EXHIBIT 4(a)(xv)
Indenture
Trust N7___UW
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of __________ __, 199_
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A319 AIRCRAFT
BEARING U.S. REGISTRATION XXXX N7__UW
LEASED BY US AIRWAYS, INC.
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.01. Form of Equipment Notes. . . . . . . . . . . . . . 7
SECTION 2.02. Issuance and Terms of Equipment Notes. . . . . . . 12
SECTION 2.03. Payments from Trust Indenture Estate Only . . . . . 15
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . 17
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . 20
SECTION 2.06. Termination of Interest in Trust Indenture
Estate . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes . . . . . . . . . . . . . . . . . 20
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . 23
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . 23
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . 23
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . 24
SECTION 2.13. Assumption of Equipment Notes by Lessee . . . . . . 25
SECTION 2.14. Option to Purchase Equipment Notes . . . . . . . . 25
SECTION 2.15. Subordination . . . . . . . . . . . . . . . . . . . 27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE . . . . . . . . . . . . . . . . 28
SECTION 3.01. Basic Rent Distribution . . . . . . . . . . . . . . 28
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing . . . . . . . . . . . . 29
SECTION 3.03. Payments After Event of Default . . . . . . . . . . 30
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . 33
SECTION 3.06. Payments to Owner Trustee . . . . . . . . . . . . . 33
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . . . . . . . . . . 34
SECTION 4.01. Covenants of Owner Trustee . . . . . . . . . . . . 34
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . 35
SECTION 4.03. Certain Rights . . . . . . . . . . . . . . . . . . 37
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . . . . . 41
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . 43
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . 43
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . 43
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . 44
SECTION 4.10. Indenture Trustee Authorized to Execute
Bills of Sale, Etc. . . . . . . . . . . . . . . 44
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . 44
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . 45
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . . . . 46
SECTION 5.03. Indemnification. . . . . . . . . . . . . . . . . . 49
SECTION 5.04. No Duties Except as Specified in Trust
Indenture or Instructions . . . . . . . . . . . . 49
SECTION 5.05. No Action Except Under Lease, Trust Indenture
or Instructions . . . . . . . . . . . . . . . . . 50
SECTION 5.06. Replacement Airframes and Replacement Engines . . . 50
SECTION 5.07. Indenture Supplements for Replacements . . . . . . 54
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . 54
SECTION 5.09. Investment of Amounts Held by Indenture Trustee . . 54
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE . . . . . . . . . . . . . . 55
SECTION 6.01. Acceptance of Trusts and Duties. . . . . . . . . . 55
SECTION 6.02. Absence of Duties. . . . . . . . . . . . . . . . . 55
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents. . . . . . . . . . . . . . 56
SECTION 6.04. No Segregation of Monies; No Interest. . . . . . . 57
SECTION 6.05. Reliance; Agreements; Advice of Counsel. . . . . . 57
SECTION 6.06. Capacity in Which Acting. . . . . . . . . . . . . 58
SECTION 6.07. Compensation. . . . . . . . . . . . . . . . . . . 58
SECTION 6.08. Instructions from Note Holders. . . . . . . . . . 58
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE . . . . . . . . . 59
SECTION 7.01. Scope of Indemnification. . . . . . . . . . . . . 59
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.01. Notice of Successor Owner Trustee. . . . . . . . . 60
SECTION 8.02. Resignation of Indenture Trustee; Appointment
of Successor . . . . . . . . . . . . . . . . . . 60
SECTION 8.03. Appointment of Additional and Separate Trustees. . 61
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.01. Instructions of Majority; Limitations. . . . . . . 63
SECTION 9.02. Trustees Protected. . . . . . . . . . . . . . . . 66
SECTION 9.03. Documents Mailed to Note Holders. . . . . . . . . 66
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Agreement and Indenture Supplement . . . . 66
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.01. Termination of Trust Indenture. . . . . . . . . . 66
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Note Holders. . . . . . . . . . . . . . . . . . 67
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding. . 67
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture . . . . . . . . . . . . . . . . . . . 68
SECTION 10.05. Notices. . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.06. Severability. . . . . . . . . . . . . . . . . . . 68
SECTION 10.07. No Oral Modification or Continuing Waivers. . . . 69
SECTION 10.08. Successors and Assigns. . . . . . . . . . . . . . 69
SECTION 10.09. Headings. . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.10. Normal Commercial Relations. . . . . . . . . . . . 69
SECTION 10.11. Governing Law; Counterpart Form. . . . . . . . . . 70
SECTION 10.12. Voting By Note Holders. . . . . . . . . . . . . . 70
SECTION 10.13. Bankruptcy. . . . . . . . . . . . . . . . . . . . 70
SECTION 10.14. No Action Contrary to Lessee's Rights Under
the Lease. . . . . . . . . . . . . . . . . . . . 70
EXHIBIT A TRUST AGREEMENT AND INDENTURE SUPPLEMENT . . . EXHIBIT A-1
SCHEDULE I SERIES A . . . . . . . . . . . . . . . . . . . SCHEDULE I-2
SERIES B . . . . . . . . . . . . . . . . . . . SCHEDULE I-3
SERIES C . . . . . . . . . . . . . . . . . . . SCHEDULE I-4
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS . . . . . . . . SCHEDULE II-1
TRUST INDENTURE AND SECURITY AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
TRUST INDENTURE AND SECURITY AGREEMENT (US Airways, Inc. Trust
No. N7__UW), dated as of _________ __, 199_ ("Trust Indenture"), between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
not in its individual capacity, except as expressly stated herein, but
solely as Owner Trustee under the Trust Agreement referred to below
(together with its successors under the Trust Agreement, the "Owner
Trustee"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, as Indenture Trustee hereunder (together with its successors
hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the Owner Participant and the Owner Trustee have
entered into the Trust Agreement whereby, among other things, (i) the Owner
Trustee has established a certain trust for the use and benefit of the
Owner Participant subject, however, to the Trust Indenture Estate created
pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of Equipment Notes issued hereunder, and (ii) the
Owner Trustee has been authorized and directed to execute and deliver this
Trust Indenture;
WHEREAS, the parties desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee to the
Pass Through Trustees (or their designee) of the Equipment Notes evidencing
the participation of the Pass Through Trustees in the payment of Lessor's
Cost for the Aircraft, as provided in the Participation Agreement and (ii)
to provide for the assignment, mortgage and pledge by the Owner Trustee to
the Indenture Trustee, as part of the Trust Indenture Estate hereunder,
among other things, of all of the Owner Trustee's right, title and interest
in and to the Aircraft and, except as hereinafter expressly provided, all
of the Owner Trustee's right, title and interest in, to and under the Lease
and all payments and other amounts received hereunder or thereunder in
accordance with the terms hereof or thereof, as security for, among other
things, the Owner Trustee's obligations to the Indenture Trustee, for the
ratable benefit and security of the Note Holders, subject to Section 2.15
and Article III hereof;
WHEREAS, all things have been done to make the Equipment Notes,
when executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations
of the Owner Trustee; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding hereunder and
(ii) the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions herein and in the Participation
Agreement and the Equipment Notes contained, for the benefit of the Note
Holders, the Loan Participants and each of the Indenture Indemnitees and
the prompt payment of all amounts from time to time owing hereunder, under
the Participation Agreement and under the Lease to the Note Holders, the
Loan Participants or any Indenture Indemnitee by the Owner Trustee or
Lessee (the "Secured Obligations") and for the uses and purposes and
subject to the terms and provisions hereof, and in consideration of the
premises and of the covenants herein contained, and of the acceptance of
the Equipment Notes by the holders thereof, and for other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner Trustee has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security
and benefit of the Note Holders, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to
and under the following described property, rights and privileges, other
than Excluded Payments (which collectively, excluding Excluded Payments but
including all property hereafter specifically subjected to the Lien of this
Trust Indenture by the Trust Agreement and Indenture Supplement or any
mortgage supplemental hereto, are included within the Trust Indenture
Estate), to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which the Owner
Trustee shall from time to time acquire title as provided herein and in the
Lease), all as more particularly described in the Trust Agreement and
Indenture Supplement executed and delivered with respect to the Aircraft or
any such replacements or substitutions therefor, as provided in this
Indenture;
(2) the Lease and any Lease Supplement and all Rent thereunder
(including, without limitation, all amounts of Basic Rent, EBO Amount,
Supplemental Rent and payments of any kind thereunder (excluding any
Excluded Payments));
(3) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Xxxx of Sale;
(4) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(5) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section
11 of the Lease, but excluding insurance proceeds described in clauses (ii)
and (iii) of the definition of Excluded Payments;
(6) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or the Lease or required hereby or by the Lease to be
held by the Indenture Trustee hereunder (other than Excluded Payments); and
(7) all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Trust Indenture
Estate all Excluded Payments, and the right to enforce and collect the
same, and SUBJECT TO all of the terms and conditions of this Trust
Indenture and the rights of the Owner Trustee and the Owner Participant
hereunder.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee the original executed counterpart of
the Lease and the Lease Supplement No. 1 (to each of which a chattel paper
receipt is attached), and executed copies of the Participation Agreement,
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders, the Loan Participants and the
Indenture Indemnitees except as provided in Section 2.15 and Article III
hereof without any preference, distinction or priority of any one Equipment
Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and in all cases and as to all
property specified in paragraphs (1) through (7) inclusive above, subject
to the terms and provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each
of the Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Loan Participants, Indenture Indemnitees, Indenture Trustee and the
Note Holders shall have no obligation or liability under the Indenture
Agreements, by reason of or arising out of the assignment hereunder, nor
shall the Loan Participants, Indenture Indemnitees, Indenture Trustee or
the Note Holders be required or obligated in any manner to perform or
fulfill any obligations of the Owner Trustee under or pursuant to any of
the Indenture Agreements to which it is a party, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any
time or times.
