basis
points over (B) the principal amount of such Note.
"Appraised Value" means the fair market sale value as of a specified date
of the appraised assets that would be obtained in an arm's length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy, as determined by an
Independent Appraiser; provided, however, that with respect to any Collateral or
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Acquired Slots or Permitted Substitutes (except Cash Collateral), at any time,
"Appraised Value" shall mean:
3
(a) Liquidation Value as determined by and as of the date set forth in a
Company Appraiser's Certificate, as adjusted by the factors set forth in
paragraph (b) of this definition and by the procedure set forth in paragraph (c)
of this definition.
(b) (i) In the case of any Operative Collateral being released in
connection with any of the following events or transactions with respect to
which Operative Collateral or Slots are being furnished as a Permitted
Substitute: the Liquidation Value of any such Collateral (A) to be released
upon an Event of Loss in respect of which insurance proceeds or proceeds of a
condemnation or other taking are payable (or in the case of insurance proceeds
would be payable if all insurance required by the Pledge Agreement were in
effect) shall be the Fair Market Value of such Collateral; (B) to be released
upon a sale thereof, shall be the Fair Market Value of such Collateral; and (C)
to be released upon a deemed sale thereof described in Section 4.04(c) of the
Pledge Agreement, shall be the Fair Market Value of such Collateral (each as
determined and adjusted under paragraph (c) of this definition); provided,
however, that if, upon any Event of Loss with respect to any Operative
Collateral which Operative Collateral is being released in connection with an
Event of Loss not described in clause (b)(i)(A), above, the Company shall
receive any payment, recovery or other proceeds in excess of the Liquidation
Value of such Operative Collateral, the Liquidation Value of such Collateral to
be released shall be increased by an amount equal to such excess, but not
exceeding the Fair Market Value of such Collateral.
(ii) In the case of any Operative Collateral or Slots being furnished
as a Permitted Substitute for Operative Collateral the Liquidation Value of
which has been adjusted under subparagraph (b)(i)(A), (B) or (C), above: the
Liquidation Value of such Permitted Substitute (to the extent so substituted)
shall be its Fair Market Value.
(c) Whenever such Company Appraiser's Certificate is filed with the
Indenture Trustee:
(i) the Trustee shall have the right at the Company's expense and
within the times set forth in Section 4.13(b) of the Pledge Agreement to
obtain a Trustee Appraiser's Certificate with respect to any or all assets
(or if the Trustee Appraiser determines that any assets are more
appropriately valued as a group, groups of assets) valued by the Company
Appraiser's Certificate;
(ii) the average of the Liquidation Values of each such asset or
group of assets specified in the Company Appraiser's Certificate and the
Trustee Appraiser's Certificate shall be the Appraised Value of such asset
or group unless the difference between the Liquidation Values specified for
any such asset or group exceeds the Dispute Threshold; and
(iii) if the difference between such Liquidation Values specified
for any such asset or group exceeds the Dispute Threshold, the Company
Appraiser and the Trustee Appraiser shall select the Third Party Appraiser,
whose determination of the Liquidation Value of such asset or group of
assets shall be the Appraised Value of such asset or group.
4
(d) Notwithstanding the foregoing:
(i) "Appraised Value" means the amount thereof when applied to cash
and the bid price therefor (as reported in the then-most-current issue of
The Wall Street Journal or, if not so reported, as quoted by a dealer in
-----------------------
the Investment Security being valued reasonably acceptable to the Trustee)
when applied to Investment Securities;
(ii) except as expressly provided elsewhere, "Appraised Value" shall
be determined currently in the case of cash and Investment Securities and
as of a date within 30 days of the date of the applicable substitution or
other action in all other cases;
(iii) any diminution of the proceeds, price or value of Property
resulting from any failure of the Company to perform or comply with any
condition, covenant, representation, warranty, or undertaking in the
Indenture or any Operative Document shall be disregarded in determining the
value of any Collateral or Acquired Slot to be released; and
(iv) references in this and related definitions and provisions of
the Operative Documents to the price upon any sale or deemed sale of any
Collateral or Acquired Slot shall be equal to the full consideration
therefor, whether in cash or in value received or to be received, directly
or indirectly, by the Company, its Affiliates or Persons having other
contractual relationships with the Company or its Affiliates.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition") in one transaction or a series of related
transactions, of (i) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary), (ii) all
or substantially all the assets of any division or line of business of the
Company or any Restricted Subsidiary or (iii) sales of aircraft, engines and
related equipment (and leasehold interests therein) and any other assets of the
Company or any Restricted Subsidiary outside of the ordinary course of business
of the Company or such Restricted Subsidiary; provided that "Asset Disposition"
shall not include (A) any sale, lease, transfer or other disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (B) any sale, lease, transfer or other
disposition that constitutes a Restricted Payment permitted by Section 4.3 of
the Indenture, (C) any sale, lease, transfer or other disposition of (i)
inventory, (ii) Receivables or (iii) other current assets in the ordinary course
of business, (D) any sale, lease, transfer or other disposition of assets for
consideration at least equal to the fair market value of the assets sold or
disposed of, to the extent that the consideration received would constitute
Additional Assets, (E) any sale, lease, transfer or other disposition of the
Company's direct or indirect interest in Worldspan, (F) any sale, lease,
transfer or other disposition of aircraft and related engines, spare parts and
equipment (including ground equipment) or leasehold interests therein which are
obsolete or which have been grounded and held for resale or are of a type no
longer used by the Company in the ordinary course of business, (G) any
Sale/Leaseback Transaction permitted by clause (i) of Section 4.23 of
5
the Indenture, (H) any sale, lease, transfer or other disposition of maintenance
bases, hangars and engine shops or (I) any disposition of Collateral or Pledged
Collateral permitted by the other Operative Documents.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at
the time of determination, the present value (discounted at the interest rate
borne by the Notes) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bankruptcy Law" has the meaning provided in Section 6.1 of the Indenture.
"Beneficial Interest" means the unit of interest representing the entire
beneficial interest in the Slot Trust.
"Beneficial Interest Certificate" means the certificate in substantially
the form of Exhibit B attached to the Acquired Slot Trust Agreement representing
the Beneficial Interest issued by the Slot Trustee.
"Board of Directors" means the Board of Directors of the Company or any
committee of such board duly authorized to act in respect of any particular
matter.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capital Units" means those Spare Parts which will normally last the life
of the aircraft on which they are to be placed, such as spare control surfaces,
landing gears, avionic units and engine accessories.
"Cash Collateral" means cash and/or Investment Securities of the types
described in Section 2.01(d),(e) and (g) of the Pledge Agreement deposited or to
be deposited with the
6
Collateral Agent, and may at the Company's election include cash held by the
Trustee as additional Collateral under Section 5.05 of the Pledge Agreement.
"Certifying Officer" means an Officer or an assistant secretary of the
Company.
"Change in Control" means the occurrence of any of the following events:
(i) any person (including any entity or group deemed to be a "person" under
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) is or becomes the
direct or indirect beneficial owner (as determined in accordance with Rule 13d-3
under the Exchange Act) of shares of the Company's Capital Stock representing
greater than 50% of the total voting power of all shares of Capital Stock of the
Company entitled to vote in the election of directors of the Company under
ordinary circumstances or to elect a majority of the Board of Directors of the
Company, (ii) the Person then constituting the "Company" under the Indenture
sells, transfers or otherwise disposes of all or substantially all of its
assets, (regardless of whether such Person thereupon ceases to constitute the
"Company" under the Indenture pursuant to Section 5.2 thereof), (iii) when,
during any period of 12 consecutive months after the date of original issuance
of the Securities, individuals who at the beginning of any such 12-month period
constituted the Board of Directors (together with any new directors whose
election by such Board or whose nomination for election by the stockholders of
the Company was approved by a vote of majority of the directors still in office
entitled to vote with respect to such nomination who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved, but excluding any of the individuals who at the
beginning of such 12-month period constituted such Board but who ceased to be a
member of the Board pursuant to the Company's mandatory retirement policy as in
effect as of the Issue Date), cease for any reason to constitute a majority of
the Board of Directors then in office or (iv) the date of the consummation of
the merger or consolidation of the Person then constituting the "Company" under
the Indenture with another corporation where the stockholders of such Person,
immediately prior to the merger or consolidation, would not beneficially own,
immediately after the merger or consolidation, shares entitling such
stockholders to 50% or more of all votes (without consideration of the rights of
any class of stock to elect directors by a separate class vote) to which all
stockholders of the corporation issuing cash or securities in the merger or
consolidation would be entitled in the election of directors or where members of
the Board of Directors of the Person then constituting the "Company" under the
Indenture, immediately prior to the merger or consolidation, would not,
immediately after the merger or consolidation, constitute a majority of the
board of directors of the corporation issuing cash or securities in the merger
or consolidation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in Section 2.01 of the Pledge
Agreement (or when used with respect to Property which is to become a Permitted
Substitute, such Property).
"Collateral Agent" means the Trustee acting in the capacity of collateral
agent on behalf of the Holders under the Pledge Agreement.
"Common Stock" includes any stock of any class of the Company which has no
preference in respect to dividends or of amounts payable in the event of any
voluntary or
7
involuntary liquidation, dissolution or winding up of the Company and which is
not subject to redemption by the Company.
"Company" means the party named as such in the Indenture or any obligor on
the Securities until a successor replaces it pursuant to the Indenture and
thereafter means the successor.
"Company Appraiser" means an Independent Appraiser selected by the Company.
"Company Appraiser's Certificate" means an Independent Appraiser's
Certificate signed by a Company Appraiser.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending prior to the date of such determination
for which financial statements have been made publicly available to (ii)
Consolidated Fixed Charges for such four fiscal quarters; provided, however,
that
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Fixed Charges for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness
had been Incurred on the first day of such period and the discharge of any
other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period,
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Fixed Charges for such
period shall be calculated on a pro forma basis as if such discharge had
occurred on the first day of such period,
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA
(if negative), directly attributable thereto for such period and
Consolidated Fixed Charges for such period shall be reduced by an amount
equal to the Consolidated Fixed Charges directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with
8
such Asset Disposition for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Fixed Charges for such
period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such
disposition),
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Fixed
Charges for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period, and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Fixed Charges for such period shall be calculated
after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Fixed Charges associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of one year).
"Consolidated Fixed Charges" means, for any period, the sum of (i) the
Consolidated Interest Expense for such period plus (ii) dividends declared
during such period with respect to Preferred Stock that is Disqualified Stock.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, determined
on a consolidated basis in accordance with GAAP, plus, to the extent not
included in such total interest expense, and to the extent incurred by the
Company or its Restricted Subsidiaries, without duplication, (i) interest
expense attributable to capital leases, (ii) amortization of debt discount and
debt issuance cost (other than in respect of the Notes), (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and
9
bankers' acceptance financing, (vi) net costs associated with Hedging
Obligations (including amortization of fees), (vii) interest incurred in
connection with Investments in discontinued operations, (viii) interest accruing
on any Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary and (ix) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(i) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that (A) subject to the
exclusion contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution paid to a Restricted Subsidiary,
to the limitations contained in clause (iii) below) and (B) the Company's
equity in a net loss of any such Person for such period shall be included
in determining such Consolidated Net Income;
(ii) any net income (or loss) of any Person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject
to the exclusion contained in clause (iv) below, the Company's equity in
the net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid
to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain or loss realized upon the sale or other disposition of
any assets of the Company or its consolidated Subsidiaries (including
pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Capital Stock of
any Person;
(v) extraordinary, unusual and non-recurring gains or losses; and
10
(vi) the cumulative effect of a change in accounting principles
since the Issue Date.
Notwithstanding the foregoing, for the purposes of Section 4.3 of the
Indenture only, there shall be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such covenants pursuant to clause (a)(3)(C) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company for which financial statements have been made
publicly available prior to the taking of any action for the purpose of which
the determination is being made, as (i) the par or stated value of all
outstanding Capital Stock of the Company plus (ii) paid-in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) only to the extent
otherwise included in the amount specified in clauses (i), (ii) or (iii) of this
definition, any amounts attributable to Disqualified Stock.
"Corporate Trust Office" when used with respect to the Trustee means the
office of the Trustee at which at any particular time its corporate trust
business is administered and which, at the Issue Date, is located at First
Security Bank, National Association, as Trustee, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, XX 00000, Attention: Corporate Trust Services.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary designed to protect such Person against
fluctuations in currency values and not for the purpose of speculation.
"Custodian" has the meaning provided in Section 6.1 of the Indenture.
"Declaration" means the Acquired Slot Trust Agreement Declaration of Trust
between the Company and the Slot Trustee dated as of December 9, 1997.
"Deed of Conveyance" is defined in Section 3.01 of the Declaration.
"Default" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default.
"Definitions Appendix" means the Definitions Appendix attached as Appendix
I to the Indenture and the Pledge Agreement and constituting a part of the
Indenture and each Operative Document.
"Designated Locations" means the locations in the U.S. designated from time
to time by the Company at which the Pledged Spare Parts are located; provided
that Designated Locations (i) shall at all times include the four (or, after the
Designated Location Release Date (as defined below) the one or two) locations in
the U.S. at which are located the Company's highest dollar
11
value of Spare Parts that may be pledged under the Pledge Agreement (such four
or one or two locations, as the case may be, shall be referred to as the
"Primary Locations"), and (ii) shall at no time exclude locations at which are
located inventories of Spare Parts which are materially and disproportionally
newer or more valuable (or as shown in the Inventory Control System, more
active), in light of the aircraft types on which Spare Parts may be used, than
the Pledged Spare Parts. The Designated Locations and the Primary Locations
initially shall be the facilities of the Company set forth on Schedule 1 to the
Pledge Agreement.
Following the initial designation by the Company of Designated Locations
and so long as the Pledged Parts Threshold is maintained, a non-Designated
Location may become a Designated Location: (i) if such non-Designated Location
becomes a Primary Location, provided that upon such non-Designated Location
becoming a Primary Location, the Designated Location previously designated a
Primary Location with the fourth highest dollar value of Pledged Spare Parts
(based on the aggregate values of such Pledged Spare Parts as reflected on the
Inventory Control System at the time such non-Designated Location is to become a
Designated Location) shall, at the election of the Company, cease to be a
Primary Location but shall not cease to be a Designated Location unless such
cessation (x) is permitted by clause (ii) of the preceding paragraph and (y)
shall not cause the Company to fail to maintain the Pledged Parts Threshold;
provided that if such cessation is prevented under clauses (x) or (y) of this
paragraph, the Company at its election may cause any other single Designated
Location with a lower dollar value of Pledged Spare Parts than that of such
previously designated Primary Location and whose cessation as a Designated
Location would not be prevented under said clause (x) or (y) to cease to be a
Designated Location; provided further that neither such previously designated
Primary Location nor any other Designated Location may thereafter cease to be a
Designated Location except as permitted under this paragraph upon some
additional non-Designated Location becoming a Primary Location or as permitted
under the last paragraph of this definition; and (ii) for the purpose of using
the Spare Parts at such location as Permitted Substitutes, complying with
clauses (i) or (ii) of the preceding paragraph, maintaining the Pledged Parts
Threshold or otherwise. In the case of a Designated Location (which is not a
Primary Location) becoming a Primary Location, the Primary Location with the
fourth highest dollar value of Pledged Spare Parts (based on the aggregate
values of such Pledged Spare Parts as reflected on the Inventory Control System
at the time such Spare Parts become subject to the Lien of the Pledge Agreement)
shall cease to be a Primary Location, but shall continue to be a Designated
Location.
At such time as the aggregate principal amount of the Securities
Outstanding has been reduced to $60,000,000, the Company will be entitled to
reduce the number of Designated Locations to the one or two locations in the
U.S. at which are located the Company's highest dollar value of Pledged Spare
Parts (based on the aggregate values of such Pledged Spare Parts as reflected on
the Inventory Control System as of the Designated Location Release Date). The
reduction of Designated Locations referred to in the immediately preceding
sentence will occur on the first date (the "Designated Location Release Date"),
on or after such reduction of such principal amount of Securities, when (i)
after giving effect to such release, the ratio of the aggregate Fair Market
Value of the Pledged Spare Parts at such remaining Designated Location or
Locations (based on a Company Appraiser's Certificate) to the aggregate
principal amount of the Securities Outstanding (less Cash Collateral), would
equal or exceed 2.5 to 1 and (ii) the applicable Preconditions have been
satisfied. Upon Request by the Company, payment by the
12
Company of the Collateral Agent's costs (including reasonable legal fees and
disbursements) incurred in complying with such Request and satisfaction of all
the conditions in the immediately preceding sentence, the Collateral Agent shall
release from the Lien of the Pledge Agreement, assign and transfer to the
Company or its designee at any time, all the right, title and interest of the
Collateral Agent in and to any Operative Collateral that is located at any
locations other than such one or two remaining Designated Locations.
"Dispute Threshold" means a difference in the valuation set forth in a
Company Appraiser's Certificate and in a Trustee Appraiser's Certificate of more
than (a) $5,000,000 or (b) twenty percent (20%) of the lower of the two
valuations.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (i) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise
prior to the first anniversary of the Stated Maturity of the Notes, (ii) is
convertible or exchangeable for Indebtedness with a Stated Maturity prior to the
first anniversary of the Stated Maturity of the Notes or Disqualified Stock or
(iii) is redeemable at the option of the holder thereof, in whole or in part, in
each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of a "change of control" or "asset disposition" occurring prior to
the first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "change of control" or "asset disposition" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the provisions under Sections 4.15 and 4.19, respectively, of
the Indenture.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of the
Company and its consolidated Restricted Subsidiaries, (b) depreciation expense
of the Company and its consolidated Restricted Subsidiaries, (c) amortization
expense of the Company and its consolidated Restricted Subsidiaries (excluding
amortization expense attributable to a prepaid cash item that was paid in a
prior period) and (d) all other noncash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any such noncash charge to the
extent that it represents an accrual of or reserve for cash expenditures in any
future period), in each case for such period. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the depreciation
and amortization and noncash charges of, a Restricted Subsidiary shall be added
to Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
13
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time
"Event of Default" is defined in Section 6.1 of the Indenture.
"Event of Loss" means (a) with respect to Pledged Spare Parts: a single
occurrence of any of the following events with respect to any portion of the
Pledged Spare Parts having an Appraised Value of five percent (5%) or greater of
the total Appraised Value of such Pledged Spare Parts: (i) the loss of any such
portion of the Pledged Spare Parts or the use thereof due to destruction, damage
beyond repair or rendition of any such portion of the Pledged Spare Parts
permanently unfit for normal use for any reason whatsoever; (ii) any damage to
any such portion of the Pledged Spare Parts which results in the receipt of
insurance proceeds with respect to any such portion of the Pledged Spare Parts
on the basis of an actual or constructive loss; (iii) the loss of possession of
any such portion of the Pledged Spare Parts by the Company for ninety (90)
consecutive days as a result of the theft or disappearance of any such portion
of the Pledged Spare Parts; (iv) the loss of possession of any such portion of
the Pledged Spare Parts by the Company for one hundred and twenty (120)
consecutive days as a result of the condemnation, confiscation, seizure or
requisition for use of any such portion of the Pledged Spare Parts by the United
States Government or any instrumentality or agency thereof; or (v) the
institution of bankruptcy, insolvency or similar proceedings with respect to a
sublessee of any such portion of the Pledged Spare Parts and the inability of
the Company, as a result thereof, to repossess any such portion of the Pledged
Spare Parts within one hundred and eighty (180) days following a failure by such
sublessee to pay the rent due under the applicable sublease; and (b) with
respect to Acquired Slots: (i) the loss of any Acquired Slot resulting from the
withdrawal from the Company or the Slot Trust of any such Acquired Slot by the
United States Government or any instrumentality or agency thereof for any
reason, including, but not limited to, violation of the requirements for usage
set forth in Section 93.227 of Title 14, international operations, essential air
services (as defined by the Department of Transportation of the U.S.),
operational needs or elimination of Slots; (ii) the institution of bankruptcy,
insolvency or similar proceedings with respect to a third party sub-licensee
possessing the right to use any Acquired Slot pursuant to a Third Party License,
Prior Third Party License (as defined in the Declaration), or Slot Trade and the
inability of the Slot Trust, as a result thereof, to reacquire the right to use
any such Acquired Slot within thirty (30) days after the rejection of such Third
Party License, Prior Third Party License or Slot Trade; (iii) the repeal of the
right to transfer Slots set forth in section 93.221 of Title 14; or (iv) the
imposition of any law, rule or regulation prohibiting or restricting in any
respect materially adverse to the Holders of the Securities the ability of the
Slot Trust to hold, sell or otherwise transfer the right to hold or use Slots.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Existing L-1011/747 Spare Parts" means Spare Parts owned by the Company on
the Issue Date which are appropriate for use on Lockheed L-1011 or Boeing 747
model airframe types and which are specific to such airframes because of their
non-compatibility with other types of airframes.
14
"Expendables" means those Spare Parts which are used (consumed) in the
Company's routine operations and are generally items which either are used only
once and then discarded or are held in inventory until such time as they are
designated as Pipeline Spares, and include aircraft and airframe parts, such as
blades, gears and panels, and general hardware items such as gaskets, light
bulbs, raw metal stock and fabric.
"FAA" means the Federal Aviation Administration or similar regulatory
authority established to replace it.
"FAA Slot Regulations" is defined in Section 7.01(b)(i) of the Master
Sub-License Agreement.
"Fair Market Value" (a) means with respect to any Collateral, or Acquired
Slots or Permitted Substitutes, at any time, the fair market value (on the basis
of a hypothetical sale negotiated in an arm's length free market transaction
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure to complete the transaction) as determined by and as of the date
set forth in a Company Appraiser's Certificate; provided that (i) the Fair
Market Value of cash and Investment Securities shall be equal to their Appraised
Value, (ii) the Fair Market Value of any Collateral that has been the subject of
a condemnation or similar taking, or of a contemporaneous sale thereof to a
third party occurring under the same circumstances as such hypothetical sale,
shall equal the amount of all proceeds of such condemnation or taking (assuming
reasonable efforts to achieve a fair recovery) net of reasonable expenses of
obtaining the same or, in the case of such a sale, the sale price net of all
reasonable expenses incurred in connection therewith, and (iii) the
determination of Fair Market Value will be subject to the procedures governing
determinations of Appraised Value set forth in paragraph (c) and the provisions
of paragraph (d) of the definition thereof; provided that the Company Appraisers
--------
Certificate (x) for purposes of the Substitution Requirements for Acquired Slots
or for the reduction of Designated Locations pursuant to the last paragraph of
the definition thereof, may be up to twenty (20) months old, and (y) for
purposes of the release of Acquired Slots upon partial prepayment under Section
6.02(b) of the Master Sub-License Agreement, may be up to twelve (12) months
old, in the case of each of (x) and (y) only if such Company Appraiser's
Certificate is accompanied by an Officers' Certificate described in clause (ii)
of the definition of the term "Preconditions".
"Federal Aviation Act" means Title 49 of the United States Code,
"Transportation," as amended from time to time, or any similar legislation of
the United States enacted in substitution or replacement thereof. In the event
there is enacted any legislation replacing, modifying or repealing, in whole or
in part, the Federal Aviation Act, then the term "certificated," when used with
reference to the Federal Aviation Act or any particular provision thereof, shall
mean authorized to provide, or not prohibited from providing, air transportation
services.
"Fuel Protection Agreements" means in respect to a Person any fuel
protection agreement or other financial agreement or arrangement designed to
protect such Person against fluctuations in market prices of aircraft fuels and
not for the purpose of speculation.
15
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Exhibit 1 to the Rule
144A/Regulation S Appendix to the Indenture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
condition or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement, Fuel Protection Agreement or Currency
Agreement.
"Holder", "Holder of Securities", "Securityholder" or "Noteholder" means
the Person in whose name a Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a non-
interest bearing or other discount security shall be deemed the Incurrence of
Indebtedness. Neither the accrual of interest, the accretion of original issue
discount or fluctuations in exchange rates of currencies shall be considered an
Incurrence of Indebtedness. Any change in GAAP that results in an obligation of
such Person that exists at such time becoming Indebtedness shall not be
considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
16
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable, including, in each
case, any premium on such indebtedness to the extent such premium has
become due and payable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (i)
through (iii) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, the liquidation preference
with respect to, any Preferred Stock (but excluding, in each case, any
accrued dividends);
(vi) all obligations of the type referred to in clauses (i) through
(v) above of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including by
means of any Guarantee;
(vii) all obligations of the type referred to in clauses (i) through
(vi) above of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured; and
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The "amount" or "principal amount" of Indebtedness at any time of
determination as used herein represented by (a) any contingent Indebtedness,
shall be the maximum principal amount thereof, (b) any Indebtedness issued at a
price that is less than the principal amount at maturity thereof, shall be the
amount of the liability in respect thereof determined in accordance with
17
GAAP and (c) any Disqualified Stock, shall be the maximum fixed redemption or
repurchase price in respect thereof.
"Indenture" means the Indenture dated as of December 9, 1997, between the
Company and the Trustee under which the Securities are issued, as amended or
supplemented from time to time.
"Indenture Discharge Date" means the date of the effectiveness of the
termination of the Company's obligations under the Indenture pursuant to Section
8.1(a) or (b) thereof.
"Indenture Trustee" means the Trustee.
"Independent Appraiser" means a Person (i) engaged in a business which
includes appraising aircraft and assets and rights related to the operation and
maintenance of aircraft from time to time and (ii) who (a) is in fact
independent of the parties to the transaction in question and their Affiliate;
(b) does not have any direct financial interest or any material indirect
financial interest in the Company or any of the Restricted Subsidiaries or any
of their respective Affiliates and (c) is not connected with the Company, any of
the Restricted Subsidiaries or any of such Affiliates as an officer, director,
employee, promoter, underwriter, trustee, partner or person performing similar
functions.
"Independent Appraiser's Certificate'" means a certificate signed by an
Independent Appraiser and delivered to the Trustee, the Collateral Agent and/or
the Slot Trustee pursuant to the Indenture or the applicable Operative Document,
which shall include the statements provided for in Section 11.05 of the
Indenture if and to the extent required by the provisions thereof.
"Interest Escrow Account" means an account established with the Trustee
pursuant to the terms of the Note Pledge Agreement for the deposit of cash
and/or the Pledged Securities purchased by the Company with a portion of the net
proceeds from the Offering.
"Interest Payment Date" means June 15 and December 15 of each year during
which any Security is Outstanding (commencing June 15, 1998) and the date on
which the Securities mature, if different.
"Interest Rate Agreement" means in respect of a Person any interest rate
swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates and not for the purpose of speculation.
"Inventory Control System" means the method in effect on the Issue Date by
which the Company tracks and values its inventory of Expendables and Pipeline
Spares. On the Issue Date, the Inventory Control System valued Expendables and
Pipeline Spares in accordance with the Company's standard pricing method,
pursuant to which units of Expendables or Pipeline Spares of a particular type
are valued initially at the actual purchase price of such unit ("Standard
Cost"), provided, that the existing Standard Cost of a particular type of
Expendable or Pipeline Spare is revised by the Company at the end of each month
whenever either (a) the actual unit price paid for newly purchased Expendables
or Pipeline Spares of such particular type varies twenty percent (20%) more or
less than the currently established Standard Cost per unit or (b) the aggregate
18
purchase price of the newly purchased Expendables or Pipeline Spares (i.e., the
purchase price per unit multiplied by the quantity of the units purchased) is
$500 more or less than the product of the existing Standard Cost per unit and
the quantity of units purchased. Capital Units are not included in the Company's
Inventory Control System and are tracked and valued in the Company's Maintenance
and Operational Cost System. For purposes of the Pledge Agreement, however, the
valuation of Capital Units in the Maintenance and Operational Cost System shall
be deemed to be included in the Inventory Control System and, on the Issue Date,
Capital Units were valued in accordance with the Company's average acquisition
pricing method, pursuant to which each type of Capital Unit is valued at the
average of the original acquisition cost for such type of Capital Unit at a
prior date with no re-evaluation to reflect the actual purchase price of newly
purchased Capital Units. The Company's financial statement valuations
attributable to Expendables and Pipeline Spares are generated from the Inventory
Control System valuations but are not so related in the case of Capital Units.
All such factors may be considered by the Independent Appraiser who conducts any
valuations with respect to Spare Parts. The value of Existing L-1011/747 Spare
Parts set forth or deemed to be set forth in the Inventory Control System has
been reduced by 31% of the Standard Cost with respect to such Parts.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of transfer of cash or other property to
others or any payment for property or other services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary", the definition of "Restricted Payment" and Section
4.3 of the Indenture, (i) "Investment" shall include the portion (proportionate
to the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Investment Security" means (a) any bond, note or other obligation which is
a direct obligation of or guaranteed by the U.S. or any agency thereof; (b) any
obligation which is a direct obligation of or guaranteed by any state of the
U.S. or any subdivision thereof or any agency of any such state or subdivision,
and which has the highest rating published by Xxxxx'x Investors Service or
Standard & Poor's Corporation; (c) any commercial paper issued by a U.S. obligor
and having the highest rating published by Xxxxx'x Investors Service or Standard
& Poor's Corporation; (d) any money market investment instrument relying upon
the credit and backing of any bank or trust company which is a member of the
Federal Reserve System and which has a combined capital (including capital
reserves to the extent not included in capital) and surplus and undivided
profits of not less than $250,000,000 (including the Collateral Agent and its
Affiliates
19
if such requirements as to Federal Reserve System membership and combined
capital and surplus and undivided profits are satisfied), including, without
limitation, certificates of deposit, time and other interest-bearing deposits,
bankers' acceptances, commercial paper, loan and mortgage participation
certificates and documented discount notes accompanied by irrevocable letters of
credit and money market fund investing solely in securities backed by the full
faith and credit of the United States; or (e) repurchase agreements
collateralized by any of the foregoing.
"Issue Date" means the date on which the Securities are originally issued.
"Legal Holiday" means a Saturday, Sunday or any other day on which banks
located in Xxx Xxxx Xxxx xx Xxxx Xxxx Xxxx, Xxxx are authorized or obligated by
law to remain closed.
"Lien" means any conveyance in trust, assignment, mortgage, pledge,
security interest, encumbrance, lien or charge of any kind (including any
conditional sale or other title retention agreement or lease in the nature
thereof).
"Liquidation Value" means with respect to any Collateral or Acquired Slots,
or any Operative Collateral or Slots to become Permitted Substitutes, at any
time, the value thereof on the basis of a hypothetical individual sale (not an
auction or distress sale or a fleet or bulk sale) at arm's length between a
willing buyer and a seller who is perceived to be under the compulsion to
complete the sale within a period of 15 months.
"Maintenance and Operational Cost System" means the inventory system used
by the Company to track and value Capital Units. Capital Units are valued in
accordance with the Company's average acquisition pricing method, pursuant to
which each type of Capital Unit is valued at the average of the original
acquisition cost for such type of Capital Unit at a prior date with no re-
evaluation to reflect the actual purchase price of newly purchased Capital
Units. The value of Existing L1011/B747 Spare Parts set forth or deemed to be
set forth in the Inventory Control System have been reduced by 31% of the
average acquisition price.
"Maintenance Ratio" means the ratio of (i) the sum of the aggregate Fair
Market Values of the Pledged Spare Parts and the Acquired Slots to (ii) the
aggregate principal amount of the Securities Outstanding minus the Fair Market
Value of any existing Cash Collateral.
"Master Sub-License Agreement" means the Master Sub-License Agreement dated
as of December 9, 1997, between the Slot Trustee and the Company in
substantially the form attached as Exhibit C to the Acquired Slot Trust
Agreement.
"NASDAQ National Market" means the National Association of Securities
Dealers' Automated Quotation National Market System.
"Net Available Cash" from an Asset Disposition means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of indebtedness or other
obligations relating to such properties or assets or received in any other
20
noncash form), in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Disposition, (ii) all payments made
on any Indebtedness which is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset Disposition, (iii)
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition
and (iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
property or other assets disposed in such Asset Disposition and retained by the
Company or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds" means, with respect to any issuance or sale of Capital
Stock, the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Slot Collateral" means all Collateral other than the Slot Collateral.
"Note Pledge Agreement" means the Collateral Pledge and Security Agreement,
dated as of the date of the Indenture, by and between the Trustee and the
Company, providing for, among other things, the governing of the disbursement of
funds from the Interest Escrow Account.
"Notes" means the Securities.
"Obligations" is defined in Section 2.01 of the Pledge Agreement.
"Offer to Purchase" means an offer to purchase all or a pro rata portion,
as the case may be, of the Notes by the Company from the Holders commenced by
the mailing (by first class mail, postage prepaid) by the Company (or, if
requested by the Company on at least five Business Days' prior notice to the
Trustee and at the Company's expense, by the Trustee) of a notice to each Holder
(and, if mailed by the Company, to the Trustee) at such Holder's address
appearing in the Register, stating: (i) the covenant pursuant to which the offer
is being made and that all Notes validly tendered will be accepted for payment
on a pro rata basis; (ii) the purchase price and the date of purchase (which
shall be a Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed) (the "Payment Date"); (iii) that any Note not
tendered will continue to accrue interest pursuant to its terms; (iv) that,
unless the Company defaults in the payment of the purchase price, any Note
accepted for payment pursuant to the Offer to Purchase shall cease to accrue
interest on and after the Payment Date; (v) that Holders electing to have a Note
purchased pursuant to the Offer to Purchase will be required to surrender the
Note, together with the form entitled "Option of the Holder to Elect Purchase"
on the reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date (or, if such day is a Legal
21
Holiday, on the next subsequent day which is not a Legal Holiday), and such
Holder shall be entitled to receive from the Paying Agent a non-transferable
receipt of deposit evidencing such deposit; (vi) that, unless the Company
defaults in making the payment of the purchase price or shall otherwise, in its
sole discretion, consent thereto, Holders will be entitled to withdraw their
election only if the Trustee receives, not later than the close of business on
the fifth Business Day immediately preceding the Payment Date, a telegram,
facsimile transmission or letter setting forth the name of such Holder, the
principal amount at maturity of Notes delivered for purchase and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered: provided that each Note purchased and each new Note issued shall be
in a principal amount at maturity of $1,000 or integral multiples thereof. The
Company shall place such notice in a financial newspaper of general circulation
in New York City. No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right. On the Payment Date,
the Company shall (i) accept for payment on a pro rata basis Notes or portions
thereof tendered pursuant to an Offer to Purchase; (ii) deposit with the Trustee
money sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Trustee shall promptly mail to the Holders of Notes so accepted payment in
an amount equal to the purchase price, and the Trustee shall promptly
authenticate, and the Company shall promptly execute and mail (or cause to be
mailed) to such Holders a new Note equal in principal amount at maturity to any
unpurchased portion of the Note surrendered; provided that each Note purchased
and each new Note issued shall be in a principal amount at maturity of $1,000 or
integral multiples thereof; provided further that if the Payment Date is between
a regular Record Date and the next succeeding Interest Payment Date, Notes to be
repurchased must be accompanied by payment of an amount equal to the interest
and Special Interest, if any, payable on such succeeding Interest Payment Date
on the principal amount to be repurchased, and the interest on the principal
amount of the Note being repurchased, and Special Interest, if any, with respect
thereto, will be paid on such next succeeding Interest Payment Date to the
registered holder of such Note on the immediately preceding Record Date. A Note
repurchased on an Interest Payment Date need not be accompanied by any such
payment, and the interest on the principal amount of the Note being repurchased
and Special Interest, if any, with respect thereto, will be paid on such
Interest Payment Date to the registered holder of such Note on the corresponding
Record Date. The Company will publicly announce the results of an Offer to
Purchase as soon as practicable after the Payment Date. The Trustee shall act as
the Paying Agent for an Offer to Purchase. The Company will comply with Rule
14e-l under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable, in the event
that the Company is required to repurchase Notes pursuant to an Offer to
Purchase. Both the notice of the Company and the notice of the Holder having
been given as specified above, the Notes so to be repurchased shall, on the
Payment Date become due and payable at the purchase price applicable thereto and
from and after such date (unless the Company shall default in the payment of
such purchase price) such Notes shall cease to bear interest. If any Note shall
not be paid upon surrender thereof for repurchase, the principal shall, until
paid, bear interest from the Payment Date at the rate borne by such Note. Any
Note which is to be submitted for repurchase only in
22
part shall be delivered pursuant to the above provisions with (if the Company or
Trustee so requires) due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing.
"Officer" means the Chairman of the Board, the President, any Vice
President of any grade, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate'" means a certificate signed by an Officer and by a
Certifying Officer satisfying the requirements of Sections 11.4 and 11.5 of the
Indenture.
"Operative Collateral" means the Pledged Spare Parts and (when used with
respect to Permitted Substitutes) Spare Parts which are to become Permitted
Substitutes.
"Operative Documents" means the Deed of Conveyance, the Indenture, the
Acquired Slot Trust Agreement, the Master Sub-License Agreement, the Note Pledge
Agreement and the Pledge Agreement.
"Opinion of Counsel" means a written opinion from the General Counsel of
the Company, legal counsel to the Company or another legal counsel who is
reasonably acceptable to the Trustee, which Opinion of Counsel shall comply with
Sections 11.4 and 11.5 of the Indenture. The counsel may be an employee of the
Company. The acceptance by the Trustee (without written objection to the Company
during the fifteen (15) Business Days following receipt) of, or its action on,
an opinion of counsel not specifically referred to above shall be sufficient
evidence that such counsel is acceptable to the Trustee.