The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, granted for
good and valuable consideration and coupled with an interest and with full
power of substitution, and with full power (in the name of the Owner
Trustee or otherwise) to ask for, require, demand, receive, compound and
give acquittance for any and all monies and claims for monies (in each case
including insurance and requisition proceeds but in all cases excluding
Excluded Payments) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Trust Indenture Estate, to endorse any checks or
other instruments or orders in connection therewith and to file any claims
or to take any action or to institute any proceedings which the Indenture
Trustee may deem to be necessary or advisable in the premises. Without
limiting the generality of the foregoing, but subject to the rights of the
Owner Trustee and the Owner Participant hereunder, during the continuance
of any Event of Default under this Trust Indenture, the Indenture Trustee
shall have the right under such power of attorney to accept any offer in
connection with the exercise of remedies as set forth herein of any
purchaser to purchase the Airframe and Engines and upon such purchase to
execute and deliver in the name of and on behalf of the Owner Trustee an
appropriate xxxx of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, and
in its discretion to file any claim or take any other action or
proceedings, either in its own name or in the name of the Owner Trustee or
otherwise, which the Indenture Trustee may deem necessary or appropriate to
protect and preserve the right, title and interest of the Indenture Trustee
in and to such Rents and other sums and the security intended to be
afforded hereby; provided, however, that no action of the Indenture Trustee
pursuant to this paragraph shall increase the obligations or liabilities of
the Owner Trustee to any Person beyond those obligations and liabilities
specifically set forth in this Trust Indenture and in the other Operative
Documents. Under the Lease, Lessee is directed, so long as this Trust
Indenture shall not have been fully discharged, to make all payments of
Rent (other than Excluded Payments) and all other amounts which are
required to be paid to or deposited with the Owner Trustee pursuant to the
Lease (other than Excluded Payments) directly to, or as directed by, the
Indenture Trustee at such address or addresses as the Indenture Trustee
shall specify, for application as provided in this Trust Indenture. The
Owner Trustee agrees that promptly upon receipt thereof, it will transfer
to the Indenture Trustee any and all monies from time to time received by
it constituting part of the Trust Indenture Estate, for distribution by the
Indenture Trustee pursuant to this Trust Indenture, except that the Owner
Trustee shall accept for distribution pursuant to the Trust Agreement any
amounts distributed to it by the Indenture Trustee under this Trust
Indenture.
The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner Trustee
will promptly and duly execute and deliver or cause to be duly executed and
delivered any and all such further instruments and documents as the
Indenture Trustee may reasonably deem necessary or desirable to perfect,
preserve or protect the mortgage, security interests and assignments
created or intended to be created hereby or to obtain for the Indenture
Trustee the full benefits of the assignment hereunder and of the rights and
powers herein granted. The parties hereto acknowledge that neither the
Owner Trustee nor the Owner Participant shall have any obligation as to any
recording, filing, refiling or re-recording of any documents or instruments
in regard to maintaining the perfection of the security interests created
hereunder, in the Trust Indenture Estate or any security interest that may
be claimed to have been created by the Lease or the ownership interest of
the Owner Trustee in the Aircraft.
The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in
effect, and the Lien hereof shall not have been released pursuant to
Section 10.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except as
otherwise provided in this Trust Indenture and except with respect to
Excluded Payments to which it is entitled, (i) accept any payment from
Lessee under any Indenture Agreement, (ii) enter into any agreement
amending or supplementing any Indenture Agreement, (iii) execute any waiver
or modification of, or consent under, the terms of, or exercise any rights,
powers or privileges under, any Indenture Agreement, (iv) settle or
compromise any claim (other than those relating to an Excluded Payment)
arising under any Indenture Agreement or (v) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.
The Owner Trustee does hereby further agree that it will not
without the written consent of the Indenture Trustee:
(a) collect or agree to the receipt or collection of any
payment of Rent (other than Excluded Payments),
including Basic Rent, EBO Amount, Termination Value or
any other payment to be made pursuant to Section 9, 10
or 19 of the Lease prior to the date for the payment
thereof provided for by the Lease or assign, transfer
or hypothecate (other than to the Indenture Trustee
hereunder) any payment of Rent (other than Excluded
Payments), including Basic Rent, EBO Amount,
Termination Value or any other payment to be made
pursuant to Section 9, 10 or 19 of the Lease, then due
or to accrue in the future under the Lease in respect
of the Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner
trustee, sell, mortgage, transfer, assign or
hypothecate (other than to the Indenture Trustee
hereunder) its interest in the Airframe and Engines or
any part thereof or in any amount to be received by it
from the use or disposition of the Airframe and
Engines, other than amounts distributed to it pursuant
to Article III hereof.
It is hereby further agreed that any and all property described
or referred to in the granting clauses hereof which is hereafter acquired
by the Owner Trustee shall ipso facto, and without any further conveyance,
assignment or act on the part of the Owner Trustee or the Indenture
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained
in this paragraph shall be deemed to modify or change the obligations of
the Owner Trustee contained in the foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made
by it therein, herein or in any of the other Owner Trustee Documents.
Notwithstanding the Granting Clause or any of the foregoing
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT
TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS
EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE
UNDER TRUST AGREEMENT (US AIRWAYS, INC. TRUST NO. N7__UW)
DATED AS OF _______ __, 199_.
SERIES [___] NON-RECOURSE EQUIPMENT NOTE DUE [___] ISSUED IN
CONNECTION WITH THE AIRBUS A-___ AIRCRAFT BEARING UNITED
STATES REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the
"Owner Trustee") under that certain Trust Agreement (US Airways, Inc.
Trust No. N7__UW), dated as of _________ __, 199_, between the Owner
Participant named therein and the Owner Trustee (herein as such Trust
Agreement may be supplemented or amended from time to time called the
"Trust Agreement"), hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the Principal
Amount remaining unpaid from time to time (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Interest Rate indicated
above. The Principal Amount of this Equipment Note shall be payable on the
dates and in the installments as set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semi-annual installments
commencing _______ 30, ____, and thereafter on _______ 30 and ______ 30 of
each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Equipment Note becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement (US Airways, Inc. Trust No. N7__UW), dated
as of ___________ __, 199_, between the Owner Trustee and State Street Bank
and Trust Company (the "Indenture Trustee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest and any other amounts payable hereunder which are overdue,
in each case for the period the same is overdue. Amounts shall be overdue
if not paid when due (whether at stated maturity, by acceleration or
otherwise).
All payments of the Principal Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due hereunder by the Owner Trustee of
every obligation or covenant contained in the Trust Indenture and in the
Participation Agreement or any of the other Operative Documents shall be
payable only from the income and proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate and only to the extent that
the Owner Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to enable the
Indenture Trustee to make such payments in accordance with the terms of
Section 2.03 and Article III of the Trust Indenture and each holder hereof,
by its acceptance of this Equipment Note, agrees that it will look solely
to the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to the holder hereof as above provided and that
none of the Owner Participant, the Owner Trustee, in its individual
capacity, or the Indenture Trustee is personally liable or liable in any
manner extending to any assets other than the Trust Indenture Estate to the
holder hereof for any amounts payable or any liability under this Equipment
Note or, except as expressly provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust Indenture or the
Participation Agreement; provided, however, that nothing herein contained
shall limit, restrict or impair the right of the Indenture Trustee, subject
always to the terms and provisions of the Trust Indenture, to accelerate
the maturity of this Equipment Note upon occurrence of an Event of Default
under the Trust Indenture in accordance with Section 4.04(b) of the Trust
Indenture, to bring suit and obtain a judgment against the Owner Trustee on
this Equipment Note for purposes of realizing upon the Trust Indenture
Estate and to exercise all rights and remedies provided under the Trust
Indenture or otherwise realize upon the Trust Indenture Estate.
There shall be maintained a Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor in
the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the
Trust Indenture. Each such payment shall be made on the date such payment
is due and without any presentment or surrender of this Equipment Note,
except that in the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of an
installment of the Principal Amount, Make-Whole Premium, if any, and
interest received by it hereunder shall be applied, first, to the payment
of accrued interest on this Equipment Note (as well as any interest on any
overdue Principal Amount, any overdue Make-Whole Amount, if any, or, to the
extent permitted by Law, any overdue interest and other amounts hereunder)
to the date of such payment, second, to the payment of the Principal Amount
of this Equipment Note (or portion hereof) then due (other than by reason
of redemption), third, to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Trust Indenture, and fourth, the
balance, if any, remaining thereafter, to the payment of the Principal
Amount hereof remaining unpaid and due by reason of redemption. The
amounts paid pursuant to clause fourth of the preceding sentence shall be
applied to installments of the Principal Amount of this Equipment Note
remaining unpaid in the inverse order of their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Trust Indenture which have been or are to be issued by the Owner
Trustee pursuant to the terms of the Trust Indenture. The Trust Indenture
Estate is held by the Indenture Trustee as security, in part, for the
Equipment Notes. The provisions of this Equipment Note are subject to the
Trust Indenture. Reference is hereby made to the Trust Indenture and the
Participation Agreement for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security
for, this Equipment Note and the rights and obligations of the holders of,
and the nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for a
statement of the terms and conditions of the Trust created by the Trust
Indenture, to all of which terms and conditions in the Trust Indenture and
the Participation Agreement each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a
like aggregate Principal Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Indenture Trustee shall deem and
treat the Person in whose name this Equipment Note is registered on the
Equipment Note Register as the absolute owner and holder hereof for the
purpose of receiving all amounts payable with respect to this Equipment
Note and for all purposes, and neither of the Owner Trustee nor the
Indenture Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise.
This Equipment Note is also subject to assumption by Lessee as provided in
Section 2.13 of the Trust Indenture, to exchange and to purchase by the
Owner Participant or the Owner Trustee as provided in Section 2.14 of the
Trust Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of [Series A
Equipment Notes](1) [Series A and Series B Equipment Notes](2), and this
Equipment Note is issued subject to such provisions. The Note Holder of
this Equipment Note, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Indenture Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Trust Indenture and (c)
appoints the Indenture Trustee his attorney-in-fact for such purpose.](3)
-----------------
(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted for each Equipment Note other than any
Series A Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Trust
Indenture or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment
Note to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
------------ ---------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance thereof,
shall be issued in three separate series consisting of Series A, Series B
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations
of $1,000 and integral multiples thereof, except that one Equipment Note of
each Series may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ 30, ____, and on each ______ 30
and ______ 30 thereafter until maturity. The Principal Amount of each
Equipment Note shall be payable on the dates and in the installments as set
forth in Schedule I which shall be attached to the Equipment Notes.
Notwithstanding the foregoing, the final payment made under each Equipment
Note shall be in an amount sufficient to discharge in full the unpaid
Principal Amount and all accrued and unpaid interest on, and any other
amounts due under, such Equipment Note. Each Equipment Note shall bear
interest at the Past Due Rate (calculated on the basis of a year of 360
days comprised of twelve 30-day months) on any part of the Principal
Amount, Make-Whole Amount, if any, and to the extent permitted by
applicable law, interest and any other amounts payable thereunder not paid
when due for any period during which the same shall be overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not
paid when due (whether at stated maturity, by acceleration or otherwise).
Notwithstanding anything to the contrary contained herein, if any date on
which a payment under any Equipment Note becomes due and payable is not a
Business Day then such payment shall not be made on such scheduled date but
shall be made on the next succeeding Business Day with the same force and
effect as if made on such scheduled date and if such payment is made on
such next succeeding Business Day, no interest shall accrue on the amount
of such payment from and after such scheduled date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (i) to the extent not
payable (whether or not in fact paid) under Section 7(a) of the Note
Purchase Agreement (as originally in effect or as amended with the consent
of the Owner Participant) an amount or amounts equal to the fees payable to
the Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter (as defined in the Intercreditor Agreement)
multiplied by a fraction the numerator of which shall be the then
outstanding aggregate principal amount of the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes and the denominator
of which shall be the then outstanding aggregate principal amount of all
"Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures; (ii) (x) the amount equal
to interest on any Downgrade Advance (other than any Applied Downgrade
Advance) payable under Section 3.07 of each Liquidity Facility minus
Investment Earning from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) (x) the amount equal
to interest on any Non-Extension Advance (other than any Applied Non-
Extension Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Non-Extension Advance multiplied by (y)
the fraction specified in the foregoing clause (i); (iv) if any payment
default shall have occurred and be continuing with respect to interest on
any Series A Equipment Note, Series B Equipment Note or Series C Equipment
Note, (x) the excess, if any, of (1) the amount equal to interest on any
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance payable under Section 3.07 of each Liquidity Facility over (2)
the sum of Investment Earnings from any Final Advance plus any amount of
interest at the Past Due Rate actually payable (whether or not in fact
paid) by the Owner Trustee in respect of the overdue scheduled interest on
the Equipment Notes in respect of which such Unpaid Advance, Applied
Downgrade Advance or Applied Non-Extension Advance was made multiplied by
(y) a fraction the numerator of which shall be the then aggregate overdue
amounts of interest on the Series A Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes (other than interest becoming due and
payable solely as a result of acceleration of any such Equipment Notes)
and the denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures (other than
interest becoming due and payable solely as a result of acceleration of any
such "Equipment Notes") and (v) any other amounts owed to the Liquidity
Provider by the Subordination Agent as borrower under each Liquidity
Facility (other than amounts due as repayment of advances thereunder or as
interest on such advances), except to the extent payable pursuant to clause
(i), (ii), (iii) or (iv) above multiplied by the fraction specified in the
foregoing clause (i). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer. Equipment
Notes bearing the signatures of individuals who were at any time the proper
officers of the Owner Trustee shall bind the Owner Trustee, notwithstanding
that such individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Equipment Notes or did not hold
such offices at the respective dates of such Equipment Notes. The Owner
Trustee may from time to time execute and deliver Equipment Notes with
respect to the Aircraft to the Indenture Trustee for authentication upon
original issue and such Equipment Notes shall thereupon be authenticated
and delivered by the Indenture Trustee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or
other authorized officer of the Owner Trustee; provided, however, that each
such request shall specify the aggregate Principal Amount of all Equipment
Notes to be authenticated hereunder on original issue with respect to the
Aircraft. No Equipment Note shall be secured by or entitled to any benefit
under this Trust Indenture or be valid or obligatory for any purposes,
unless there appears on such Equipment Note a certificate of authentication
in the form provided for herein executed by the Indenture Trustee by the
manual signature of one of its authorized officers and such certificate
upon any Equipment Notes shall be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. Payments from Trust Indenture Estate Only.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this
Trust Indenture, each Note Holder, by its acceptance of a Equipment Note,
agrees that as between it and the Owner Trustee, except as expressly
provided in this Trust Indenture, the Participation Agreement or any other
Operative Document, (i) the obligation to make all payments of the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Equipment Notes, and the performance by the
Owner Trustee of every obligation or covenant contained in this Trust
Indenture and in the Participation Agreement or any of the other Operative
Documents, shall be payable only from the income and proceeds from the
Trust Estate to the extent included in the Trust Indenture Estate and only
to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Indenture Trustee to make such payments in
accordance with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when
made in such capacity) contained in this Trust Indenture and any agreement
referred to herein other than the Trust Agreement, unless expressly
otherwise stated, are made and intended only for the purpose of binding the
Trust Estate and establishing the existence of rights and remedies which
can be exercised and enforced against the Trust Estate; therefore, anything
contained in this Trust Indenture or such other agreements to the contrary
notwithstanding (except for any express provisions or representations that
the Owner Trustee is responsible for, or is making, in its individual
capacity, for which there would be personal liability of the Owner
Trustee), no recourse shall be had with respect to this Trust Indenture or
such other agreements against the Owner Trustee in its individual capacity
or against any institution or person which becomes a successor trustee or
co-trustee or any officer, director, trustee, servant or direct or indirect
parent or controlling Person or Persons of any of them, and (ii) none of
the Owner Trustee, in its individual capacity, the Owner Participant, the
Indenture Trustee and any officer, director, trustee, servant, employee,
agent or direct or indirect parent or controlling Person or Persons of any
of them shall have any personal liability for any amounts payable, or other
obligation owed, hereunder, under the Participation Agreement or any of the
other Operative Documents or under the Equipment Notes except as expressly
provided herein or in the Participation Agreement; provided, however, that
nothing contained in this Section 2.03(a) shall be construed to limit the
exercise and enforcement in accordance with the terms of this Trust
Indenture or such other agreements of rights and remedies against the Trust
Estate.