"Ordinary Course" means, when applied to any one or any related group or
series of sales, or deemed sales in the case of certain leases or other
dispositions of Collateral, including transfers of Pledged Spare Parts from
Designated Locations to, or locations at, locations which are not Designated
Locations (each a "disposition" and collectively "dispositions"), that such
disposition or dispositions (as of the date, or if a group or series the last
date, thereof) (a) are in the Ordinary Course Of Business and (b) in the case of
dispositions of Pledged Spare Parts (in a single transaction or related group or
series of transactions as aforesaid), (i) are not dispositions (in such single
or related transactions) of Pledged Spare Parts having aggregate value as
reflected on the Inventory Control System in excess of $10,000,000, and (ii) are
dispositions (in such single or related transactions) which do not occur at a
time when the aggregate value of the remaining Pledged Spare Parts as so
reflected is less, and which will not cause such aggregate value to be less,
than the Pledged Parts Threshold.
"Ordinary Course Of Business" means (i) in the Company's ordinary course of
business and (ii) without limitation of the generality of clause (i), (x) in
good faith, (y) for business reasons other than meeting the cash requirements of
the Company and its Subsidiaries and (z) not for the purpose of circumventing
the provisions of the Operative Documents.
23
"Original Issue Date" means with respect to any Note the date such Note is
first issued pursuant to the Indenture.
"Outstanding or outstanding" when used with respect to Notes or a Note,
means all Notes theretofore authenticated and delivered under the Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes for which payment has been deposited with the Trustee or
any Paying Agent in trust other than deposits pursuant to Section 8.1 of
the Indenture; and
(c) Notes which have been paid, or for which other Notes shall have
been authenticated and delivered in lieu thereof or in substitution
therefor pursuant to the terms of Section 2.7 of the Indenture, unless
proof satisfactory to the Trustee is presented that any such Securities are
held by holders in due course.
A Note does not cease to be Outstanding because the Company or one of its
Affiliates holds the Note; provided, however, that in determining whether the
Holders of the requisite aggregate principal amount of Notes Outstanding have
given any request, demand, authorization, direction, notice, consent or waiver
under the Indenture, Section 2.8 of the Indenture shall be applicable.
"Paying Agent" has the meaning provided in Section 2.3 of the Indenture,
except that for the purposes of Article 8 of the Indenture and any Offer to
Purchase, the Paying Agent shall not be the Company.
"Payment Date" with respect to any Offer to Purchase, has the meaning
specified in the definition of Offer to Purchase.
"Payments" means such monies as the Company shall cause to be delivered to
the Trustee or any Paying Agent for the purpose of paying principal, purchase
price or redemption price of, or interest on, or Special Interest with respect
to, the Notes on any Interest Payment Date, Payment Date, redemption date or
acceleration; and "Pay" means paying such monies.
"Permitted Collateral Liens" means those Liens permitted under Section 4.09
of the Pledge Agreement. "Permitted Investment" means an Investment by the
Company or any Restricted Subsidiary in (i) the Company, a Restricted Subsidiary
or a Person that will, upon the making of such Investment, become a Restricted
Subsidiary; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary; (iii)
Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
24
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary in
an aggregate amount outstanding at any time of not more than $1,000,000; (vii)
any Investment arising as a result of any Hedging Obligations; (viii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (ix) any Investment to the extent
such Investment represents the non-cash portion of the consideration received
for an Asset Disposition as permitted pursuant to Section 4.19 of the Indenture
and (x) Investments in the normal course of business in any Persons the primary
business of which is substantially related, ancillary or complementary to the
airline business.
"Permitted Liens" means, with respect to any Person and subject in all
cases to any applicable provisions of the Operative Documents,
(a) Liens existing or securing Indebtedness existing (or for which a
written commitment has been made on or prior to the Issue Date) on the
Issue Date;
(b) Liens granted on or after the Issue Date in favor of the holders
of the Notes or the Exchange Notes;
(c) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company to secure Indebtedness
owing to the Company by such Restricted Subsidiary;
(d) Liens for employee wages and pledges or deposits by such Person
under worker's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which
such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government
bonds to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;
(e) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person
shall then be proceeding with an appeal or other proceedings for review;
(f) Liens for property taxes not yet subject to penalties for non-
payment or which are being contested in good faith and by appropriate
proceedings;
25
(g) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of business; provided, however, that such letters of credit
do not constitute Indebtedness;
(h) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes,
or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
(i) any Lien securing Aircraft Acquisition Debt, which Lien is
Incurred when such Indebtedness is Incurred and which Lien does not extend
to property other than aircraft, related engines or spare engines, spare
parts or related equipment (including ground equipment) financed thereby;
(j) Liens on property or shares of Capital Stock of another Person
at the time such other Person becomes a Subsidiary of such Person;
provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such other Person becoming such a
Subsidiary; provided further, however, that such Lien may not extend to any
other property owned by such Person or any of its Subsidiaries;
(k) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such acquisition;
provided further, however, that the Liens may not extend to any other
property owned by such Person or any of its Subsidiaries;
(l) Liens securing Hedging Obligations permitted under the
Indenture;
(m) any Lien or pledge created or subsisting in the ordinary course
of business over documents of title, insurance policies or sale contracts
in relation to commercial goods to secure the purchase price thereof;
(n) Liens to secure any Refinancing (or successive Refinancings) as
a whole, or in part, of any Indebtedness secured by any Lien referred to in
clauses (a), (i), (j), (k), and (r); provided, however, that (x) such new
Lien shall be limited to all or part of the same property that secured the
original Lien (plus improvements to or on such property) and (y) the
Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (A) the outstanding principal amount, or, if
greater, committed amount of the Indebtedness described under clause (a),
(i), (j), (k), and (r) at the time the original Lien became a Permitted
Lien and (B) an amount necessary to pay any fees and expenses, including
premiums, related to such Refinancing;
26
(o) Liens with respect to Indebtedness permitted pursuant to clauses
(b)(5), (b)(12) or (b)(16) of Section 4.17 of the Indenture;
(p) Liens securing any future interest payable with respect to any
Indebtedness on cash and cash equivalents which constituted a portion of
the net proceeds to the Company or a Restricted Subsidiary from the
issuance of such Indebtedness;
(q) Liens securing Indebtedness or other obligations of a Subsidiary
of such Person owing to such Person or a wholly owned Subsidiary of such
Person;
(r) Liens on Receivables (or on the Capital Stock and assets of any
special purpose Subsidiary formed solely for the purpose of effecting a
Receivables-based financing transaction) securing Indebtedness permitted
under clause (b)(15) of Section 4.17 of the Indenture; and
(s) any judgment Lien, unless the judgment it secures shall not,
within sixty (60) days after the entry thereof, have been discharged,
vacated or reversed or the execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within sixty (60) days
after the expiration of any such stay.
"Permitted Substitutes" means with respect to (a) Acquired Slots ("old
Slots"): Slots ("new Slots"); (b) Pledged Spare Parts: Spare Parts or (prior to
the release of all Slots pursuant to Section 4.04(f) of the Pledge Agreement)
Slots; and (c) any Collateral or Acquired Slots (if permitted by the Master Sub-
License Agreement): cash or Investment Securities; provided, in each case, that
the Collateral to be substituted (the "new Collateral") is subject to no Liens
except Permitted Collateral Liens, that there has been compliance (to the extent
applicable) with Section 4.04(e) of the Pledge Agreement and Section 7.01 of the
Master Sub-License Agreement, and that the Appraised Value of the new Collateral
or new Slots equals or exceeds the Appraised Value of the old Collateral or old
Slots.
"Person" means any individual, corporation, partnership, limited liability
issuer, joint venture, association, joint-stock issuer, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Pipeline Spares" means certain semi-rotable Spare Parts consisting
principally of engine components.
"Pledge Agreement" means the Pledge and Security Agreement dated as of
December 9, 1997, between the Company and the Collateral Agent in substantially
the form attached to the Indenture as Exhibit C.
"Pledged Collateral" has the meaning specified in Section 1 of the Note
Pledge Agreement.
"Pledged Parts Threshold" means an amount, expressed in dollars, equal to
85% of the aggregate value, as reflected in the Inventory Control System as of
November 30, 1997, of all Pledged Spare Parts which will be subject to the Lien
of the Pledge Agreement on the Issue Date
27
(established by the Officers' Certificate provided under clause (d) of Section
2.2 of the Indenture), less any reductions in such amount accomplished under
Section 4.04(c) of the Pledge Agreement and paragraph (b) of the Substitution
Requirements.
"Pledged Securities" means the U.S. Government Obligations purchased by the
Company with a portion of the net proceeds from the sale of the Notes and
deposited in the Interest Escrow Account in accordance with the terms of the
Note Pledge Agreement, together with any replacement or substitute securities
therefor.
"Pledged Spare Parts" means the Spare Parts included in the Company's
Inventory Control System, now or hereafter owned or acquired by the Company,
located at Designated Locations and, except with respect to the Existing L-
1011/747 Spare Parts, used or usable on the models of aircraft and engines in
the Company's fleet as constituted from time to time while the Securities are
outstanding; provided, however, that the term "Pledged Spare Parts" does not
include (a) Spare Parts that are installed on an aircraft or engine; (b) Spare
Parts leased or sold to the Company by unaffiliated parties under purchase money
installment sales or other purchase money financing arrangements or refinancings
thereof in each case, as permitted under the Indenture, but only until the
Company acquires title to such Spare Parts free of such arrangements or any
refinancings thereof at arm's length and with Persons who are not Affiliates of
the Company (provided, however, that no financing of Spare Parts shall occur if
the aggregate value of Pledged Spare Parts as reflected on the Inventory Control
System is less than the Pledged Parts Threshold); and (c) Spare Parts leased to,
loaned to or held on consignment by, the Company. The Pledged Spare Parts on the
Issue Date include, without limitation, Expendables, Pipeline Spares and Capital
Units. Except as provided in the Pledge Agreement, particular Pledged Spare
Parts will cease to be Pledged Spare Parts if disposed of in the Ordinary
Course.
"Preconditions" (quoted terms herein below being defined only for purposes
of this definition), when applied to releases of Collateral or Acquired Slots
under Section 4.04(f) of the Pledge Agreement or Section 6.02(b) of the Master
Sub-License Agreement ("releases") or to the reduction of Designated Locations
pursuant to the last paragraph of the definition thereof (the "Reduction"),
means (i) no Event of Default, no Default pursuant to Section 6.1(a), (e), (f),
(h), (i) or (j) of the Indenture has occurred and is continuing or will result
therefrom, and the Company so certifies to the Trustee in an Officers'
Certificate, (ii) the Company has delivered an Officers' Certificate to the
Indenture Trustee, the Collateral Agent (in the case of the Reduction, a release
of Collateral pursuant to Section 4.04(f) of the Pledge Agreement or a
determination of Substitution Requirements with respect to any Event of Loss)
and the Slot Trustee (in the case of a release of Collateral pursuant to Section
6.02(b) of the Master Sub-License Agreement or a determination of Substitution
Requirements with respect to any Event of Loss, or sale, with respect to an
Acquired Slot) certifying that the Company complies with the Security Ratio
requirements set forth in the definition thereof or, with respect to the
Reduction, the ratio set forth in the last paragraph of the definitions of
"Designated Locations", assuming, in each case, that the definition of "Fair
Market Value" was "with respect to any Collateral or Acquired Slots, the fair
market value (on the basis of a hypothetical sale negotiated in an arm's length
free market transaction between a willing seller and a willing and able buyer,
neither of whom is under undue pressure to complete the transaction) as
determined by and as of the date set forth in an Officers' Certificate", and
(iii) the Company has complied with any applicable requirements of the TIA.
28
"Preferred Stock" as applied to the Capital Stock of any Person means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"Primary Locations" is defined in the definition of Designated Locations.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Prior Third Party License" means a Third Party License in effect on the
Issue Date and listed on Schedule II to the Declaration.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, present or future, or tangible or intangible.
"Public Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Receivables" means accounts receivables, chattel paper, instruments,
documents or general intangibles evidencing or relating to the right to payment
of money and other similar assets, in each case, relating to such receivables,
including any interest in merchandise or goods, the sale or lease of which gave
rise to such receivables, related contractual rights, guarantees, insurance
proceeds, collections, other related assets and proceeds of all of the
foregoing.
"Record Date" means the fifteenth (15th) day preceding any Interest Payment
Date or Redemption Date, whether or not a Business Day.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to the Indenture and
such Security.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange for, such indebtedness. "Refinanced" or "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x)
29
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Register" has the meaning provided in Section 2.3 of the Indenture.
"Registrar" has the meaning provided in Section 2.3 of the Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of December 9, 1997, among the Company, Lazard Freres & Co. LLC and
PaineWebber Incorporated.
"Remaining Term" means, with respect to any Acquired Slot (or any Slot to
be used as a Permitted Substitute), the period of time remaining from the date
of calculation until expiration of the term (including any possible renewal
term) of the Third Party License or Slot Trade with respect to such Slot as to
which the Company is committed (including any time of commitment prior to the
commencement of the term of such Third Party License or Slot Trade).
"Request" means a written request for the action therein specified signed
on behalf of the Company by any Officer and delivered to the Trustee. Each
Request shall be accompanied by an Officers' Certificate if and to the extent
required by Section 11.4 of the Indenture.
"Required Holders" means from time to time the Holders of the Applicable
Percentage in principal amount of the Notes then Outstanding.
"Restricted Payment" with respect to any Person means (i) the declaration
or payment of any dividends or any other distributions of any sort in respect of
its Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the direct or
indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary and other than pro rata purchases,
redemptions, acquisitions or retirements made by a Subsidiary that is not a
Wholly-Owned Subsidiary), including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock), (iii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations (other than the purchase, repurchase or other acquisition of
Subordinated Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of acquisition) or (iv) the making of any Investment in any
Person (other than a Permitted Investment). Any purchase or redemption of
Capital Stock by an employee stock ownership or benefit plan shall
30
not constitute a Restricted Payment except to the extent, if any, that such
purchase or redemption is financed by the Company or its Restricted
Subsidiaries.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission and any government
agency succeeding to its functions.
"Securities" means the "Securities" (as defined in the Indenture), as
amended or supplemented from time to time, that are issued under the Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security Interest" means the Lien granted to the Collateral Agent by the
Company pursuant to the Pledge Agreement in all of the Company's right, title
and interest in and to the Collateral.
"Security Ratio" means for purposes of determining the Company's
obligations in the case of an Event of Loss or a sale, deemed sale, disposition,
or release of Collateral (collectively for the purposes of this definition,
"disposition"), a fraction (i) the numerator of which is the sum of the
aggregate Fair Market Value of the Pledged Spare Parts and Acquired Slots
remaining or to be remaining after such disposition and (ii) the denominator of
which is the aggregate principal amount of the Securities Outstanding minus the
-----
Fair Market Value of the existing Cash Collateral, which fraction, for purposes
of the Substitution Requirements, Section 6.02(b) of the Master Sub-License
Agreement and Section 4.04(f) of the Pledge Agreement shall be at least 2.0 over
1.
"Senior Indebtedness" of any Person means (i) Indebtedness of such Person,
whether outstanding on the Issue Date or thereafter Incurred and (ii) accrued
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company to the extent post-
filing interest is allowed in such proceeding) in respect of (A) indebtedness
for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is responsible or
liable unless, in the case of (i) and (ii), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Notes;
provided, however, that Senior Indebtedness shall not include (1) any obligation
of such Person to any Subsidiary of such Person, (2) any liability for Federal,
state, local or other taxes owed or owing by such Person, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of such Person (and any accrued interest in
respect thereof) which is subordinate or junior in any respect to any other
Indebtedness or other obligation of
31
such Person or (5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of the Indenture.
"Significant Subsidiary" means any Subsidiary which is a Significant
Subsidiary within the meaning of Article I of Regulation S-X under the Exchange
Act.
"Slot" means all of the rights, titles, interests and privileges of an air
carrier in and to the primary operating authority granted by the FAA pursuant to
Title 14, to conduct one Instrument Flight Rule (as defined under the Federal
Aviation Act) take-off or landing in a specified one-hour or half-hour period.
The term "Slot" shall also include all Slots created after the Issue Date
pursuant to Title 14.
"Slot Collateral" means (i) the Collateral described in clauses (b) and (c)
of Section 2.01 of the Pledge Agreement and (ii) any Collateral described in
clause (g) of Section 2.01 of the Pledge Agreement which arises from the use,
operation, storage, control or management of the Collateral described in clauses
(b) or (c) of Section 2.01 of the Pledge Agreement.
"Slot Trade" means a temporary "swap" of operating authority with respect
to an Acquired Slot in exchange for operating authority with respect to another
Slot, to accommodate seasonal schedule changes, or a temporary "slide"
transaction with the FAA with respect to an Acquired Slot, in each case provided
that (i) such transaction (x) is entered into in the Ordinary Course Of Business
in accordance with standard airline industry practice, (y) has a Remaining Term
of no longer than six (6) months, and (ii) the terms of such transaction are
such that operating authority with respect to such Acquired Slot automatically
reverts to the Company at the end of such Remaining Term.
"Slot Trust" means the trust created under the Declaration solely to
acquire and hold the Acquired Slots transferred to the Slot Trust pursuant to
the Deed of Conveyance.
"Slot Trust Assets" is defined in Section 4.01 of the Acquired Slot Trust
Agreement.
"Slot Trustee" means the Trustee, in its capacity as trustee under the
Acquired Slot Trust Agreement.
"Spare Parts" means all appliances, spare parts, instruments,
appurtenances, accessories, furnishings; all expendable parts, appliances,
modules, apparatus and assemblies; all rotable and repairable nonconsumable
parts, appliances, apparatus, assemblies and materials which are interchangeable
for use or useable, and other equipment of whatever nature (other than engines)
maintained for installation or use or useable in aircraft, airframes, engines or
any appliance or propeller useable thereon, and any and all substitutions for
any of the foregoing and replacements thereto. The terms "spare parts" and
"appliances" (as used in this definition) shall include, but not be limited to,
the definitions assigned to those terms by Section 40102 of Title 49 of the
United States Code as amended from time to time or any recodification thereof in
any regulation.
"Special Interest" has the meaning assigned to such term in the
Registration Rights Agreement.
32
"Special Record Date" has the meaning provided in Section 2.1 of the
Indenture.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
"Sublease" is defined in Section 4.05(b) of the Pledge Agreement.
"Sub-License" is defined in the Recitals to the Master Sub-License
Agreement.
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement to that
effect.
"Subsequent Deed of Conveyance" is defined in Section 3.01 of the
Declaration.
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including membership or
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Subsidiary Guaranty" means the Guarantee by a Restricted Subsidiary of the
Company's obligations with respect to the Notes. The form of such Guarantee is
provided for in the Indenture. Each Subsidiary Guaranty will be limited in
amount to an amount not to exceed the maximum amount that can be guaranteed by
the applicable Restricted Subsidiary without rendering the Subsidiary Guaranty,
as it relates to such Restricted Subsidiary, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
"Substitution Requirements" means furnishing to the Collateral Agent, the
Indenture Trustee or the Slot Trustee, as appropriate:
(a) within forty-five (45) days after any Event of Loss (provided, that if
the applicable appraisal procedures are not yet completed, the amount
of Collateral and/or Acquired Securities to be furnished shall be
established by the Company Appraiser's Certificate, subject to upward
adjustment or refund upon completion of the applicable appraisal
procedures):
(i) if, (A) the Company elects to establish the Security Ratio to
determine if it is entitled to limit its obligation to furnish
Permitted Substitutes, (I) a Company Appraiser's Certificate
stating, as of a date within the time frame contemplated by the
proviso to clause (iii) of the definition of "Fair Market
Value", in the opinion of the Company Appraiser, (1) the Fair
33
Market Values, by type and category and in reasonable detail,
of all assets or groups of assets required for the computation
of the Security Ratio, and (2) the Security Ratio, determined
after giving effect to such Event of Loss and to the furnishing
by the Company of such Permitted Substitutes under paragraph
(c) of this definition as the Company may elect to furnish and
(II) an Officers' Certificate described in clause (ii) of the
definition of "Preconditions"; and
(ii) unless the Security Ratio, determined as provided in clause (i)
and as adjusted pursuant to the appraisal procedures applicable
to determinations of Fair Market Value, meets the Security
Ratio requirements (A) if available earlier, any Temporary Cash
Collateral arising from or in connection with such Event of
Loss (subject to replacement by any combination of Collateral
furnished under paragraph (c) of this definition or Cash
Collateral or Acquired Securities furnished under paragraph (d)
of this definition, all as provided by paragraph (f) of this
definition), (B) the Collateral described in said paragraph
(c), or the Cash Collateral or Acquired Securities described in
said paragraph (d), or any combination thereof, (C) a Company
Appraiser's Certificate as to the Appraised Values and Fair
Market Values (as of an appraisal date which shall be the
Business Day next preceding the date of such Event of Loss and
determined without regard to any prospect or expectation of the
event giving rise to such Event of Loss), described in
paragraph (e) of this definition, which are applicable to
Property of the kind described in said paragraph (c) or
paragraph (d), as the case may be, or which may be needed for
purposes of paragraph (f) of this definition, and (D) such
certificates and opinions, if any, as may be required by the
TIA, all as shall be designated in an Officers' Certificate
delivered to the Collateral Agent;
(b) simultaneously with any Request under 6.02(a) of the Master Sub-
License Agreement for the release of Acquired Slots (collectively, a
"Requested Release") or any request under Section 4.04(c) of the
Pledge Agreement to lower the Pledged Parts Threshold or to release
Operative Collateral:
(i) if, with respect to any Requested Release the Company elects to
establish the Security Ratio to determine if it is entitled to
limit its obligation to furnish Permitted Substitutes, (A) a
Company Appraiser's Certificate stating, as of a date within
the time frame contemplated by the proviso to clause (iii) of
the definition of "Fair Market Value" and furnished at least 15
days before the applicable Requested Release, in the opinion of
the Company Appraiser, (I) the Fair Market Values, by type and
category and in reasonable detail, of all assets or groups of
assets required for the computation of the Security Ratio, and
(II) the Security Ratio, determined after giving effect to such
Requested Release and to the furnishing by the Company of such
Permitted Substitutes under paragraph (c) of this
34
definition as the Company may elect to furnish and (B) an
Officers' Certificate described in clause (ii) of the
definition of "Preconditions"; and
(ii) unless, with respect to any Requested Release, the Security
Ratio, determined as provided in clause (i) and as adjusted
pursuant to the appraisal procedures applicable to
determinations of Fair Market Value, meets the Security Ratio
requirements, (A) the Operative Collateral or Slots described
in paragraph (c) of this definition or the Cash Collateral or
Acquired Securities described in paragraph (d) of this
definition, or any combination thereof, (B) a Company
Appraiser's Certificate stating, as of an appraisal date not
more than 30 days before, and furnished at least 15 days
before, the Requested Release, the Appraised Values and Fair
Market Values described in paragraph (e) of this definition
which are applicable to the Property of the kind described in
said paragraph (c) or paragraph (d), as the case may be, or
which may be needed for purposes of paragraph (f) of this
definition, and (C) such certificates and opinions, if any, as
may be required by the TIA, all as shall be designated in an
Officers' Certificate delivered to the Collateral Agent; and
(iii) simultaneously with any Request under Section 4.04(c) of the
Pledge Agreement to lower the Pledged Parts Threshold or to
release Operative Collateral, (A) a Company Appraiser's
Certificate stating, as of an appraisal date not more than 30
days before, and furnished at least 15 days before, the
applicable lowering of the Pledged Parts Threshold or release
of Operative Collateral, the Appraised Values and Fair Market
Values described in paragraph (e) of this definition which are
applicable to Property of the kind described in said paragraph
(c) or paragraph (d), as the case may be, or which may be
needed for purposes of paragraph (f) of this definition and (B)
such certificates and opinions, if any, as may be required by
the TIA, all as shall be designated in an Officers' Certificate
delivered to the Collateral Agent;
(c) new Operative Collateral or Slots of the types and Appraised Values
necessary to constitute Permitted Substitutes for all or the
applicable proportion of the Collateral or Acquired Slots subject to
the Event of Loss, the Requested Release or the release of Operative
Collateral or equal to the amount of the requested reduction of the
Pledged Parts Threshold, as the case may be;
(d) Cash Collateral with a Fair Market Value or a face amount of Acquired
Securities (for cancellation), together equal to all or the equivalent
remaining proportion of the Fair Market Value of the Collateral or
Acquired Slots subject to such Event of Loss, Requested Release or
release of Operative Collateral or to the amount of the requested
reduction of the Pledged Parts Threshold;
35
(e) a Company Appraiser's Certificate meeting the requirements of clause
(a)(ii)(C) or clause (b)(ii)(B) or clause (b)(iii)(A) or clause
(f)(ii) of this definition, as appropriate, which shall state:
(i) the Appraised Value of (A) any Collateral or Acquired Slot
which is the subject of the Event of Loss or proposed release
and for which the Permitted Substitutes will be Operative
Collateral or Slots, and (B) the Operative Collateral or Slots
to be furnished as Permitted Substitutes therefor;
(ii) the Fair Market Value of any Collateral or Acquired Slot which
is the subject of the Event of Loss or proposed release and for
which the Permitted Substitutes will be Cash Collateral or on
account of which a face amount of Acquired Securities will be
furnished in lieu of Permitted Substitutes; and
(iii) the Appraised Value of any Operative Collateral or Acquired
Slot, the Fair Market Value of any Cash Collateral or the face
amount of Acquired Securities equal to the requested reduction
in the Pledged Parts Threshold.
(f) in connection with any Request for return to the Company of Temporary
Cash Collateral (i) the Operative Collateral or Slots described in
paragraph (c) of this definition, (ii) a Company Appraiser's
Certificate stating the Appraised Value of such Operative Collateral
or Slots as of a date within thirty (30) days of the date such
Temporary Cash Collateral is to be returned and, unless previously
determined under paragraph (a)(ii)(C) or paragraph (b)(ii)(B) of this
definition, the Appraised Value, as of the applicable appraisal date
there specified, of the Operative Collateral or Acquired Slots on
account of whose loss, sale or deemed sale the Temporary Cash
Collateral was furnished, and (iii) such certificates and opinions, if
any, as may be required by TIA, all as shall be designated in an
Officers' Certificate delivered to the Collateral Agent.
"Supplemental Pledge Agreement" means a pledge agreement supplemental to
the Pledge Agreement substantially in the form of Exhibit A or Exhibit B
thereto.
"Temporary Cash Collateral" means Cash Collateral required to be deposited
with the Collateral Agent or the Trustee upon or after an Event of Loss but
before Operative Collateral or Slots are required to be provided as Permitted
Substitutes, including at the Company's election Cash Collateral deposited by
the Company or held by the Collateral Agent as additional Collateral under
Section 5.05 of the Pledge Agreement.
"Temporary Cash Investments" means any of the following: (i) any
investment in U.S. Government Obligations; (ii) investments in time deposit
accounts, certificates of deposit and money market deposits maturing within 180
days of the date of acquisition thereof issued by a bank or trust issuer which
is organized under the laws of the United States of America, any state thereof
or any foreign country recognized by the United States, and which bank or trust
issuer has
36
capital, surplus and undivided profits aggregating in excess of $50,000,000 (or
the foreign currency equivalent thereof) and has outstanding debt which is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money market fund sponsored by a registered broker dealer
or mutual fund distributor; (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above; (iv) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
of America or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-l"
(or higher) according to Xxxxx'x Investors Service, Inc., or "A-l" (or higher)
according to Standard & Poor's Ratings Group; and (v) investments in securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors
Service, Inc.
"Tender" means, with respect to any Security, the effective tender of such
Security (in whole or in part) for repurchase in accordance with the provisions
of the Indenture.
"Third-Party Appraiser" means an Independent Appraiser jointly selected by
the Company Appraiser and the Trustee Appraiser.
"Third-Party License" means a sub-license and/or agreement to sublicense
directly or indirectly from the Company to air carriers the right to use
Acquired Slots in accordance with Sections 5.01(b) and (c) of the Master Sub-
License Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
77bbbb) as in effect on the date of the Indenture; provided, however, that in
-------- -------
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Title 14" means Title 14 of the Code of Federal Regulations, Part 93,
Subparts K & S, as amended from time to time or any recodification thereof in
any regulation.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to such
redemption or repurchase date (or, if such Statistical Release is no longer
published, any publicly available source or similar market data)) most nearly
equal to the period from such redemption or repurchase date to the Stated
Maturity of the Notes; provided, however, that if the period from such
redemption or repurchase date to the Stated Maturity of the
37
Notes is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.
"Trust Officer" means any officer in the corporate trust department of the
Trustee, or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in the Indenture until a successor
replaces it in accordance with the provisions of the Indenture and thereafter
means the successor.
"Trustee Appraiser" means an Independent Appraiser selected by the Trustee.
"Trustee Appraiser's Certificate'" means an Independent Appraiser's
Certificate signed by a Trustee Appraiser.
"TWA" means the Company.
"U.S. or United States" means the United States of America.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the option of the issuer thereof.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.3 of the Indenture. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness under paragraph (a) of Section 4.17 of the
Indenture and (y) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be made by the Company to the
Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
38
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
or one or more Wholly Owned Subsidiaries.
SECTION 2. RULES OF CONSTRUCTION. Unless the context otherwise requires, the
following rules of construction shall apply to all purposes of the Indenture,
the Pledge Agreement, the Note Pledge Agreement, the Acquired Slot Trust
Agreement and the Master Sub-License Agreement (including this appendix) and of
such agreements as may incorporate this appendix by reference.
(a) a term has the meaning assigned to it;
(b) whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms;
(c) the words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation";
(d) all terms used in Article 9 of the Uniform Commercial Code as
in effect in the State of New York that are used but not defined herein
shall have the meaning assigned to such terms therein;
(e) references to documents, contracts, or agreements shall include
any and all supplements and amendments thereto;
(f) references to a specific Person shall include the Person and
(except as limited by any agreement by which such Person is bound) the
successors and assigns of such Person;
(g) references to "applicable laws" shall include statutes,
ordinances, rules, regulations, court and administrative decisions and
conditions, restrictions and limitations in licenses, permits, approvals
and authorizations issued or granted by federal, state or local United
States or foreign governmental bodies and agencies;
(h) unless otherwise specified in the computation of a period of
time from a specified date to a later specified date, the word "from" means
"from and including", and the words "to" and "until" each mean "to but
excluding";
(i) words in the singular include the plural, and words in the
plural include the singular;
(j) provisions apply to successive events and transactions.
(k) "herein", "hereto" and other words of similar import in any
agreement refer to that agreement as a whole and not to any particular
Article, Section or other subsection of that agreement;
(l) unless otherwise specified, all references in any Operative
Document to Sections, Articles, Exhibits and Schedules are to Sections of,
Articles of, Exhibits to and Schedules to such Operative Document;
(m) all accounting terms used herein and not expressly defined
shall have the meanings given to them in accordance with GAAP; and
(n) unless otherwise specified, references in this Definitions
Appendix to any instrument, agreement or other document shall be deemed to
be references to such instrument, agreement or other document as it may be
amended, restated, supplemented or otherwise modified from time to time
pursuant to and as permitted by the terms thereof, whether or not so stated
in any particular definition.
RULE 144A/REGULATION S APPENDIX
Appendix II
To the Indenture between
Trans World Airlines, Inc.
and
First Security Bank, National Association
dated December 9, 1997
for the Company's 11 1/2% Senior Secured Notes
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A, INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED
IN RULE 501(A)(1), (2), (3) or (7)) AND TO CERTAIN PERSONS
IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
-----------
1.1 Definitions
-----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Security bearing the restricted
securities legend set forth in Section 2.3(d) and which is held by an IAI.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Securities" means the 11 1/2% Senior Secured Notes Due 2004 to be
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" mean Lazard Freres & Co. LLC and PaineWebber
Incorporated.
"Initial Securities" means the 11 1/2% Senior Secured Notes Due 2004,
issued under the Indenture on or about the date of the Indenture.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers, in exchange for the Initial Securities held by the
Initial Purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means the 11 1/2% Senior Secured Notes Due
2004 to be issued pursuant to the Indenture to the Initial Purchasers in a
Private Exchange.
"Purchase Agreement" means the Purchase Agreement, dated as of December 4,
1997, among the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
2
"Registered Exchange Offer" means the offer by the Company, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 9, 1997, between the Company and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities and the
Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement of the
Company, in connection with the offer and sale of Initial Securities or Private
Exchange Securities, pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Definitive Securities and Securities
that bear or are required to bear the legend set forth in Section 2.3(d) hereto.
1.2 Other Definitions
-----------------
Defined in this Rule 144A/Regulation S
--------------------------------------
Term Appendix in the Section indicated below
---- ---------------------------------------
"Agent Members"............................................................................................... 2.1(b)
"Global Security"............................................................................................. 2.1(b)
"Regulation S"................................................................................................ 2.1(a)
"Rule 144A"................................................................................................... 2.1(a)
Unless otherwise indicated, all Section numbers referenced herein are to
Sections of this Rule 144A/Regulations S Appendix.
2. The Securities.
--------------
2.1 Form and Dating.
---------------
The Initial Securities are being offered and sold by the Company pursuant
to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a QIB
-----------------
in reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in
the Purchase Agreement, shall be issued initially in the form of one permanent
global Security in definitive, fully registered form without interest coupons
with the global securities legend and restricted
3
securities legend set forth in Exhibit 1 hereto (the "144A Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its New York office, as custodian for
the Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the 144A Global Security may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S under
the Securities Act ("Regulation S"), as provided in the Purchase Agreement,
shall be issued initially in the form of one permanent global Security in
definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1 hereto
(the "Regulation S Global Security"), which shall be deposited on behalf of the
purchasers of the Initial Securities represented thereby with the Trustee, as
custodian, for the Depository (or with such other custodian as the Depository
may direct), and registered in the name of the Depository or the nominee of the
Depository duly executed by the Company and authenticated by the Trustee as
hereinafter provided. On or prior to the 40th day after the later of the
commencement of the offering and the Closing Date (as defined in the Purchase
Agreement), beneficial interests in the Regulation S Global Security may only be
held for the accounts of designated agents holding on behalf of Xxxxxx Guaranty
Trust Company of News York, Brussels office, as operator of the Euroclear System
("Euroclear") or Cedel Bank, societe anonyme. ("Cedel"). Following such 40 day
period, beneficial interests in the Regulation S Global Security may be held
through Euroclear, Cedel or other participants having accounts at the
Depository. The aggregate principal amount of the Regulation S Global Security
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee, as the case may be, as
hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to
---------------------
the 144A Global Security and the Regulation S Global Security (each a "Global
Security") deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one Global Security in
respect of Initial Securities issued pursuant to Rule 144A and one Global
Security in respect of Initial Securities issued pursuant to Regulation S that
(a) shall each be registered in the name of the Depository for such Global
Security or the nominee of such Depository and (b) shall each be delivered by
the Trustee to such Depository or pursuant to such Depository's instructions or
held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under any Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of any Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any
4
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
-----------------------
or Section 2.3 or 2.4, owners of beneficial interests in any Global Security
will not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who are IAI's and are neither QIBs nor non-U.S.
persons within the meaning of Regulation S will receive Definitive Securities;
provided, however, that upon transfer of such Definitive Securities to a QIB in
-------- -------
reliance on Rule 144A or a non-U.S. person in reliance on Regulation S, such
Definitive Securities will, unless the applicable Global Security has previously
been exchanged for Definitive Securities, be exchanged for an interest in the
applicable Global Security pursuant to the provisions of Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
Initial Securities for original issue on the Issue Date in an aggregate
principal amount of $140,000,000 and (2) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to the Registration Rights Agreement, for a like
principal amount at maturity of Initial Securities, in each case upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Exchange Securities or Private Exchange
Securities. The aggregate principal amount at maturity of Securities
Outstanding at any time may not exceed $140,000,000 except as provided in
Section 2.7 of the Indenture of which this appendix forms a part.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
--------------------- -----------------------------------
Securities. When Definitive Securities are presented to the Registrar or a co-
----------
registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount at maturity of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
-----------------
exchange shall be accompanied by a duly executed Assignment Form in the form
attached to Exhibit 1 hereto.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
------------------------------------------------------------------
Interest in a Global Security. A Definitive Security may not be exchanged for a
-----------------------------
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
5
(i) certification that such Definitive Security is being transferred
(x) to a QIB in accordance with Rule 144A or (y) to a non-U.S. person in
reliance on Regulation S; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to the applicable Global Security to reflect an increase in
the aggregate principal amount at maturity of the Securities represented by
such Global Security, such instructions to contain information regarding
the Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount at maturity of Securities represented by the
applicable Global Security to be increased by the aggregate principal amount at
maturity of the Definitive Security to be exchanged and shall credit or cause to
be credited to the account of the Person specified in such instructions a
beneficial interest in the applicable Global Security equal to the principal
amount at maturity of the Definitive Security so canceled. If no Global
Security is then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Global Security in the appropriate principal amount at
maturity.
(c) Transfer and Exchange of a Global Security.