(b) If (i) all or any part of the Trust Estate becomes the
property of, or the Owner Trustee or Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Code, (ii)
pursuant to such reorganization provisions, including Section 1111(b) of
the Bankruptcy Code, the Owner Trustee (in its individual capacity) or the
Owner Participant is required, by reason of the Owner Trustee (in its
individual capacity) or the Owner Participant being held to have recourse
liability to any Note Holder or the Indenture Trustee, directly or
indirectly (other than the recourse liability of the Owner Trustee (in its
individual capacity)), to make payment on account of any amount payable as
principal, Make-Whole Amount, if any, interest or other amounts on the
Equipment Notes or under this Indenture and (iii) any Note Holder or the
Indenture Trustee actually receives any Indenture Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in
its individual capacity) or the Owner Participant on account of clause (ii)
above, then such Note Holder or the Indenture Trustee, as the case may be,
shall promptly refund to the Owner Trustee (in its individual capacity) or
the Owner Participant (whichever shall have made such payment) such
Indenture Excess Amount.
For purposes of this Section 2.03(b), "Indenture Excess Amount"
means the amount by which such payment exceeds the amount that would have
been received by a Note Holder or the Indenture Trustee if the Owner
Trustee (in its individual capacity) or the Owner Participant had not
become subject to the recourse liability referred to in clause (ii) above.
Nothing contained in this Section 2.03(b) shall prevent a Note Holder or
the Indenture Trustee from enforcing any personal recourse obligation (and
retaining the proceeds thereof) of the Owner Trustee (in its individual
capacity) or the Owner Participant under the Participation Agreement or
this Trust Indenture (and any exhibits or annexes hereto or thereto) or by
separate agreement or from retaining any amount paid by Owner Participant
under Section 2.14 or 4.03 hereof.
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount, if
any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not
later than [11:00 a.m.], New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution among
the Note Holders in the manner provided herein. The Owner Trustee shall
not have any responsibility for the distribution of such payment to any
Note Holder. Notwithstanding the foregoing or any provision in any
Equipment Note to the contrary, the Indenture Trustee will use reasonable
efforts to pay or cause to be paid, if so directed in writing by any Note
Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder's Equipment Note or Equipment Notes
to such holder or a nominee therefor (including all amounts distributed
pursuant to Article III of this Trust Indenture) by transferring, or
causing to be transferred, by wire transfer of immediately available funds
in Dollars, prior to 2:00 p.m., New York City time, on the due date of
payment, to an account maintained by such holder with a bank located in the
continental United States the amount to be distributed to such holder, for
credit to the account of such holder maintained at such bank. If the
Indenture Trustee shall fail to make any such payment as provided in the
immediately preceding sentence after its receipt of funds at the place and
prior to the time specified above, the Indenture Trustee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss of
use of funds at the Federal Funds Rate until such payment is made and the
Indenture Trustee shall be entitled to any interest earned on such funds
until such payment is made. Any payment made hereunder shall be made
without any presentment or surrender of any Equipment Note, except that, in
the case of the final payment in respect of any Equipment Note, such
Equipment Note shall be surrendered to the Indenture Trustee for
cancellation promptly after such payment. Notwithstanding any other
provision of this Trust Indenture to the contrary, the Indenture Trustee
shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for
the Indenture Trustee to do so in view of the time of day when the funds to
be so transferred were received by it if such funds were received after
11:00 a.m., New York City time, at the place of payment. Prior to the due
presentment for registration of transfer of any Equipment Note, the Owner
Trustee and the Indenture Trustee shall deem and treat the Person in whose
name any Equipment Note is registered on the Equipment Note Register as the
absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither the Owner Trustee nor the
Indenture Trustee shall be affected by any notice to the contrary. So long
as any signatory to the Participation Agreement or nominee thereof shall be
a registered Note Holder, all payments to it shall be made to the account
of such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner Trustee, shall
exclude and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Equipment Note (and such exclusion and withholding
shall constitute payment in respect of such Equipment Note) any and all
United States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Equipment Notes, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Equipment Note) and timely pay the same to the appropriate authority in the
name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner Trustee and Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary
evidence as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the Equipment Note(s)
held by such holder is made (but prior to the making of such payment), or
in either of the two preceding calendar years, and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such form prior to the
date of such payment (and the Indenture Trustee has no reason to know that
any information set forth in such form is inaccurate), the Indenture
Trustee shall withhold only the amount, if any, required by Law (after
taking into account any applicable exemptions claimed by the Note Holder)
to be withheld from payments hereunder or under the Equipment Notes held by
such holder in respect of United States federal income tax (and such
withholding shall constitute payment in respect of such Equipment Note).
If a Note Holder (x) which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 4224 in duplicate (or such successor
certificate, form or forms as may be required by the United States Treasury
Department as necessary in order to avoid withholding of United States
federal income tax), during the calendar year in which the payment is made
(but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and the Indenture Trustee has no
reason to know that any information set forth in such form is inaccurate)
or (y) which is a U.S. Person has furnished to the Indenture Trustee a
properly completed and currently effective U.S. Internal Revenue Service
Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from
payments in respect of United States federal income tax. If any Note
Holder has notified the Indenture Trustee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not filed
a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation
thereof are at any time after the date hereof amended to require such
withholding of United States federal income taxes from payments under the
Equipment Notes held by such holder, the Indenture Trustee agrees to
withhold from each payment due to the relevant Note Holder withholding
taxes at the appropriate rate under Law and will, on a timely basis as more
fully provided above, deposit such amounts with an authorized depository
and make such returns, statements, receipts and other documentary evidence
in connection therewith as required by applicable law. Neither the Owner
Participant nor the Owner Trustee shall be liable if the Indenture Trustee
fails to withhold withholding taxes in accordance with this Section 2.04 or
if any Note Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note
(as well as any interest on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Equipment
Note (or a portion thereof) then due thereunder (other than by reason of
redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid and
due by reason of redemption (provided that such Equipment Note shall not be
subject to redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity.
SECTION 2.06. Termination of Interest in Trust Indenture
Estate.
A Note Holder and Indenture Indemnitees shall not, as such, have
any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the Secured Obligations due to such Note
Holder or Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Equipment
Notes.