------------------------------------------
(i) The transfer and exchange of a Global Security or beneficial
interests therein shall be effected through the Depository, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver to
the Registrar a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the applicable
Global Security. The Registrar shall, in accordance with such
instructions, instruct the Depository to credit to the account of the
Person specified in such instructions a beneficial interest in the
applicable Global Security and to debit the account of the Person making
the transfer the beneficial interest in the applicable Global Security
being transferred.
(ii) Notwithstanding any other provisions of this Rule
144A/Regulation S Appendix (other than the provision set forth in Section
2.4 hereof), neither Global Security may be transferred as a whole except
by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of
such successor Depository.
(iii) In the event that either Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 hereof or
Section 2.9 of the Indenture prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Securities, such Securities may
be exchanged
6
only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements intended to ensure that such transfers comply with Rule 144A
or Regulation S, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(d) Legends.
-------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY
STATE SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE WHICH IS THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE DATE OF ORIGINAL ISSUANCE OF THESE SECURITIES AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THESE
SECURITIES (OR ANY PREDECESSOR OF THESE SECURITIES) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501
7
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER (i)
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING BELOW IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
Each Regulation S Global Security will also bear the following additional
legend:
ON OR PRIOR TO THE 40TH DAY AFTER THE LATER OF THE COMMENCEMENT OF THE
OFFERING AND THE CLOSING DATE, TRANSFERS OF INTERESTS IN THE REGULATION S
GLOBAL SECURITY TO U.S. PERSONS SHALL BE LIMITED TO TRANSFERS TO QUALIFIED
INSTITUTIONAL BUYERS PURSUANT TO RULE 144A UNDER THE SECURITIES ACT.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a certificated Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
certificated Security that does not bear the
8
legend set forth above and rescind any restriction
on the transfer of such Transfer Restricted Security, if the Holder
certifies in writing to the Registrar that its request for such
exchange was made in reliance on Rule 144.
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Security or such Private Exchange Security will cease to
apply, the requirements requiring any such Initial Security or such Private
Exchange Security issued to certain Holders to be issued in global form
will cease to apply, and a certificated Initial Security or Private
Exchange Security without legends will be available to the transferee of
the Holder of such Initial Securities or Private Exchange Securities upon
exchange of such transferring Holder's certificated Initial Security or
Private Exchange Security or directions to transfer such Holder's interest
in the applicable Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
cease to apply and certificated Initial Securities with the Restricted
Securities Legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will be
available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such initial Securities are
offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(e) Cancellation or Adjustment of the Global Security. At such time
-------------------------------------------------
as all beneficial interests in any Global Security have either been exchanged
for certificated or Definitive Securities, redeemed, repurchased or canceled,
such Global Security shall be returned to the Depository for cancellation or
retained and canceled by Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for certificated or
Definitive Securities, redeemed, repurchased or canceled, the principal amount
at maturity of Securities represented by such Global Security shall be reduced
and an adjustment shall be made on the books and records of the Trustee (if it
is then the Securities Custodian for such Global Security) with respect to
Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
9
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities,
Definitive Securities and any Global Security at the Registrar's or co-
registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessment or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 3.7, 4.10 and 9.5 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to register
the transfer or exchange of any certificated or Definitive Security
tendered for repurchase in whole or in part pursuant to an Offer to
Purchase (as defined in Appendix I to the Indenture), except the unredeemed
portion of any certificated or Definitive Security being repurchased in
part and except to the Company.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of, interest on, or Special Interest, if
any, with respect to, such Security and for all other purposes whatsoever,
whether or not such Security is overdue and none of the Company, the
Trustee, the Paying Agent, the Register or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of any Global Security, a member of or a participant in
the Depository or other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depository or its nominee in the case of each Global Security). The
rights of beneficial owners in each Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
10
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in a Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Securities.
-----------------------
(a) All or any portion of any Global Security deposited with the
Depository or with the Trustee as custodian for the Depository pursuant to
Section 2.1 shall be transferable to the beneficial owners thereof in the form
of certificated Securities in an aggregate principal amount equal to the
principal amount of such certificated security, in exchange for such interest in
the applicable Global Security, only if such transfer complies with Section 2.3
and (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time such
Depository ceases to be a "clearing agency" registered under the Exchange Act,
or (ii) an Event of Default has occurred and is continuing or (iii) the Company,
in its sole discretion, notifies the Trustee in writing such Global Security or
Global Securities shall be exchangeable.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to the
Trustee located in the Borough of Manhattan, The City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount at maturity of
certificated Initial Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount at
maturity and any integral multiple thereof (except that any Global Security may
be issued in a different denomination) and registered in such names as the
Depository shall direct. Any certificated Initial Security delivered in
exchange for an interest in a Global Security shall, except as otherwise
provided by Section 2.3, bear the legend set forth in Section 2.3(d).
(c) Subject to the provision of Section 2.4(b), the registered Holder
of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 4.22
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR
ANY STATE SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE WHICH IS THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE DATE OF ORIGINAL ISSUANCE OF THESE SECURITIES AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE
2
OF THE COMPANY WAS THE OWNER OF THESE SECURITIES (OR ANY PREDECESSOR OF THESE
SECURITIES) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS AS "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2) (3), OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE, OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING BELOW IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
[Regulation S Global Security Legend]
ON OR PRIOR TO THE 40TH DAY AFTER THE LATER OF THE COMMENCEMENT OF THE
OFFERING AND THE CLOSING DATE, TRANSFERS OF INTERESTS IN THE REGULATION S GLOBAL
SECURITY TO U.S. PERSONS SHALL BE LIMITED TO TRANSFERS TO QUALIFIED
INSTITUTIONAL BUYERS PURSUANT TO RULE 144A UNDER THE SECURITIES ACT.
3
No. CUSIP No.
$
11 1/2% Senior Secured Notes Due 2004
TRANS WORLD AIRLINES, INC., a Delaware corporation promises to pay to
__________, or registered assigns, the principal sum of __________ Dollars on
December 15, 2004.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
TRANS WORLD AIRLINES, INC.
By:____________________________________
Name:
Title:
Attest:
____________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the Securities referred to in the
Indenture.
By:____________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
11 1/2% Senior Secured Notes due 2004
This Security is one of a duly authorized issue of securities of the
Company designated as its 11 1/2% Senior Secured Notes due 2004 (hereinafter
called the Securities"), limited in aggregate principal amount Outstanding to
$140,000,000, issued or to be issued pursuant to an Indenture, dated as of
December 9, 1997 (hereinafter called the "Indenture") between the Company and
First Security Bank, National Association, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture).
1. Interest; Special Interest. The Company promises to pay interest on
--------------------------
the principal amount of this Security at the rate of Eleven and one-half percent
(11 1/2%) per annum; provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs (each period during which a
Registration Default has occurred and is continuing referred to herein as a
"Registration Default Period"), additional interest will accrue on this Security
at a per annum rate of 0.50% for the first 90 days of the Registration Default
Period, at a per annum rate of 1.0% for the second 90 days of the Registration
Default Period, at a per annum rate of 1.5% for the third 90 days of the
Registration Default Period and at a per annum rate of 2.0% thereafter for the
remaining portion of the Registration Default Period (such additional interest
is referred to herein as "Special Interest"). The Company will pay interest and
Special Interest, if any, semi-annually on the Interest Payment Dates set forth
on the face of this Security, commencing June 15, 1998. Interest on the
Securities will accrue from December 9, 1997 or the most recent Interest Payment
Date to which interest and Special Interest, if any, have been paid. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. Except as otherwise set forth herein with respect
-----------------
to a Security that is subject to an Offer to Purchase, the Company will pay
interest on and Special Interest, if any, with respect to, the Securities
(except defaulted interest) to the persons who are registered Holders of
Securities at the close of business on the Record Date set forth on the face of
this Security next preceding the applicable Interest Payment Date. Defaulted
interest will be paid by the Company in accordance with the applicable
provisions of the Indenture. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal, interest and
Special Interest, if any, at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York and at any other
office or agency maintained by the Company for such purpose in money of the
United States that at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Company, payment
of interest on and Special Interest, if any, with respect to, the Securities may
be by check payable in such money and mailed to a Holder's registered address.
If a payment date is a legal holiday at a place of payment, payment may be made
at that place on the next succeeding Business Day, and no interest shall accrue
for the intervening period.
3. Registrar, Paying Agent and Tender Agent. Initially, the Trustee will
----------------------------------------
act as Registrar and Paying Agent. The Company may change any Paying Agent or
Registrar or co-
2
registrar without prior notice to any Securityholder. The Company may act in any
such capacity, except in certain circumstances.
4. Indenture. The Company issued the Securities under the Indenture. The
---------
terms of the Securities include those stated in the Indenture and those made
applicable to the Indenture by the TIA. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior secured obligations of the
Company limited to $140,000,000 aggregate principal amount, except as otherwise
provided in the Indenture. Capitalized terms used in this Security and not
defined in this Security shall have the meaning set forth in Section 1 of the
Definitions Appendix attached as Appendix 1 to the Indenture, which shall be a
part of this Security as if fully set forth in this place. The rules of
construction for this Security are set forth in Section 2 of the Definitions
Appendix.
5. Optional Redemption. Except as set forth in the second and third
-------------------
paragraphs under this paragraph 5, the Securities may not be redeemed prior to
December 15, 2001. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest and Special Interest, if any, with respect to, the
Securities to and including the redemption date:
if redeemed during the 12-month period beginning December 15,
Period Percentage
------------ ----------
2001 105.750%
2002 102.875%
2003 and thereafter 100.000%
Notwithstanding the foregoing, the Company shall have the right, without
the consent of the Holders, to redeem the Securities in whole, but not in part,
at a redemption price equal to 100% of the unpaid principal amount of the
Outstanding Securities plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest if any, to, the date of redemption in the event
that the Company enters into a binding agreement to consummate any transaction
which would be prohibited by Section 5.1 of the Indenture. Such redemption date
must occur prior to or simultaneously with the consummation of such prohibited
transaction.
In addition, the Securities may be redeemed in part by the Company at its
sole option if, on or before December 15, 2000, the Company receives Net Cash
Proceeds of one or more Public Equity Offerings. The Company may use all or a
portion of any such Net Cash Proceeds to redeem up to $49,000,000 aggregate
principal amount of the Securities, within 90 days of such Public Equity
Offering, at a redemption price (expressed as a percentage of the aggregate
principal amount of Securities Outstanding) of 111 1/2 plus accrued and unpaid
interest and Special Interest, if any, to the redemption date (subject to the
right of holders of record on the relevant record date to receive interest and
Special Interest, if any, due on the relevant Interest Payment Date); provided,
however, that at least $91,000,000 aggregate principal amount of the Securities
shall remain Outstanding after each such redemption.
3
6. Notice of Redemption. Notice of any redemption will be mailed at least
--------------------
30 days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on, and Special Interest, if any, with respect to, all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Security. The Securities are secured by Liens on certain Properties of
--------
the Company pursuant to the Operative Documents described in the Indenture.
8. Change in Control. In the event that there shall occur a Change in
-----------------
Control, the Company shall make an Offer to Purchase all of the Outstanding
Securities, at a purchase price equal to 101% of the aggregate principal amount
of the Securities Outstanding, plus accrued and unpaid interest and Special
Interest, if any, to and including the repurchase date. The right to require
such repurchase of Securities shall not continue after a discharge of the
Company from its obligations with respect to the Securities in accordance with
Article 8 of the Indenture. The Company shall commence such Offer to Purchase
within thirty (30) days after the occurrence of a Change in Control.
The Company shall also be required to make an Offer to Purchase all of the
Outstanding Securities at a purchase price equal to 100% of the principal amount
thereof, plus the Applicable Premium as of, and accrued and unpaid interest and
Special Interest, if any, to, the Payment Date, prior to any Incurrence of any
Acquired Indebtedness.
In addition, under certain circumstances in connection with certain Asset
Dispositions, the Company may be required to make an Offer to Purchase
Outstanding Securities at 100% of their principal amount plus accrued and unpaid
interest and Special Interest, if any, to the Purchase Date.
"Offer to Purchase" means an offer to purchase all or a pro rata portion,
as the case may be, of the Securities by the Company from the Holders commenced
by the mailing (by first class mail, postage prepaid) by the Company (or, if
requested by the Company on at least five Business Days' prior notice to the
Trustee and at the Company's expense, by the Trustee) of a notice to each Holder
(and, if mailed by the Company, to the Trustee) at such Holder's address
appearing in the Register, stating: (i) the covenant pursuant to which the
offer is being made and that all Securities validly tendered will be accepted
for payment on a pro rata basis; (ii) the purchase price and the date of
purchase (which shall be a Business Day no earlier than 30 days nor later than
60 days from the date such notice is mailed) (the "Payment Date"); (iii) that
any Security not tendered will continue to accrue interest pursuant to its
terms; (iv) that, unless the Company defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest on and after the Payment Date; (v) that Holders
electing to have a Security purchased pursuant to the Offer to Purchase will be
required to surrender the Security, together with the form entitled "Option of
the Holder to Elect Purchase"
4
attached to this Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date (or, if such day is a Legal Holiday, on
the next subsequent day which is not a Legal Holiday), and such Holder shall be
entitled to receive from the Paying Agent a non-transferable receipt of deposit
evidencing such deposit; (vi) that, unless the Company defaults in making the
payment of the purchase price or shall otherwise, in its sole discretion,
consent thereto, Holders will be entitled to withdraw their election only if the
Trustee receives, not later than the close of business on the fifth Business Day
immediately preceding the Payment Date, a telegram, facsimile transmission or
letter setting forth the name of such Holder, the principal amount at maturity
of Securities delivered for purchase and a statement that such Holder is
withdrawing his election to have such Securities purchased; and (vii) that
Holders whose Securities are being purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered: provided that each Security purchased and each new
Security issued shall be in a principal amount at maturity of $1,000 or integral
multiples thereof. The Company shall place such notice in a financial newspaper
of general circulation in New York City. No failure of the Company to give the
foregoing notice shall limit any Holder's right to exercise a repurchase right.
On the Payment Date, the Company shall (i) accept for payment on a pro rata
basis Securities or portions thereof tendered pursuant to an Offer to Purchase;
(ii) deposit with the Trustee money sufficient to pay the purchase price of all
Securities or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Securities or portions thereof so accepted
together with an Officers' Certificate specifying the Securities or portions
thereof accepted for payment by the Company. The Trustee shall promptly mail to
the Holders of Securities so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate, and the Company shall
promptly execute and mail (or cause to be mailed) to such Holders a new Security
equal in principal amount at maturity to any unpurchased portion of the Security
surrendered; provided that each Security purchased and each new Security issued
shall be in a principal amount at maturity of $1,000 or integral multiples
thereof; provided further that if the Payment Date is between a regular Record
Date and the next succeeding Interest Payment Date, Securities to be repurchased
must be accompanied by payment of an amount equal to the interest and Special
Interest, if any, payable on such succeeding Interest Payment Date on the
principal amount to be repurchased, and the interest on the principal amount of
the Security being repurchased, and Special Interest, if any, with respect
thereto, will be paid on such next succeeding Interest Payment Date to the
registered holder of such Security on the immediately preceding Record Date. A
Security repurchased on an Interest Payment Date need not be accompanied by any
such payment, and the interest on the principal amount of the Security being
repurchased and Special Interest, if any, with respect thereto, will be paid on
such Interest Payment Date to the registered holder of such Security on the
corresponding Record Date. The Company will publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-l under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Securities pursuant to
an Offer to Purchase. Both the notice of the Company and the notice of the
Holder having been given as specified above, the Securities so to be repurchased
shall, on the Payment Date become due and payable at the purchase price
applicable thereto and from and after such date (unless the
5
Company shall default in the payment of such purchase price) such Securities
shall cease to bear interest. If any Security shall not be paid upon surrender
thereof for repurchase, the principal shall, until paid, bear interest from the
Payment Date at the rate borne by such Security. Any Security which is to be
submitted for repurchase only in part shall be delivered pursuant to the above
provisions with (if the Company or Trustee so requires) due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing.
9. Denominations, Transfer, Exchange. The Securities shall be issuable
---------------------------------
only in registered form without coupons and in denominations of $1,000 and
integral multiples thereof. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes required by law or permitted by the
Indenture.
10. Persons Deemed Owners. The Company, the Trustee and any agent of the
---------------------
Company or the Trustee may treat the person in whose name the Security is
registered with the Registrar as the owner for all purposes.
11. Discharge and Defeasance. Subject to certain conditions, the Company
------------------------
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of, interest on, and Special
Interest, if any, with respect to, the Securities to Stated Maturity.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture,
----------------------
the Securities, or the other Operative Documents may be amended with the consent
of the Holders of at least a majority in principal amount of the then
Outstanding Securities, and any existing Default, Event of Default or
acceleration may be waived with the consent of the Holders of a majority in
principal amount of the then Securities Outstanding. Without the consent of any
Holder, the Indenture, the Securities or any of the Operative Documents may be
amended to, among other things, cure any ambiguity, defect or inconsistency.
13. Defaults and Remedies. Events of Default under the Indenture include
---------------------
the following: default for the period specified in the Indenture in payment of
interest on, or Special Interest, if any, with respect to the Securities;
default in payment of principal when due on the Securities (at maturity, upon
acceleration, redemption, repurchase or otherwise); failure by the Company to
comply with specific covenants of the Indenture or the other Operative
Documents; failure by the Company for sixty (60) days after notice to it to
comply in any material respect with any of its other covenants, conditions or
agreements in the Indenture, the other Operative Documents or the Securities,
unless otherwise specified; the occurrence of certain defaults under any
Indebtedness of the Company or any Significant Subsidiary in excess of
$15,000,000 in principal amount; the rendering or domestication of final
judgments by a court of competent jurisdiction against the Company or any
Restricted Subsidiary in an aggregate amount of $15,000,000 or more which remain
undischarged for a period (during which execution is not stayed) of sixty (60)
days after the date on which the right to appeal has expired; cessation of
6
effectiveness of Operative Documents without the consent of the Trustee; and
certain events of bankruptcy, insolvency or reorganization. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee or the Holders of twenty-five percent (25%) in principal amount of
the then Securities Outstanding may declare all the Securities to be due and
payable immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all Securities Outstanding become
due and payable immediately without further action or notice. Securityholders
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the then Outstanding Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish compliance certificates to the
Trustee. The above description of Events of Default and remedies is qualified by
reference, and subject in its entirety to the more complete description thereof
contained in the Indenture.
14. Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication. This Security shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
17. Unclaimed Money. If money for the payment of principal of, interest
---------------
on, or Special Interest, with respect to, or the purchase price for the
Securities remains unclaimed for two (2) years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After such payment, Holders
entitled to any portion of such money must look to the Company for payment
unless an applicable law designates another person.
18. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. CUSIP Numbers. The Company in issuing this Security may use a
-------------
"CUSIP" number (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities
7
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
20. Holders' Compliance with Registration Rights Agreement. Each Holder
------------------------------------------------------
of a Security, by acceptance hereof, acknowledges and agrees to the provisions
of the Registration Rights Agreement, including, without limitation, the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
21. Governing Law. THIS SECURITY SHALL BE GOVERNED BY THE LAWS OF THE
-------------
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
The Company will furnish to any Holder of this Security, upon written
request and without charge, a copy of the Indenture. Request may be made to:
Trans World Airlines, Inc., One City Centre, 000 X. 0xx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Corporate Secretary.
Dated:_______________________ NOTICE: To be executed by an executive
officer
8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
(Insert Assignee's Soc. Sec. or Tax I.D. No.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________ agent to Signature(s):____________________________________
transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Date:_____________________________________________ Signature(s):____________________________________
____________________________________
(Sign exactly as your name(s) appear(s) on the other side of this
Security)
Signature(s) guaranteed by: (All signatures must be guaranteed by a member of a national securities
exchange or of the National Association of Securities Dealers, Inc. or
by a commercial bank or trust company located in the United States)
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF NOTES
Re: 11 1/2% Senior Secured Notes due 2004 (the "Notes") of Trans World
Airlines, Inc. (the "Company")
This Certificate relates to Notes held in definitive form by
___________ (the "Transferor")
The Transferor has requested the Registrar by written order to
exchange or register the transfer of a Note or Notes. In connection with such
request and in respect of each such Note, the Transferor does hereby certify
that the Transferor is familiar with the Indenture relating to the above
captioned Notes and that the transfer of this Note does not require registration
under the Securities Act of 1933 (the "Securities Act"), because:*
[_] Such Note is being transferred to the Company.
[_] Such Note is being transferred pursuant to an effective
Registration Statement under the Securities Act.
[_] Such Note is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in reliance on Rule
144A.
[_] Such Note is being transferred pursuant to an offshore
transaction in accordance with Rule 904 under the Securities Act.
[_] Such Note is being transferred to an Institutional "Accredited
Investor" within the meaning of Subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act.
[_] Such Note is being transferred in a transaction meeting the
requirements of Rule 144 under the Securities Act.
The Registrar and the Company are entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a copy
hereof to any interest party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
______________________________________
[INSERT NAME OF TRANSFEROR]
By: __________________________________
Date:______________________________
___________________________________
* Please check applicable box.
OPTION OF THE HOLDER TO ELECT PURCHASE
If you want to elect to have this Security repurchased by the Company
pursuant to any Offer to Purchase under the Indenture, check the box:
If you want to elect to have only part of this Security repurchased by the
Company pursuant to any Offer to Purchase under the Indenture, state the
principal amount to be repurchased:
$___________________________________
(in an integral multiple of $1,000)
Date:_______________________________ Signature(s):_____________________
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by: (All signatures must be guaranteed by a member of a national securities
exchange or of the National Association of Securities Dealers, Inc. or
by a commercial bank or trust company located in the United States)
EXHIBIT 2
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
[*/]
-
[**/]
--
No. CUSIP No.
$
11 1/2% Senior Secured Notes Due 2004
TRANS WORLD AIRLINES, INC., a Delaware corporation, promises to pay to
__________, or registered assigns, the principal sum of __________ Dollars on
December 15, 2004.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the other side
of this Security.
2
Dated:
TRANS WORLD AIRLINES, INC.
By:_________________________________
Name:
Title:
Attest:
_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Securities referred to in the
Indenture.
By:__________________________
Authorized Signatory
______________________
*/ If the Security is to be issued in global form add the Global Securities
-
Legend from Exhibit 1 to Appendix A.
**/ If the Security is a Private Exchange Security issued in a Private Exchange
--
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit 2 to Appendix A with the Assignment
Form included in such Exhibit 1.
[FORM OF REVERSE SIDE OF EXCHANGE OR PRIVATE EXCHANGE SECURITY]
11 1/2% Senior Secured Notes due 2004
This Security is one of a duly authorized issue of securities of the
Company designated as its 11 1/2% Senior Secured Notes due 2004 (hereinafter
called the Securities"), limited in aggregate principal amount Outstanding to
$140,000,000, issued or to be issued pursuant to an Indenture, dated as of
December 9, 1997 (hereinafter called the "Indenture") between the Company and
First Security Bank, National Association, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture).
1. Interest; Special Interest. The Company promises to pay interest on
--------------------------
the principal amount of this Security at the rate of Eleven and one-half percent
(11 1/2%) per annum; provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs (each period during which a
Registration Default has occurred and is continuing referred to herein as a
"Registration Default Period"), additional interest will accrue on this Security
at a per annum rate of 0.50% for the first 90 days of the Registration Default
Period, at a per annum rate of 1.0% for the second 90 days of the Registration
Default Period, at a per annum rate of 1.5% for the third 90 days of the
Registration Default Period and at a per annum rate of 2.0% thereafter for the
remaining portion of the Registration Default Period (such additional interest
is referred to herein as "Special Interest"). The Company will pay interest and
Special Interest, if any, semi-annually on the Interest Payment Dates set forth
on the face of this Security, commencing June 15, 1998. Interest on the
Securities will accrue from December 9, 1997 or the most recent Interest Payment
Date to which interest and Special Interest, if any, have been paid. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. Except as otherwise set forth herein with respect
-----------------
to a Security that is subject to an Offer to Purchase, the Company will pay
interest on and Special Interest, if any, with respect to, the Securities
(except defaulted interest) to the persons who are registered Holders of
Securities at the close of business on the Record Date set forth on the face of
this Security next preceding the applicable Interest Payment Date. Defaulted
interest will be paid by the Company in accordance with the applicable
provisions of the Indenture. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal, interest and
Special Interest, if any, at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York and at any other
office or agency maintained by the Company for such purpose in money of the
United States that at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Company, payment
of interest on and Special Interest, if any, with respect to, the Securities may
be by check payable in such money and mailed to a Holder's registered address.
If a payment date is a legal holiday at a place of payment, payment may be made
at that place on the next succeeding Business Day, and no interest shall accrue
for the intervening period.
3. Registrar, Paying Agent and Tender Agent. Initially, the Trustee will
----------------------------------------
act as Registrar and Paying Agent. The Company may change any Paying Agent or
Registrar or co-
2
registrar without prior notice to any Securityholder. The Company may act in any
such capacity, except in certain circumstances.
4. Indenture. The Company issued the Securities under the Indenture. The
---------
terms of the Securities include those stated in the Indenture and those made
applicable to the Indenture by the TIA. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior secured obligations of the
Company limited to $140,000,000 aggregate principal amount, except as otherwise
provided in the Indenture. Capitalized terms used in this Security and not
defined in this Security shall have the meaning set forth in Section 1 of the
Definitions Appendix attached as Appendix 1 to the Indenture, which shall be a
part of this Security as if fully set forth in this place. The rules of
construction for this Security are set forth in Section 2 of the Definitions
Appendix.
5. Optional Redemption. Except as set forth in the second and third
-------------------
paragraphs under this paragraph 5, the Securities may not be redeemed prior to
December 15, 2001. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest and Special Interest, if any, with respect to, the
Securities to and including the redemption date:
if redeemed during the 12-month period beginning December 15,
Period Percentage
------ ----------
2001 105.750%
2002 102.875%
2003 and thereafter 100.000%
Notwithstanding the foregoing, the Company shall have the right, without
the consent of the Holders, to redeem the Securities in whole, but not in part,
at a redemption price equal to 100% of the unpaid principal amount of the
Outstanding Securities plus the Applicable Premium as of, and accrued and unpaid
interest and Special Interest if any, to, the date of redemption in the event
that the Company enters into a binding agreement to consummate any transaction
which would be prohibited by Section 5.1 of the Indenture. Such redemption date
must occur prior to or simultaneously with the consummation of such prohibited
transaction.
In addition, the Securities may be redeemed in part by the Company at its
sole option if, on or before December 15, 2000, the Company receives Net Cash
Proceeds of one or more Public Equity Offerings. The Company may use all or a
portion of any such Net Cash Proceeds to redeem up to $49,000,000 aggregate
principal amount of the Securities, within 90 days of such Public Equity
Offering, at a redemption price (expressed as a percentage of the aggregate
principal amount of Securities Outstanding) of 111 1/2 plus accrued and unpaid
interest and Special Interest, if any, to the redemption date (subject to the
right of holders of record on the relevant record date to receive interest and
Special Interest, if any, due on the relevant Interest Payment Date); provided,
however, that at least $91,000,000 aggregate principal amount of the Securities
shall remain Outstanding after each such redemption.
3
6. Notice of Redemption. Notice of any redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on, and Special Interest, if any, with respect to, all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Security. The Securities are secured by Liens on certain Properties
--------
of the Company pursuant to the Operative Documents described in the Indenture.
8. Change in Control. In the event that there shall occur a Change in
-----------------
Control, the Company shall make an Offer to Purchase all of the Outstanding
Securities, at a purchase price equal to 101% of the aggregate principal amount
of the Securities Outstanding, plus accrued and unpaid interest and Special
Interest, if any, to and including the repurchase date. The right to require
such repurchase of Securities shall not continue after a discharge of the
Company from its obligations with respect to the Securities in accordance with
Article 8 of the Indenture. The Company shall commence such Offer to Purchase
within thirty (30) days after the occurrence of a Change in Control.
The Company shall also be required to make an Offer to Purchase all of the
Outstanding Securities at a purchase price equal to 100% of the principal amount
thereof, plus the Applicable Premium as of, and accrued and unpaid interest and
Special Interest, if any, to, the Payment Date, prior to any Incurrence of any
Acquired Indebtedness.
In addition, under certain circumstances in connection with certain Asset
Dispositions, the Company may be required to make an Offer to Purchase
Outstanding Securities at 100% of their principal amount plus accrued and unpaid
interest and Special Interest, if any, to the Purchase Date.
"Offer to Purchase" means an offer to purchase all or a pro rata portion,
as the case may be, of the Securities by the Company from the Holders commenced
by the mailing (by first class mail, postage prepaid) by the Company (or, if
requested by the Company on at least five Business Days' prior notice to the
Trustee and at the Company's expense, by the Trustee) of a notice to each Holder
(and, if mailed by the Company, to the Trustee) at such Holder's address
appearing in the Register, stating: (i) the covenant pursuant to which the
offer is being made and that all Securities validly tendered will be accepted
for payment on a pro rata basis; (ii) the purchase price and the date of
purchase (which shall be a Business Day no earlier than 30 days nor later than
60 days from the date such notice is mailed) (the "Payment Date"); (iii) that
any Security not tendered will continue to accrue interest pursuant to its
terms; (iv) that, unless the Company defaults in the payment of the purchase
price, any Security accepted for payment pursuant to the Offer to Purchase shall
cease to accrue interest on and after the Payment Date; (v) that Holders
electing to have a Security purchased pursuant to the Offer to Purchase will be
required to surrender the Security, together with the form entitled "Option of
the Holder to Elect Purchase"
4
attached to this Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date (or, if such day is a Legal Holiday, on
the next subsequent day which is not a Legal Holiday), and such Holder shall be
entitled to receive from the Paying Agent a non-transferable receipt of deposit
evidencing such deposit; (vi) that, unless the Company defaults in making the
payment of the purchase price or shall otherwise, in its sole discretion,
consent thereto, Holders will be entitled to withdraw their election only if the
Trustee receives, not later than the close of business on the fifth Business Day
immediately preceding the Payment Date, a telegram, facsimile transmission or
letter setting forth the name of such Holder, the principal amount at maturity
of Securities delivered for purchase and a statement that such Holder is
withdrawing his election to have such Securities purchased; and (vii) that
Holders whose Securities are being purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered: provided that each Security purchased and each new
Security issued shall be in a principal amount at maturity of $1,000 or integral
multiples thereof. The Company shall place such notice in a financial newspaper
of general circulation in New York City. No failure of the Company to give the
foregoing notice shall limit any Holder's right to exercise a repurchase right.
On the Payment Date, the Company shall (i) accept for payment on a pro rata
basis Securities or portions thereof tendered pursuant to an Offer to Purchase;
(ii) deposit with the Trustee money sufficient to pay the purchase price of all
Securities or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Securities or portions thereof so accepted
together with an Officers' Certificate specifying the Securities or portions
thereof accepted for payment by the Company. The Trustee shall promptly mail to
the Holders of Securities so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate, and the Company shall
promptly execute and mail (or cause to be mailed) to such Holders a new Security
equal in principal amount at maturity to any unpurchased portion of the Security
surrendered; provided that each Security purchased and each new Security issued
shall be in a principal amount at maturity of $1,000 or integral multiples
thereof; provided further that if the Payment Date is between a regular Record
Date and the next succeeding Interest Payment Date, Securities to be repurchased
must be accompanied by payment of an amount equal to the interest and Special
Interest, if any, payable on such succeeding Interest Payment Date on the
principal amount to be repurchased, and the interest on the principal amount of
the Security being repurchased, and Special Interest, if any, with respect
thereto, will be paid on such next succeeding Interest Payment Date to the
registered holder of such Security on the immediately preceding Record Date. A
Security repurchased on an Interest Payment Date need not be accompanied by any
such payment, and the interest on the principal amount of the Security being
repurchased and Special Interest, if any, with respect thereto, will be paid on
such Interest Payment Date to the registered holder of such Security on the
corresponding Record Date. The Company will publicly announce the results of an
Offer to Purchase as soon as practicable after the Payment Date. The Trustee
shall act as the Paying Agent for an Offer to Purchase. The Company will comply
with Rule 14e-l under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable,
in the event that the Company is required to repurchase Securities pursuant to
an Offer to Purchase. Both the notice of the Company and the notice of the
Holder having been given as specified above, the Securities so to be repurchased
shall, on the Payment Date become due and payable at the purchase price
applicable thereto and from and after such date (unless the
5
Company shall default in the payment of such purchase price) such Securities
shall cease to bear interest. If any Security shall not be paid upon surrender
thereof for repurchase, the principal shall, until paid, bear interest from the
Payment Date at the rate borne by such Security. Any Security which is to be
submitted for repurchase only in part shall be delivered pursuant to the above
provisions with (if the Company or Trustee so requires) due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing.
9. Denominations, Transfer, Exchange. The Securities shall be issuable
---------------------------------
only in registered form without coupons and in denominations of $1,000 and
integral multiples thereof. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes required by law or permitted by the
Indenture.
10. Persons Deemed Owners. The Company, the Trustee and any agent of the
---------------------
Company or the Trustee may treat the person in whose name the Security is
registered with the Registrar as the owner for all purposes.
11. Discharge and Defeasance. Subject to certain conditions, the Company
------------------------
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of, interest on, and Special
Interest, if any, with respect to, the Securities to Stated Maturity.
12. Amendments and Waivers. Subject to certain exceptions, the Indenture,
----------------------
the Securities, or the other Operative Documents may be amended with the consent
of the Holders of at least a majority in principal amount of the then
Outstanding Securities, and any existing Default, Event of Default or
acceleration may be waived with the consent of the Holders of a majority in
principal amount of the then Securities Outstanding. Without the consent of any
Holder, the Indenture, the Securities or any of the Operative Documents may be
amended to, among other things, cure any ambiguity, defect or inconsistency.
13. Defaults and Remedies. Events of Default under the Indenture include
---------------------
the following: default for the period specified in the Indenture in payment of
interest on, or Special Interest, if any, with respect to the Securities;
default in payment of principal when due on the Securities (at maturity, upon
acceleration, redemption, repurchase or otherwise); failure by the Company to
comply with specific covenants of the Indenture or the other Operative
Documents; failure by the Company for sixty (60) days after notice to it to
comply in any material respect with any of its other covenants, conditions or
agreements in the Indenture, the other Operative Documents or the Securities,
unless otherwise specified; the occurrence of certain defaults under any
Indebtedness of the Company or any Significant Subsidiary in excess of
$15,000,000 in principal amount; the rendering or domestication of final
judgments by a court of competent jurisdiction against the Company or any
Restricted Subsidiary in an aggregate amount of $15,000,000 or more which remain
undischarged for a period (during which execution is not stayed) of sixty (60)
days after the date on which the right to appeal has expired; cessation of
6
effectiveness of Operative Documents without the consent of the Trustee; and
certain events of bankruptcy, insolvency or reorganization. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee or the Holders of twenty-five percent (25%) in principal amount of
the then Securities Outstanding may declare all the Securities to be due and
payable immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all Securities Outstanding become
due and payable immediately without further action or notice. Securityholders
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the then Outstanding Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish compliance certificates to the
Trustee. The above description of Events of Default and remedies is qualified by
reference, and subject in its entirety to the more complete description thereof
contained in the Indenture.
14. Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication. This Security shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
17. Unclaimed Money. If money for the payment of principal of, interest
---------------
on, or Special Interest, with respect to, or the purchase price for the
Securities remains unclaimed for two (2) years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After such payment, Holders
entitled to any portion of such money must look to the Company for payment
unless an applicable law designates another person.
18. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. CUSIP Numbers. The Company in issuing this Security may use a
-------------
"CUSIP" number (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities
7
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
20. Holders' Compliance with Registration Rights Agreement. Each Holder
------------------------------------------------------
of a Security, by acceptance hereof, acknowledges and agrees to the provisions
of the Registration Rights Agreement, including, without limitation, the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
21. Governing Law. THIS SECURITY SHALL BE GOVERNED BY THE LAWS OF THE
-------------
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
The Company will furnish to any Holder of this Security, upon written
request and without charge, a copy of the Indenture. Request may be made to:
Trans World Airlines, Inc., One City Centre, 000 X. 0xx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Corporate Secretary.
Dated:____________________________ NOTICE: To be executed by an executive
officer
8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
(Insert Assignee's Soc. Sec. or Tax I.D. No.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________ Signature(s):_____________________
agent to transfer this
Security on the books of the Company.
The agent may substitute
another to act for him.
Date:_________________________________ Signature(s):_____________________
_____________________
(Sign exactly as your name(s)
appear(s) on the other side of this
Security)
Signature(s) guaranteed by: (All signatures must be guaranteed
by a member of a national
securities exchange or of the
National Association of Securities
Dealers, Inc. or by a commercial
bank or trust company located in
the United States)
9
OPTION OF THE HOLDER TO ELECT PURCHASE
If you want to elect to have this Security repurchased by the Company
pursuant to any Offer to Purchase under the Indenture, check the box:
[_]
If you want to elect to have only part of this Security repurchased by the
Company pursuant to any Offer to Purchase under the Indenture, state the
principal amount to be repurchased:
$__________________________________
(in an integral multiple of $1,000)
Date:________________________________ Signature(s):__________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by: (All signatures must be guaranteed by
a member of a national securities
exchange or of the National Association
of Securities Dealers, Inc. or by a
commercial bank or trust company located
in the United States)
EXHIBIT A TO INDENTURE
________________________________________________________________________________
ACQUIRED SLOT TRUST AGREEMENT
DECLARATION OF TRUST
DATED AS OF DECEMBER 9, 1997
BY AND BETWEEN
TRANS WORLD AIRLINES, INC.