The Indenture Trustee shall keep a register (the "Equipment Note
Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer
of any Equipment Note, the Owner Trustee shall execute, and the Indenture
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Equipment Notes of a like
aggregate Principal Amount and of the same series. At the option of the
Note Holder, Equipment Notes may be exchanged for other Equipment Notes of
any authorized denominations of a like aggregate Principal Amount, upon
surrender of the Equipment Notes to be exchanged to the Indenture Trustee
at the Corporate Trust Office. Whenever any Equipment Notes are so
surrendered for exchange, the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and deliver, the Equipment Notes which
the Note Holder making the exchange is entitled to receive. All Equipment
Notes issued upon any registration of transfer or exchange of Equipment
Notes (whether under this Section 2.07 or under Section 2.08 hereof or
otherwise under this Trust Indenture) shall be the valid obligations of the
Owner Trustee evidencing the same respective obligations, and entitled to
the same security and benefits under this Trust Indenture, as the Equipment
Notes surrendered upon such registration of transfer or exchange. Every
Equipment Note presented or surrendered for registration of transfer, shall
(if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of Principal Amount previously made on
the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old
Equipment Note or Equipment Notes has been paid. Interest shall be deemed
to have been paid on such new Equipment Note to the date on which interest
shall have been paid on such old Equipment Note, and all payments of the
Principal Amount marked on such new Equipment Note, as provided above,
shall be deemed to have been made thereon. The Owner Trustee shall not be
required to exchange any surrendered Equipment Notes as provided above
during the ten-day period preceding the due date of any payment on such
Equipment Note. The Owner Trustee shall in all cases deem the Person in
whose name any Equipment Note shall have been issued and registered as the
absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable by the Owner Trustee with respect
to such Equipment Note and for all purposes until a notice stating
otherwise is received from the Indenture Trustee and such change is
reflected on the Equipment Note Register. The Indenture Trustee will
promptly notify the Owner Trustee, the Owner Participant and Lessee of each
registration of a transfer of a Equipment Note. Any such transferee of a
Equipment Note, by its acceptance of a Equipment Note, agrees to the
provisions of the Participation Agreement applicable to Note Holders,
including Sections 5, 7(a), 7(c), 7(g), 7(h), 7(i), 7(n), 7(q), 7(u) and
7(z), 9, 12(a), 12(b), 14(b) and 14(e), and shall be deemed to have
represented and warranted (except as provided above), and covenanted, to
the parties to the Participation Agreement as to the matters represented,
warranted and covenanted by the Purchasers in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner Trustee shall use all reasonable efforts to issue new Equipment Notes
upon transfer or exchange within ten (10) Business Days of the date a
Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of
such Equipment Note, execute and the Indenture Trustee shall authenticate
and deliver in replacement thereof a new Equipment Note, payable in the
same Principal Amount dated the same date and captioned as issued in
connection with the Aircraft. If the Equipment Note being replaced has
become mutilated, such Equipment Note shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to the Owner Trustee.
If the Equipment Note being replaced has been destroyed, lost or stolen,
the holder of such Equipment Note shall furnish to the Owner Trustee, the
Owner Participant and the Indenture Trustee such security or indemnity as
may be required by them to save the Owner Trustee, the Owner Participant
and the Indenture Trustee harmless and evidence satisfactory to the Owner
Trustee, the Owner Participant and the Indenture Trustee of the
destruction, loss or theft of such Equipment Note and of the ownership
thereof. If a "qualified institutional buyer" of the type referred to in
paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the Securities
Act (a "QIB") is the holder of any such destroyed, lost or stolen Equipment
Note, then the written indemnity of such QIB, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Lessee, the Owner Participant, the Owner Trustee and the
Indenture Trustee shall be accepted as satisfactory indemnity and security
and no further indemnity or security shall be required as a condition to
the execution and delivery of such new Equipment Note. Subject to
compliance by the Note Holder of the requirements set forth in this Section
2.08, the Indenture Trustee and the Owner Trustee shall use all reasonable
efforts to issue new Equipment Notes within ten (10) Business Days of the
date of the written request therefor from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Indenture
Trustee, as Equipment Note Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Equipment Notes.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
(a) On the date on which Lessee is required pursuant to Section
10(a)(i) of the Lease to make payment for an Event of Loss with respect to
the Aircraft, all of the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption and
all other amounts payable hereunder or under the Participation Agreement to
the Note Holders but without the Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9, Section 19(b) or Section 20 thereof and
Lessee shall not have assumed all of the obligations of the Owner Trustee
hereunder pursuant to Section 2.13 and Section 7(u) of the Participation
Agreement, on the date the Lease is so terminated all the Equipment Notes
shall be redeemed in whole at a redemption price equal to 100% of the
unpaid Principal Amount thereof, together with accrued interest thereon to
the date of redemption and all other amounts payable hereunder or under the
Participation Agreement to the Note Holders plus the Make-Whole Amount, if
any.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than, all of the Equipment Notes may be
redeemed by the Owner Trustee with the prior consent of Lessee upon at
least 20 days revocable prior written notice to the Indenture Trustee, at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with accrued interest thereon to the date of redemption and all
other amounts payable hereunder or under the Participation Agreement to the
Note Holders plus the Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by the Owner Trustee of any Equipment Note may be made except to
the extent and in the manner expressly permitted by this Trust Indenture.
No purchase of any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than 15 nor more than 60 days prior
to the applicable redemption date, to each Note Holder of such Equipment
Notes to be redeemed or purchased, at such Note Holder's address appearing
in the Equipment Note Register; provided, that in the case of a redemption
to be made pursuant to Section 2.10(b) or Section 2.11, such notice shall
be revocable and shall be deemed revoked in the event that the Lease does
not in fact terminate on the specified termination date or if notice of
such redemption shall have been given in connection with a refinancing of
Equipment Notes and the Indenture Trustee receives written notice of such
revocation from Lessee or the Owner Trustee not later than three days prior
to the redemption date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become
due and payable upon each such Equipment Note, and that, if any such
Equipment Notes are then outstanding, interest on such Equipment Notes
shall cease to accrue on and after such redemption date, and (4) the place
or places where such Equipment Notes are to be surrendered for payment of
the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal
to the redemption price for the Equipment Notes to be redeemed or purchased
on the redemption date shall not then be held in the Trust Indenture
Estate, deposit or cause to be deposited with the Indenture Trustee by
11:00 a.m. New York City time on the redemption date in immediately
available funds the redemption price of the Equipment Notes to be redeemed
or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not deemed revoked as contemplated in the proviso to Section
2.12(b)), the Equipment Notes to be redeemed or purchased shall, on the
redemption date, become due and payable at the Corporate Trust Office of
the Indenture Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price)
any such Equipment Notes then outstanding shall cease to bear interest.
Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice, such Equipment Note shall be redeemed at the
redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such
Equipment Note as of such redemption date.
SECTION 2.13. Assumption of Equipment Notes by Lessee.
If, in accordance with Section 7(u) of the Participation
Agreement Lessee shall assume (on a full recourse basis) all of the
obligations of the Owner Trustee hereunder, under the Equipment Notes and
all other Operative Documents by supplemental indenture satisfactory to the
Indenture Trustee (which shall contain (i) the provisions substantially
similar to Sections 6, 7, 8, 10, 11 and 12 of the Lease and (ii) other
provisions necessary or advisable to effectuate such assumption), then upon
delivery of such supplemental indenture, payment by Lessee of all expenses
(including reasonable fees and expenses of counsel) for the Owner Trustee
and the Owner Participant and delivery of an opinion of counsel for Lessee
that such assumption has been duly and validly effected, the Owner Trustee
shall be released and discharged from any further obligations hereunder and
under the Equipment Notes and all other Operative Documents and the Owner
Participant shall be released and discharged from any further obligations
under the Participation Agreement and any other Operative Document to which
it is a party, except with respect to any such obligations that accrued
prior thereto.
SECTION 2.14. Option to Purchase Equipment Notes.
Either the Owner Trustee or the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set forth
in this Section 2.14, purchase all but not less than all of the Equipment
Notes outstanding hereunder, and each Note Holder agrees that it will, upon
such events and subject to such terms and conditions and upon receipt of
such price, sell, assign, transfer and convey to such purchaser or its
nominee (without recourse or warranty of any kind except as to its title to
the Equipment Notes and except against Liens on such Equipment Notes
arising by, through or under such holder), all of the right, title and
interest of such Note Holder in and to the Trust Indenture Estate, this
Trust Indenture and the Equipment Notes held by it, and such purchaser or
its nominee shall assume all of such holder's obligations under the
Participation Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant at any time following the
occurrence of any of the following events, and, in any such event, the
purchase price thereof shall equal for each Equipment Note the aggregate
unpaid Principal Amount thereof, plus accrued and unpaid interest thereon
to, but not including, the date of purchase and all other amounts (other
than the Make-Whole Amount, except as provided in the next sentence) then
payable hereunder or under the Participation Agreement to the holder
thereof. Such option to purchase the Equipment Notes may be exercised: (i)
upon an Indenture Trustee Event or (ii) in the event there shall have
occurred and be continuing a Lease Event of Default, provided, that if such
option is exercised pursuant to this clause (ii) at a time when there shall
have occurred and be continuing for less than one hundred eighty (180) days
a Lease Event of Default, the purchase price thereof shall equal the price
provided in the preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by
the Owner Trustee or the Owner Participant giving written notice of its
election of such option to the Indenture Trustee, which notice (i) shall
specify a date for such purchase not more than thirty (30) days or less
than fifteen (15) days after the date of such notice and (ii) may specify
that its election of such option is contingent upon the trustee or the
debtor-in-possession in a proceeding involving Lessee under Chapter 11 of
the Bankruptcy Code not entering into an agreement during the Section 1110
Period to perform the Lease. The Indenture Trustee shall not exercise any
of the remedies hereunder or, without the consent of the Owner Trustee or
the Owner Participant, under the Lease, during the period from the time
that a notice of exercise by the Owner Participant of such option to
purchase becomes irrevocable until the date on which such purchase is
required to occur pursuant to the terms of the preceding sentence. Such
election to purchase the Equipment Notes shall become irrevocable (subject
to the provision in clause (ii) of the first sentence of this paragraph)
upon the fifteenth day preceding the date specified in the written notice
described in the first sentence of this paragraph.
If the Owner Trustee or the Owner Participant on or before the
date of such purchase shall so request, the Note Holders will comply with
all the provisions of Section 2.07 to enable new Equipment Notes to be
issued to the Owner Trustee or the Owner Participant or its nominee in such
denominations as the Owner Trustee or the Owner Participant shall request.
All taxes, charges and expenses required pursuant to Section 2.09 in
connection with the issuance of such new Equipment Note shall be borne by
the Owner Participant.
SECTION 2.15. Subordination.
(a) The Owner Trustee and, by acceptance of its Equipment Notes
of any Series, each Note Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Note Holder of such Series, including any payment
or distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15
or Article III hereof, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c) hereof) and will forthwith
turn over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A until the Secured Obligations in
respect of Series A Equipment Notes have been paid in full and (ii) after
the Secured Obligations in respect of Series A Equipment Notes have been
paid in full, the Note Holders of Series B until the Secured Obligations in
respect of Series B Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.
Except as otherwise provided in Section 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments
of Basic Rent and any payment received by the Indenture Trustee pursuant to
Section 4.03 hereof shall be promptly distributed in the following order of
priority:
First, (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series A Equipment Notes shall be distributed to the Note Holders of
Series A ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series A
Equipment Note bears to the aggregate amount of the payments then due under
all Series A Equipment Notes; (ii) after giving effect to paragraph (i)
above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series B Equipment Notes shall be distributed to the Note Holders of
Series B ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series B
Equipment Note bears to the aggregate amount of the payments then due under
all Series B Equipment Notes; and (iii) after giving effect to paragraph
(ii) above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series C Equipment Notes shall be distributed to the Note Holders of
Series C ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the payments then due under
all Series C Equipment Notes; and
Second, the balance, if any, of such installment remaining
thereafter shall be distributed to the Owner Trustee free and clear of the
Lien of this Indenture; provided, however, that if an Event of Default
shall have occurred and be continuing, then such balance shall not be
distributed as provided in this clause "Second" but shall be held by the
Indenture Trustee as part of the Trust Indenture Estate and invested in
accordance with Section 5.09 hereof until whichever of the following shall
first occur: (i) all Events of Default shall have been cured or waived, in
which event such balance shall be distributed as provided in this clause
"Second" without reference to this proviso, (ii) Section 3.03 hereof shall
be applicable, in which event such balance shall be distributed in
accordance with the provisions of such Section 3.03, or (iii) the 120th day
after the receipt of such payment in which case such payment shall be
distributed as provided in this clause "Second" without reference to this
proviso.
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Refinancing.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss, (ii) pursuant to a voluntary termination of the
Lease pursuant to Section 9, 19(b) or 20 thereof, (iii) in connection with
a refinancing of the Equipment Notes pursuant to Section 16 of the
Participation Agreement or (iv) in connection with any optional redemption
of the Equipment Notes effected in accordance with the Operative Documents
shall be applied to redemption of the Equipment Notes, to payment of the
Secured Obligations or to the Indenture Trustee or any Note Holder under
the Participation Agreement by applying such funds in the following order
of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or indemnity
by Lessee, under the Operative Documents and then (ii) to pay any other
amounts then due to the Indenture Trustee and the Note Holders under this
Trust Indenture, the Participation Agreement or the Equipment Notes;
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus Make-Whole Amount, if any, then
due and payable in respect of the Series A Equipment Notes; (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of the Series B Equipment
Notes; and (iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in respect of
the Series C Equipment Notes; and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine
shall be substituted for the Airframe or Engine subject to such Event of
Loss as provided in Section 10 of the Lease and as permitted by Section
5.06 hereof, any insurance, condemnation or similar proceeds which result
from such Event of Loss and are paid over to the Indenture Trustee shall be
held by the Indenture Trustee as permitted by Section 6.04 hereof (provided
that such moneys shall be invested as provided in Section 5.09 hereof) as
additional security for the obligations of Lessee under the Lessee
Documents and, unless otherwise applied pursuant to the Lease, such
proceeds (and such investment earnings) shall be released to Lessee at
Lessee's written request upon the release of such damaged Airframe or
Engine and the replacement thereof as provided in the Lease.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Section 15 of the Lease or Article IV hereof) after
both an Event of Default shall have occurred and be continuing and the
Equipment Notes shall have become due and payable pursuant to Section
4.04(b) hereof, as well as all payments or amounts then held by the
Indenture Trustee as part of the Trust Indenture Estate, shall be promptly
distributed by the Indenture Trustee in the following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Trust Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to Section
4.05(b) hereof) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any other
expenses for which the Indenture Trustee or the Note Holders are entitled
to reimbursement under any Operative Document and all amounts payable to
the other Indenture Indemnitees hereunder and under the Participation
Agreement and the Lease excluding those amounts described in clauses Second
and Third below, and in the case the aggregate amount to be so distributed
is insufficient to pay as aforesaid, then ratably, without priority of one
over the other, in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for payments
made pursuant to Section 5.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in accordance with
the amount of the payment or payments made by each such then existing or
prior Note Holder pursuant to said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series A Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Equipment Notes to the date of distribution, shall be distributed
to the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series A Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series A Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; (ii) after giving effect to paragraph (i)
above, so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series B
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and (iii) after giving effect to paragraph
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of all Series
C Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon and all other Secured Obligations in respect of the Series C
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series C Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner Trustee free and
clear of the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Trust Indenture and
for which such provision is made in the Lease, the Participation Agreement
or any other Operative Document shall be applied forthwith to the purpose
for which such payment was made in accordance with the terms of the Lease,
the Participation Agreement or such other Operative Document, as the case
may be.
(b) The Indenture Trustee will distribute promptly upon receipt
any indemnity payment received by it from the Owner Trustee or Lessee in
respect of (i) the Indenture Trustee in its individual capacity or any
other Indenture Indemnitees, (ii) any Note Holder, (iii) the Subordination
Agent, (iv) the Liquidity Provider, and (v) the Pass Through Trustees, in
each case whether pursuant to Section 6 of the Participation Agreement or
as Supplemental Rent, directly to the Person entitled thereto. Any payment
received by the Indenture Trustee under clause (b) of the third paragraph
of Section 2.02 shall be distributed to the Subordination Agent to be
distributed in accordance with the terms of the Intercreditor Agreement,
and any payment received by the Indenture Trustee under clause (c) of the
third paragraph of Section 2.02 shall be distributed directly to the
Persons entitled thereto.
(c) Notwithstanding anything to the contrary contained in this
Article III, any amounts received by the Indenture Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the
Indenture Trustee directly to the Person or Persons entitled thereto.
(d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by the Indenture Trustee that would, but for the
provisions of Section 3.03 hereof, otherwise be distributed to Lessee
shall, notwithstanding the provisions of said Section, be distributed to
Lessee unless and until a Lease Event of Default shall have occurred and be
continuing.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Lease, the
Participation Agreement, elsewhere in this Trust Indenture or in any other
Operative Document shall be distributed by the Indenture Trustee to the
extent received or realized at any time (i) prior to the payment in full of
all Secured Obligations due the Note Holders, in the order of priority
specified in Section 3.01 hereof subject to the proviso thereto, and (ii)
after payment in full of all Secured Obligations due the Note Holders, in
the following order of priority:
First, to the extent payments or amounts described in clause
"First" of Section 3.03 hereof are otherwise obligations of Lessee under
the Operative Documents or for which Lessee is obligated to indemnify
against thereunder, in the manner provided in clause "First" of Section
3.03 hereof, and
Second, in the manner provided in clause "Fourth" of Section
3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and 3.04
hereof, all payments received and amounts realized by the Indenture Trustee
under the Lease or otherwise with respect to the Aircraft (including,
without limitation, all amounts realized upon the sale or release of the
Aircraft after the termination of the Lease with respect thereto), to the
extent received or realized at any time after payment in full of all
Secured Obligations due the Note Holders, shall be distributed by the
Indenture Trustee in the order of priority specified in clause (ii) of the
immediately preceding sentence of this Section 3.05.