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS
SLOT TRUSTEE
11 1/2% SENIOR SECURED NOTES DUE 2004
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE......................... 2
Section 1.01. Definitions............................................... 2
Section 1.02. Rules of Construction..................................... 2
ARTICLE 2 NAME............................................................... 2
Section 2.01. Name...................................................... 2
ARTICLE 3 PURPOSE OF SLOT TRUST.............................................. 2
Section 3.01. Purpose................................................... 2
ARTICLE 4 CONVEYANCE OF SLOTS, ORIGINAL ISSUANCE OF CERTIFICATE.............. 2
Section 4.01. Holding and Conveyance of Slots........................... 2
Section 4.02. Acceptance by Slot Trustee................................ 3
Section 4.03. Execution of Beneficial Interest Certificate.............. 3
ARTICLE 5 OWNERSHIP AND TRANSFER OF SLOT TRUST ASSETS........................ 3
Section 5.01. Ownership of Slot Trust Assets............................ 3
Section 5.02. Transfer of Slot Trust Assets............................. 4
ARTICLE 6 BENEFICIAL INTEREST IN THE SLOT TRUST.............................. 4
Section 6.01. Ownership of Beneficial Interest.......................... 4
Section 6.02. Transfer of Beneficial Interest........................... 4
ARTICLE 7 THE SLOT TRUSTEE................................................... 5
Section 7.01. Management of the Slot Trust.............................. 5
Section 7.02. Powers.................................................... 5
Section 7.03. Principal Transactions.................................... 6
Section 7.04. Service in Other Capacities............................... 6
Section 7.05. Resignation and Removal of Slot Trustee................... 6
Section 7.06. Successor Slot Trustee.................................... 6
ARTICLE 8 LIMITATION OF LIABILITY AND INDEMNIFICATION........................ 6
Section 8.01. Limitation of Slot Trustee Liability...................... 6
Section 8.02. Indemnification of Slot Trustee........................... 7
Section 8.03. Duties of Slot Trustee.................................... 7
Section 8.04. Rights of Slot Trustee.................................... 8
ARTICLE 9 VOTING POWERS OF HOLDER OF RECORD OF BENEFICIAL INTEREST........... 9
Section 9.01. No Voting Power........................................... 9
ARTICLE 10 MISCELLANEOUS...................................................... 9
(i)
Section 10.01. Slot Trust Expenses, Etc.................................. 9
Section 10.02. Term of Slot Trust; Filing of Copies...................... 9
Section 10.03. Discharge of Slot Trustee; Termination of Slot Trust...... 9
Section 10.04. Amendment Procedure....................................... 10
Section 10.05. References to Slot Trust and Slot Trustee................. 10
Section 10.06 Notices; Waivers.......................................... 10
Section 10.07. Amendments, Etc........................................... 11
Section 10.08. No Waiver; Remedies....................................... 11
Section 10.09. Conflict with Trust Indenture Act of 1939................. 12
Section 10.10. Holidays.................................................. 12
Section 10.11. Successors and Assigns.................................... 12
Section 10.12. Governing Law; Waiver of Jury Trial....................... 12
Section 10.13. Indemnification........................................... 12
Section 10.14. Effect of Headings........................................ 13
Section 10.15. No Adverse Interpretation of Other Agreement.............. 13
Section 10.16. No Recourse Against Others................................ 13
Section 10.17. Counterpart Originals..................................... 13
Section 10.18. Severability.............................................. 13
Section 10.19. Benefits of Agreement Restricted.......................... 13
Section 10.20. Survival Provisions....................................... 13
SIGNATURE PAGE........................................................... 14
Schedule I - Acquired Slots.............................................. I-1
Schedule II - Prior Third Party Licenses.................................. II-1
Exhibit A - Form of Deed of Conveyance............................. A-1 to A3
Exhibit B - Form of Beneficial Interest Certificate and Power...... B-1 to B3
Exhibit C - Form of Master Sub-License Agreement................. C-1 to C-15
Exhibit 1 - Form of Monthly Report to Slot Trustee............... C-16
Exhibit 2 - Instruction to Transfer Operator Status.............. C-17
Schedule 1 - Slot Release Schedule................................ C-18
(ii)
ACQUIRED SLOT TRUST AGREEMENT
DECLARATION OF TRUST
DATED AS OF DECEMBER 9, 1997
DECLARATION OF TRUST (together with all amendments and supplements hereto,
this "Agreement"), made as of December 9, 1997, executed by TRANS WORLD
AIRLINES, INC., a Delaware corporation, having an office at 000 X. 0xx Xxxxxx,
Xx. Xxxxx, Xxxxxxxx 00000 (herein, together with its successors and assigns,
"TWA"), and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States, having an office at
00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, as trustee (or its successor
in interest or any successor trustee appointed as hereinafter provided and its
assigns, the "Slot Trustee");
R E C I T A L S:
WHEREAS, TWA has duly authorized the issuance of $140,000,000 aggregate
principal amount outstanding of its 11 1/2% Senior Secured Notes due 2004
pursuant to an Indenture (together with all amendments, modifications and
supplements thereto, the "Indenture") dated as of December 9, 1997 between TWA
and First Security Bank, National Association (the "Trustee"); and
WHEREAS, the Indenture requires TWA to establish the Slot Trust for the
purpose of holding the Acquired Slots described in Schedule I for the benefit of
the Holders of the Securities; and
WHEREAS, this Agreement establishes the Slot Trust for the purpose of
holding the Acquired Slots for the benefit of Holders of the Securities (as
defined in the Definitions Appendix described below); and
WHEREAS, as a result of the foregoing, pursuant to the terms of the
Indenture and in order to secure the due and punctual payment, performance and
observance in full of the Obligations (as defined in the Definitions Appendix),
the Beneficial Interest and the Beneficial Interest Certificate, among other
things, will be pledged to the Collateral Agent pursuant to the Pledge Agreement
for the equal and ratable benefit of the Holders of the Securities; and
WHEREAS, TWA has duly authorized the execution and delivery of this
Agreement.
NOW, THEREFORE, both parties agree as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. Capitalized terms used and not otherwise
-----------
defined herein shall have the meanings ascribed to such terms in Section 1 of
the Definitions Appendix attached to the Indenture as Appendix I, which shall be
a part of this Acquired Slot Trust Agreement as if fully set forth in this
place.
Section 1.02. Rules of Construction. The rules of construction for
---------------------
this Acquired Slot Trust Agreement are set forth in Section 2 of the Definitions
Appendix.
ARTICLE 2. NAME
Section 2.01. Name. The Slot Trust established by this Agreement shall
----
be known as the ACQUIRED SLOT TRUST NO. 2 (together with all amendments and
supplements hereto, the "Slot Trust").
ARTICLE 3. PURPOSE OF SLOT TRUST
Section 3.01. Purpose. The purpose for which the Slot Trust has been
-------
formed is (i) to acquire and hold, for the benefit of the holder of the
Beneficial Interest and the Beneficial Interest Certificate, the Acquired Slots
assigned, transferred and conveyed to the Slot Trust pursuant to the Deed of
Conveyance, dated as of December 9, 1997, delivered by TWA to the Slot Trustee
in substantially the form attached as Exhibit A hereto (the "Deed of
Conveyance"), and subsequent deeds of conveyance substantially similar in form
and substance to the Deed of Conveyance (each a "Subsequent Deed of Conveyance")
pursuant to which TWA has transferred and may transfer Slots to the Slot Trust,
the pledge of the Beneficial Interest therein to serve as security for the
payment and performance of the Obligations, and (ii) to transfer such Acquired
Slots, all in accordance with the terms and conditions set forth in this
Agreement, the Master Sub-License Agreement and the Indenture.
ARTICLE 4. CONVEYANCE OF SLOTS, ORIGINAL ISSUANCE OF CERTIFICATE
Section 4.01. Holding and Conveyance of Slots. TWA by the execution
-------------------------------
and delivery hereof, confirms that pursuant to the Deed of Conveyance, it is
assigning, transferring and conveying to the Slot Trust the Acquired Slots
described in Schedule I, in each case free and clear of liens, encumbrances and
rights of others (except for (i) Acquired Slots which are subject to the Prior
Third Party Licenses listed in Schedule II hereto, and (ii) Acquired Slots
subject to Slot Trades) and without recourse (such Acquired Slots, together with
all other Slots which may, from time to time, be assigned, transferred and
conveyed to the Slot Trust from TWA pursuant to the Master Sub-License Agreement
or otherwise, but excluding any Acquired Slots which have been released and
assigned, transferred and reconveyed to TWA from the Slot Trust (unless later
reassigned, retransferred and reconveyed to the Slot Trust) pursuant to the
Master Sub-License
2
Agreement, herein being collectively referred to as the "Acquired Slots" or the
"Slot Trust Assets"), subject to the terms hereof.
Section 4.02. Acceptance by Slot Trustee. The Slot Trustee
--------------------------
acknowledges the prior or concurrent assignment, transfer and conveyance to it
of the Acquired Slots referred to in Section 4.01 hereof and declares that it
holds and will hold all Slot Trust Assets received by it hereunder in trust, in
accordance with, and subject to, the terms herein set forth.
Section 4.03. Execution of Beneficial Interest Certificate. The Slot
--------------------------------------------
Trustee shall execute and record the ownership of the Beneficial Interest
Certificate in accordance with Section 6.01 and deliver it to the Collateral
Agent, whereafter the Beneficial Interest shall be represented by the Beneficial
Interest Certificate, subject to all the terms hereof.
ARTICLE 5. OWNERSHIP AND TRANSFER OF SLOT TRUST ASSETS
Section 5.01. Ownership of Slot Trust Assets. The Slot Trust Assets
------------------------------
shall be held separate and apart from any assets now or hereafter held in any
capacity other than as trustee hereunder by the Slot Trustee. All the assets of
the Slot Trust shall at all times be considered as vested in the Slot Trustee.
For so long as the Slot Trust Assets are held by the Slot Trust, TWA shall not,
and shall not be deemed to, have ownership in, or any rights of the holder of
record at the FAA with respect to, any Slot Trust Asset or any right of
partition or possession thereof, but TWA or its permitted assignee shall have an
undivided beneficial ownership interest in the entire Slot Trust. It is the
intent hereof that by the Deed of Conveyance, any Subsequent Deed of Conveyance,
this Agreement and the Master Sub-License Agreement, TWA (for all purposes other
than tax purposes) has assigned, transferred and conveyed (or in the case of any
Subsequent Deed of Conveyance, will have assigned, transferred and conveyed) its
entire interest in the Acquired Slots to the Slot Trust subject to no Liens
except Permitted Collateral Liens, and that TWA can only acquire an interest
therein upon satisfaction of all the Obligations or under the limited
circumstances set forth in Article 6 of the Master Sub-License Agreement. If,
notwithstanding TWA's failure to satisfy all the Obligations or comply with said
Article 6, it is held or determined that any present or future right or interest
in any Acquired Slot does so exist in TWA by contingent right of reverter,
expectancy or otherwise, TWA agrees that such holding or determination is
contrary to the intent hereof and that it has no right to, and shall not,
transfer or otherwise place any Lien upon such interest or make any agreement or
understanding to do so unless and until all the Obligations have been satisfied
or such Acquired Slot shall have ceased to be an Acquired Slot for all purposes
hereof and of the Master Sub-License Agreement.
Section 5.02. Transfer of Slot Trust Assets. Except as provided in the
-----------------------------
Master Sub-License Agreement, including Section 6.02 thereof, until such time as
the Slot Trust receives notice from the Indenture Trustee that (i) TWA has
satisfied all of its Obligations or (ii) acceleration of TWA's obligations under
the Securities has occurred, the Slot Trust shall not transfer any of the Slot
Trust Assets. Upon receipt of notice from the Indenture Trustee that no Event of
Default exists and TWA has satisfied all of the Obligations, the Slot Trustee
shall, subject to the provisions of Section 9.02 of the Master Sub-License
Agreement, and except as otherwise provided in Section 9.02 thereof, reassign,
retransfer and reconvey to TWA or its
3
designee by deed of conveyance, without recourse, representation or warranty,
all of the Acquired Slots then held as Slot Trust Assets. Upon receipt of notice
from the Indenture Trustee that acceleration of TWA's obligations under the
Securities has occurred, the Slot Trust, upon direction from the Indenture
Trustee, shall take all such actions as are appropriate and necessary, in the
exercise of its sole and exclusive discretion, to protect the interests of the
Holders of the Securities, including without limitation, to deny TWA use of the
Acquired Slots (the Master Sub-License Agreement having terminated), to cause or
allow the termination of, enforce attornment obligations under or otherwise deal
with Third-Party Licenses and to transfer by deed of conveyance without
recourse, representation or warranty any or all of the Acquired Slots.
Notwithstanding the foregoing, if the Slot Trust or the Slot Trustee (in
its capacity as Slot Trustee) receives any Property other than Slot Trust Assets
(including, without limitation, cash and/or Investment Securities) such Property
shall be immediately delivered to the Collateral Agent.
ARTICLE 6. BENEFICIAL INTEREST IN THE SLOT TRUST
Section 6.01. Ownership of Beneficial Interest. TWA shall be the holder
--------------------------------
of record of the Beneficial Interest Certificate; provided however that upon
acceleration of the Securities in accordance with the Indenture, the Collateral
Agent may at any time in its discretion and without notice to TWA request that
the Slot Trustee transfer to or register in its name the Beneficial Interest
Certificate, and thereupon shall become holder of record of such certificate.
The ownership of the Beneficial Interest and the Beneficial Interest Certificate
shall be recorded by the Slot Trustee on the books of the Slot Trust. The record
books of the Slot Trust shall be conclusive as to who is the holder of record of
the Beneficial Interest and the Beneficial Interest Certificate.
Section 6.02. Transfer of Beneficial Interest. So long as TWA is
-------------------------------
recorded on the books of the Slot Trust as the holder of record of the
Beneficial Interest and the Beneficial Interest Certificate, TWA shall not
transfer or assign the Beneficial Interest and/or the Beneficial Interest
Certificate to any Person, except that TWA may pledge, transfer or assign the
Beneficial Interest and the Beneficial Interest Certificate to the Collateral
Agent under the Pledge Agreement and to no other Person. At such time as the
Collateral Agent becomes the holder of record of the Beneficial Interest and the
Beneficial Interest Certificate, the Beneficial Interest and the Beneficial
Interest Certificate shall be fully transferable and assignable. Any assignment
of the Beneficial Interest or Beneficial Interest Certificate in violation of
this Agreement shall be null and void ab initio.
ARTICLE 7. THE SLOT TRUSTEE
Section 7.01. Management of the Slot Trust. The business and affairs of
----------------------------
the Slot Trust shall be managed by the Slot Trustee, and the Trustee shall have
all powers granted to it pursuant to applicable law and under this Agreement.
4
Section 7.02. Powers. The Slot Trustee in all instances shall carry out
------
its duties under this Agreement without interference by TWA. The Slot Trustee
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments necessary in connection with its
duties under this Agreement. In addition to the powers granted to the Slot
Trustee pursuant to applicable law and subject to any applicable limitation in
this Agreement, the Slot Trustee shall have power and authority:
(a) To enter into and perform on behalf of the Slot Trust
the Master Sub-License Agreement, under substantially the terms and
conditions set forth in the form of such agreement attached as Exhibit
C hereto;
(b) To hold on behalf of the Slot Trust the Acquired Slots
assigned, transferred and conveyed to the Slot Trust from TWA pursuant
to the Deed of Conveyance or any Subsequent Deed of Conveyance from
TWA;
(c) To cancel, terminate and declare null and void the
Master Sub- License Agreement pursuant to the terms of such agreement;
(d) After acceleration of TWA's obligations under the
Securities in accordance with the Indenture (i) to take such actions
as are appropriate and necessary in the exercise of its sole and
exclusive discretion, to enter into, cause or allow the termination
of, enforce attornment obligations under or otherwise deal with
sublicenses and Third-Party Licenses and (ii) to assign, transfer and
convey by deed of conveyance, without recourse, representation or
warranty, any or all of the Acquired Slots, upon direction of the
Indenture Trustee;
(e) To transfer to the Collateral Agent any property other
than Slot Trust Assets (including, without limitation, cash and/or
Investment Securities) delivered to it; and
(f) To reassign, retransfer and reconvey by deed of
conveyance without recourse, representation or warranty (except as
otherwise provided in Section 9.02 of the Master Sub-License
Agreement) to TWA the Acquired Slots held as Slot Trust Assets, upon
receipt of notice from the Indenture Trustee of satisfaction by TWA of
all its Obligations or under certain circumstances with respect to
certain Acquired Slots as set forth in the Master Sub-License
Agreement.
Section 7.03. Principal Transactions. The Slot Trustee shall not on
----------------------
behalf of the Slot Trust, or otherwise, transfer any Slot Trust Assets or any
other property delivered to the Slot Trustee or the Slot Trust from the Slot
Trust or sell or lend any Slot Trust Assets or any other property delivered to
the Slot Trustee or the Slot Trust to any person, except as set forth in
Sections 5.02 and 7.02 hereof.
Section 7.04. Service in Other Capacities. The Slot Trustee may serve
---------------------------
in any other capacity on its own behalf or on behalf of others (and must serve
as Indenture Trustee and as
5
Collateral Agent), and may engage in such other business activities in addition
to its services on behalf of the Slot Trust as may be desirable and permissible
under any applicable law. The Slot Trustee agrees to, and shall have the
benefit of, all provisions of the Indenture and the Operative Documents stated
therein to be agreements of or applicable to the Slot Trustee.
Section 7.05. Resignation and Removal of Slot Trustee. The Slot Trustee
---------------------------------------
may resign or be removed and a successor Slot Trustee appointed in accordance
with the terms of Section 7.8 of the Indenture; provided, however, that upon the
occurrence of an Event of Default, the Slot Trustee shall, if required under
applicable law to preserve the existence of the Slot Trust, resign and/or
appoint a successor individual trustee who shall be an individual person and
shall for all purposes be the Slot Trustee hereunder.
Section 7.06. Successor Slot Trustee. Any successor Slot Trustee
----------------------
appointed as provided in Section 7.05 hereof or which became a successor Slot
Trustee in accordance with Section 7.8 of the Indenture shall execute,
acknowledge and deliver to TWA and to its predecessor Slot Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Slot Trustee shall become effective, and such successor Slot
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Slot Trustee herein. The
predecessor Slot Trustee shall deliver to the successor Slot Trustee all
documents and statements held by it hereunder, and TWA and the predecessor Slot
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully, and certainty in, vesting and
confirming in the successor Slot Trustee all such rights, powers, duties and
obligations.
ARTICLE 8. LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.01. Limitation of Slot Trustee Liability. Every act or thing
--------------------------------------
done or omitted, and every power exercised or obligation incurred by the Slot
Trustee in the administration of the Slot Trust or in connection with any
business, property or concerns of the Slot Trust, whether ostensibly in its own
name or in its capacity as Slot Trustee, shall be done, omitted, exercised or
incurred by it as Slot Trustee; and every person contracting or dealing with the
Slot Trustee or having any debt, claim or judgment against it shall look only to
TWA for payment or satisfaction; and the Slot Trustee shall not be personally
liable for or on account of any contract, debt, tort, claim, damage, judgment or
decree arising out of or connected with the administration or preservation of
the Slot Trust Assets or the conduct of any business of the Slot Trust.
Except as provided in Section 9.01 of the Master Sub-License Agreement, the
Slot Trustee does not make and shall not be deemed to have made any
representation or warranty, expressed or implied, as to the title,
merchantability, compliance with specifications, condition, design, operation,
fitness for use or for a particular purpose, or any other representation or
warranty whatsoever, expressed or implied, with respect to the Slot Trust
Assets.
The Slot Trustee shall not be subject to any personal liability whatsoever
to any person for any action or failure to act (including, without limitation,
the failure to compel in any way any
6
former or acting Slot Trustee to redress any breach of trust) and all Persons
shall look solely to TWA for satisfaction of claims of any nature arising in
connection with the affairs of the Slot Trust, except for the Slot Trustee's own
bad faith or negligence.
Section 8.02. Indemnification of Slot Trustee. TWA shall indemnify and
-------------------------------
hold harmless the Slot Trustee to the same extent provided for the Indenture
Trustee under Section 7.7 of the Indenture, and the Slot Trustee shall have
those rights set forth in such Section 7.7 for the Indenture Trustee.
Section 8.03. Duties of Slot Trustee. If an Event of Default has
----------------------
occurred and is continuing, the Slot Trustee shall exercise such of the rights
and powers vested in it by this Agreement and use the same degree of care and
skill in such exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
Except during the continuance of an Event of Default:
(a) The Slot Trustee need perform only those duties as
specifically set forth in this Agreement and no others.
(b) In the absence of bad faith on its part, the Slot Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Slot Trustee and conforming to the requirements
of this Agreement. However, the Slot Trustee shall examine the certificates
and opinions to determine whether or not they conform to the requirements
of this Agreement.
(c) The Slot Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph (c) does not limit the effect of
paragraph (b) of this Section 8.03 or of Section 8.04 hereof;
(ii) The Slot Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Slot Trustee was negligent in ascertaining the
pertinent facts;
(iii) The Slot Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.02 hereof;
and
(iv) The Slot Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(d) Every provision of this Agreement that in any way relates
to the Slot Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 8.03.
7
(i) Except as specifically set forth herein, in the Master Sub-
License Agreement or in the Pledge Agreement, the Slot Trustee shall have
no duty (i) to perform any recording or filing in connection with the Slot
Trust Assets, (ii) to see to the payment or discharge of any tax,
assessment or other governmental charge or any lien owing with respect to,
or assessed or levied against, any part of the Slot Trust Assets, or (iii)
to take any other actions in connection with the use, operation, management
or maintenance of the Slot Trust Assets.
Section 8.04. Rights of Slot Trustee . (a) The Slot Trustee may rely on
----------------------
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Slot Trustee need not investigate any fact or matter
stated in any such document.
(b) Before the Slot Trustee acts or refrains from acting, it
may require an Opinion of Counsel, satisfactory to the Slot Trustee in its
reasonable discretion, which shall conform to Section 11.5 of the
Indenture. The Slot Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion.
(c) The Slot Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Slot Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers. The Slot Trustee shall have the right at any
time to seek instruction concerning the administration of this Agreement or
the trust created thereby from any court of competent jurisdiction.
(e) The Slot Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
ARTICLE 9. VOTING POWERS OF HOLDER OF RECORD OF BENEFICIAL INTEREST
Section 9.01. No Voting Power. So long as TWA is the holder of record
---------------
of the Beneficial Interest and the Beneficial Interest Certificate, TWA shall
have no voting power with respect to any matter relating to the Slot Trust,
unless, and only to the extent, required by law, which vote shall be exercised
by the Collateral Agent. At such time as the Collateral Agent becomes the holder
of record of the Beneficial Interest and the Beneficial Interest Certificate,
the Collateral Agent shall have all voting power with respect to any and all
matters relating to the Slot Trust, including, without limitation, the
dissolution of the Slot Trust, any direction to the Slot Trustee to make
distributions, in kind or otherwise, or any direction to the Slot Trustee to
sell, lease or otherwise dispose of the Slot Trust Assets; provided these powers
are not in derogation of any powers or rights exercisable by the Slot Trustee
under Section 7.02.
8
ARTICLE 10. MISCELLANEOUS
Section 10.01. Slot Trust Expenses, Etc. TWA shall pay all reasonable
------------------------
expenses and disbursements of the Slot Trust and the Slot Trustee, including,
without limitation, taxes (to the extent provided in Section 4.02 of the Pledge
Agreement), fees and commissions of every kind incurred in connection with the
activities of the Slot Trust; expenses of registering and qualifying the Slot
Trust and the Beneficial Interest under Federal and State laws and regulations,
legal expenses, and such non-recurring items as may arise, including litigation
to which the Slot Trust or the Slot Trustee is a party, and for all losses and
liabilities incurred in administering the Slot Trust.
Section 10.02. Term of Slot Trust; Filing of Copies. The term of the
------------------------------------
Slot Trust shall be from the date of this Agreement to and including such time
as all of the Slot Trust Assets have been assigned, transferred and conveyed
pursuant to the terms set forth herein. The original or a copy of this
instrument and of each Declaration of Trust supplemental hereto shall be kept at
the office of the Slot Trustee.
Section 10.03. Discharge of Slot Trustee; Termination of Slot Trust. Upon
----------------------------------------------------
completion of the assignment, transfer and conveyance of the Slot Trust Assets
pursuant to the terms set forth herein, the Slot Trustee shall be discharged of
any and all further liabilities and duties hereunder and this Slot Trust and the
right, title and interest of all parties hereto shall be canceled and
discharged.
Section 10.04. Amendment Procedure. (a) Except as provided in Section
-------------------
10.04(b) hereof and subject to Section 4.11 of the Indenture and Article 9 of
the Indenture, this Agreement may be amended by TWA and the Slot Trustee only
with the affirmative vote of the Required Holders; provided, however, that the
--------
affirmative vote of each Holder shall be required to amend this Section 10.04.
(b) TWA and the Slot Trustee may also amend this Agreement
without the vote of the Holders of the Securities if such parties each deem
it necessary to cure any ambiguity, defect or inconsistency or conform the
Slot Trust and/or this Agreement to the requirements of applicable laws, so
long as such amendment or amendments do not have a material adverse effect
on the interests of the Holders, but the Slot Trustee shall not be liable
for failing so to do.
(c) Notwithstanding the foregoing, nothing contained in this
Agreement shall permit any amendment of this Agreement which would impair
the exemption from personal liability of the Slot Trustee.
Section 10.05. References to Slot Trust and Slot Trustee. All references
-----------------------------------------
in this Agreement and all other Operative Documents to the Slot Trust or the
Slot Trustee shall be to both the Slot Trust and the Slot Trustee unless such a
reference would render the provision in which it is contained meaningless or
ambiguous.
9
Section 10.06. Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with
(a) TWA shall be sufficient for every purpose hereunder if in
writing (including telecopied communications) and made, given, furnished or
filed by personal delivery or mailed by first-class mail, or by a
nationally recognized overnight courier, postage or courier charges, as the
case may be, prepaid, to TWA at:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President & General Counsel
Telecopier No.: (000) 000-0000
(b) the Slot Trustee shall be sufficient for every purpose
hereunder if in writing (including telecopied communications) and made,
given, furnished or filed by personal delivery or mailed by registered or
certified mail, or by a nationally recognized overnight courier, postage or
courier charges, as the case may be, prepaid, to or with the Slot Trustee
at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Corporate Trust Department
Telecopier No.: (000) 000-0000
or to any of the above parties at any other address or telecopier number
subsequently furnished in writing by it to each of the other parties listed
above. An affidavit by any person representing or acting on behalf of TWA or
the Slot Trustee as to such mailing, having any registry receipt required by
this Section attached, shall be conclusive evidence of the giving of such
demand, notice or communication.
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first-class mail or by nationally recognized overnight courier,
postage or courier charges, as the case may be, prepaid, at such Holder's
address as it appears on the Register and shall be sufficiently given to such
Holder if so mailed within the time prescribed.
Failure to mail a notice or send a communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Notices to
the Slot Trustee or to TWA are deemed given only when received. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by
10
the Holders shall be filed with the Slot Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
Section 10.07. Amendments, Etc. No amendment or waiver of any provision
---------------
of this Agreement nor consent to any departure by TWA therefrom shall in any
event be effective unless the same shall be in writing, approved by the Required
Holders (to the extent required herein or by the Indenture) and signed by the
Slot Trustee, and then any such waiver or consent shall only be effective in the
specific instance and for the specific purpose for which given.
Section 10.08. No Waiver; Remedies. (a) No failure on the part of he
-------------------
Slot Trustee to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right, or constitute an election precluding any other or further
exercise of any alternative right, of the Slot Trustee, the Collateral Agent or
the Indenture Trustee under the Indenture or any Operative Document. The
remedies herein provided are cumulative, may be exercised singly or
concurrently, and are not exclusive of any remedies provided by law or the
Indenture, the Securities or any of the other Operative Documents.
(b) Failure by the Slot Trustee at any time or times hereafter to
require strict performance by TWA or any other Person of any of the provisions,
warranties, terms or conditions contained herein or in any of the Indenture, the
Securities or any other Operative Documents now or at any time or times
hereafter executed by TWA or any such other Person and delivered to the Slot
Trustee shall not waive, affect or diminish any right the Slot Trustee at any
time or times hereafter to demand strict performance thereof, and such right
shall not be deemed to have been modified or waived by any course of conduct or
knowledge of the Slot Trustee or any agent, officer or employee of the Slot
Trustee.
Section 10.09. Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent any provision of this Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the TIA, such imposed
duties shall control.
Section 10.10. Holidays. In the event that any date for the payment of
--------
any amount due hereunder shall not be a Business Day, such payments
(notwithstanding any other provision of this Agreement) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the due date, and no interest shall accrue for the
period from such due date to and including the next succeeding Business Day.
Section 10.11. Successors and Assigns. This Agreement and all
----------------------
obligations of TWA hereunder shall be binding upon the successors and permitted
assigns of TWA and shall, together with the rights and remedies of the Slot
Trustee hereunder, inure to the benefit of the Slot Trustee, the Holders, and
their respective successors and assigns. TWA and the Slot Trustee understand
and agree that the interest of TWA under this Agreement is not assignable and
that any attempt to assign all or any portion of this Agreement by TWA shall be
null and void except for an assignment in connection with a merger,
consolidation or sale of substantially all TWA's assets permitted under the
Indenture.
11
Section 10.12. Governing Law; Waiver of Jury Trial.
-----------------------------------
(a) The laws of the State of New York shall govern this Agreement
without regard to principles of conflict of laws.
(b) TWA and the Slot Trustee each waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Agreement.
Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
Section 10.13. Indemnification. TWA agrees to pay, and to save the Slot
---------------
Trustee harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all excise, sales or other similar taxes which
may be payable or determined to be payable in connection with any of the
transactions contemplated by this Agreement.
Section 10.14. Effect of Headings. The Article and Section headings and
------------------
the Table of Contents contained in this Agreement have been inserted for
convenience of reference only, and are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of this Agreement.
Section 10.15. No Adverse Interpretation of Other Agreement. This
--------------------------------------------
Agreement may not be used to interpret any security agreement of TWA or any of
its Subsidiaries which is unrelated to the Indenture, the Securities or the
other Operative Documents. Any such security agreement may not be used to
interpret this Agreement.
Section 10.16. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder, as such, of TWA shall not have any liability for any
obligations of TWA under this Agreement or for any claim based on, in respect of
or by reason of such obligations or its creation.
Section 10.17. Counterpart Originals. This Agreement may be signed in
---------------------
two or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.
Section 10.18. Severability. The provisions of this Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction, and a Holder shall have no claim therefor against
any party hereto.
Section 10.19. Benefits of Agreement Restricted. Subject to the
--------------------------------
provisions of Section 10.11 hereof, nothing in this Agreement, express or
implied, shall give or be construed to give to any Person, firm or corporation,
other than the parties hereto and their successors and the Holders, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
12
under any covenant, condition, or provision herein contained, all such
covenants, conditions and provisions being for the sole benefit of the parties
hereto and their successors and of the Holders.
Section 10.20. Survival Provisions. Notwithstanding any right of the
-------------------
Collateral Agent, the Initial Purchasers or any of the Holders to investigate
the affairs of TWA, and notwithstanding any knowledge of facts determined or
determinable by any of them pursuant to such investigation or right of
investigation, all representations, warranties and covenants of TWA contained
herein shall survive the execution and delivery of this Agreement, and shall
terminate only upon the termination of this Agreement.
13
IN WITNESS WHEREOF, the parties have caused this Acquired Slot Trust
Agreement to be duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: _______________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Slot Trustee
By: _______________________________
Name:
Title:
14
SCHEDULE I
TO ACQUIRED SLOT TRUST AGREEMENT
ACQUIRED SLOTS
--------------
The Acquired Slots consist of thirty (30) slots at Washington National
Airport more particularly identified by number, time and frequency as follows:
Slot Number Slot Time A/D Frequency
DCA A 1521 0000 X XXX
XXX A 1585 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1051 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1139 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1481 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1420 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1666 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1345 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1460 0000 X XXX
XXX A 1473 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1221 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1561 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1100 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1353 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1441 0000 X XXX
XXX X 0000 0000 X XXX
XXX A 1575 0000 X XXX
XXX A 1642 2200 N DLY
I-1
SCHEDULE II
TO ACQUIRED SLOT TRUST AGREEMENT
PRIOR THIRD PARTY LICENSES
--------------------------
END OF
SLOT REMAINING
SLOT NUMBER TIME A/D FREQUENCY CARRIER TERM
----------- ------ ---- ----------- --------- -----------
DCA A 1208 0000 X XXX Xxxxxxxx 0/00/00
Xxxxxxxx
XXX A 1345 1500 N DLY American 6/30/98
Airlines
II-1
EXHIBIT A
TO ACQUIRED SLOT TRUST AGREEMENT
________________________________________________________________________________
FORM OF
DEED OF CONVEYANCE
AND
ASSIGNMENT OF SLOTS
FROM
TRANS WORLD AIRLINES, INC.
TO
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS SLOT TRUSTEE OF THE ACQUIRED SLOT TRUST NO. 2
11 1/2% SENIOR SECURED NOTES DUE 2004
________________________________________________________________________________
EXHIBIT A
FORM OF
DEED OF CONVEYANCE AND
ASSIGNMENT OF SLOTS
FOR VALUE RECEIVED the undersigned TRANS WORLD AIRLINES, INC. ("TWA") on
behalf of itself and for its successors and assigns does hereby assign, transfer
and convey to the ACQUIRED SLOT TRUST NO. 2 (together with all amendments and
supplements thereto, the "Slot Trust") created by that certain Acquired Slot
Trust Agreement Declaration of Trust dated as of December 9, 1997 (as the same
may be amended and supplemented from time to time, the "Acquired Slot Trust
Agreement"), with First Security Bank, National Association, a national banking
association, as trustee (together with its successors in trust and assigns the
"Slot Trustee") all of the rights, titles, interests and privileges of TWA in
and to the primary operating authority granted by the Federal Aviation
Administration (the "FAA") pursuant to Title 14 of the Code of Federal
Regulations, Part 93, Subparts K & S, as amended from time to time, or any
recodification thereof in any regulation ("Title 14"), to conduct certain
Instrument Flight Rule (as defined under the Federal Aviation Act of 1958, as
amended) take-offs or landings in specified one-hour or half-hour periods (the
"Slots," each of which is set forth on Schedule I.). Capitalized terms used
herein and not otherwise defined have the respective meanings ascribed to them
in the Acquired Slot Trust Agreement or incorporated therein by reference.
The reference to the Slot Trustee having "transferred" to TWA the Acquired
Slots in the parties' facsimile transmittal to the Office of Slot
Administration, Office of the Chief Counsel - Slot Transfers, Federal Aviation
Administration, dated December 8, 1997, refers to the transfer made by the
execution and delivery of this DEED OF CONVEYANCE.
This Conveyance is an absolute and complete conveyance of all of the Slots.
TWA shall have the exclusive temporary leasehold or sub-license for the use
of the Slots during the period set forth in that certain Master Sub-License
Agreement between the Slot Trustee and TWA, dated as of December 9, 1997 (as the
same may be amended and supplemented from time to time, the "Master Sub-License
Agreement"), subject to the terms thereof. The Slot Trustee, as trustee of the
Slot Trust, shall continue to be the holder of record at the FAA with respect to
the Slots, subject to the regulations adopted by the FAA pursuant to
authorization of the Secretary of Transportation of the United States.
TWA does hereby warrant and represent to the Slot Trust and the Slot
Trustee that it has been granted the Slots by the FAA pursuant to Title 14,
subject only to regulation by the FAA, that TWA holds the Slots free and clear
of any liens or other encumbrances or rights of others, subject only to (i) Slot
Trades in effect on the date hereof, and (ii) the Third Party Licenses in effect
on the date hereof and listed on Schedule II to the Acquired Slot Trust
Agreement.
TWA further warrants and represents that it has, at all times since
obtaining each Slot, complied in all material respects with all of the terms,
conditions and regulations set forth in
A-1
Title 14. With specificity, TWA warrants and represents that there are existing
at this time no violations of the terms, conditions and regulations of the
aforesaid regulatory enactments adopted by the FAA, the result of which would
give the FAA in the exercise of its powers the right to terminate, cancel,
withdraw or revoke any of the Slots.
TWA further warrants and represents that it has used all of the Slots in
accordance with Section 93.227 of Title 14 since the date that it obtained each
of the Slots.
TWA further warrants and represents that the Slots are not Slots which have
been categorized as "essential air service Slots," "international Slots" or
"temporary Slots" by the FAA.