SECTION 3.06. Payments to Owner Trustee.
Any amounts distributed hereunder by the Indenture Trustee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from
the Owner Trustee to the Indenture Trustee from time to time. The Owner
Trustee hereby notifies the Indenture Trustee that unless and until the
Indenture Trustee receives notice to the contrary from the Owner Trustee,
all amounts to be distributed to the Owner Trustee pursuant to clause
"Second" of Section 3.01 hereof shall be distributed by wire transfer of
funds of the type received by the Indenture Trustee to the Owner
Participant's account (within the time limits contemplated by Section
2.04(a)) specified in Schedule I to the Participation Agreement.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of Owner Trustee.
The Owner Trustee hereby covenants and agrees as follows:
(a) the Owner Trustee will duly and punctually pay the Principal
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under the Equipment Notes and hereunder in accordance with the terms of the
Equipment Notes and this Trust Indenture and all amounts, if any, payable
by it to the Note Holders under the Participation Agreement;
(b) [Reserved]
(c) in the event the Owner Trustee shall have Actual Knowledge
of an Event of Default, a Default or an Event of Loss, the Owner Trustee
will give prompt written notice of such Event of Default, Default or Event
of Loss to the Indenture Trustee, each Note Holder, Lessee and the Owner
Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to
the Owner Trustee under the Lease, including, without limitation, a copy of
any Termination Notice received pursuant to Section 9(a) of the Lease, a
copy of each notice delivered pursuant to Section 10, 19 or 20 of the Lease
and a copy of each report or notice received pursuant to Section 11(c) of
the Lease to the extent that the same shall not be required to have been
furnished to the Indenture Trustee pursuant to the Lease;
(e) except pursuant to the Operative Documents or with the
consent of the Indenture Trustee (acting pursuant to instructions given in
accordance with Section 9.01 hereof), the Owner Trustee will not contract
for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability
of so doing, or otherwise), endorse or otherwise be or become contingently
liable, directly or indirectly, in connection with the Debt of any other
person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Operative Documents.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever
the reason for such Event of Default and whether such event shall be
voluntary or involuntary or come about or be effected by operation of Law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body):
(a) any Lease Event of Default (provided that any such Lease
Event of Default caused solely by a failure of Lessee to pay to the Owner
Trustee or the Owner Participant when due any amount that is included in
the definition of Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Trustee to the Indenture
Trustee that such failure shall constitute an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment
of Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder (other than
any such failure arising as a result of a Lease Event of Default or a Lease
Default) and such failure shall have continued unremedied for ten (10)
Business Days in the case of any payment of Principal Amount or interest or
Make-Whole Amount, if any, thereon and, in the case of any other amount,
for ten (10) Business Days after the Owner Trustee or the Owner Participant
receives written demand from the Indenture Trustee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee in
its individual or trust capacity pursuant to Section 7(f) of the
Participation Agreement, or by the Owner Participant pursuant to Section
7(f) of the Participation Agreement shall remain undischarged for a period
of thirty (30) days after the Owner Trustee and the Owner Participant shall
have received written notice from the Indenture Trustee or any Note Holder
of such Lien; or
(d) any representation or warranty made by the Owner Participant
or the Owner Trustee herein, in the Participation Agreement or in any
certificate furnished by the Owner Participant or the Owner Trustee to the
Indenture Trustee or any Note Holder in connection with the transactions
contemplated by the Operative Documents shall prove to have been false or
incorrect when made in any material respect and continues to be material
and adverse to the interests of the Indenture Trustee or the Note Holders;
and if such misrepresentation is capable of being corrected and if such
correction is being sought diligently, such misrepresentation shall not
have been corrected within sixty (60) days (or, without affecting Section
4.02(f) hereof, in the case of the representations made in Section 7(a) of
the Participation Agreement as to the citizenship of the Owner Trustee in
its individual capacity [or of the Owner Participant, respectively,](4) as
soon as is reasonably practicable but in any event within sixty (60) days
following notice thereof from the Indenture Trustee or any Note Holder to
the Owner Trustee or the Owner Participant, as the case may be; or
---------------
(4) Delete for foreign OP.
(e) other than as provided in (c) above or (f) below, any
failure by the Owner Trustee or Owner Participant to observe or perform any
other covenant or obligation of the Owner Trustee or Owner Participant, as
the case may be, for the benefit of the Indenture Trustee or the Note
Holders contained in the Participation Agreement, Section 4.01(a) of the
Trust Agreement, the Equipment Notes or this Trust Indenture which is not
remedied within a period of sixty (60) days after notice thereof has been
given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the
laws of the United States, the Owner Participant shall not be a Citizen of
the United States, and as the result thereof the registration of the
Aircraft under the Transportation Code, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default
shall be deemed to have occurred under this paragraph (f) unless such
circumstances continue unremedied for more than sixty (60) days after the
Owner Participant has Actual Knowledge of the state of facts that resulted
in such ineffectiveness and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of the Owner Participant, the Owner
Trustee or the Trust Estate under the federal bankruptcy Laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar Law in the United States or seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Owner Participant, the Owner
Trustee or the Trust Estate or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and unstayed
for a period of ninety (90) consecutive days; or (ii) the commencement by
the Owner Participant, the Owner Trustee or the Trust Estate of a voluntary
case or proceeding under the federal bankruptcy Laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States, or the consent by the
Owner Participant, the Owner Trustee or the Trust Estate to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Owner
Participant, the Owner Trustee or the Trust Estate or for all or
substantially all of its property, or the making by the Owner Participant,
the Owner Trustee or the Trust Estate of any assignment for the benefit of
creditors or the Owner Participant or the Owner Trustee shall take any
action to authorize any of the foregoing; provided, however, that an event
referred to in this Section 4.02(g) with respect to the Owner Participant
shall not constitute an Event of Default if within thirty (30) days of the
commencement of the case or proceeding a final non-appealable order,
judgement or decree shall be entered in such case or proceeding by a court
or a trustee, custodian, receiver or liquidator, to the effect that no part
of the Trust Estate (except for the Owner Participant's beneficial interest
therein) and no right, title or interest under the Trust Indenture Estate
shall be included in, or be subject to, any declaration or adjudication of,
or proceedings with respect to, the bankruptcy, insolvency or liquidation
of the Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. Certain Rights.
The Indenture Trustee shall give the Note Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of
Default of which the Indenture Trustee has Actual Knowledge and, if any
such Event of Default results from a Lease Event of Default, shall give the
Note Holders, the Owner Trustee and the Owner Participant not less than ten
(10) Business Days prior written notice of the date (the "Enforcement
Date") on or after which the Indenture Trustee may (subject to the notice
provision set forth in Section 4.04(a)) commence and consummate the
exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof, or the exercise of any remedy or remedies pursuant to the
provisions of Section 15 of the Lease; provided, however, that in the event
the Indenture Trustee shall have validly terminated the Lease (or, in the
event of a reorganization proceeding involving Lessee instituted under
Chapter 11 of the Bankruptcy Code, such Lease is rejected), the Indenture
Trustee shall not, without the consent of the Owner Participant, sell or
lease, or otherwise afford the use of, the Aircraft or any portion thereof
to Lessee or any Affiliate thereof. Without limiting the generality of the
foregoing, the Indenture Trustee shall give the Owner Trustee, the Owner
Participant and Lessee at least ten (10) Business Days prior written notice
(which may be given concurrently with notice of the Enforcement Date) of
any declaration of the Lease to be in default pursuant to Sections 14 and
15 of the Lease or any termination of the Lease. If an Event of Default
shall have occurred and be continuing, the Owner Trustee shall have the
following rights hereunder, any of which may be exercised directly by the
Owner Participant.