TWA further warrants and represents that the execution and delivery of this
DEED OF CONVEYANCE and the execution of the related documents shall not and does
not create a default or an event of default under any existing loan agreement,
mortgage, deed of trust, indenture, contract or other material agreement to
which TWA is a party, and does not violate any term, covenant and condition of
any other material agreement with any regulatory authority or any of the
provisions of the Certificate of Incorporation or By-Laws of TWA as in effect on
the date hereof.
IN WITNESS WHEREOF, the undersigned, TWA, by and through its duly
undersigned authorized officer does hereby execute this DEED OF CONVEYANCE as of
this 9th day of December, 1997.
TRANS WORLD AIRLINES, INC.
By: _______________________________
Name:
Title:
A-2
Before me personally appeared this 9th day of
---
December, 1997,___________, _____________, as
______________________________ of TRANS WORLD
AIRLINES,INC., a Delaware corporation, who in
my presence did execute this DEED OF
CONVEYANCE and acknowledged that he/she
executed this DEED OF CONVEYANCE for the
purpose stated herein as an act and deed of said
corporation.
_____________________________________________
Name:
_____________________________________________
Notarial Seal _____________________________
Acknowledged and Agreed to as of this 9th
day of December, 1997.
ACQUIRED SLOT TRUST NO. 2
First Security Bank, National Association,
as Slot Trustee on behalf of the Acquired Slot Trust
No. 2
By: ____________________________________
Name:
Title:
After recording and confirmation please return to First Security Bank, National
Association, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Attention:
Corporate Trust Department
A-3
EXHIBIT B
TO ACQUIRED SLOT TRUST AGREEMENT
________________________________________________________________________________
BENEFICIAL INTEREST CERTIFICATE
UNDER
ACQUIRED SLOT TRUST AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS SLOT TRUSTEE
11 1/2% SENIOR SECURED NOTES DUE 2004
________________________________________________________________________________
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS AND LIMITATIONS SET FORTH IN SECTIONS 5.02 AND
6.02 OF THE ACQUIRED SLOT TRUST AGREEMENT REFERRED TO BELOW
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS
SLOT TRUSTEE UNDER THE ACQUIRED SLOT
TRUST AGREEMENT DATED DECEMBER 9, 1997
BENEFICIAL INTEREST CERTIFICATE No. 1
December 9, 1997
FIRST SECURITY BANK, NATIONAL ASSOCIATION, as Slot Trustee (the "Slot
Trustee") under the Acquired Slot Trust Agreement Declaration of Trust, dated as
of December 9, 1997 (as the same may be amended and supplemented from time to
time, the "Acquired Slot Trust Agreement") between TRANS WORLD AIRLINES, INC.
("TWA") and the Slot Trustee (capitalized terms used herein and not otherwise
defined have the respective meanings ascribed to them in the Acquired Slot Trust
Agreement or incorporated therein by reference), hereby certifies as follows:
(i) this Beneficial Interest Certificate is the Beneficial Interest Certificate
referred to in the Acquired Slot Trust Agreement, which Beneficial Interest
Certificate has been executed by the Slot Trustee; and (ii) TWA, as the holder
of record of this Beneficial Interest Certificate (the "Holder"), has an
undivided beneficial ownership interest in the entire Slot Trust; however, all
the assets of the Slot Trust shall at all times be considered as vested in the
Slot Trustee.
The ownership of this Beneficial Interest Certificate shall be recorded by
the Slot Trustee on the books of the Slot Trust, at the corporate trust office
of the Slot Trustee at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000,
Attention: Corporate Trust Department, or at the office of any successor Slot
Trustee, in accordance with Section 6.01 of the Acquired Slot Trust Agreement.
Reference is hereby made to the Acquired Slot Trust Agreement, the Pledge
and Security Agreement dated as of December 9, 1997 between TWA and the
Collateral Agent thereunder, the Indenture dated as of December 9, 1997 between
TWA and the Trustee (as defined therein) and the Master Sub-License Agreement
dated as of December 9, 1997 between TWA and the Slot Trustee for a statement of
the rights of the Holder of this Beneficial Interest Certificate, as well as for
a statement of the terms and conditions of the trust created by the Acquired
Slot Trust
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Agreement, to all of which terms and conditions the Holder hereof agrees by its
acceptance of this Beneficial Interest Certificate.
THIS BENEFICIAL INTEREST CERTIFICATE MAY BE TRANSFERRED, SOLD, ASSIGNED OR
OTHERWISE DISPOSED OF BY THE HOLDER HEREOF ONLY IN ACCORDANCE WITH THE
PROVISIONS OF SECTIONS 5.02 AND 6.02 OF THE ACQUIRED SLOT TRUST AGREEMENT. The
Holder hereof, by its acceptance of this Beneficial Interest Certificate, agrees
not to transfer, sell, assign or otherwise dispose of this Beneficial Interest
Certificate except in accordance with the terms of Sections 5.02 and 6.02 of the
Acquired Slot Trust Agreement. Upon surrender of this Beneficial Interest
Certificate for registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed by the registered Holder hereof or
his attorney duly authorized in writing, and after compliance with the
provisions of Sections 5.02 and 6.02 of the Acquired Slot Trust Agreement, a new
Beneficial Interest Certificate representing the undivided beneficial interest
in the entire Slot Trust will be executed and delivered to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Slot Trustee may treat the Person in whose name this Beneficial
Interest Certificate is registered as the owner hereof for all purposes set
forth in the Acquired Slot Trust Agreement.
IN WITNESS WHEREOF, the Slot Trustee has caused this Beneficial Interest
Certificate to be duly executed by an authorized officer of the Slot Trustee as
of the date first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Slot Trustee
By: ______________________________
Name:
Title:
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BENEFICIAL INTEREST CERTIFICATE POWER
FOR VALUE RECEIVED, ____________________________________________________ hereby
sells, assigns and transfers unto _____________________________________________
(_________) percent of the ownership of the beneficial interest in the ACQUIRED
SLOT TRUST NO. 2 (the "Slot Trust") created pursuant to that certain Acquired
Slot Trust Agreement Declaration of Trust, dated as of December 9, 1997 (the
"Acquired Slot Trust Agreement"), made by Trans World Airlines, Inc., a Delaware
corporation (the "Company"), and First Security Bank, National Association, a
national bank, as slot trustee (the "Slot Trustee"), standing in the Company's
name on the books of the Slot Trustee represented by Beneficial Interest
Certificate No. 1, herewith, and do hereby irrevocably constitute and appoint
____________________________________ attorney to transfer said beneficial
interest certificate on the books of said Trust with full power of substitution
in the premises.
Dated:
TRANS WORLD AIRLINES INC.
By: ______________________________
Name:
Title:
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EXHIBIT C
TO ACQUIRED SLOT TRUST AGREEMENT
________________________________________________________________________________
MASTER SUB-LICENSE AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
("TWA")
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
PURSUANT TO THE ACQUIRED SLOT TRUST AGREEMENT
DATED AS OF DECEMBER 9, 1997
11 1/2% SENIOR SECURED NOTES DUE 2004
________________________________________________________________________________
MASTER SUB-LICENSE AGREEMENT
THIS MASTER SUB-LICENSE AGREEMENT dated as of December 9, 1997 (herein,
together with all supplements and amendments hereto, this "Agreement"), made by
TRANS WORLD AIRLINES, INC., a Delaware corporation, having an office at 000 X.
0xx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 (herein, together with its successors and
assigns, "TWA") and the trust existing under the Acquired Slot Trust Agreement
Declaration of Trust, dated as of December 9, 1997 (the "Slot Trust"), with
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a banking association organized under
the laws of the United States, having an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000 (herein, together with its successors in trust and
assigns, the "Slot Trustee").
R E C I T A L S:
WHEREAS, TWA and First Security Bank, National Association, as Trustee,
have contemporaneously herewith entered into that certain Indenture dated as of
December 9, 1997 (the "Indenture") providing for the issuance of $140,000,000
aggregate principal amount outstanding of 11 1/2% Senior Secured Notes due 2004;
and
WHEREAS, TWA granted, assigned, transferred and conveyed to the Slot Trust
by the Deed of Conveyance (as defined in the Definitions Appendix described
below) all of the Acquired Slots set forth in Schedule I to the Acquired Slot
Trust Agreement; and from time to time hereafter TWA may assign, transfer and
convey to the Slot Trust other Slots pursuant to any Subsequent Deed of
Conveyance. All Slots so conveyed to the Slot Trust by the Deed of Conveyance
and Subsequent Deeds of Conveyance (as defined in the Definitions Appendix)
together constitute the "Acquired Slots"; and
WHEREAS, the Slot Trustee has agreed to grant to TWA an exclusive sub-
license (the "Sub-License") to use the Acquired Slots in accordance with this
Agreement; and
WHEREAS, as security for the due and punctual payment, performance and
observance in full of the Obligations (as defined in the Definitions Appendix),
TWA pledged, among other things, the Beneficial Interest and the Beneficial
Interest Certificate, to the Collateral Agent on behalf of the holders of the
Securities; and
WHEREAS, TWA has duly authorized the execution and delivery of this
Agreement.
NOW, THEREFORE, both parties agree as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities
(the "Holders").
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. Capitalized terms used and not otherwise
-----------
defined herein shall have the meanings ascribed to such terms in Section 1 of
the Definitions Appendix attached to
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the Indenture as Appendix I, which shall be a part of this Master Sub-License
Agreement as if fully set forth in this place.
Section 1.02. Rules of Construction. The rules of construction for this
---------------------
Master Sub-License Agreement are set forth in Section 2 of the Definitions
Appendix.
ARTICLE 2. SUB-LICENSE
Section 2.01. Grant of Sub-License. The Slot Trust does hereby grant unto
--------------------
TWA an exclusive Sub-License to use the Acquired Slots, subject to the terms
hereof and, except as otherwise provided herein, TWA shall not be required to
pay any fee for such Sub-License. The reference to the Slot Trustee having
"licensed-back" to TWA the Acquired Slots in the parties' facsimile transmittal
to the Office of Slot Administration, Office of the Chief Counsel - Slot
Transfers, Federal Aviation Administration, dated December 8, 1997, refers to
the Sub-License granted unto TWA by this Section 2.01.
ARTICLE 3. NATURE OF SUB-LICENSE
Section 3.01. Non-Proprietary Nature. The Sub-License shall be deemed to
----------------------
be in the nature of a usufruct and not a proprietary right, and the interest of
TWA under this Agreement shall be terminable in accordance with the terms and
conditions hereof.
ARTICLE 4. REPRESENTATION AND WARRANTY
Section 4.01. Representation and Warranty. TWA represents and warrants
---------------------------
that it is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with corporate power and authority under
such laws to own, lease and operate its properties and conduct its business as
conducted on the date hereof, and has all such power and authority as is
necessary to enter into this Agreement.
ARTICLE 5 COVENANTS
Section 5.01. Covenants. TWA covenants and agrees that:
---------
(a) It shall use the Acquired Slots, or cause the Acquired Slots to be
used, in a manner consistent with Title 14 (including the percentage use
requirement contained therein) or other regulations established by any
lawful authority (unless noncompliance with such provision or regulations
is otherwise waived or consented to by the FAA or such authority, as the
case may be). TWA shall not use the Acquired Slots for international or
essential air service operations as defined by the FAA. TWA shall file all
such reports as are required by the FAA or by any other lawful authority to
protect each Acquired Slot in form and content in compliance with the
provisions of Title 14 or other regulations established by any other lawful
authority, which reports shall be delivered to
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the FAA or such other lawful authority on a timely basis. On or before the
tenth Business Day of each month TWA shall furnish to the Slot Trustee a
certificate as to its compliance with this Agreement for the immediately
preceding three months in substantially the form of Exhibit 1 to this
Agreement.
(b) Except as expressly permitted in this Section 5.01(b), TWA shall
not transfer, sub-license or otherwise grant to others rights with respect
to the Acquired Slots, and any such non-permitted transfer, sub-license or
other grant by TWA shall be null and void. TWA may, in the Ordinary Course
Of Business, (i) enter into Slot Trades, and (ii) sub-license and agree to
sub-license, directly or indirectly, to air carriers the right to use
Acquired Slots (such licenses in this clause (ii) hereinafter referred to
as the "Third Party Licenses"), provided that, (A) TWA shall not have
outstanding at any one time Third Party Licenses with a Remaining Term of
longer than twenty-four (24) months with respect to more than forty percent
(40%) of the number of Acquired Slots; (B) in the case of an indirect Third
Party License with respect to an Acquired Slot, the direct third party
sublicensee shall contractually bind itself with TWA to promptly sub-
license the right to use any such Acquired Slot to an air carrier; (C) TWA
shall not enter into or agree to enter into any Third Party License with a
Remaining Term of longer than fifteen (15) months after its receipt of
notice of a Default under Section 6.01(f) of the Indenture or after the
occurrence of any other Default under the Indenture and so long as any such
Default shall continue and (D) TWA shall not accept prepayments of rentals
in connection with Third Party Licenses.
(c) The rights of all sub-licensees claiming from or under TWA under
any and all Third Party Licenses, except as otherwise provided with respect
to Prior Third-Party Licenses, are subject and subordinate in all respects
to the terms of this Master Sub-License Agreement and the Slot Trust. TWA
shall use commercially reasonable efforts to obtain, as promptly as
practicable, from each licensee under a Prior Third Party License an
agreement (for the express benefit of the Slot Trustee) that, and as a
condition to entering into any Third Party License, TWA will require each
prospective sub-licensee to agree (for the express benefit of the Slot
Trustee) that, upon receipt of notice from the Slot Trustee that this
Master Sub-License Agreement has been terminated, it will promptly either
(i) (A) attorn to the Slot Trustee for the then scheduled Remaining Term of
the Third-Party License and acknowledge that, thereafter, its rights with
respect to the relevant Acquired Slot have terminated, and (B) agree that
for the Remaining Term of such Third Party License it will make license
payments directly to the Slot Trustee in an amount equal to the higher of
(1) the payments that, from time to time, would have been due and payable
under the terms of the Third-Party License, or (2) monthly fair market
value license payments with respect to the relevant Acquired Slot, or (ii)
acknowledge that such Third Party License, and the Third-Party Licensee's
rights with respect to the relevant Acquired Slot, shall terminate sixty
(60) days after notice from the Slot Trustee to such licensee of the Slot
Trustee's election to terminate such license. TWA shall not extend and
shall not, in any material respect, amend the Prior Third Party Licenses
described in Schedule II to the Acquired Slot Trust Agreement, except on
terms complying with this paragraph and Section 5.01(b).
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(d) TWA shall pay any reasonable fees or expenses incurred by the Slot
Trust or Slot Trustee in connection with being the holder of record at the
FAA of any Acquired Slot or the right to use any Acquired Slot.
(e) TWA shall take any action necessary to maintain the Slot Trust as
the holder of record at the FAA of the Acquired Slots.
ARTICLE 6. EVENT OF LOSS; RELEASE OF ACQUIRED SLOTS
Section 6.01. Event of Loss. (a) On the occurrence of an Event of Loss
-------------
with respect to an Acquired Slot, TWA shall give the Slot Trustee prompt notice
thereof and shall satisfy the Substitution Requirements.
(b) Upon compliance by TWA with its obligations above, with Article 7
hereof and with any applicable requirements of the TIA, and upon Request
and payment by TWA of the Slot Trustee's costs (including reasonable legal
fees and disbursements) incurred in connection with the foregoing, and
provided that any Slot which may be assigned, transferred and conveyed to
the Slot Trust as provided above shall immediately upon such assignment,
transfer and conveyance for all purposes under the Indenture, the Pledge
Agreement, the Declaration, any Subsequent Deed of Conveyance and this
Agreement become and be an Acquired Slot, the Slot Trust shall execute and
deliver the required documents, assigning, transferring and conveying the
Acquired Slot which was the subject of the Event of Loss to TWA or its
designee, without recourse, whereupon such Acquired Slot shall cease to be
an Acquired Slot for all purposes of the Indenture and the Operative
Documents, including this Agreement.
Section 6.02. Release of Acquired Slots. Upon Request and payment by TWA
-------------------------
of the Slot Trustee's costs (including reasonable legal fees and disbursements)
incurred in complying with such Request:
(a) Sale to Third Parties. So long as no Event of Default has
occurred and is continuing or would result therefrom, the Slot Trust shall
assign, transfer and convey to TWA or its designee, without recourse, any
Acquired Slot that is the subject of a contract of sale pursuant to which
TWA has agreed to sell such Acquired Slot in the Ordinary Course, on an
arm's-length basis to an unaffiliated third party within ninety (90) days
after the date of such release, which contract contains only closing
conditions that are customary to a sale of that kind at that time and which
sale is not a "sale/leaseback" or other similar transaction used by TWA as
a financing vehicle, but only if TWA shall comply with the Substitution
Requirements.
(b) Release of Acquired Slots Upon Partial Prepayment. Simultaneously
with or promptly following the cancellation of any Securities, whether
pursuant to a partial repurchase of any Securities pursuant to any Offer
to Purchase under the Indenture, following a tender of Securities in
connection with a tender offer therefor or otherwise and subject to
compliance by the Company with the Preconditions, and provided that
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after giving effect to such release of Acquired Slots, the Company will be
in compliance with the Security Ratio requirements set forth in the
definition thereof, the Slot Trustee shall assign, transfer and convey to
TWA or its designee without recourse the Acquired Slots set forth in
Schedule 1 hereto (the "Released Slots") based upon the reduction in the
amount of Securities Outstanding to an amount equal to or less than the
level specified for the release of particular Acquired Slots as set forth
in said Schedule 1 (the "Release Trigger").
(c) Release of Acquired Slot. Subject to the conditions and upon
compliance with all of the requirements of this Section 6.02 and Article 7
hereof and any applicable requirements of the TIA, and provided that any
Slot which may be assigned, transferred and conveyed to the Slot Trust
shall immediately upon such assignment, transfer and conveyance, for all
purposes under the Indenture, the Pledge Agreement, the Declaration, any
Subsequent Deed of Conveyance and this Agreement become and be an Acquired
Slot, the Acquired Slot or Acquired Slots, as the case may be, released
pursuant to Section 6.02(a) or 6.02(b), as the case may be, shall cease to
be Acquired Slots for all purposes hereof and of the Indenture and the
Operative Documents (unless later reassigned, retransferred and reconveyed
to the Slot Trust).
ARTICLE 7. SUBSEQUENT DEEDS OF CONVEYANCE
Section 7.01. Subsequent Deeds of Conveyance. If and whenever TWA shall
------------------------------
be required to assign, transfer and convey Slots to the Slot Trust or if TWA
shall at any time desire to assign, transfer and convey Slots to the Slot Trust,
TWA will furnish to the Slot Trustee the following:
(a) a Subsequent Deed of Conveyance duly executed by TWA,
appropriately describing and identifying such Slots; and
(b) an Opinion of Counsel, dated the date of execution of said
Subsequent Deed of Conveyance, stating that:
(i) all necessary filings have been made with the FAA to effect the
transfer of such Slots from TWA to the Slot Trust pursuant to
Title 14, Code of Federal Regulations, Part 93.221 (the "FAA Slot
Regulations"), and TWA has received confirmation from the FAA of
the transfer of such Slots to the Slot Trust and of the license-
back to TWA pursuant to the Subsequent Deed of Conveyance and
this Agreement; the Slot Trust owns such Slots subject to the
transfers permitted under the Subsequent Deed of Conveyance and
this Agreement and owns such Slots free and clear of all liens
and interests of others except as may be provided herein and the
Slot Trust has been identified as the owner and holder of record
of each such Slot pursuant to the FAA Slot Regulations; TWA has
been identified as the operator of record of such Slots (subject
to transfers permitted under the Subsequent Deed of Conveyance
and this Agreement) and such right to
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use such Slots has been duly recorded in the name of TWA pursuant
and subject to the FAA Slot Regulations; and
(ii) except as described in subsection 7.01(b)(i) above, no
authorization, approval, consent or license of the FAA or the
Department of Transportation of the United States is required for
the execution, delivery, or performance of the Subsequent Deed of
Conveyance by TWA; and
(c) Such Officers' Certificates, Opinions of Counsel or other
documents, if any, as the TIA may require or the Slot Trustee may
reasonably require.
ARTICLE 8. REMEDIES UPON DEFAULT OR FAA ACTION
Section 8.01. Remedies upon Default or FAA Action. (a) The parties
-----------------------------------
acknowledge and agree that the primary operating authority represented by a Slot
exists at the discretion of the FAA, acting pursuant to Title 14 and statutory
authority, and that the FAA may terminate, cancel, withdraw or revoke a Slot or
amend or revoke the regulation which permits Slots to be bought and sold and
thereby gives them value (any of the foregoing, an "FAA Action"). The parties
further acknowledge and agree that any of these actions by the FAA would
substantially impair the rights of the Slot Trustee and the value of the
Collateral.
(b) It is understood and agreed between the parties that:
(i) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE INDENTURE OR
AN FAA ACTION AND DURING THE CONTINUANCE THEREOF, TWA SHALL DELIVER TO THE
COLLATERAL AGENT, ALL CONSIDERATION TO BE RECEIVED BY TWA AFTER SUCH EVENT
OF DEFAULT OR FAA ACTION (OTHER THAN THE RIGHT TO USE A SLOT, AS TO WHICH A
PERSON OTHER THAN TWA IS THE HOLDER OF RECORD AT THE FAA) IN CONNECTION
WITH A THIRD PARTY LICENSE OR SLOT TRADE; PROVIDED THAT IF SUCH
CONSIDERATION IS A SLOT, AS TO WHICH TWA BECAME THE HOLDER OF RECORD AT THE
FAA, SUCH SLOT SHALL BE ASSIGNED, TRANSFERRED AND CONVEYED TO THE SLOT
TRUST AND SHALL BE HELD BY THE SLOT TRUST AS A SLOT TRUST ASSET;
(ii) UPON THE ACCELERATION OF TWA'S OBLIGATIONS UNDER THE SECURITIES
IN ACCORDANCE WITH THE INDENTURE, THIS AGREEMENT WILL, WITHOUT ANY ACTION
BY ANY PARTY THERETO, TERMINATE AND TWA SHALL HAVE NO FURTHER RIGHT OR
INTEREST IN THE ACQUIRED SLOTS AND THE SLOT TRUSTEE MAY TAKE SUCH ACTIONS
AS NECESSARY TO CAUSE OR ALLOW THE TERMINATION OF OR ENFORCE ATTORNMENT
OBLIGATIONS UNDER OR OTHERWISE DEAL WITH THIRD PARTY LICENSES AND SLOT
TRADES, AND TO ASSIGN, TRANSFER AND CONVEY BY DEED OF CONVEYANCE, WITHOUT
RECOURSE, WARRANTY OR REPRESENTATION THE ACQUIRED SLOTS; PROVIDED, THAT, IF
SUCH
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ACCELERATION IS RESCINDED IN ACCORDANCE WITH SECTION 6.2 OF THE INDENTURE
PRIOR TO THE SLOT TRUSTEE'S HAVING DISPOSED OF ANY OF THE ACQUIRED SLOTS,
THIS AGREEMENT WILL, WITHOUT ANY ACTION BY ANY PARTY THERETO, BE REINSTATED
WITH RESPECT TO THOSE SLOTS STILL HELD BY THE SLOT TRUSTEE AFTER TAKING ANY
SUCH ACTION; AND
(iii) IN FURTHERANCE OF THE FOREGOING, THE SLOT TRUSTEE IS HEREBY
IRREVOCABLY APPOINTED THE TRUE AND LAWFUL ATTORNEY OF TWA, IN ITS NAME AND
STEAD, TO THE EXTENT PERMITTED BY LAW, TO EXECUTE, FILE, REGISTER AND/OR
RECORD ALL DOCUMENTS AND INSTRUMENTS OF ASSIGNMENT, TRANSFER AND SURRENDER
OF THE ACQUIRED SLOTS (INCLUDING, WITHOUT LIMITATION, AN INSTRUCTION TO
TRANSFER OPERATOR STATUS IN THE FORM ATTACHED HERETO AS EXHIBIT 2, A COPY
OF WHICH HAS BEEN EXECUTED IN BLANK BY AN AUTHORIZED OFFICER OF TWA AND
DELIVERED TO THE SLOT TRUSTEE, BUT WHICH MAY ALSO BE EXECUTED ON BEHALF OF
TWA BY THE SLOT TRUSTEE PURSUANT TO THIS POWER OF ATTORNEY), AND ALL OTHER
DOCUMENTS AND INSTRUMENTS, NECESSARY, OR IN THE GOOD FAITH OPINION OF THE
SLOT TRUSTEE DESIRABLE, IN ORDER TO (X) RECORD OF RECORD WITH THE FAA ANY
TERMINATION OF TWA'S RIGHTS OR INTERESTS IN THE ACQUIRED SLOTS UPON THE
ACCELERATION OF TWA'S OBLIGATIONS UNDER THE SECURITIES IN ACCORDANCE WITH
THE INDENTURE, (Y) UPON OR AT ANY TIME AFTER SUCH ACCELERATION, EFFECT THE
TRANSFER OF TWA'S OPERATOR STATUS WITH RESPECT TO ANY OR ALL OF THE
ACQUIRED SLOTS TO THE SLOT TRUSTEE OR A THIRD PARTY DESIGNATED BY THE SLOT
TRUSTEE AND/OR (Z) OTHERWISE EFFECT THE ACTIONS THAT THE SLOT TRUSTEE IS
AUTHORIZED, OR INTENDED TO BE AUTHORIZED, TO TAKE PURSUANT TO THE FOREGOING
CLAUSES (I) AND (II) OF THIS SECTION 8.01(B), AND MAY SUBSTITUTE ONE OR
MORE PERSONS, FIRMS OR CORPORATIONS WITH LIKE POWER, TWA HEREBY RATIFYING
AND CONFIRMING ALL THAT ITS SAID ATTORNEY OR SUCH SUBSTITUTE OR SUBSTITUTES
SHALL LAWFULLY DO BY VIRTUE HEREOF; BUT IF SO REQUESTED BY THE SLOT
TRUSTEE, TWA SHALL RATIFY AND CONFIRM ANY SUCH ACTION TAKEN IN ACCORDANCE
WITH THIS POWER OF ATTORNEY AS MAY BE DESIGNATED IN ANY SUCH REQUEST. THE
FOREGOING POWER OF ATTORNEY IS COUPLED WITH AN INTEREST, IS IRREVOCABLE AND
SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT, PROVIDED ONLY THAT THE
FOREGOING POWER OF ATTORNEY WILL TERMINATE UPON RECONVEYANCE OF THE
ACQUIRED SLOTS TO TWA IN ACCORDANCE WITH SECTION 9.01 HEREOF.
(c) In view of the nature of a Slot and the discretion given to the
FAA with respect to Slots, the parties understand and agree that the
termination, cancellation, withdrawal or revocation of the Acquired Slots
or the amendment or revocation of the
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regulation which permits Slots to be bought and sold would cause a
immediate and permanent detrimental effect upon the Slot Trust and the
ability of the Holders to look to the pledge by TWA of the Beneficial
Interest and the Beneficial Interest Certificate to secure TWA's
obligations under the Securities and the Indenture. In accordance with the
foregoing, upon the acceleration of TWA's obligations under the Securities
in accordance with the Indenture, the Slot Trustee and TWA shall (unless
such action on the part of the Slot Trustee is not consistent with action a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs or is not required to authorize and permit the Slot Trustee
to take the actions described in this sentence) apply for and use their
best efforts to obtain a temporary restraining order and preliminary and
final injunctive or other equitable relief authorizing and permitting the
Slot Trustee to cancel, or confirming the cancellation of, this Agreement
in accordance with Section 8.01(b) hereof, and authorizing and permitting
the Slot Trustee to sell, assign, transfer and convey the Acquired Slots
for a price and under such terms and conditions as may be commercially
reasonable and/or to preserve, to the maximum extent possible, the value of
the Acquired Slots.
(d) In accordance with the foregoing, TWA further recognizes,
understands and agrees that in the event of either a filing by TWA or a
entry of an order or decree against TWA of a petition under the Bankruptcy
Law then, and in either such event, the Slot Trust will only be protected
adequately with respect to the Acquired Slots upon the immediate entry of
an order providing either (i) for immediate abandonment of the Acquired
Slots to the Slot Trust and a grant of authority to the Slot Trust to
assign, transfer and convey the Acquired Slots and have the Collateral
Agent hold any proceeds thereof for the benefit of the Holders or (ii)
permitting TWA, at the sole discretion of the Slot Trustee, which may be
revoked at any time as to any one or more or all of the Acquired Slots, to
continue to use all of the Acquired Slots on a daily basis so as to
prohibit the FAA from immediately terminating, canceling, withdrawing or
revoking the rights thereunder.
It is the position of the Slot Trust and TWA that under the terms of the
Deed of Conveyance, any Subsequent Deed of Conveyance and this Agreement, TWA
(for all purposes other than tax purposes) has assigned, transferred and
conveyed (or, in the case of any Subsequent Deed of Conveyance, will have
assigned, transferred and conveyed) its entire property interest, if any, in the
Acquired Slots and can only acquire an interest therein upon satisfaction of all
of the Obligations or under limited circumstances set forth in Article 6 hereof.
In the event, however, that it is determined by a court of competent
jurisdiction that a property interest in the Acquired Slots does so exist in TWA
notwithstanding the failure of TWA to satisfy all of the Obligations or the
existence of certain circumstances set forth in Article 6 hereof, then and in
that event, the Slot Trustee and TWA agree that an order for adequate protection
pertaining to the foregoing rights of the Slot Trust with respect to the
Acquired Slots shall be immediately entered and TWA does hereby for itself and
its successors and assigns, including without limitation a trustee in any
proceeding instituted by or against TWA under the Bankruptcy Law, consent to the
entry of a order providing for such adequate protection of the Slot Trust's
interest in the Acquired Slots.
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ARTICLE 9. TERMINATION AND RECONVEYANCE OF ALL ACQUIRED SLOTS
Section 9.01. Reconveyance of All Acquired Slots. In the event that no
----------------------------------
Default or Event of Default exists under the Indenture, and TWA satisfies all of
the Obligations, then, and in that event, upon receipt by the Indenture Trustee
of such satisfaction in immediately available funds, the Slot Trustee shall,
without cost or charge to TWA (except as otherwise provided herein), reassign,
retransfer and reconvey by deed of conveyance without recourse, representation
or warranty to TWA, all of the Acquired Slots, except that the Slot Trustee
shall represent and warrant that (except in accordance with Article 8 hereof),
it has made no transfers of, or knowingly permitted any liens to be imposed
upon, Acquired Slots other than the limited interest granted to TWA under this
Agreement, and thereupon this Agreement (other than Article 10 hereof) shall
terminate.
Section 9.02. Continued Effectiveness of Agreement. If the reassignment,
------------------------------------
retransfer or reconveyance referred to in Section 9.01 hereof is prohibited by
any then applicable law or regulation, this Agreement (including Section 5.01(e)
but otherwise excluding Articles 5, 6, 7, 11, 12, 13 and 14 hereof) will
continue in effect until such time as the reassignment, retransfer or
reconveyance of the primary operating authority with respect to the Acquired
Slots is permitted.
ARTICLE 10. INDEMNIFICATION
Section 10.01. Indemnification by TWA. TWA shall indemnify and hold
----------------------
harmless the Slot Trustee to the extent provided to the Indenture Trustee under
Section 7.7 of the Indenture, and the Slot Trustee shall have those rights set
forth in such Section 7.7 for the Indenture Trustee.
ARTICLE 11. AMENDMENTS
Section 11.01. Amendments. (a) Except as provided in Section 11.01(b)
----------
hereof, and subject to Section 4.11 of the Indenture and Article 9 of the
Indenture, this Agreement may be amended by TWA and the Slot Trustee only with
the affirmative vote of the Required Holders; provided, however, that the
-------- -------
affirmative vote of each Holder shall be required to amend this Section 11.01.
(b) TWA and the Slot Trustee may also amend this Agreement without
the vote of the Holders if such parties each deem it necessary to cure any
ambiguity, defect or inconsistency or conform this Agreement to the requirements
of applicable laws so long as such amendment does not have a material adverse
effect on the interests of the Holders.
ARTICLE 12. ASSIGNMENTS
Section 12.01. Rights of Assignment by TWA. TWA and the Slot Trustee
---------------------------
understand and agree that the interest of TWA under this Agreement is not
assignable and that any attempt to assign all or any portion of this Agreement
by TWA shall be null and void ab initio except for an
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assignment in connection with a merger, consolidation or sale of substantially
all TWA's assets permitted under the Indenture.
ARTICLE 13. INDEPENDENT APPRAISALS
Section 13.01. Independent Appraisal Required Under Certain Circumstances.
----------------------------------------------------------
Whenever a Permitted Substitute has been used or operated by a Person or Persons
other than TWA, in a business similar to that in which it has been or is to be
used or operated by TWA, within six (6) months prior to the date of its
acquisition by TWA, or the fair value of any Acquired Slots or Collateral to be
released, assigned or transferred by the Collateral Agent or the Slot Trust,
together with all other Property so released, assigned or transferred since the
commencement of the then-current calendar year or in any twelve (12) month
period, as set forth in the certificate or certificates required by this
Agreement, is ten percent (10%) or more of the aggregate principal amount of
Securities at the time Outstanding, TWA will provide to the Slot Trustee such
certificates and opinions, if any, as the TIA may require.
ARTICLE 14. RECEIPT OF CASH AND/OR INVESTMENT SECURITIES
BY THE SLOT TRUSTEE
Section 14.01. Receipt of Cash And/or Investment Securities. In the event
--------------------------------------------
the Slot Trust or the Slot Trustee (in its capacity as Slot Trustee) receives
any Property (including, without limitation, cash and/or Investment Securities)
other than Slots, such Property shall immediately be delivered to the Collateral
Agent (which shall be evidenced by a certificate of the Collateral Agent
delivered to the Slot Trustee, acknowledging receipt of such Property).
ARTICLE 15. SLOT TRUSTEE
Section 15.01. Rights and Duties of Slot Trustee. Except as specifically
---------------------------------
set forth herein, in the Pledge Agreement or in the Slot Trust Agreement, the
Slot Trustee shall have no duty (i) to perform any recording or filing in
connection with the Slot Trust Assets, (ii) to see to the payment or discharge
of any tax, assessment or other governmental charge or any lien owing with
respect to, or assessed or levied against, any part of the Slot Trust Assets, or
(iii) to take any other actions in connection with the use, operation,
management or maintenance of the Slot Trust Assets.
Except as provided in Section 9.01 hereof, the Slot Trustee does not make
and shall not be deemed to have made any representation or warranty, expressed
or implied, as to the title, merchantability, compliance with specifications,
condition, design, operation, fitness for use or for a particular purpose, or
any other representation or warranty whatsoever, expressed or implied, with
respect to the Slot Trust Assets.
Section 15.02. References to Slot Trust and Slot Trustee. All references
-----------------------------------------
in this Agreement and the other Operative Documents to the Slot Trust or the
Slot Trustee shall be to
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both the Slot Trust and the Slot Trustee unless such a reference would render
the provision in which it is contained meaningless or ambiguous.
ARTICLE 16. MISCELLANEOUS
Section 16.01 Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with
(a) TWA shall be sufficient for every purpose hereunder if in writing
(including telecopied communications) and made, given, furnished or filed
by personal delivery or mailed by first-class mail, or by a nationally
recognized overnight courier, postage or courier charges, as the case may
be, prepaid, to TWA at:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President & General Counsel
Telecopier No.: (000) 000-0000
(b) the Slot Trustee shall be sufficient for every purpose hereunder
if in writing (including telecopied communications) and made, given,
furnished or filed by personal delivery or mailed by registered or
certified mail, or by a nationally recognized overnight courier, postage or
courier charges, as the case may be, prepaid, to or with the Slot Trustee
at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Corporate Trust Department
Telecopier No.: (000) 000-0000
or to any of the above parties at any other address or telecopier number
subsequently furnished in writing by it to each of the other parties listed
above. An affidavit by any person representing or acting on behalf of TWA or
the Slot Trustee as to such mailing, having any registry receipt required by
this Section attached, shall be conclusive evidence of the giving of such
demand, notice or communication.
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first-class mail or by nationally recognized overnight courier,
postage or courier charges, as the case may be, prepaid, at such Holder's
address as it appears on the Register and shall be sufficiently given to such
Holder if so mailed within the time prescribed.
C-11
Failure to mail a notice or send a communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Notices
to the Slot Trustee or to TWA are deemed given only when received. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by the Holders shall be filed with the Slot Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 16.02. Amendments, Etc. Subject to Section 11.01, no amendment or
---------------
waiver of any provision of this Agreement nor consent to any departure by TWA
therefrom shall in any event be effective unless the same shall be in writing,
and signed by the Slot Trustee and approved by the Required Holders if required
hereby or by the Indenture, and then any such waiver or consent shall only be
effective in the specific instance and for the specific purpose for which given.
Section 16.03. No Waiver; Remedies. (a) No failure on the part of the
-------------------
Slot Trustee to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative, may be
exercised singly or concurrently, and are not exclusive of any remedies provided
by law or the Indenture, the Securities or any of the other Operative Documents.
(b) Failure by the Slot Trustee at any time or times hereafter to
require strict performance by TWA or any other Person of any of the provisions,
warranties, terms or conditions contained herein or in any of the Indenture, the
Securities or any other Operative Documents now or at any time or times
hereafter executed by TWA or any such other Person and delivered to the Slot
Trustee shall not waive, affect or diminish any right of the Slot Trustee at any
time or times hereafter to demand strict performance thereof, and such right
shall not be deemed to have been modified or waived by any course of conduct or
knowledge of the Slot Trustee or any agent, officer or employee of the Slot
Trustee.
Section 16.04. Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent any provision of this Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive of the TIA, such imposed duties
shall control.
Section 16.05. Holidays. In the event that any date for the payment of
--------
any amount due hereunder shall not be a Business Day, then (notwithstanding any
other provision of this Agreement) such payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the due date, and no interest shall accrue on such payment
for the period from such due date to and including the next succeeding Business
Day.
Section 16.06. Successors and Assigns. This Agreement and all obligations
----------------------
of TWA hereunder shall be binding upon the successors and if permitted assigns
of TWA, and shall, together with the rights and remedies of the Slot Trustee
hereunder, inure to the benefit of the
C-12
Slot Trustee, the Holders, and their respective successors and assigns. Any
assignment of this Agreement in violation of Section 12.01 herein shall be null
and void ab initio.
Section 16.07. Governing Law; Waiver of Jury Trial. (a) The laws of the
-----------------------------------
State of New York shall govern this Agreement without regard to principles of
conflict of laws.
(b) TWA and the Slot Trustee each waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Agreement.
Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
Section 16.08. Indemnification. TWA agrees to pay, and to save the Slot
---------------
Trustee harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all excise, sales or other similar taxes which
may be payable or determined to be payable with respect to any of the Collateral
or Slot Trust Assets or in connection with any of the transactions contemplated
by this Agreement.
Section 16.09. Effect of Headings. The Article and Section headings and
------------------
the Table of Contents contained in this Agreement have been inserted for
convenience of reference only, and are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of this Agreement.
Section 16.10. No Adverse Interpretation of Other Agreement. This
--------------------------------------------
Agreement may not be used to interpret any agreement of TWA or any of its
Subsidiaries which is unrelated to the Indenture, the Securities or the other
Operative Documents. Any such other agreement may not be used to interpret this
Agreement.
Section 16.11. No Recourse Against Others. A director, officer, employee
--------------------------
or stockholder, as such, of TWA shall not have any liability for any obligations
of TWA under the Agreement or for any claim based on, in respect of or by reason
of such obligations or its creation.
Section 16.12. Counterpart Originals. This Agreement may be signed in two
---------------------
or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.
Section 16.13. Severability. The provisions of this Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction, and a Holder shall have no claim therefor against
any party hereto.
Section 16.14. Benefits of Agreement Restricted. Subject to the
--------------------------------
provisions of Sections 12.01 and 16.06, nothing in this Agreement, express or
implied, shall give or be construed to give to any Person, firm or corporation,
other than the parties hereto and their successors and the
C-13
Holders, any legal or equitable right, remedy or claim under or in respect of
this Agreement or under any covenant, condition, or provision herein contained,
all such covenants, conditions and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders.
Section 16.15. Survival Provisions. Notwithstanding any right of the
-------------------
Collateral Agent, the Initial Purchasers or any of the Holders to investigate
the affairs of TWA, and notwithstanding any knowledge of facts determined or
determinable by any of them pursuant to such investigation or right of
investigations all representations, warranties and covenants of TWA contained
herein shall survive the execution and delivery of this Agreement, and shall
terminate only upon the termination of this Agreement.
C-14
IN WITNESS WHEREOF, the parties have caused this Master Sub-License
Agreement to be duly executed as of the date first written above.
TRANS WORLD AIRLINES, INC.
By: ______________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Slot Trustee on behalf of the Slot Trust
By: ______________________________
Name:
Title:
C-15
EXHIBIT 1 TO
EXHIBIT C
CERTIFICATE
-----------
The undersigned, [Manager of Current Schedules and Industry Affairs] of
Trans World Airlines, Inc. ("TWA"), DOES HEREBY CERTIFY THAT:
1. This Certificate is delivered to the Slot Trustee pursuant to Article
5, Section 5.01(a) of the Master Sub-License Agreement dated as of December
9, 1997 (the "Master Sub-License Agreement") between TWA and First Security
Bank, National Association, as Slot Trustee pursuant to the Acquired Slot
Trust Agreement, dated as of December 9, 1997. All capitalized terms used
herein and not otherwise defined have the respective meanings ascribed to
them in the Master Sub-License Agreement or incorporated therein by
reference.
2. I am responsible for maintaining and managing the operation of slots
(as such term is defined in 14 C.F.R. 93) for TWA.
3. Except as noted on Schedule A attached hereto, during each of the one-
month, two-month and three-month periods ending the last day of the month
preceding the date of this Certificate:
(a) all the Acquired Slots were operated by TWA or other carriers or
both; and
(b) (i) the Acquired Slots operated by TWA, and
(ii) to the best of my knowledge based upon due inquiry, the
Acquired Slots operated by all other carriers, and
(iii) accordingly, to the best of my knowledge, all the Acquired
Slots
were used in a manner consistent with the usage and other requirements
of 14 C.F.R. 93 and Section 5.01(a) of the Master Sub-License
Agreement; and
(c) no notice of non-compliance with FAA Slot Regulations has been
received from the FAA with respect to any Acquired Slot.
DATED:_____________________ BY:___________________________________
NAME:
Att: Schedule A (None - No Exceptions)
C-16
EXHIBIT 2 TO
EXHIBIT C
INSTRUCTION TO TRANSFER OPERATOR STATUS
The undersigned TRANS WORLD AIRLINES, INC. ("TWA") hereby authorizes and
directs the Federal Aviation Administration, Office of Slot Administration (and
any successor federal agency or office thereof, the "FAA") to assign, transfer
and convey operator status of the right to conduct Instrument Flight Rule (as
defined under the Federal Aviation Act of 1958, as amended) take-offs or
landings in specified one-hour or half-hour periods set forth on Schedule A
hereto (the "Slots") to __________________________________, and to record such
assignment, transfer and conveyance of operator status on the records of the
FAA.
IN WITNESS WHEREOF, the undersigned, TWA, by and through its duly
authorized officer does hereby execute this instruction to transfer the Slots
("Instruction") as of this ___ day of ____________, ________.
TRANS WORLD AIRLINES, INC.
By: _______________________________
Name:
Title:
____________________________________
(Name of Transferee)
By: _______________________________
Name:
Title:
By execution below, the Federal Aviation Administration
Office of Slot Administration, acknowledges receipt of
this Instruction, this ___ day of __________, ________.
By: _______________________________
Name:
Title:
C-17
SCHEDULE 1
TO EXHIBIT C
SLOT RELEASE SCHEDULE
Released Slots Slot Release Trigger
-------------- --------------------
All Slots listed on Schedule $100,000,000.00
I to the Acquired Slot Trust
Agreement
Note: Slots referred to are as of the date of the Master Sub-License Agreement.
If additional or substitute Slots are conveyed to the Slot Trust in satisfaction
of the Substitution Requirements, such substitute Acquired Slots shall be
subject to release at the same time and under the same circumstances (and only
at the same time and under the same circumstances) as the Acquired Slots for
which they were substituted could have been released under the Master Sub-
License Agreement.
C-18
EXHIBIT B TO INDENTURE
PLEDGE AND SECURITY AGREEMENT
FROM
TRANS WORLD AIRLINES, INC.
TO
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
AS COLLATERAL AGENT
Dated as of December 9, 1997
11 1/2% Senior Secured Notes due 2004
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 - Definitions and Rules of Construction
Section 1.01 Definitions................................................ 1
Section 1.02 Rules of Construction...................................... 1
ARTICLE 2 - Collateral
Section 2.01 Grant of Security Interest................................. 2
Section 2.02 Substitution of Collateral................................. 3
ARTICLE 3 - Representations and Warranties
Section 3.01 Representations and Warranties of the Company.............. 3
ARTICLE 4 - Covenants
Section 4.01 Further Assurances......................................... 5
Section 4.02 Taxes...................................................... 5
Section 4.03 Maintenance................................................ 7
Section 4.04 Event of Loss; Use in the Ordinary Course of Business;
Release; Thresholds; Effect of Release; Substitution...... 7
Section 4.05 Possession, Sublease and Assignment........................ 12
Section 4.06 Recording; Registration; Compliance with Laws and Rules.... 13
Section 4.07 Indemnities................................................ 13
Section 4.08 FAA Records................................................ 14
Section 4.09 Restrictions on Liens; Permitted Contests.................. 14
Section 4.10 Warranty of Title.......................................... 15
Section 4.11 Inventory Control System................................... 16
Section 4.12 Actions Regarding the Beneficial Interest Certificates..... 16
Section 4.13 Reports Regarding Collateral............................... 16
Section 4.14 Maintenance Ratio.......................................... 17
Section 4.15 Change in Location of Principal Office, Records or Name.... 18
ARTICLE 5 - Insurance
Section 5.01 Insurance to Be Carried.................................... 19
Section 5.02 Alteration of Insurance.................................... 19
Section 5.03 Additional Insurance....................................... 20
Section 5.04 Insurance Certificates..................................... 20
Section 5.05 Proceeds of Insurance...................................... 20
ARTICLE 6 - Remedies
Section 6.01 Remedies................................................... 21
Section 6.02 Application of Proceeds.................................... 22
Section 6.03 Obligations of Company Not Affected by Remedies............ 22
Section 6.04 Remedies Cumulative and Subject to Applicable Law.......... 23
(i)
ARTICLE 7 - Termination
Section 7.01 Termination................................................ 23
ARTICLE 8 - Collateral Agent
Section 8.01 Collateral Agent........................................... 23
ARTICLE 9 - Miscellaneous
Section 9.01 Benefits of Pledge Agreement Restricted.................... 24
Section 9.02 Funds May Be Held by the Collateral Agent; Investments in
Investment Securities..................................... 24
Section 9.03 Certificates and Opinions of Counsel; Statements to Be
Contained Therein; Basis Therefor......................... 26
Section 9.04 Appraiser's Certificate.................................... 26
Section 9.05 Notices; Waiver............................................ 26
Section 9.06 Amendments, Etc............................................ 27
Section 9.07 No Waiver; Remedies........................................ 28
Section 9.08 Conflict with Trust Indenture Act of 1939.................. 28
Section 9.09 Holidays................................................... 28
SECTION 9.10 Successors and Assigns..................................... 28
SECTION 9.11 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages.................................. 29
Section 9.12 Indemnification............................................ 30
SECTION 9.13 Effect of Headings......................................... 30
SECTION 9.14 No Adverse Interpretation of Other Agreements.............. 30
Section 9.15 No Recourse Against Others................................. 30
SECTION 9.16 Counterpart Originals...................................... 30
SECTION 9.17 Severability............................................... 30
SECTION 9.18 Survival Provisions........................................ 31
SECTION 9.19 Waivers.................................................... 31
EXHIBIT A FORM OF SUPPLEMENTAL PLEDGE AGREEMENT (To Add Collateral)
EXHIBIT B FORM OF SUPPLEMENTAL PLEDGE AGREEMENT (To Release Collateral
EXHIBIT C FORM OF MONTHLY INVENTORY REPORT
SCHEDULE 1 DESIGNATED LOCATIONS
SCHEDULE 2 COLLATERAL RELEASE SCHEDULE
SCHEDULE 3 UCC FILING JURISDICTIONS
(ii)
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of December 9, 1997 by and
between TRANS WORLD AIRLINES, INC., a Delaware corporation (together with its
successors and assigns, the "Company"), and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association organized under the laws of the
United States of America, having an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, as Collateral Agent appointed pursuant to the Indenture
referred to below (together with its successors in such capacity, the
"Collateral Agent").
RECITALS
WHEREAS, the Company and the Trustee have entered into an Indenture
dated as of the date hereof (as at any time amended or supplemented or otherwise
modified, the "Indenture"), providing for the issuance of its securities
consisting of $140,000,000 aggregate principal amount of 11 1/2% Senior Secured
Notes due 2004 (collectively, the "Securities"); and
WHEREAS, in order to secure the payment of the principal amount of and
interest and Special Interest, if any, on the Securities and all other
Obligations of the Company under the Indenture, the Securities and the Operative
Documents, the Company has agreed to pledge and grant a security interest in the
Collateral, as provided for herein; and
WHEREAS, the Company and the Collateral Agent wish to set forth herein
their respective rights, liabilities and obligations with respect to the
Collateral.
NOW, THEREFORE, in consideration of the premises and other benefits to
the Company, the receipt and sufficiency of which are hereby acknowledged, the
Company hereby makes the following representations and warranties and hereby
covenants and agrees as follows:
ARTICLE 1
Definitions and Rules of Construction
Section 1.01 Definitions. Capitalized terms used and not otherwise
-----------
defined herein shall have the meanings ascribed to such terms in Section 1 of
the Definitions Appendix attached hereto as Appendix I, which shall be part of
this Pledge Agreement as if fully set forth in this place.
Section 1.02 Rules of Construction. The rules of construction for
---------------------
this Pledge Agreement are set forth in Section 2 of the Definitions Appendix.
ARTICLE 2
Collateral
Section 2.01 Grant of Security Interest. To secure the prompt
--------------------------
payment, performance and observance in full of any and all of the Company's
indebtedness and obligations evidenced
by or set forth in the Securities or the Indenture (including, without
limitation, the principal of, premium, if any, on and interest and Special
Interest, if any, with respect to, the Securities) and all of its obligations to
perform acts or refrain from taking any action under the Indenture, the
Securities, this Pledge Agreement and the other Operative Documents (all the
foregoing hereinafter called the "Obligations"), the Company hereby pledges and
assigns to the Collateral Agent, and grants to the Collateral Agent for the
benefit of the Holders a continuing general, valid, perfected security interest
(senior in right and priority to all Liens except Permitted Collateral Liens) in
all right, title and interest of the Company in, to and under the following
whether now owned or hereafter acquired (collectively, the "Collateral"):
(a) The Pledged Spare Parts.
(b) The Beneficial Interest and the Beneficial Interest Certificate.
(c) The Slot Trust Assets, but only to the extent, if any, of any
right, title or interest that the Company notwithstanding the agreements of the
Company set forth in Section 5.01 of the Declaration, may have in, to or under
the Slot Trust Assets (it being acknowledged and understood by the parties
hereto that pursuant to the Declaration and the Deed of Conveyance, the Company
has agreed that all right, title and interest in and to the Slots specified in
the Deed of Conveyance has been assigned, transferred and conveyed, and that all
right, title and interest in and to any Slots that hereafter are the subject of
any Subsequent Deed of Conveyance will be assigned, transferred and conveyed, to
the Slot Trustee, and it being further acknowledged and agreed that the pledge,
assignment and grant set forth in this Section 2.01(c) does not in any way limit
the Deed of Conveyance or any Subsequent Deed of Conveyance).
(d) All cash and/or Investment Securities deposited with the
Collateral Agent to be held by the Collateral Agent as security for the
Obligations as provided herein or in the Master Sub-License Agreement.
(e) All other Property which may be granted, bargained, sold,
conveyed, transferred, assigned or pledged pursuant to the terms of this Pledge
Agreement by the Company to the Collateral Agent at any time and all proceeds
(as such term is defined in Article 9 of the New York Uniform Commercial Code in
effect on the date hereof) of and to any of the Property in which a security
interest is granted under this Section 2.01.
(f) All repair, maintenance and inventory records, logs, manuals and
all other documents and materials similar thereto (including, without
limitation, any such records, logs, manuals, documents and materials that are
computer print-outs) at any time maintained, created or used by the Company, and
all records, logs, documents and other materials required at any time to be
maintained by the Company pursuant to the FAA or under the Federal Aviation Act,
in each case with respect to any of the Spare Parts included in any of the
foregoing.
(g) The tolls, rents, revenues, issues, income, distributions,
products and profits, and all the estate, right, title, interest and claim
whatsoever, at law, as well as in equity, which the Company has or possesses on
the date of delivery of this Pledge Agreement or to which the Company may
thereafter become legally or equitably entitled, from, in or to the Collateral
or the
2
Slot Trust Assets (excluding any cash on hand or in banks, instruments and
accounts receivable arising from the conduct of the Company's business which do
not arise either from the use, operation, storage, control or management of the
Collateral or the Slot Trust Assets by the Collateral Agent pursuant to Article
6 hereof or through distributions, if any, made by the Slot Trust).
It is the true, clear, and express intention of the Company that the
continuing grant of the security interests provided for in this Pledge Agreement
remain as security for payment and performance of the Obligations until such
Obligations are satisfied and performed in full. The notice of the continuing
grant of this security interest therefor shall not be required to be stated on
the face of any Security, nor shall the Company otherwise be required to
identify such Security as being secured hereby.
Section 2.02 Substitution of Collateral. The Company may from time
--------------------------
to time substitute Permitted Substitutes for any Non-Slot Collateral then
subject to the Lien of this Pledge Agreement to the extent permitted by and in
accordance with Section 4.04 and the Substitution Requirements and, upon the
consummation of such substitution, the Collateral Agent, upon Request of the
Company, shall release its Lien on the Collateral for which Permitted
Substitutes are so substituted.
ARTICLE 3
Representations and Warranties
Section 3.01 Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to the Collateral Agent as follows:
(a) The Company is an air carrier certificated under Section 44705 of
the Federal Aviation Act.
(b) The Company owns, and has full right, title and interest in, the
Collateral, free and clear of all Liens, except Permitted Collateral Liens.
(c) The Company maintains public liability, property damage and
workers' compensation insurance and insurance on all its insurable property,
including the Collateral, against fire and other hazards with responsible
insurance carriers to the extent usually maintained by similarly situated
companies.
(d) This Pledge Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or general principles of equity and commercial
reasonableness.
(e) Upon the delivery to the Collateral Agent of Beneficial Interest
Certificate, the filing of this Pledge Agreement with the FAA and the filing of
financing statements under the
3
Uniform Commercial Code (the "UCC") in the offices of the Secretaries of State
and (to the extent required by the UCC) the county clerks in each Designated
Location, in each case as set forth in Schedule 3 hereto, the pledge of the
Collateral, securing the payment of the Obligations for the benefit of the
Collateral Agent and the Holders, will constitute a first priority perfected
security interest in such Collateral, enforceable as such against all creditors
of the Company and any Persons purporting to purchase any of the Collateral from
the Company other than Permitted Collateral Liens, except as such enforceability
may be limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity and commercial reasonableness.
(f) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either for (i) the pledge by the
Company of the Collateral pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by the Company
(except, in the case of any Collateral a security interest in which can only be
perfected by filing of a financing statement under the UCC, for the filing of
the UCC financing statements in all Designated Locations as described in Section
3.01(e) and, with respect to Pledged Spare Parts, the filing of this Pledge
Agreement with the FAA or (ii) the exercise by the Collateral Agent of the
rights provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge Agreement.
(g) No litigation investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of the
Company, threatened by or against the Company with respect to this Pledge
Agreement, any of the Collateral or any of the transactions contemplated hereby.
(h) The pledge of the Collateral pursuant to this Pledge Agreement is
not prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
(i) The execution, delivery and performance by the Company of the
Operative Documents to which it is a party do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to the
Company, the Certificate of Incorporation or Bylaws of the Company or any order,
judgment or decree of any court or other agency of government binding on the
Company, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of the Company, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of the Company (other than any
Liens contemplated hereunder and under the other Operative Documents in favor of
the Collateral Agent, the Slot Trustee or the Trustee, as the case may be, on
behalf of the Holders), or (iv) require any approval of stockholders, or any
approval or consent of any Person under any material contractual obligation, of
the Company.
(j) The Company's chief executive office and principal place of
business is at its address set forth for notices in Section 9.05(a), and the
originals of its records pertaining to the
4
Collateral are kept at such address and the Designated Locations. The Company's
name as set forth in such Section is its correct legal name and the Company has
not within the past five years had any other legal name, nor has the Company
done within such five years nor is the Company now doing business under any
other name. The Company's correct U.S. tax identification number is 00-0000000.
ARTICLE 4
Covenants
Section 4.01 Further Assurances. From time to time, the Company
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shall perform any and all acts and execute any and all additional instruments
and documents as may be reasonably requested by the Collateral Agent, the
Indenture Trustee or the Slot Trustee, to carry out the intention of or to
facilitate the performance of the terms of this Pledge Agreement or to secure
the rights and remedies hereunder or thereunder of the Holders including,
without limitation, the execution and delivery of instruments of title, any
supplemental agreements and any financing statement or continuation of any
financing statement or other appropriate instrument of recording under the
Uniform Commercial Code as in effect in the jurisdictions in which the
Collateral is located, under the Federal Aviation Act and the rules and
regulations promulgated thereunder or under any other appropriate law or
regulatory scheme applicable to the Collateral.
Section 4.02 Taxes. The Company will promptly pay and discharge all
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taxes, assessments, fees, charges, fines and penalties of any kind which may be
imposed (a) upon any of the Collateral, the Acquired Slots or upon the Slot
Trust and (b) for the use or operation thereof by the Company, and will at all
times keep the Collateral and the Acquired Slots free and clear of all taxes,
assessments, fees, charges, fines and penalties of any kind which might in any
way affect the title thereto or result in a Lien which is not a Permitted
Collateral Lien upon any part or the whole of the Collateral or the Acquired
Slots; provided, however, that the Company shall not be required to pay or
discharge any taxes, assessments, fees, charges, fines or penalties of any kind
(i) whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which adequate provision has been made if
required in accordance with GAAP, as in effect from time to time, or (ii) if the
Company delivers to the Collateral Agent an Officers' Certificate stating that
such non-payment and non-discharge is in the interest of the Company, presents
no material risk of sale, forfeiture or loss of any Collateral, and is not
prejudicial in any material respect to the Holders, except that the Company will
pay all such taxes, assessments, fees, charges, fines or penalties forthwith
upon the commencement of proceedings to foreclose any Lien on any Collateral or
Acquired Slot which may have attached as security therefor. If any expenses,
taxes, assessments, fees, charges, fines or penalties which are payable by the
Company hereunder shall have been charged or levied against the Collateral
Agent, the Indenture Trustee or the Slot Trustee directly and, after notice to
the Company and opportunity to contest as aforesaid, paid by the Collateral
Agent, the Indenture Trustee or the Slot Trustee, the Company shall reimburse
the Collateral Agent, the Indenture Trustee or the Slot Trustee on presentation
of an invoice therefor.
5
For purposes of this Section 4.02 and notwithstanding any other
provision of this Pledge Agreement, the Collateral Agent, the Indenture Trustee
or the Slot Trustee are the sole parties to, from, or with whom the Company
shall be obligated to communicate or receive any communication or notice,
negotiate, settle, or enter into any stipulation, agree upon or make factual
determinations, elections, or payments regarding any matter arising under this
Section 4.02. Any and all notices received or served by the Company from or upon
the Collateral Agent, the Indenture Trustee or the Slot Trustee shall be deemed
notice duly served from or upon the Company. The Company shall have no
obligation to communicate or deal with any parties except the Collateral Agent,
the Indenture Trustee or the Slot Trustee regarding any matter arising under
this Section 4.02.
The Company will, except as otherwise permitted under the first
paragraph of this Section 4.02, pay, and will save the Collateral Agent, the
Indenture Trustee and the Slot Trustee and the Holders harmless from, any stamp
taxes which shall be payable in connection with this Pledge Agreement, any
supplement or amendment hereof or the original issuance of the Securities.
If a written claim is made against the Collateral Agent, the Indenture
Trustee or the Slot Trustee or the Holders of Securities for any taxes,
assessments, fees, charges, fines, or penalties which are subject to payment or
indemnification by the Company under this Section 4.02, the Collateral Agent,
the Indenture Trustee or the Slot Trustee shall promptly notify the Company
thereof in writing. If requested by the Company in writing within thirty (30)
days (but twenty (20) days if the Collateral Agent, the Indenture Trustee or the
Slot Trustee received a 30-day statutory notice) of the notice to the Company,
the Collateral Agent, the Indenture Trustee or the Slot Trustee shall, at the
Company's expense and direction, for so long as the Collateral Agent, the
Indenture Trustee or the Slot Trustee reasonably believes that the Company is
acting in good faith and the Collateral Agent, the Indenture Trustee or the Slot
Trustee have received adequate indemnification therefor, contest such taxes,
assessments, fees, charges, fines or penalties. The Company shall select the
forum for such contest and shall determine whether such contest shall be by:
(a) resisting or refusing payment of such taxes, assessments, fees,
charges, fines or penalties; or
(b) not paying such taxes, assessments, fees, charges, fines or
penalties except under protest; or
(c) paying such taxes, assessments, fees, charges, fines, or penalties
and seeking a refund thereof.
If permissible under applicable law, the Collateral Agent, the
Indenture Trustee or the Slot Trustee shall assign its right to contest the
imposition or levy of any such tax, assessment, fees, charges, fines or
penalties to the Company.
Section 4.03 Maintenance. The Company, at its own cost or expense:
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6
(a) shall maintain, or cause to be maintained, at all times all
Pledged Spare Parts in accordance with all applicable laws, rules, regulations,
orders, directives and instructions issued by the FAA or any other governmental
authority having jurisdiction over the Company or any such Collateral, including
making any modifications, alterations, replacements and additions necessary
therefor;
(b) shall maintain, or cause to be maintained, all records, logs and
other materials required by the FAA or under the Federal Aviation Act to be
maintained in respect of any Pledged Spare Parts and shall retain complete
copies thereof to the extent necessary to insure that the value of such Pledged
Spare Parts will not be materially diminished for lack of a full maintenance
history;
(c) shall maintain, or cause to be maintained, every Pledged Spare
Part in good order and condition, shall perform all maintenance thereon
necessary for that purpose and shall obtain all necessary recertification
thereof and shall maintain generally the quality and makeup (by type and class)
thereof in accordance with applicable laws.
Section 4.04 Event of Loss; Use in the Ordinary Course of Business;
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Release; Thresholds; Effect of Release; Substitution.
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(a) Event of Loss. Upon the occurrence of an Event of Loss with
respect to any Operative Collateral, the Company shall give the Collateral Agent
prompt notice thereof and shall satisfy the applicable Substitution
Requirements.
Upon compliance by the Company with its obligations above and upon
Request by the Company, payment by the Company of the Collateral Agent's and
Slot Trustee's costs (including reasonable legal fees and disbursements) in
connection therewith and satisfaction of any applicable requirements of the TIA,
the Collateral Agent shall execute and deliver the required documents releasing,
assigning and transferring all of the right, title and interest of the
Collateral Agent in and to the Collateral which is the subject of such Event of
Loss to the Company or its designee, whereupon such Collateral shall cease to be
Collateral for all purposes hereof.
(b) Use in the Ordinary Course of Business. So long as no Event of
Default shall exist, the Company shall have the right, at any time and from time
to time at its own cost and expense, without any release from or consent by the
Collateral Agent, to deal with (but not, except as expressly otherwise permitted
under this Pledge Agreement, to sell, lease, transfer or otherwise dispose of,
or relinquish possession of) the Operative Collateral in any manner consistent
with the Company's Ordinary Course Of Business, including without limitation any
of the following:
With respect to the Pledged Spare Parts:
(A) to dismantle any Pledged Spare Part that has become worn out
or obsolete or unfit for use, and either in the Ordinary Course or
pursuant to sales permitted under Section 4.04(c), to sell or dispose
of other parts thereof not reasonably
7
repairable or usable or any salvage resulting from such dismantling,
free from the Lien of this Pledge Agreement;
(B) to apply and use in the Ordinary Course Of Business, free
from the Lien of this Pledge Agreement, any Pledged Spare Parts for
installation or use in or for use in connection with any aircraft,
aircraft engines, propellers or appliances or spare parts owned or
operated by the Company; and
(C) to transfer any or all of the Pledged Spare Parts located at
one or more Designated Locations to one or more other Designated
Locations or one or more additional locations that are to be
designated as Designated Locations or either in the Ordinary Course or
pursuant to sales permitted under Section 4.04(c), to one or more
locations which are not Designated Locations.
(c) Release of Non-Slot Collateral. (i) The Company shall comply with this
Section 4.04(c) and the Substitution Requirements in connection with and (except
as provided in Section 4.05(a)(iv)) at or prior to the completion of any sale
(other than sales permitted under paragraphs (ii) or (iii) of this Section
4.04(c)) or deemed sale of Operative Collateral under this Pledge Agreement.
Upon Request by the Company, payment by the Company of the Collateral Agent's
costs (including reasonable legal fees and disbursements) incurred in complying
with such Request and satisfaction of the applicable Substitution Requirements,
and so long as no Event of Default has occurred and is continuing or would
result therefrom, the Collateral Agent shall release from the Lien of this
Pledge Agreement, assign and transfer to the Company or its designee at any
time, all the right, title and interest of the Collateral Agent in and to any
Operative Collateral that is the subject of (A) a contract of sale pursuant to
which the Company in the Ordinary Course has agreed to sell such Operative
Collateral on an arm's-length basis to an unaffiliated third party within ninety
(90) days after the date of such release, which contract contains only closing
conditions that are customary to a sale of that kind at that time and which sale
is not a "sale/leaseback" or other similar transaction used by the Company as a
financing vehicle, or (B) a deemed sale under this Section or Section
4.05(a)(iv) or 4.05(c) hereof; provided, however, that, so long as no Event of
Default then exists, (1) the Company shall not be so required to satisfy the
Substitution Requirements with respect to Pledged Spare Parts disposed of in the
Ordinary Course or pursuant to sales permitted by paragraphs (ii) or (iii) of
this Section 4.04(c), (2) the lien hereof shall automatically be released
concurrently with such disposition described in clause (1) above and without any
further action, and (3) such disposition shall be free and clear of any lien or
security interest created hereby. If Pledged Spare Parts cannot conveniently be
disposed of in the Ordinary Course because the Company has not maintained the
Pledged Parts Threshold or if the Company otherwise elects to reduce the Pledged
Parts Threshold, the Company may reduce the Pledged Parts Threshold upon
satisfying the applicable Substitution Requirements.
(ii) The Company may sell for cash Pledged Spare Parts in the Ordinary
Course of Business (other than any sale, whether in a single transaction
8
or a related group or series of transactions, of Pledged Spare Parts having an
aggregate value as reflected on the Inventory Control System in excess of
$10,000,000), so long as either (A) the net proceeds of any such sale are
deposited with the Collateral Agent to be held as additional Cash Collateral
hereunder or (B) the aggregate value as reflected on the Inventory Control
System of the Pledged Spare Parts remaining after giving effect to such sale is
equal to or greater than the Pledged Parts Threshold.
(iii) The Company may sell for cash Pledged Spare Parts having an
aggregate value as reflected on the Inventory Control System in excess of
$10,000,000 (whether in a single transaction or a related group or series of
transactions), if the net proceeds in excess of $10,000,000 of such sale or
sales are deposited with the Collateral Agent to be held as additional Cash
Collateral hereunder.
(iv) The Collateral Agent shall return to the Company any net
proceeds deposited pursuant to paragraphs (ii) or (iii) above upon Request
therefor if at any time the Security Ratio requirements are met (which, for this
purpose shall be at least 1.93 over 1), and the Collateral Agent has received a
Company Appraiser's Certificate (which, for purposes of this Section
4.04(c)(iv), need not be based on an actual physical inspection of the
Collateral so long as it is based on a full appraisal which included such
physical inspection performed by the same Independent Appraiser furnishing such
Company Appraiser's Certificate and such physical inspection was conducted no
earlier than 20 months prior to the date of such Company Appraiser's
Certificate) dated as of a date within thirty (30) days of the date such net
proceeds are to be returned, stating (A) the Fair Market Values, by type and
category and in reasonable detail, of all assets or groups of assets required
for the computation of the Security Ratio and (B) the Security Ratio, in each
case after giving effect to the return of such proceeds.
(d) Effect of Release. No purchaser in good faith of property purporting
to be released, assigned and transferred pursuant hereto shall be bound to
ascertain the authority of the Collateral Agent to execute the release,
assignment and transfer or to inquire as to the existence of any conditions
herein prescribed for the exercise of such authority; nor shall any purchaser or
grantee of any property or rights permitted by this Article 4 to be sold,
granted or otherwise disposed of by the Company be under any obligation to
ascertain or inquire into the authority of the Company to make any such sale,
grant or other disposition. Any release, assignment and transfer executed by the
Collateral Agent under this Section 4.04 shall be sufficient for the purposes of
this Pledge Agreement and shall constitute a good and valid release, assignment
and transfer of the Property therein described from ownership of the Collateral
Agent and the Lien of this Pledge Agreement.
(e) Substitution. If and whenever the Company shall be required or
permitted to subject any additional Property to the Lien of this Pledge
Agreement that is not already so subject pursuant to any provision of this
Pledge Agreement or pursuant to the terms of the Master Sub-
9
License Agreement or the Indenture, the Company will furnish to the Collateral
Agent the following:
(i) a Supplemental Pledge Agreement duly executed by the Company,
appropriately describing, identifying and locating such Property or the
location that is to become a Designated Location and specifically
subjecting the same to the Lien of this Pledge Agreement;
(ii) in the case of Spare Parts, cash, Investment Securities or
Property being subjected to the Lien of this Pledge Agreement, an Opinion
of Counsel, dated the date of execution of said Supplemental Pledge
Agreement, stating that:
(1) said Supplemental Pledge Agreement: (a) has been duly
authorized, executed and delivered by the Company, and (b) except
in the case of a Supplemental Pledge Agreement relating to
Pledged Spare Parts, validly subjects to the Lien of this Pledge
Agreement under applicable Federal and State laws all the right,
title and interest of the Company in and to the Property
specifically described in said Supplemental Pledge Agreement, or
in the case of a Supplemental Pledge Agreement relating to
Pledged Spare Parts, validly subjects to the Lien of this Pledge
Agreement under applicable Federal and State laws all the right,
title and interest of the Company in and to such of the Pledged
Spare Parts described in said Supplemental Pledge Agreement as
may from time to time be situated at the Designated Locations
within the United States, and only while so situated; and
(2) said Supplemental Pledge Agreement has been duly filed
for recording in accordance with the provisions of the Federal
Aviation Act, and either: (a) is not required to be filed or
recorded in any other place within the United States in order to
perfect and preserve the Lien of this Pledge Agreement under the
laws of the United States on (i) except in the case of a
Supplemental Pledge Agreement relating to Pledged Spare Parts,
the Property specifically described in said Supplemental Pledge
Agreement, or (ii) in the case of a Supplemental Pledge Agreement
relating to Pledged Spare Parts, Spare Parts described in said
Supplemental Pledge Agreement as may from time to time be
situated at the Designated Locations within the United States,
and only while so situated; or (b) if any such other filing or
recording shall be required that
10
said filing or recording has been accomplished in such other
manner and places, which shall be specified in such Opinion of
Counsel, as are necessary to perfect and preserve the Lien of
this Pledge Agreement; and
(iii) An Officers' Certificate stating that (A) the Company is the
legal and beneficial owner of the Property specifically described in said
Supplemental Pledge Agreement, free and clear of all Liens, except
Permitted Collateral Liens; and (B) in the opinion of the Officers
executing the Officers' Certificate, all conditions precedent provided for
in this Pledge Agreement relating to the subjection of such property to the
Lien of this Pledge Agreement have been complied with.
(f) Release of Collateral Upon Partial Prepayment. Simultaneously with or
promptly following the cancellation of any Securities, whether pursuant to a
partial redemption of any Securities pursuant to Article 3 of the Indenture, a
partial repurchase of any Securities pursuant any Offer to Purchase under the
Indenture, following a tender of Securities in connection with a tender offer
therefor or otherwise and subject to compliance by the Company with the
Preconditions, and provided that after giving effect to the release of such
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Collateral the Company will be in compliance with the Security Ratio, the
Collateral Agent shall release from the Lien of this Pledge Agreement and assign
and transfer to the Company or its designee all of the right, title and interest
of the Collateral Agent in designated Collateral as set forth in Schedule 2
hereto (the "Released Collateral") based upon the reduction in the amount of
Securities Outstanding to an amount equal to or less than the level specified
for the release of particular Collateral as set forth in Schedule 2 (the
"Collateral Release Trigger"). The Collateral Agent shall execute and deliver to
the Company the proper instrument or instruments (including, without limitation,
a Supplemental Pledge Agreement in the form of Exhibit B and Uniform Commercial
Code statements on form UCC-3) to evidence the release of the Lien on the
Released Collateral and to assign, transfer and deliver to the Company against
receipt but without recourse, warranty or representation the Released Collateral
and any other Property or proceeds received in respect thereof and then in the
possession of the Collateral Agent.