If as a result of the occurrence of an Event of Default in
respect of the nonpayment by Lessee of Basic Rent due under the Lease, the
Indenture Trustee shall have insufficient funds to make any payment of
Principal Amount and interest on any Equipment Note on the day it becomes
due and payable, the Owner Trustee or the Owner Participant may, but shall
not be obligated to, pay the Indenture Trustee prior to the Enforcement
Date, in the manner provided in Section 2.04 hereof, for application in
accordance with Section 3.01 hereof, an amount equal to the portion of the
Principal Amount and interest (including interest, if any, on any overdue
payments of such portion of Principal Amount and interest) then due and
payable on the Equipment Notes, and, unless the Owner Trustee has cured
Events of Default in respect of payments of Basic Rent on each of the three
(3) immediately preceding Basic Rent payment dates, or the Owner Trustee
has cured six (6) previous Events of Default in respect of payments of
Basic Rent, such payment by the Owner Trustee shall, solely for purposes of
this Trust Indenture, be deemed to cure any Event of Default which would
otherwise have arisen on account of the nonpayment by Lessee of such
installment of Basic Rent (but not any other Default or Event of Default
which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment
of Basic Rent by Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee or the Owner Participant may, but shall not be
obligated to, cure such Event of Default by making such payment prior to
the Enforcement Date as is necessary to accomplish the observance or
performance of the defaulted covenant, condition or agreement.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such
Event of Default, obtain any Lien on any of the Mortgaged Property or any
Rent payable under the Lease for or on account of costs or expenses
incurred in connection with the exercise of such right, nor shall any claim
of the Owner Trustee against Lessee or any other party for the repayment of
such costs or expenses impair the prior right and security interest of the
Indenture Trustee in and to the Mortgaged Property. Upon any payment by
the Owner Trustee or the Owner Participant pursuant to the first or second
preceding paragraphs of this Section 4.03, the Owner Trustee or the Owner
Participant, as the case may be, shall be subrogated to the rights of the
Indenture Trustee and the Note Holders in respect of the Basic Rent which
was overdue at the time of such payment and interest payable by Lessee on
account of its being overdue and any Supplemental Rent in respect of the
reimbursement of amounts paid by Owner Trustee pursuant to the immediately
preceding paragraph (but in either case shall have no rights as a secured
party hereunder), and thereafter, the Owner Trustee or the Owner
Participant, as the case may be, shall be entitled to receive such overdue
Basic Rent or Supplemental Rent, as the case may be, and interest thereon
upon receipt thereof by the Indenture Trustee (and shall be entitled to
bring an action against Lessee to enforce such payment); provided, however,
that (i) if the Principal Amount and interest on the Equipment Notes shall
have become due and payable pursuant to Section 4.04(b) hereof (and such
acceleration shall not have been rescinded pursuant to Section 4.04(b)),
such subrogation shall, until the Principal Amount of, interest on, Make-
Whole Amount, if any, and all other amounts due with respect to all
Equipment Notes shall have been paid in full, be subordinate to the rights
of the Indenture Trustee, the Indenture Indemnitees and the Note Holders in
respect of such payment of overdue Basic Rent, Supplemental Rent and such
interest and (ii) the Owner Trustee shall not be entitled to seek to
recover any such payment (or any payment in lieu thereof) except pursuant
to the foregoing right of subrogation by demand or suit for damages.
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, if an
Event of Default shall have occurred and be continuing and so long as the
same shall continue unremedied, then and in every such case the Indenture
Trustee may, subject to the second paragraph of this Section 4.04(a), on
and after the Enforcement Date if such Event of Default results from a
Lease Event of Default, exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this Article IV and shall
have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and, in the event such Event of Default
is also a Lease Event of Default, any and all of the remedies pursuant to
Section 15 of the Lease and may take possession of all or any part of the
properties covered or intended to be covered by the Lien created hereby or
pursuant hereto and may exclude the Owner Participant, the Owner Trustee
and Lessee and all persons claiming under any of them wholly or partly
therefrom, provided, that (x) in the case of a sale of the Aircraft, the
Indenture Trustee shall give the Owner Trustee and the Owner Participant,
subsequent to the earlier of (I) the expiration of the Section 1110 Period
(as hereinafter defined) and (II) Lessee's rejection of the Lease in a
proceeding instituted under Chapter 11 of the Bankruptcy Code, twenty (20)
days prior written notice of its intention to sell the Aircraft and (y) in
the case of any judicial proceeding to foreclose the Lien of the Indenture,
fifteen (15) days prior written notice of its intention to initiate such
proceeding and, provided, further, that in the event the Indenture Trustee
shall have validly terminated the Lease (or, in the event of a
reorganization proceeding involving Lessee instituted under Chapter 11 of
the Bankruptcy Code, such Lease is rejected), the Indenture Trustee shall
not, without the consent of the Owner Participant, sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to Lessee
or any affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at any public sale and become the purchaser.
Without limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available
to it, even though it shall not have taken possession of the Aircraft and
shall not have possession thereof at the time of such sale.
Anything in this Trust Indenture to the contrary
notwithstanding, the Indenture Trustee shall not be entitled to exercise
any remedy hereunder as a result of an Event of Default which arises solely
by reason of one or more events or circumstances which constitute a Lease
Event of Default unless the Indenture Trustee as security assignee of the
Owner Trustee shall have (i) accelerated the maturity of the Equipment
Notes and (ii) exercised or concurrently be exercising one or more of the
remedies provided for in Section 15 of the Lease to terminate the Lease (in
the event that it is not commercially reasonable to take possession of the
Aircraft) or take possession and/or sell the Aircraft; provided, however,
that such requirement to exercise one or more of such remedies under the
Lease shall not apply in circumstances where the Indenture Trustee is, and
has been, for a continuous period in excess of sixty (60) days subsequent
to the entry of an order for relief or such other period as may be
specified in Section 1110(a)(1)(A) of the Bankruptcy Code (such 60-day or
other period being the "Section 1110 Period"), involuntarily stayed or
prohibited by applicable law or court order from exercising such remedies
under the Lease (a "Continuous Stay Period"); provided further, however,
that the requirement to exercise one or more of such remedies under the
Lease shall nonetheless be applicable during a Continuous Stay Period
subsequent to the expiration of the Section 1110 Period to the extent that
the continuation of such Continuous Stay Period subsequent to the
expiration of the Section 1110 Period (A) results from an agreement by the
trustee or the debtor-in-possession in such proceeding during the Section
1110 Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and Lessee
continues to perform as required by Section 1110(a)(1)(A-B) of the
Bankruptcy Code or (B) is an extension of the Section 1110 Period with the
consent of the Indenture Trustee pursuant to Section 1110(b) of the
Bankruptcy Code or (C) results from Lessee's assumption during the Section
1110 Period with the approval of the relevant court of the Lease pursuant
to Section 365 of the Bankruptcy Code or (D) is the consequence of the
Indenture Trustee's own failure to give any requisite notice to any Person.
In the event that the applicability of Section 1110 of the Bankruptcy Code
to the Aircraft is being contested by Lessee in judicial proceedings, both
the Indenture Trustee and the Owner Trustee shall have the right to
participate in such proceedings.
It is expressly understood and agreed that, subject only to
the immediately preceding paragraph, the inability, described in such
paragraphs, of the Indenture Trustee to exercise any right or remedy under
the Lease shall in no event and under no circumstances prevent the
Indenture Trustee from exercising any or all of its rights, powers and
remedies under this Trust Indenture, including, without limitation, this
Article IV.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), subject to Section 4.03 hereof, at any time, by
delivery of written notice or notices to the Owner Trustee and the Owner
Participant, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately
become due and payable without presentment, demand, protest or notice, all
of which are hereby waived; provided that if an Event of Default referred
to in clause (g) of Section 4.02 hereof shall have occurred and be
continuing or a Lease Event of Default under Section 14(e) of the Lease
shall have occurred and be continuing, then and in every such case the
unpaid Principal Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived;
provided further that in the event of a reorganization proceeding involving
Lessee instituted under Chapter 11 of the Bankruptcy Code, if no other
Lease Event of Default and no other Event of Default (other than the
failure to pay the Principal Amount of the Equipment Notes which by such
declaration have become payable) exists at any time after the consummation
of such proceeding, such declaration shall be automatically rescinded
without any further action on the part of any Note Holder.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable under the Equipment Notes (except the Principal Amount of the
Equipment Notes which by such declaration shall have become payable) shall
have been duly paid, and every other Default and Event of Default with
respect to any covenant or provision of this Trust Indenture shall have
been cured, then and in every such case a Majority in Interest of