Section 4.05 Possession, Sublease and Assignment. (a) The Company shall
-----------------------------------
have the right, in the Ordinary Course Of Business, to (i) sublease (which in
this Section includes lease) any Pledged Spare Part to any "air carrier" (as
defined in the Federal Aviation Act) or to any manufacturer of such Pledged
Spare Part, or any Affiliate of such manufacturer, provided that the term of
--------
such sublease does not exceed twelve (12) months; (ii) sublease any Pledged
Spare Part to any Person as permitted by Section 4.05(c) hereof; (iii) transfer
possession of any Pledged Spare Part to the manufacturer thereof or any other
organization for testing, overhaul, repairs, maintenance, alterations,
modifications or promotional purposes; or (iv) subject any Pledged Spare Part to
an interchange or pooling, exchange, borrowing or maintenance servicing
agreement arrangement customary in the airline industry and entered into in the
Ordinary Course Of Business which does not contemplate or require the transfer
of title to such Pledged Spare Part and that requires such Pledged Spare Part to
be returned to the Company upon termination or expiration of such agreement or
arrangement (provided, however, that if the Company's title
11
to any such Pledged Spare Part shall be divested under any such agreement or
arrangement, such divestiture shall be deemed to be a sale with respect to such
Pledged Spare Part and the Company shall immediately comply with Section 4.04(c)
hereof in respect thereof); provided, however, that the Company shall not have
the right to enter into any sublease or other arrangement pursuant to this
Section 4.05(a) if an Event of Default shall have occurred and be continuing.
Without the prior written consent of the Collateral Agent, the Company will not
otherwise sell, sublease, transfer or relinquish possession of any Pledged Spare
Part to anyone other than the Collateral Agent and will not assign any of its
rights hereunder, except as permitted by the provisions of this Section 4.05 and
Sections 4.03 and 4.04 hereof.
(b) Any sublease of any Pledged Spare Part permitted under Section 4.05(a)
(a "Sublease") shall be fully subject to the following conditions:
(i) Each Sublease of any Pledged Spare Part shall contain an
express agreement by the sublessee to the effect that: (A) such Sublease is
fully subject and subordinate in all respects to this Pledge Agreement and
to the Collateral Agent's rights and remedies with respect to such Pledged
Spare Part, (B) upon notice of the occurrence of an Event of Default given
by the Collateral Agent to such sublessee, the Collateral Agent may avoid
such Sublease, and the sublessee shall forthwith deliver such Pledged Spare
Part to the Collateral Agent and (C) such Pledged Spare Part shall be
located in the United States.
(ii) All necessary action shall have been taken which is
required to continue the perfection of the Collateral Agent's security
interest in such Pledged Spare Part and the Collateral Agent's rights under
this Pledge Agreement and the Sublease and all other necessary documents
shall have been filed, registered or recorded in such public offices as may
be required to fully preserve the priority of the interest of the
Collateral Agent in such Pledged Spare Part under the laws of the United
States and any relevant state law; and the Company shall have furnished an
Opinion of Counsel with respect to such matters satisfactory to the
Collateral Agent.
(iii) The Company shall deliver to the Collateral Agent, promptly
after execution thereof, a duly executed copy of such Sublease.
(iv) Each Sublease of Pledged Spare Parts pursuant to Section
4.05(a) hereof shall be assigned by the Company to the Collateral Agent as
security for the Company's obligations hereunder, and the sublessee shall
be required upon the occurrence and during the continuance of an Event of
Default to make all payments under such Sublease directly to the Collateral
Agent; provided that if such Event of Default shall cease or shall be
waived pursuant to the provisions of the Indenture, the Collateral Agent
shall immediately pay all funds so received and deliver all Investment
Securities acquired with such funds to the Company.
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(c) Notwithstanding the foregoing, the Company may at its option, with
respect to any Sublease, decline to comply with the requirements set forth in
this Section 4.05 in which case the Sublease shall be deemed a sale with respect
to the Pledged Spare Part covered thereunder and the Company shall first comply
with Section 4.04(c) hereof in respect thereof.
(d) No Sublease, interchange or pooling, exchange, borrowing or maintenance
servicing arrangement or other transfer or relinquishment of the possession of
any Pledged Spare Part or of any of the Company's rights hereunder shall in any
way discharge or diminish any of the Company's obligations to the Collateral
Agent hereunder, cause the sublessee, transferee, assignee or any other Person
(other than the Company) to be deemed to be the "Company" or an obligor on the
Securities for purposes of this Pledge Agreement, or constitute a waiver of any
of the Collateral Agent's rights or remedies hereunder, except to the extent
such obligations, rights or remedies may be inapplicable during the period of
any Sublease as elsewhere herein provided.
Section 4.06 Recording; Registration; Compliance with Laws and Rules. The
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Company will cause this Pledge Agreement and all agreements supplemental hereto
to be filed and recorded (and to the extent required by law, refiled and re-
recorded) under the Federal Aviation Act (with respect to supplements, only if
such supplement involves Pledged Spare Parts) and the Uniform Commercial Code as
in effect in the jurisdictions in which the Collateral is located; and the
Company will from time to time do and perform any other acts and execute,
acknowledge, deliver, file and record any and all further instruments required
under the laws of the United States or any other applicable jurisdiction for the
purpose of proper protection of the Collateral Agent's and the Holders of the
Securities rights under this Pledge Agreement or for the purpose of carrying out
the intention of this Pledge Agreement; and the Company will promptly furnish to
the Collateral Agent certificates or other evidences of such filing, recording,
refiling and re-recording satisfactory to the Collateral Agent.
Section 4.07 Indemnities. The Company agrees to indemnify, and hold
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harmless the Collateral Agent to the same extent provided to the Indenture
Trustee under Section 7.7 of the Indenture, and the Collateral Agent shall have
those rights set forth in such Section 7.7 for the Indenture Trustee. This
covenant of indemnity shall continue in full force and effect notwithstanding
the full payment of principal of and interest on the Securities or the
termination of this Pledge Agreement in any manner whatsoever.
In addition, the Company shall indemnify, protect and hold harmless the
Collateral Agent from and against any and all liabilities, claims, demands,
costs, charges and expenses, including royalty payments and reasonable counsel
fees, in any manner imposed upon or accruing against the Collateral Agent
because of any design, article or material in respect of the Collateral which
infringes, or is claimed to infringe, any patent or other industrial property
right. The Collateral Agent will give notice to the Company of any such claim
known to the Collateral Agent in respect of which liability may be charged
against the Company.
Section 4.08 FAA Records. The Company will maintain or cause to be
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maintained all records, logs and other materials required by the FAA to be
maintained in respect of the Collateral, the Acquired Slots and any other Slot
Trust Assets regardless of whether such
13
requirements are, by their terms, imposed upon the Company, the Collateral
Agent, the Indenture Trustee or the Slot Trustee, and in the event that any
Collateral is repossessed by the Collateral Agent pursuant to Article 6 hereof,
will forthwith deliver to the Collateral Agent all such records, logs and other
materials relating thereto.
Section 4.09 Restrictions on Liens; Permitted Contests. (a) Restrictions
----------------------------------------- ------------
on Liens. The Company will not create, incur, assume or suffer to exist or
--------
permit to be created or incurred or assumed or to exist any Lien upon or against
the Collateral, the Acquired Slots or other Slot Trust Assets except for the
following (collectively, the "Permitted Collateral Liens"): (i) this Pledge
Agreement and the other Operative Documents and the rights of the Collateral
Agent, the Indenture Trustee, the Slot Trustee, the Holders of Securities and
the Company hereunder and thereunder, (ii) in the case of Operative Collateral
or the Beneficial Interest (to the extent the Beneficial Interest constitutes a
general intangible under the New York Uniform Commercial Code as in effect from
time to time), Liens for taxes or other governmental charges or levies not yet
due, the payment of which shall not at the time be required to be made in
accordance with Section 4.02 hereof, (iii) in the case of Operative Collateral,
materialmen's, mechanics', workmen's, repairmen's, employees', other like Liens
and other Liens arising in the Ordinary Course Of Business and which are not
overdue for more than 45 days, except to the extent that any such Lien is being
contested in good faith and by appropriate legal proceedings which, in the
opinion of the Company, do not involve any material danger of the sale,
forfeiture or loss of any Collateral or any interest therein, (iv) in the case
of Operative Collateral or the Beneficial Interest (to the extent the Beneficial
Interest constitutes a general intangible under the New York Uniform Commercial
Code as in effect from time to time) any judgment Lien, unless the judgment it
secures shall not, within sixty (60) days after the entry thereof, have been
discharged, vacated or reversed or the execution thereof stayed pending appeal,
or shall not have been discharged, vacated or reversed within sixty (60) days
after the expiration of any such stay, (v) in the case of Operative Collateral,
Subleases and other transfers of possession permitted under Sections 4.03 and
4.05 hereof, (vi) in the case of Acquired Slots, the Prior Third Party Licenses,
Third-Party Licenses and Slot Trades, (vii) executory contracts for sale or
lease by the Company of any Operative Collateral or Acquired Slots under which
consummation of such sale or lease, or delivery of such Operative Collateral or
Acquired Slots is conditioned on release of such Operative Collateral or
Acquired Slots from this Pledge Agreement or the Slot Trust and (viii) in the
case of Pledged Spare Parts subject to arrangements or agreements referred to in
Section 4.05(a) (iv), the right of any Person other than the Company to claim a
portion of the insurance proceeds received or receivable by the Collateral Agent
as a result of an Event of Loss.
(b) Permitted Contests. If no Event of Default shall be continuing, the
------------------
Company shall not be required, nor shall the Collateral Agent have the right,
without prior agreement of the Company, to discharge or remove, as the case may
be, any Lien on or against the whole or any part of any Collateral or the
Acquired Slots, the discharge or removal of which would otherwise be required by
the terms of this Pledge Agreement, the Slot Trust or the Master Sub-License
Agreement, or to comply with any legal requirements, compliance with which would
otherwise be required by this Pledge Agreement, or to pay any charge or other
amount the Company may be obligated to pay to any Person pursuant to this Pledge
Agreement other than an indemnification payment to a Person entitled to such
indemnification pursuant to the terms of Section 4.07
14
hereof, so long as the Company shall at its own expense contest the existence,
amount, applicability, extent or validity thereof in good faith by an
appropriate proceeding timely instituted, which, in the case of any Lien so
contested, shall operate to prevent the collection or satisfaction of such Lien,
and, in all cases in which the sale or forfeiture of the whole or any part of
such Collateral or the Acquired Slots shall be at issue, shall operate to
prevent such sale or forfeiture; provided, however, that such proceeding
presents no material danger of the sale, forfeiture or loss of any Collateral or
Acquired Slot which has not been provided for by the Company giving such
security as may be required in the proceeding; and, provided, further, that
nether the Collateral Agent, the Indenture Trustee nor the Slot Trustee (as
fiduciaries or in their individual capacities) nor any holder of Securities
would be in any danger of criminal liability, or any other liability or
obligation for which no indemnification is provided hereunder, by reason of such
nonpayment or noncompliance. The Collateral Agent hereby agrees to execute and
deliver at the Company's expense such documents, including powers of attorney,
as the Company may reasonably request in order that the Company shall be enabled
effectively to conduct any such proceeding.
Section 4.10 Warranty of Title. The Company warrants that (subject to the
-----------------
parenthetical phrase in Section 2.01(c)) as of the date of delivery of this
Pledge Agreement it is the legal and beneficial owner of the Collateral
(excluding any Property which may become Collateral hereafter) and has good
right to mortgage or transfer, as the case may be, the same. The Company will at
the time it subjects any Property to the Lien of this Pledge Agreement by
supplemental agreement be the legal and beneficial owner of such Property and
will have good right to mortgage the same, subject to Permitted Collateral
Liens. The Company warrants that all the Collateral (except Property which may
become Collateral hereafter) is, and at the time the Company subjects any
Property acquired hereafter to the Lien of this Pledge Agreement by supplemental
agreement, the Property so subjected will be, free and clear of all Liens,
except Permitted Collateral Liens.
The Company will, at or before the time it subjects any Property to the
Lien of this Pledge Agreement, cause evidence of its title to be duly recorded,
filed, or filed for recording, to the extent permitted under the Federal
Aviation Act or required under any other applicable law, by the Company as
owner. The Company will at all times defend and protect its title to the
Collateral, against the enforcement against such Collateral of all claims,
Liens, penalties and rights asserted by any and all parties whatsoever.
Section 4.11 Inventory Control System. The Company shall not change in
------------------------
any material respect the methods and practices (including, without limitation,
any change in the designation of any Spare Parts as "active" or "excess" which
change would be inconsistent with practices as in effect on the Issue Date)
relating to the valuation of Spare Parts as reflected in its Inventory Control
System as in effect on the Issue Date unless such change is consented to by the
Collateral Agent (such consent not to be unreasonably withheld or delayed).
Section 4.12 Actions Regarding the Beneficial Interest Certificates. (a)
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The Collateral Agent shall be entitled to exercise any and all voting and
consensual rights and powers relating or
15
pertaining to the Beneficial Interest Certificate or any part thereof, subject
to Section 9.01 of the Acquired Slot Trust Agreement.
(b) All distributions with respect to the Beneficial Interest Certificate
shall be paid directly to and shall be retained by the Collateral Agent subject
to the Lien of this Pledge Agreement.
(c) The Company will take all action necessary or appropriate to cause the
Collateral Agent to obtain the benefit of the provisions in clauses (a) and (b)
above and if any payments or distributions on the Beneficial Interest
Certificate are made to the Company, the Company will immediately deliver the
same to the Collateral Agent.
(d) The Beneficial Interest Certificate delivered to the Collateral Agent
on the date hereof shall be accompanied by an irrevocable stock power or powers
(or trust equivalent) executed by the Company and the Company further agrees to
execute any and all additional documents and instruments deemed necessary or
appropriate by the Collateral Agent to facilitate the Collateral Agent's
exercise of remedies pursuant to the terms of this Pledge Agreement; provided,
however, that unless and until there shall occur an acceleration of the
obligations of the Company under the Securities and the Indenture, the Company
shall continue to be the holder of record of the Beneficial Interest and the
Beneficial Interest Certificate on the books of the Slot Trust.
Section 4.13 Reports Regarding Collateral. (a) The Company shall deliver
----------------------------
to the Indenture Trustee and the Collateral Agent (i) on the Issue Date (as of
November 30, 1997) an inventory of the Pledged Spare Parts that will be subject
to the Lien of the Pledge Agreement at the Designated Locations describing the
values of such Pledged Spare Parts, as reflected on the Inventory Control System
and (ii) as of the last day of each month thereafter (within 20 days of the end
of each such month) an inventory of the Pledged Spare Parts at the Designated
Locations describing, among other things, the values of such Pledged Spare
Parts, as reflected on the Inventory Control System, in the form of the report
attached hereto as Exhibit C. The Company shall promptly respond to any request
of the Indenture Trustee or Collateral Agent for an explanation concerning any
discrepancies or changes in values reflected in such reports. The Collateral
Agent shall have the right to appoint and be reimbursed for expenses of a
technical adviser, and to have the Company deliver documentation to it and such
technical adviser as either of them may reasonably request.
(b) If (i) within fifteen (15) days after the delivery of a Company
Appraiser's Certificate for purposes of satisfying the Substitution
Requirements, the Indenture Trustee gives notice that it desires to have a
Trustee Appraiser redetermine the matters set forth in such Company Appraiser's
Certificate, and (ii) a Trustee Appraiser delivers to the Company, the Indenture
Trustee and the Collateral Agent an Independent Appraiser's Certificate as to
such matters signed by such Trustee Appraiser within fifteen (15) days after the
date of delivery of such Indenture Trustee's notice, the Appraised Values (or
Fair Market Values) of the Collateral subject to such Event of Loss or Request
for release and the Permitted Substitutes evidenced by such Independent
Appraiser's Certificates shall be determined as provided in the definition of
16
Appraised Value (or Fair Market Value). If (i) within thirty (30) days after the
delivery of a Company Appraiser's Certificate for purposes of establishing the
Security Ratio in connection with an Event of Loss, the Indenture Trustee gives
notice that it desires to have a Trustee Appraiser redetermine the matters set
forth in such Company Appraiser's Certificate, and (ii) a Trustee Appraiser
delivers to the Company, the Indenture Trustee and the Collateral Agent an
Independent Appraiser's Certificate as to such matters signed by the Trustee
Appraiser within thirty (30) days after the delivery of such Indenture Trustee's
notice, the Security Ratio shall be established as provided in paragraph (a) of
the Substitution Requirements. The Company and the Indenture Trustee may but
shall be under no obligation to join in the appointment of a single Independent
Appraiser for purposes of making any determination of Liquidation Value,
Appraised Value or Fair Market Value or establishing the Security Ratio, and if
they do so, the resulting determination of the Independent Appraiser so selected
shall be delivered to the Company, the Indenture Trustee and the Collateral
Agent at such time as the Company and Indenture Trustee shall agree and shall be
final and binding upon all parties.
Section 4.14 Maintenance Ratio. (a) The Company shall, (i) within 60 days
-----------------
after delivery (or deemed delivery pursuant to Section 4.14 (b) below) of a
monthly inventory report pursuant to Section 4.13 which indicates that the
aggregate value of Pledged Spare Parts is less than 60% of the value of the
Pledged Spare Parts shown on the inventory report delivered on the Issue Date,
deliver to the Collateral Agent an Officers' Certificate showing a calculation
of the Maintenance Ratio as of the date of such Officers' Certificate (a
"Maintenance Ratio Officers' Certificate") which Maintenance Ratio Officers'
Certificate shall be based on, and have attached thereto, a Company Appraiser's
Certificate (which, for purposes of this Section 4.14, need not be based on an
actual physical inspection of the Collateral so long as it is based on a full
appraisal which included such physical inspection performed by the same
Independent Appraiser furnishing such Company Appraiser's Certificate and such
physical inspection was conducted no earlier than 20 months prior to the date of
such Company Appraiser's Certificate) stating (A) the Fair Market Value, by type
and category and in reasonable detail, of all assets or groups of assets
required for the computation of the Maintenance Ratio, and (B) the Maintenance
Ratio (a "Maintenance Appraisal Certificate"), in each case as of the last day
of the month to which such monthly inventory report relates and (ii) if the
Maintenance Ratio shown in such Maintenance Appraisal Certificate is less than
1.2 to 1, within 30 days after the date on which such Maintenance Ratio
Officers' Certificate is delivered, (A) commence an Offer to Purchase a
principal amount of the Notes and furnish to the Trustee the Acquired Securities
(for cancellation) immediately upon such purchase, (B) furnish additional
Operative Collateral, (C) furnish Additional Acquired Slots or (D) furnish Cash
Collateral (or any combination of the foregoing), that would (on the basis of
such certificate) be required to be delivered or pledged hereunder for the
Maintenance Ratio to be at or above 1.2 to 1.0. Any such Offer to Purchase
shall be made at a purchase price equal to 101% of the principal amount of
Securities subject thereto, plus accrued and unpaid interest and Special
Interest, if any, with respect thereto.
(b) If the Company fails to deliver a monthly inventory report within
twenty days after the end of a month as required by Section 4.13(a), then, until
such time as it actually delivers an inventory report for such month, the
Company shall be deemed to have delivered a monthly inventory report for such
month which indicates that the aggregate value of Pledged
17
Spare Parts is less than 60% of the value of the Pledged Spare Parts shown on
the inventory report delivered on the Issue Date.
(c) If (i) pursuant to Section 4.14(a)(ii), the Company elects to increase
the amount of Cash Collateral so that the Maintenance Ratio is at or above 1.2
to 1 and (ii) at any time thereafter the Maintenance Ratio is at or above 1.5 to
1 then, so long as no Event of Default has occurred and is continuing or would
result therefrom, upon Request by the Company the liens and security interests
created hereby in such Cash Collateral held hereunder (in an aggregate amount
not to exceed the amount of such increase) shall be released and terminated, but
only to the extent that, after giving effect to any such release, the
Maintenance Ratio is at or above 1.5 to 1 as evidenced by a Maintenance Ratio
Officers' Certificate dated the date of the requested release, together with a
Maintenance Appraisal Certificate as of a date no earlier than 30 days prior to
the date of such requested release, delivered to the Collateral Agent. Upon any
release of Collateral or termination of a lien or security interest pursuant to
his subsection (c), the Collateral Agent shall, at the expense of the Company,
execute and deliver all such releases, termination statements and other
documents or instruments as the Company may reasonably request evidencing or
confirming such release or termination and shall return to the Company all such
cash and securities no longer required to be held as Cash Collateral.
Section 4.15 Change in Location of Principal Office, Records or Name. The
-------------------------------------------------------
Company will not change the location of its principal office or chief executive
office or the location of the offices where the records with respect to the
Collateral are kept from that set forth in Section 3.01(j) unless 20 days' prior
written notice of such change is given to the Collateral Agent. The Company
will not change its legal name, use any other name nor change the form of its
organization without giving the Collateral Agent 20 days' prior written notice
thereof.
ARTICLE 5
Insurance
Section 5.01 Insurance to Be Carried. (a) The Company will at all times
-----------------------
carry and maintain, at its own expense, with responsible insurers valid and
collectible insurance (subject to deductibles and self-insurance consistent with
the Company's current practices as of the Issue Date) on the Pledged Spare Parts
covering all-risk of physical loss or damage to such Pledged Spare Parts. The
Company will at all times carry and maintain on each aircraft or engine on which
a Spare Part that was a Pledged Spare Part is installed, at its own cost and
expense public liability and passenger liability and property damage liability
insurance.
All insurance required hereunder shall be of such type as is customarily
carried by corporations engaged in the same or a similar business, similarly
situated with the Company, and owning and operating similar Property and shall
be placed with responsible insurance companies, underwriters or funds.
All-risk of physical loss or damage insurance on Spare Parts required
hereunder shall provide for payment in the United States in U.S. Dollars.
18
(b) Without limiting anything set forth in this Article 5:
(i) all liability policies shall: (A) be primary without right
of contribution from any other insurance carried by the Collateral Agent,
and (B) name the Collateral Agent as additional insured under a standard
mortgagee clause, provided that the inclusion of more than one insured
shall not operate to increase the insurer's limit of liability or to avoid
the coverage of an insured as respects claims against said insured by the
other insured or the employees of such other insured; and
(ii) all policies (other than liability policies) required
hereunder covering loss or damage to any Collateral shall name the
Collateral Agent as loss payee under a standard mortgagee clause and shall
provide that proceeds payable under such policies shall be paid exclusively
to the Collateral Agent as loss payee.
Section 5.02 Alteration of Insurance. All policies (other than war-risk
-----------------------
policies) required by Section 5.01 hereof shall provide for not less than thirty
(30) days' prior written notice to the Collateral Agent before any material
alteration which adversely affects the interests of the Collateral Agent, or
cancellation of the insurance evidenced thereby, shall be effective as to the
Collateral Agent, or if it is not commercially possible at the time to obtain
the notice specified above, shall provide for as long a period of prior notice
as shall then be commercially possible to obtain (it being understood that in
the case of cancellation for non-payment of premium, ten (10) days prior notice
is the longest notice commercially possible to obtain on the date hereof).
Section 5.03 Additional Insurance. Nothing contained herein shall prevent
--------------------
the Company from carrying additional insurance in excess of that required
hereunder in respect of any Collateral at its own expense.
Section 5.04 Insurance Certificates. On the Issue Date and annually on or
----------------------
before the anniversary date of each insurance policy required hereunder, the
Company will furnish to the Collateral Agent a report from the Company's
independent insurance broker describing in reasonable detail the insurance then
carried and maintained on the Collateral, certifying that such insurance
complies with the terms hereof and stating the opinion of such broker that such
insurance is adequate for the protection of the interests of the Company and the
Collateral Agent in accordance with the terms hereof.
Section 5.05 Proceeds of Insurance. (a) So long as no Event of Default
---------------------
has occurred and is continuing, all proceeds of insurance required hereby which
are received by the Collateral Agent or the Company as the result of the
occurrence of an Event of Loss with respect to any Collateral shall be
immediately paid over to or retained by the Company, provided that the Company
has fully complied with the terms of Section 4.04 and has made all payments then
due and required to be made by the Company under the Indenture, and otherwise
shall be paid over to or retained by the Collateral Agent to be held as
Temporary Cash Collateral or if the Company so notifies the Collateral Agent at
any time, Cash Collateral hereunder.
19
(b) So long as no Event of Default has occurred and is continuing, all
proceeds of insurance required hereby which are received by the Collateral Agent
or the Company as the result of any property damage or loss to any Collateral
not constituting an Event of Loss will be immediately applied in payment for
repair (whether such payment be for repair or partial repair already made or for
advance payments or deposits requested by the person making such repair) or
replacement in accordance with the terms of Section 4.03, if not already paid
for by the Company, or, if already paid for by the Company, will be immediately
applied to reimburse the Company for such payment, and any balance remaining
after such application or payment shall be immediately paid over to or retained
by the Company.
(c) All proceeds of insurance required hereby which are received by the
Collateral Agent or the Company as a result of any property damage or loss to
Spare Parts or other Property not constituting Pledged Spare Parts or other
Collateral shall be immediately paid over to or retained by the Company.
(d) All proceeds of insurance received by the Collateral Agent hereunder
and not then required to be paid over to the Company shall be held by the
Collateral Agent as Temporary Cash Collateral or, if the Company so notifies the
Collateral Agent at any time, Cash Collateral hereunder.
ARTICLE 6
Remedies
Section 6.01 Remedies. In case of the happening and during the
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continuance of any Event of Default (as applied to the Non-Slot Collateral) and
upon the acceleration of the obligations of the Company under the Securities and
the Indenture (as applied to the Slot Collateral) and so long as such Event of
Default shall not have been cured or waived and/or such acceleration shall not
have been rescinded, as the case may be, the Collateral Agent shall have, in
addition to all other rights given by law or by the Pledge Agreement or the
other Operative Documents, all the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code in effect in the
State of New York and any other applicable jurisdiction at that time. In
addition the Collateral Agent may transfer to or register in its name as
Collateral Agent the Beneficial Interest Certificate and may take possession of
the Collateral or any part or the whole of any type of the Collateral, and may
by its agents enter upon the premises of the Company or of any sublessee where
any part or the whole of such type of the Collateral may be and take possession
of any part or the whole of such type of the Collateral and withdraw the same
from said premises, retaining all payments which up to that time may have been
made on account of such type of the Collateral and otherwise, and shall be
entitled to collect, receive and retain all unpaid charges of any kind earned by
such type of the Collateral or any part thereof, and may lease such portion of
the Collateral or any part thereof, or with or without retaking possession
thereof sell the same or any part thereof, free from any and all claims of the
Company at law or in equity, in one lot and as an entirety or in separate lots,
insofar as may be necessary to perform and fulfill the Obligations, at public or
private sale with or without advertisement, for cash or upon credit, in its
discretion, and may proceed otherwise to enforce
20
rights and the rights of the Holders of Securities in the manner herein
provided. Upon any such sale, the Collateral Agent itself may bid for the
Property offered for sale or any part thereof. Any such sale may be held or
conducted at such place and at such time as the Collateral Agent may specify, or
as may be required by law, and without gathering at the place of sale the
Collateral to be sold, and in general in such manner as the Collateral Agent may
determine, but so that the Company may and shall have a reasonable opportunity
to bid at any such sale. Subject to the second paragraph of Section 6.02 hereof
and to Section 6.03 hereof, upon such taking possession or withdrawal or lease
or sale of part or the whole of such type of the Collateral, the Company shall
cease to have any rights or remedies in respect of such type of the Collateral
hereunder, but all such rights and remedies shall be deemed thenceforth to have
been waived and surrendered by the Company, and no payments theretofore made by
the Company for the rent or use of such type of the Collateral shall, in case of
the happening of any Event of Default and such taking possession, withdrawal,
lease or sale by the Collateral Agent, give to the Company any legal or
equitable interest or title in or to such type of the Collateral or any part of
it or any cause or right of action at law or in equity in respect of such type
of the Collateral against the Collateral Agent or the Holders of Securities. No
such taking possession, withdrawal, lease or sale of such type of the Collateral
by the Collateral Agent and no omission of or delay in taking any such action
shall be a bar to the recovery by the Collateral Agent from the Company of the
Obligations and the Collateral Agent may xxx for and collect, and the Company
shall be and remain liable for, the Obligations until such sums shall have been
realized as, with the proceeds of the lease or sale of such portion of the
Collateral if any shall be sufficient for the discharge of all of the
Obligations whether or not they shall have then matured. The Company hereby
expressly waives any and all claims against the Collateral Agent and its agent
or agents for damages of whatever nature in connection with any retaking of
Collateral in any commercially reasonable manner.
Upon any sale of the Collateral pursuant to this Section 6.01, whether made
under the power of sale hereby given or pursuant to judicial proceedings, to the
extent permitted by law:
A. the Collateral Agent may make and deliver to the purchaser or
purchasers a good and sufficient deed, xxxx of sale and instrument of assignment
and transfer of the property sold; and
B. the Collateral Agent is hereby irrevocably appointed the true and
lawful attorney of the Company, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment and transfer of the property
thus sold; and for that purpose it may execute all necessary deeds, bills of
sale and instruments of assignment and transfer, and may substitute one or more
persons, firms or corporations with like power, the Company hereby ratifying and
confirming all that its said attorney or such substitute or substitutes shall
lawfully do by virtue hereof; but if so requested by the Collateral Agent or by
any purchaser, the Company shall ratify and confirm any such sale or transfer by
executing and delivering to the Collateral Agent or to such purchaser or
purchasers all proper deeds, bills of sale, instruments of assignment and
transfer and releases as may be designated in any such request.
Section 6.02 Application of Proceeds. If, in the case of the happening of
-----------------------
any Event of Default or acceleration, the Collateral Agent shall exercise any of
the powers conferred upon it
21
by Section 6.01 hereof, all payments made by the Company to the Collateral Agent
hereunder after such Event of Default, and the proceeds of any judgment
collected by the Collateral Agent hereunder, and the proceeds of every sale or
lease by the Collateral Agent hereunder of any part or the whole of the
Collateral, together with any other sums which may then be held by the
Collateral Agent under any of the provisions hereof, shall be applied by the
Collateral Agent in the manner set forth in Section 6.10 of the Indenture.
After all such payments shall have been made in full, the title to any part
or the whole of the Collateral remaining unsold and abandoned by the Collateral
Agent shall be conveyed by the Collateral Agent to the Company or its named
designee free from any further liabilities or obligations to the Collateral
Agent hereunder. If after applying all such sums of money realized by the
Collateral Agent as aforesaid there shall remain any amount due to the
Collateral Agent under the provisions hereof, the Company agrees to pay the
amount of such deficit to the Collateral Agent.
Section 6.03 Obligations of Company Not Affected by Remedies. No retaking
-----------------------------------------------
of possession of part or the whole of the Collateral by the Collateral Agent,
nor any withdrawal, lease or sale thereof, nor any action or failure or omission
to act against the Company or in respect of the Collateral, on the part of the
Collateral Agent or on the part of the Holder of any Securities, nor any delay
or indulgence granted to the Company by the Collateral Agent or by any such
Holder, shall affect the obligations of the Company hereunder. The Collateral
Agent may at any time upon notice in writing to the Company apply to any court
of competent jurisdiction for instructions as to the application and
distribution of the property held by it.
Section 6.04 Remedies Cumulative and Subject to Applicable Law. No right,
-------------------------------------------------
power or remedy herein conferred upon or reserved to the Collateral Agent, the
Indenture Trustee and the Slot Trustee and/or the Holders of the Securities is
intended to be exclusive of any other right, power or remedy conferred upon or
reserved to any one or more of them and every right, power and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right,
power and remedy given hereunder or under the Indenture or the other Operative
Documents or now or hereafter existing at law or in equity or otherwise
(including, without limitation, under the Uniform Commercial Code as in effect
in any applicable jurisdiction) and may be exercised from time to time and as
often and in such order as may be deemed expedient by the Collateral Agent, the
Indenture Trustee, the Slot Trustee and/or the Holders of the Securities. The
exercise by any of them of any right, power or remedy shall not be construed as
a waiver of the right of any of them to exercise at the same time or thereafter
any other right, power or remedy, nor as an election precluding exercise at the
same time or thereafter of any alternative right, power or remedy. The exercise
of any right, power or remedy shall be subject to applicable law.
22
ARTICLE 7
Termination
Section 7.01 Termination. The Company agrees that this is a continuing
-----------
agreement and shall remain in full force and effect until the earlier of (i) the
date the Company pays in full and performs all of its Obligations hereunder and
under the Securities and (ii) (x) the occurrence of the Indenture Discharge Date
and (y) the payment of all Obligations then due and payable, at which time the
Collateral Agent shall have no further interest in and to the Collateral or the
Slot Trust Assets, and will at the Company's expense release all of the
Collateral Agent's interest in and to the Collateral and the Slot Trust Assets,
including any cash and/or Investment Securities held in accordance with the
terms of this Pledge Agreement and/or the Master Sub-License Agreement.
ARTICLE 8
Collateral Agent
Section 8.01 Collateral Agent. The Collateral Agent has been appointed as
----------------
Collateral Agent hereunder. The Collateral Agent shall be obligated, and shall
have the right, hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release of Collateral or the substitution of
Permitted Substitutes) solely in accordance with this Pledge Agreement and the
Indenture. The Collateral Agent may resign and a successor Collateral Agent may
be appointed in the manner provided for a successor Trustee in the Indenture.
Upon the acceptance of any appointment as a Collateral Agent by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Pledge Agreement, and the retiring Collateral Agent
shall thereupon be discharged from its duties and obligations under this Pledge
Agreement. After any retiring Collateral Agent's resignation, the provisions of
this Pledge Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Pledge Agreement while it was Collateral
Agent. The Collateral Agent agrees to and shall have the benefit of all
provisions of the Indenture and the other Operative Documents stated therein to
be applicable to the Collateral Agent.
ARTICLE 9
Miscellaneous
Section 9.01 Benefits of Pledge Agreement Restricted. Subject to the
---------------------------------------
provisions of Section 9.10 hereof, nothing in this Pledge Agreement or the
Securities, express or implied, shall give or be construed to give to any
Person, other than the parties hereto and the Holders of the Securities, any
legal or equitable right, remedy or claim under or in respect of this Pledge
Agreement or under any covenant, condition or provision herein contained, all
such covenants, conditions and provisions, subject to Section 9.10 hereof, being
for the sole benefit of the parties hereto and the Holders of the Securities.
23
Section 9.02 Funds May Be Held by the Collateral Agent; Investments in
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Investment Securities. (a) (i) Subject to the provisions of Section 9.02(b),
---------------------
any money at any time paid to or held by the Collateral Agent hereunder until
paid out by the Collateral Agent as herein provided may be carried by the
Collateral Agent on deposit with itself, or on deposit or invested with one or
more banks or investment banking or brokerage institutions acting on its behalf,
and the Collateral Agent shall not have any liability for interest upon any such
money except as otherwise agreed with the Company.
(ii) At any time and from time to time, if no Event of Default
shall have occurred and be continuing and subject to Section 9.02(b), the
Collateral Agent shall invest and reinvest any funds held by it in
Investment Securities to be held by the Collateral Agent in trust for the
benefit of the Holders of the Securities. Any such investments may be made
by the Collateral Agent through its own bond or investment department, or
through one or more banks or investment banking or brokerage institutions
acting on its behalf.
(iii) Funds held in trust for the benefit of the Holders of the
Securities by the Collateral Agent on deposit with itself or elsewhere,
Investment Securities held in trust for the benefit of the Holders of the
Securities, funds and/or Investment Securities held for the Company by the
Collateral Agent, and funds or Investment Securities held under Section
9.02(b) shall each be held in distinct, identifiable accounts, and no other
funds or investments of any nature or from any source whatsoever may be
held in such accounts.
(iv) The Collateral Agent may sell any Investment Securities
held by it and retain the proceeds of such a sale as Collateral hereunder.
(v) The Collateral Agent shall retain, for the benefit of the
Holders of the Securities (a) any interest earned on deposits carried
pursuant to clause (i) of this Section 9.02(a), and (b) any interest (other
than accrued interest paid for at the time of purchase of an investment) or
other profit which may accrue upon, or be realized from any sale or
redemption of, Investment Securities.
(b) Notwithstanding the foregoing and so long as no Event of Default shall
have occurred and be continuing, any funds or Investment Securities held by the
Collateral Agent as Temporary Cash Collateral shall be held for the benefit of
the Holders of the Securities and shall be invested and reinvested by the
Collateral Agent in Investment Securities as specified in a Request. Any such
investments may be made by the Collateral Agent through its own bond or
investment department, or through one or more banks or investment banking or
brokerage institutions acting on its behalf if specified in such Request. No
later than six (6) months after the Event of Loss or proposed release
occasioning the deposit with the Collateral Agent of such Temporary Cash
Collateral, if no Event of Default shall have occurred and be continuing and
upon satisfaction by the Company of the applicable Substitution Requirements,
the Collateral Agent shall return to the Company Temporary Cash Collateral in an
amount equal to the entire amount of the related deposit, plus or minus any net
earnings or loss thereon during the time it
24
was held as Temporary Cash Collateral, or, if the Appraised Value of the
Operative Collateral or Slots being substituted for such Temporary Cash
Collateral (determined under paragraph (f)(ii) of the Substitution Requirements)
is less than the Appraised Value of the Operative Collateral or Acquired Slots
on account of whose loss, sale or deemed sale such Temporary Cash Collateral was
furnished (determined under paragraph (a)(ii)(C), (b)(ii) or (f)(ii) of the
Substitution Requirements), in an amount equal to such portion of such deposit,
plus or minus such net earnings or loss, as is allocable to such lesser
Appraised Value. If an Event of Default shall have occurred and be continuing or
six (6) months shall have elapsed since the date of such Event of Loss or
release, such Temporary Cash Collateral shall cease to be such and shall be held
by the Collateral Agent for the benefit of the Holders of the Securities under
Section 9.02(a).
(c) All Investment Securities shall be issued in the name of the
Collateral Agent and held by it, or, if not so held, the Collateral Agent shall
be reflected as the owner of, or secured party in respect of, such Investment
Securities in the register of the issuer of such Investment Securities. In no
event shall the Collateral Agent invest in, or hold, Investment Securities in a
manner which would cause the Collateral Agent not to have a Lien on, and first
priority perfected security interest in, such Investment Securities under the
applicable provisions of the Uniform Commercial Code in effect where the
Collateral Agent holds such Investment Securities, or if not held by it, in
effect where the registrar is located, or other applicable law then in effect,
and in no event shall the Collateral Agent hold cash other than in a manner
which would cause the Collateral Agent to have a Lien on, and first priority
perfected security interest in, such cash.
(d) The Collateral Agent shall deliver to the Company within five (5)
Business Days after December 31 of each year (commencing December 31, 1998) a
statement which sets forth the amount of cash and/or Investment Securities held
by the Collateral Agent and, with respect to Investment Securities, a schedule
identifying each Investment Security and the face or principal amount thereof.
(e) If the Company elects to repurchase the Securities, the Collateral
Agent shall release the Temporary Cash Collateral and Cash Collateral and
cooperate with the Company and the Indenture Trustee in connection with
applications of Temporary Cash Collateral and Cash Collateral to the purchase or
redemption of Securities in accordance with, and to the extent permitted by, the
provisions of Section 3.9 of the Indenture.
Section 9.03 Certificates and Opinions of Counsel; Statements to Be
------------------------------------------------------
Contained Therein; Basis Therefor. Subject to the next sentence, upon any
---------------------------------
application or Request by the Company to the Collateral Agent to take any action
under any of the provisions of this Pledge Agreement, the Company shall furnish
to the Collateral Agent an Officers' Certificate and an Opinion of Counsel in
compliance with, but only if required by Sections 11.04 and/or 11.05 of the
Indenture. Subject to Section 4.04(c) hereof, as a condition to the proposed
release or exclusion of any Spare Parts from the Lien of this Pledge Agreement
in accordance with the terms hereof, which Spare Parts remain located at a
Designated Location, the Company shall furnish to the Collateral Agent an
Opinion of Counsel, in form and substance satisfactory to the Collateral Agent
to the effect that the Collateral Agent's security interest in the other Spare
Parts which are Pledged Spare Parts at such Designated Location remains
unaffected as to validity,
25
perfection and priority under applicable federal and state law and that such
release (including, without limitation, all documents created and filings made
with respect thereto) will not have an adverse effect on the Collateral Agent's
security interest in and to the Pledged Spare Parts.
Section 9.04 Appraiser's Certificate. Unless otherwise specifically
-----------------------
provided, an Independent Appraiser's Certificate shall be sufficient evidence of
the Appraised Value and Fair Market Value to the Company of any Property under
this Pledge Agreement.
SECTION 9.05 Notices; Waiver. Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other document provided or permitted by
this Pledge Agreement to be made upon, given or furnished to, or filed with
(a) the Company shall be sufficient for every purpose hereunder if in
writing (including telecopied communications) and made, given, furnished or
filed by personal delivery or mailed by first-class mail or by nationally
recognized overnight courier, postage or courier charges, as the case may be,
prepaid, to the Company at:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President & General Counsel
Telecopier No.: (000) 000-0000
(b) the Collateral Agent shall be sufficient for every purpose
hereunder if in writing (including telecopied communications) and made, given,
furnished or filed by personal delivery or mailed by registered or certified
mail or by nationally recognized overnight courier, postage or courier charges,
as the case may be, prepaid, to or with the Collateral Agent at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: Corporate Trust Services
Telecopier No.: (000) 000-0000
or to any of the above parties at any other address or telecopier number
subsequently furnished in writing by it to each of the other parties listed
above. An affidavit by any person representing or acting on behalf of the
Company or the Collateral Agent as to such mailing, having any registry receipt
required by this Section attached, shall be conclusive evidence of the giving of
such demand, notice or communication.
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first-class mail or by nationally recognized overnight courier,
postage or courier charges, as the case
26
may be, prepaid, at such Holder's address as it appears on the Register and
shall be sufficiently given to such Holder if so mailed within the time
prescribed.
Failure to mail a notice or send a communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. Notices to
the Collateral Agent or to the Company are deemed given only when received.
Where this Pledge Agreement provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by the Holders shall be filed with the Collateral
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
Section 9.06 Amendments, Etc. (a) Except as provided in Section 9.06(b)
---------------
hereof and subject to Section 4.11 of the Indenture and Article 9 of the
Indenture, this Pledge Agreement may be amended by the Company and the
Collateral Agent only with the affirmative vote of the Required Holders;
provided, however, that the affirmative vote of each Holder shall be required to
-------- -------
amend this Section 9.06 or the definition of Required Holders or Applicable
Percentage.
(b) The Company and the Collateral Agent may also amend this Pledge
Agreement without the vote of the Holders of the Securities if such parties each
deem it necessary to cure any ambiguity, defect or inconsistency or conform this
Pledge Agreement to the requirements of applicable Federal or State laws or
regulations; provided that such amendments or amendment do not have any adverse
effect on the interests of the Holders.
Section 9.07 No Waiver; Remedies. (a) No failure on the part of the
-------------------
Collateral Agent to exercise, and no delay in exercising any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative, may be
exercised singly or concurrently, and are not exclusive of any remedies provided
by law or the Indenture, the Securities or any of the other Operative Documents.
(b) Failure by the Collateral Agent at any time or times hereafter to
require strict performance by the Company or any other Person of any of the
provisions, warranties, terms or conditions contained herein or in any of the
Indenture, the Securities or any other Operative Documents now or at any time or
times hereafter executed by the Company or any such other Person and delivered
to the Collateral Agent shall not waive, affect or diminish any right of the
Collateral Agent at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been modified or waived by
any course of conduct or knowledge of the Collateral Agent or any agent, officer
or employee of the Collateral Agent.
Section 9.08 Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent that any provision of this Pledge Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the TIA,
such imposed duties shall control.
Section 9.09 Holidays. In the event that any date for the payment of any
--------
amount due hereunder shall not be a Business Day, then (notwithstanding any
other provision of this Pledge Agreement) such payment need not be made on such
date, but may be made on the next
27
succeeding Business Day with the same force and effect as if made on the due
date, and no interest shall accrue for the period from such due date to and
including the next succeeding Business Day.
SECTION 9.10 Successors and Assigns. This Pledge Agreement and all
----------------------
obligations of the Company hereunder shall be binding upon the successors and
permitted assigns of the Company, and shall, together with the rights and
remedies of the Collateral Agent hereunder, inure to the benefit of the
Collateral Agent, the Indenture Trustee, the Holders, and their respective
successors and assigns. The Company and the Collateral Agent understand and
agree that the interest of the Company under this Pledge Agreement is not
assignable and that any attempt to assign all or any portion of this Pledge
Agreement by the Company shall be null and void except for an assignment in
connection with a merger, consolidation or sale of substantially all the
Company's assets permitted under the Indenture.
SECTION 9.11 Governing Law; Submission to Jurisdiction; Waiver of Jury
---------------------------------------------------------
Jury Trial; Waiver of Damages.
-----------------------------
(a) The laws of the State of New York shall govern this Pledge Agreement
without regard to principles of conflict of laws.
(b) The Company agrees that the Collateral Agent shall, in its capacity as
Collateral Agent or in the name and on behalf of any Holder, have the right, to
the extent permitted by applicable law, to proceed against the Company or its
property in a court in any location reasonably selected in good faith (and
having personal or in rem jurisdiction over the Company or its property, as the
case may be) to enable the Collateral Agent to realize on such property, or to
enforce a judgment or other court order entered in favor of the Collateral
Agent. The Company agrees that it will not assert any counterclaims, setoffs or
crossclaims in any proceeding brought by the Collateral Agent to realize on such
property or to enforce a judgment or other court order in favor of the
Collateral Agent, except for such counterclaims, setoffs or crossclaims which,
if not asserted in any such proceeding, could not otherwise be brought or
asserted. The Company waives any objection that it may have to the location of
the court in which the Collateral Agent has commenced a proceeding described in
this paragraph including, without limitation, any objection to the laying of
venue or based on the grounds of forum non conveniens.
(c) The Company and the Collateral Agent each waive any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort,
or otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Pledge Agreement.
Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
(d) The Company agrees that neither the Collateral Agent nor any Holder
shall have any liability to the Company (whether sounding in tort, contract or
otherwise) for losses suffered by the Company in connection with, arising out
of, or in any way related to, the transactions contemplated and the relationship
established by this Pledge Agreement, or any act, omission or event occurring in
connection therewith, unless it is determined by a final and nonappealable
28
judgment of a court that is binding on the Collateral Agent or such Holder, as
the case may be, that such losses were the result of acts or omissions on the
part of the Collateral Agent or such Holder, as the case may be, constituting
bad faith, gross negligence or willful misconduct.
(e) To the extent permitted by applicable law, and except as otherwise
provided in this Pledge Agreement, the Company waives all rights of notice and
hearing of any kind prior to the exercise by the Collateral Agent or any Holder
of rights during the continuance of any Event of Default to repossess the
Collateral with judicial process or to replevy, attach or levy upon the
Collateral or other security for the Obligations. To the extent permitted by
applicable law, the Company waives the posting of any bond otherwise required of
the Collateral Agent or any Holder in connection with any judicial process or
proceeding to obtain possession of replevy, attach or levy upon the Collateral
or other security for the Obligations, to enforce any judgment or other court
order entered in favor of the Collateral Agent or any Holder, or to enforce by
specific performance, temporary restraining order or preliminary or permanent
injunction, this Pledge Agreement or any other agreement or document between the
Company on the one hand and the Collateral Agent and/or the Holders on the other
hand.
Section 9.12 Indemnification. The Company agrees to pay, and to save the
---------------
Indenture Trustee and the Collateral Agent harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
excise, sales or other similar taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
SECTION 9.13 Effect of Headings. The Article and Section headings and
------------------
the Table of Contents contained in this Pledge Agreement have been inserted for
convenience of reference only, and are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of this Pledge Agreement.
SECTION 9.14 No Adverse Interpretation of Other Agreements. This Pledge
---------------------------------------------
Agreement may not be used to interpret any agreement of the Company or any of
its Subsidiaries which is unrelated to the Indenture, the Securities or the
other Operative Documents. Any such agreement may not be used to interpret this
Pledge Agreement.
Section 9.15 No Recourse Against Others. A director, officer, employee
--------------------------
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under this Pledge Agreement or for any claim based
on, in respect of or by reason of such obligations or their creation.
SECTION 9.16 Counterpart Originals. This Pledge Agreement may be signed
---------------------
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same agreement.
SECTION 9.17 Severability. The provisions of this Pledge Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in
29
any other jurisdiction or any other clause or provision of this Pledge Agreement
in any jurisdiction, and a Holder shall have no claim therefor against any party
hereto.
SECTION 9.18 Survival Provisions. Notwithstanding any right of the
-------------------
Collateral Agent, the Initial Purchasers or any of the Holders to investigate
the affairs of the Company, and notwithstanding any knowledge of facts
determined or determinable by any of them pursuant to such investigation or
right of investigation, all representations, warranties and covenants of the
Company contained herein shall survive the execution and delivery of this Pledge
Agreement, and shall terminate only upon the termination of this Pledge
Agreement.
SECTION 9.19 Waivers. The Company waives presentment and demand for
-------
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices which the Company
might otherwise be entitled, except as otherwise expressly provided for herein
or in the Indenture.
[SIGNATURE PAGE FOLLOWS]
30
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: _________________________________________
Name:
Title:
Agreed and accepted as of the date first written above:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Collateral Agent
By: ________________________________
Name:
Title:
31
EXHIBIT A
FORM OF SUPPLEMENTAL PLEDGE AGREEMENT
(To Add Collateral)
SUPPLEMENTAL PLEDGE AGREEMENT No. _____
SUPPLEMENTAL PLEDGE AGREEMENT NO. _______ , dated as of __________between
TRANS WORLD AIRLINES, INC., a Delaware corporation (together with its successors
and assigns, the "Company"), having an office at One City Centre, 000 X. 0xx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, and ____________________________________, as
Collateral Agent under the Pledge Agreement described below, having its
principal office at _____________________________, (together with its successors
in trust, the "Collateral Agent").
WHEREAS, the Company has heretofore executed and delivered to the
Collateral Agent a Pledge and Security Agreement, dated as of December 9, 1997
(the "Pledge Agreement"), covering the property of the Company therein
described, to secure (subject to the provisions of the Pledge Agreement and the
Indenture) the payment of the Securities (as defined in the Pledge Agreement)
outstanding from time to time;
WHEREAS, the Pledge Agreement (and any Supplemental Pledge Agreements) has
(have) been duly recorded with the Federal Aviation Administration at Oklahoma
City, Oklahoma, pursuant to the Federal Aviation Act of 1958, as amended, on the
following date as a document or conveyance bearing the following number:
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Pledge Agreement......
WHEREAS, the Company, as provided in the Pledge Agreement, is hereby
executing and delivering or heretofore has executed and delivered, to the
Collateral Agent one or more Supplemental Pledge Agreements for the purposes of
specifically subjecting to the Lien of the Pledge Agreement certain property
herein described[, or subjecting to the Lien of the Pledge Agreement appliances
and spare parts maintained by the Company or on its behalf for installation or
use in or useable on any model of aircraft or engine, at designated locations
other than the locations designated in the Pledge Agreement and in Supplemental
Pledge Agreements thereto, previously delivered). (Recite any other filing or
recording data.)
WHEREAS, the Company is the legal and beneficial owner of the property
specifically described in Schedule I annexed hereto (and located at the
(Designated Location) (location) described in Schedule I annexed hereto), free
and clear of all mortgages, security interests, pledges, liens, claims, charges
and encumbrances of every kind whatsoever, except only
A-1
Permitted Collateral Liens (as defined in the Definitions Appendix referred to
in the Pledge Agreement) and desires to execute and deliver this Supplemental
Pledge Agreement for the purpose of specifically subjecting said property to the
Lien of the Pledge Agreement;
WHEREAS, all things necessary to make this Supplemental Pledge Agreement
the valid, binding and legal obligation of the Company, including all proper
corporate action on the part of the Company, have been done and performed and
have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL PLEDGE AGREEMENT WITNESSETH, that, to
secure (subject to the provisions of the Pledge Agreement) the payment of the
principal of, premium, if any, and interest and Special Interest (as defined in
such Definitions Appendix), if any, on the Securities at any time secured under
the Pledge Agreement and issued by the Company and outstanding, and the
performance of the covenants therein and herein, the Company does hereby
transfer, grant, bargain, sell, assign, convey, mortgage, hypothecate and pledge
to the Collateral Agent the property described in Schedule I annexed hereto.
TO HAVE AND TO HOLD all and singular the aforesaid property described in
Schedule I annexed hereto unto the Collateral Agent in trust and for the uses
and purposes and subject to the terms, provisions, agreements and covenants set
forth in the Pledge Agreement.
This Supplemental Pledge Agreement shall be construed as supplemental to
the Pledge Agreement and shall form a part thereof, and the Pledge Agreement is
hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
This Supplemental Pledge Agreement is intended to be delivered in the State
of New York and shall be governed by the laws of that State without regard to
principles of conflicts of laws.
This Supplemental Pledge Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Supplemental Pledge Agreement.
A-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Pledge
Agreement to be duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: __________________________________
Name:
Title:
Agreed and accepted as of the date first written above:
[Name of Collateral Agent],
as Collateral Agent
By: ___________________________________
Name:
Title:
A-3
STATE OF MISSOURI )
) ss.:
COUNTY OF __________ )
On the ______ day of ___________, ______, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at ______________________; that he is a
___________ of TRANS WORLD AIRLINES, INC., the corporation described in and that
executed the above instrument; and that he signed his/her name thereto by order
of the Board of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
Notary Public
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the ____ day of ___________, ______, before me personally came
_____________________________, to me known, who, being by me duly sworn, did
depose and say that he/she resides at ________________________________; that
he/she is a ____________ of _________________, the ___________________________
described in and that executed the above instrument as Collateral Agent; and
that he/she signed his/her name thereto by order of the Board of Directors of
said __________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
Notary Public
A-4
SCHEDULE 1 to EXHIBIT A
A-5
EXHIBIT B
FORM OF SUPPLEMENTAL PLEDGE AGREEMENT
(To Release Collateral)
SUPPLEMENTAL PLEDGE AGREEMENT NO. _____
SUPPLEMENTAL PLEDGE AGREEMENT NO. ___, dated as of ____________ between
TRANS WORLD AIRLINES, INC., a Delaware corporation (together with its successors
and assigns, the "Company"), having an office at One City Centre, 000 X. 0xx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, and _____________________________, a
___________________________, as Collateral Agent under the Pledge Agreement
described below, having its principal office at
____________________________________________, (together with its successors in
trust, the "Collateral Agent").
WHEREAS, the Company has heretofore executed and delivered to the
Collateral Agent a Pledge and Security Agreement, dated as of December 9, 1997
(the "Pledge Agreement"), covering the property of the Company therein
described, to secure (subject to the provisions of the Pledge Agreement and the
Indenture) the payment of the Securities (as defined in the Pledge Agreement)
outstanding from time to time;
WHEREAS, the Pledge Agreement [and any Supplemental Pledge Agreements] has
[have] been duly recorded with the Federal Aviation Administration at Oklahoma
City, Oklahoma, pursuant to the Federal Aviation Act of 1958, as amended, on the
following date as a document or conveyance bearing the following number:
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Pledge Agreement......
WHEREAS, the Company, as provided in the Pledge Agreement, is hereby
executing and delivering or heretofore has executed and delivered, to the
Collateral Agent one or more Supplemental Pledge Agreements for the purposes of
specifically releasing from the Lien of the Pledge Agreement certain property
herein described. [Recite any other filing or recording data.]
WHEREAS, the Company desires to execute and deliver this Supplemental
Pledge Agreement for the purpose of specifically releasing said property from
the Lien of the Pledge Agreement;
WHEREAS, all things necessary to make this Supplemental Pledge Agreement
the valid, binding and legal obligation of the Company, including all proper
corporate action on the part of the Company, have been done and performed and
have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL PLEDGE AGREEMENT WITNESSETH, that, the
Collateral Agent releases from the Lien of the Pledge Agreement the
B-1
2
property described in Schedule I annexed hereto. This Supplemental Pledge
Agreement shall be construed as supplemental to the Pledge Agreement and shall
form a part thereof, and the Pledge Agreement is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplemental Pledge Agreement is intended to be delivered in the State
of New York and shall be governed by the laws of that State without regard to
principles of conflicts of laws.
This Supplemental Pledge Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all shall together
constitute one and the same Supplemental Pledge Agreement.
This release is made without covenant or warranty, without recourse, and
without affecting the rights of the Collateral Agent to any and all Collateral
other than that specifically released hereby.
B-2
3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Pledge
Agreement to be duly executed, as of the date and year first above written.
TRANS WORLD AIRLINES, INC.
By:________________________________
Name:
Title:
Agreed and accepted as of the date first written above:
[Name of Collateral Agent],
as Collateral Agent
By:__________________________
Name:
Title:
X-0
0
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF ________ )
On the ____ day of ______________, ______ before me personally came
____________________to me known, who, being by me duly sworn, did depose and say
that he resides at __________; that he is a _____________________of TRANS WORLD
AIRLINES, INC., the corporation described in and that executed the above
instrument; and that he signed his name thereto by order of the Board of
Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
Notary Public
STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ___ day of _________________, __________ before me personally came
_________________________________ to me known, who, being by me duly sworn, did
depose and say that he/she resides at _______________________________________;
that he/she is _________________ of _____________________________; the
_________________ described in and that executed the above instrument as
Collateral Agent; and that he/she signed his/her name thereto by order of the
Board of Directors of said ___________________________.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
Notary Public
B-4
5
SCHEDULE I to EXHIBIT B
B-5
EXHIBIT C
FORM OF MONTHLY INVENTORY REPORT
TRANS WORLD AIRLINES, INC.
CERTIFICATE AS TO PLEDGED SPARE PARTS
[Date]
First Security Bank, National Association, as
Collateral Agent under Pledge
and Security Agreement
from Trans World Airlines, Inc.
dated as of December 9, 1997
Trans World Airlines, Inc. certifies that attached hereto is a summary of
certain transactions and the inventory of the Pledged Spare Parts at the
Designated Locations describing the values of such Pledged Spare Parts, as
reflected upon the Inventory Control System, as of the last day of the month
shown on the attachment. The full inventory as of the same date in the form
required by the Pledge and Security Agreement is being delivered concurrently to
the Collateral Agent or, if designated by the Collateral Agent, to the entity
selected by the Collateral Agent to assist in evaluating Pledged Spare Parts,
and the Pledged Spare Parts shown therein correspond to the Pledged Spare Parts
and values shown on the attached summary.
This Certificate, the summary attached hereto and the full inventory
delivered to the Collateral Agent or, if designated by the Collateral Agent, to
the entity selected by the Collateral Agent to assist in evaluating Pledged
Spare Parts, are provided under Section 4.13 of the Pledge Agreement referenced
above. The undersigned is familiar with the definitions of Pledged Spare Parts,
Designated Location, Inventory Control System and other terms contained in the
Definitions Appendix to the Indenture and Pledge Agreement and the Pledged Spare
Parts shown on the attached summary are limited to those included in and are
valued as required under those definitions.
TRANS WORLD AIRLINES, INC.
By: ________________________________
[Name]
[Title]
C-1
TRANS WORLD AIRLINES, INC.
SUMMARY OF CERTAIN TRANSACTIONS
AND OF PLEDGED SPARE PARTS
AT DESIGNATED LOCATIONS AS SHOWN ON
INVENTORY CONTROL SYSTEM
AS OF THE LAST DAY OF
[NAME OF MONTH IMMEDIATELY PRECEDING DATE OF REPORT]
DESIGNATED LOCATIONS INVENTORY CONTROL SYSTEM VALUE
-------------------- ------------------------------
$
TOTAL $
The following (as checked below) has occurred since the date of the last Report:
1. Sales of Pledged Spare Parts pursuant to Section 4.04(c)(iii) of the Pledge
Agreement:
___ None.
___ Description:
Note: The Company will send the magnetic tape referenced in the letter to which
this Summary is attached to the Collateral Agent directly (and the Collateral
Agent will spot check same in their discretion with a firm of their choice).
Once the issue has been finally determined the letter to which this Summary is
attached will need to be revised accordingly.
C-2
SCHEDULE 1
DESIGNATED LOCATIONS
CITY/AIRPORT AIRPORT STATE
----------------- -------------------------------- --------------------
1. New York Xxxxxxx International New York
2. New York La Guardia New York
3. Boston Xxxxx International Massachusetts
4. Philadelphia Philadelphia International Pennsylvania
5. Baltimore Baltimore-Washington Maryland
International
6. Arlington Washington (National) Virginia
7. Herndon Dulles International Virginia
8. Pittsburgh Pittsburgh International Pennsylvania
9. Chicago X'Xxxx International Illinois
10. St. Xxxxx Xxxxxxx International Missouri
11. Kansas City Kansas City International Missouri
12. Las Vegas McCarran International Nevada
13. San Diego San Diego California
14. Los Angeles Los Angeles International California
15. San Francisco San Francisco International California
S1-1
SCHEDULE 2
COLLATERAL RELEASE SCHEDULE
Released Collateral Collateral Release Trigger (Securities Outstanding)
------------------- ---------------------------------------------------
All Acquired Slots and the related $100,000,000
Beneficial Interest, Beneficial Interest
Certificate and Slot Trust Assets
Note: Collateral referred to is as of the date of the Pledge Agreement. If
additional Collateral is pledged to the Collateral Agent in satisfaction
of the Substitution Requirements, such additional Collateral shall be
subject to release at the same time and under the same circumstances (and
only at the same time and under the same circumstances) as the Collateral
for which it was substituted could have been released under this
Schedule.
S2-1
SCHEDULE 3
UCC FILING JURISDICTIONS
SECRETARY OF STATE LOCAL FILING OFFICE
---------------------------------------------------------------------------
1. New York Queens County Register
2. Massachusetts Boston City Clerk
3. Pennsylvania Philadelphia County
Allegheny County
4. Maryland None
5. Virginia Alexandria County
Arlington County
Loudoun County
Fairfax County
6. Illinois None
7. Missouri St. Louis County
Platte County
8. Nevada None
9. California None
10. District of Columbia None
(Commissioner of Deeds)
S3-1
EXHIBIT C TO INDENTURE
EXHIBIT C TO INDENTURE
FORM OF SUBSIDIARY GUARANTY
This Subsidiary Guaranty (the "Guaranty") is made and entered into as
of __________________ by __________________________, a __________________ (the
"Guarantor"), having its principal office at __________________________________,
in favor of [name of Trustee], having an office at ____________________________,
as Trustee (in such capacity, together with its successors and assigns, the
"Trustee") for the holders (the "Holders") of the Notes (as defined herein)
issued by Trans World Airlines, Inc. (the "Company") under the Indenture
referred to below.
W I T N E S S E T H
WHEREAS, the Company and First Security Bank, National Association, as
Trustee, have entered into that certain Indenture dated as of December 9, 1997
(as amended, restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Company issued $140,000,000 in original
aggregate principal amount of 11 1/2% Senior Secured Notes due 2004 (the
"Notes"). Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Definitions Appendix to the
Indenture which shall be a part of this Guaranty as if fully set forth in this
place, and the rules of construction for this Guaranty are set forth in Section
2 of such Definitions Appendix; and
WHEREAS, the Company agreed, pursuant to Section 4.22 of the
Indenture, not to permit any Restricted Subsidiary, directly or indirectly, to
Guarantee any Indebtedness of the Company which is pari passu with or
subordinate in right of payment to the Notes unless (i) such Restricted
Subsidiary simultaneously executes and delivers a Subsidiary Guaranty of payment
of the Notes by such Restricted Subsidiary and (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guaranty; and
WHEREAS, the Guarantor is a Restricted Subsidiary and intends to incur
a Guarantee of Indebtedness of the Company which is [pari passu with]
[subordinate in right of payment to] the Notes.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees with the Trustee for its benefit and for the ratable benefit of the
Holders of Notes as follows:
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SECTION 1. Guarantee. Subject to Section 2, Guarantor hereby
---------
unconditionally and irrevocably guarantees, to each Holder and to the Trustee
and their respective successors and assigns (a) the full and punctual payment
within applicable grace periods of principal of, interest and Special Interest,
if any, on and the redemption or repurchase prices with respect to, the Notes
when due, whether at maturity, by acceleration, by redemption, by Offer to
Purchase or otherwise, and all other monetary obligations of the Company under
the Indenture and the Notes and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the
Indenture and the Notes (all the foregoing being hereinafter collectively called
the "Obligations"). Subject to Section 2, the Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from the Guarantor and that the Guarantor will remain bound under
this Guaranty notwithstanding any extension or renewal of any Obligation.
The Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. The Guarantor waives notice of any default under the
Notes or the Obligations. The obligations of the Guarantor hereunder shall not
be affected by (a) the failure of any Holder or the Trustee to assert any claim
or demand or to enforce any right or remedy against the Company or any other
Person under the Indenture, the Notes or any other agreement or otherwise; (b)
any extension or renewal of any thereof; (c) any rescission, waiver, amendment
or modification of any of the terms or provisions of the Indenture, the Notes or
any other agreement; (d) the release of any security held by a Holder, the
Trustee, the Collateral Agent, the Slot Trustee or the Slot Trust for the
Obligations or any of them; (e) the failure of any Holder or the Trustee to
exercise any right or remedy against any other guarantor of the Obligations; or
(f) any change in the ownership of the Guarantor.
The Guarantor further agrees that its guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder, the Trustee, the Collateral Agent, the Slot Trustee or the Slot Trust to
any security held for payment of the Obligations.
Except as expressly set forth in Section 2 and 4.13, the obligations
of the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Guarantor herein shall not be discharged or impaired or otherwise affected
by the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any remedy under the Indenture, the Notes or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantor or would otherwise
operate as a discharge of the Guarantor as a matter of law or equity.
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The Guarantor further agrees that its guarantee herein shall continue
to be effective or be reinstated as the case may be, if at any time payment, or
any part thereof, of principal of or interest or Special Interest, if any, on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against the
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of redemption or repurchase price of, or interest or Special Interest, if any,
on any Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption, by Offer to Purchase or otherwise, or to perform or
comply with any other Obligation, the Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i)
the unpaid amount of such Obligations, (ii) accrued and unpaid interest and
Special Interest, if any, on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
The Guarantor agrees that it shall not be entitled to and hereby
expressly waives, and will not in any manner whatsoever claim or take the
benefit or advantage of, any right of reimbursement, indemnity or subrogation in
respect of any Obligations guaranteed hereby or any other rights against the
Company or any Restricted Subsidiary as a result of any payment by the Guarantor
hereunder until payment in full of all Obligations.
The Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorney's fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section.
SECTION 2. Limitation of Liability. Any term or provision of this
-----------------------
Guaranty to the contrary notwithstanding, the maximum, aggregate amount of the
Obligations guaranteed hereunder by the Guarantor shall not exceed the maximum
amount, if any, that can be hereby guaranteed without rendering this Guaranty,
as it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
SECTION 3. Representations and Warranties. The Guarantor hereby
------------------------------
represents and warrants that:
(a) The execution, delivery and performance by the Guarantor of this
Guaranty are within the Guarantor's [corporate] [partnership] powers, have
been duly authorized by all necessary [corporate] [partnership] action, and
do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the [certificate of incorporation or
bylaws] [partnership agreement] of the Guarantor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Guarantor or result in the creation or imposition of any Lien on any assets
of the Guarantor.
4
(b) This Guaranty has been duly executed and delivered by the
Guarantor and constitutes a valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms, except as
such enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or general principles of equity and
commercial reasonableness.
(c) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the execution,
delivery or performance of this Guaranty by the Guarantor.
(d) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor with respect to this
Guaranty, or any of the transactions contemplated hereby.
(e) The guarantee pursuant to this Guaranty is not prohibited by any
applicable law or governmental regulation, release, interpretation or
opinion of the Board of Governors of the Federal Reserve System or other
regulatory agency (including, without limitation, Regulations G, T, U and X
of the Board of Governors of the Federal Reserve System).
SECTION 4. Miscellaneous Provisions.
------------------------
Section 4.1 Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Guaranty to be made upon, given or furnished to, or filed with
(a) the Guarantor shall be sufficient for every purpose hereunder if
in writing (including telecopied communications) and made, given, furnished
or filed by personal delivery or mailed by first-class mail or by
nationally recognized overnight courier, postage or courier charges, as the
case may be, prepaid, to the Guarantor at:
______________________________
______________________________
______________________________
______________________________
Attention: __________________
Telecopier No.: _____________
(b) the Trustee shall be sufficient for every purpose hereunder if in
writing (including telecopied communications) and made, given, furnished or
filed by personal recognized overnight courier, postage or courier charges,
as the case may be, prepaid, to or with the Trustee at:
5
_____________________________
_____________________________
_____________________________
Attention: _________________
Telecopier No.: ____________
or to any of the above parties at any other address or telecopier number
subsequently furnished in writing by it to each of the other parties listed
above. An affidavit by any person representing or acting on behalf of the
Guarantor or the Trustee as to such mailing, having any registry receipt
required by this Section attached, shall be conclusive evidence of the giving of
such demand, notice or communication.
Notices to the Trustee or to the Guarantor are deemed given only when
received. Where this Guaranty provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice.
Section 4.2 No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Guaranty may not be used to interpret any agreement of Guarantor or any of its
Subsidiaries which is unrelated to the Indenture, the Notes or the other
Operative Documents. Any such agreement may not be used to interpret this
Guaranty.
Section 4.3 Severability. The provisions of this Guaranty are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Guaranty in any jurisdiction.
Section 4.4 Effect of Headings. The Section headings contained in
------------------
this Guaranty have been inserted for convenience of reference only, and are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of this Guaranty.
Section 4.5 Benefits of Guaranty Restricted. Subject to the
-------------------------------
provisions of Section 4.12, nothing in this Guaranty, express or implied, shall
give or be construed to give to any Person, firm or corporation, other than the
Trustee and the Holders, acting through the Trustee, any legal or equitable
right, remedy or claim under or in respect of this Guaranty or under any
covenant, condition, or provision herein contained, all such covenants,
conditions and provisions, subject to Section 4.12 hereof, being for the sole
benefit of the Trustee and the Holders.
Section 4.6 Amendments, Waivers and Consents. The Guarantor and the
--------------------------------
Trustee may amend or agree to waive any of the provisions of this Guaranty;
provided however, that without the consent of the Required Holders, no such
amendment or waiver shall be made which adversely affects the interests of the
Holders of the Notes in any material respect. Any amendment or waiver of any
provision of this Guaranty and any consent to any departure by the Guarantor
from any provision of this Guaranty shall be effective only if made or duly
given in
6
compliance with all of the terms and provisions of this Section 4.6 and neither
the Trustee nor any Holder of Notes shall be deemed, by any act, delay,
indulgence, omission or otherwise, to have waived any right or remedy hereunder
or to have acquiesced in any default hereunder or in any breach of any of the
terms and conditions hereof. Failure of the Trustee or any Holder of Notes to
exercise, or delay in exercising, any right, power or privilege hereunder shall
not preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Trustee or any Holder of Notes of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Trustee or such Holder of Notes would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
Section 4.7 Survival Provisions. Notwithstanding any right of the
-------------------
Trustee, the Initial Purchasers or any of the Holders to investigate the affairs
of the Company or the Guarantor, and notwithstanding any knowledge of facts
determined or determinable by any of them pursuant to such investigation or
right of investigation, all representations, warranties and covenants of the
Guarantor contained herein shall survive the execution and delivery of this
Guaranty, and shall terminate only upon the termination of this Guaranty.
Section 4.8 Waivers. The Guarantor waives presentment and demand for
-------
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Guarantor might otherwise be entitled, except as otherwise expressly provided
herein.
Section 4.9 Final Expression. This Guaranty, together with any other
----------------
agreement executed in connection herewith, is intended by the parties as a final
expression of this Guaranty and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 4.10 Rights of Holders of Notes. No Holder of Notes shall
--------------------------
have any independent rights hereunder other than those rights granted to
individual Holders of Notes pursuant to the Indenture; provided that nothing in
--------
this subsection shall limit any rights granted to the Trustee under the Notes or
the Indenture.
Section 4.11 Governing Law; Submission to Jurisdiction; Waiver of Jury
---------------------------------------------------------
Trial; Waiver of Damages.
------------------------
(a) The laws of the State of New York shall govern this Guaranty
without regard to principles of conflicts of laws.
(b) The Guarantor agrees that the Trustee shall, in its capacity as
Trustee or in the name and on behalf of any Holder of Notes, have the right, to
the extent permitted by applicable law, to proceed against the Guarantor or its
property in a court in any location reasonably selected in good faith (and
having personal or in rem jurisdiction over the Guarantor or its property, as
the case may be) to enable the Trustee to realize on such property, or to
enforce a judgment or other court order entered in favor of the Trustee. The
Guarantor agrees that it will
7
not assert any counterclaims, setoffs or crossclaims in any proceeding brought
by the Trustee to realize on such property or to enforce a judgment or other
court order in favor of the Trustee, except for such counterclaims, setoffs or
crossclaims which, if not asserted in any such proceeding, could not otherwise
be brought or asserted. The Guarantor waives any objection that it may have to
the location of the court in which the Trustee has commenced a proceeding
described in this paragraph including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens.
(c) The Guarantor and the Trustee each waive any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise arising out of, connected with, related to or incidental to the
relationship established between them in connection with this Guaranty.
Instead, any disputes resolved in court will be resolved in a bench trial
without a jury.
(d) The Guarantor agrees that neither the Trustee nor any Holder of
Notes shall have any liability to the Guarantor (whether sounding in tort,
contract or otherwise) for losses suffered by the Guarantor in connection with,
arising out of, or in any way related to, the transactions contemplated and the
relationship established by this Guaranty, or any act, omission or event
occurring in connection therewith, unless it is determined by a final and
nonappealable judgment of a court that is binding on the Trustee or such Holder
of Notes, as the case may be, that such losses were the result of acts or
omissions on the part of the Trustee or such Holder of Notes, as the case may
be, constituting bad faith, gross negligence or willful misconduct.
Section 4.12 Successors and Assigns. This Guaranty and all
----------------------
obligations of the Guarantor hereunder shall be binding upon the successors of
the Guarantor, and shall, together with the rights and remedies of the Trustee
hereunder, inure to the benefit of the Trustee and the Holders, and their
respective successors and assigns. The obligations of the Guarantor hereunder
are not assignable and any attempt to assign all or any portion of such
obligations shall be null and void.
Section 4.13 Termination of Guaranty. This Guaranty shall be
-----------------------
automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, the Guarantor (which sale, exchange or transfer
is not prohibited by the Indenture) or (ii) the release or discharge of the
Guarantee which resulted in the creation of this Subsidiary Guaranty, except a
discharge or release by, or as a result of, payment under such Guarantee.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered as of the date first above written.
[Name of Guarantor]
By:___________________________________
Name:
Title:
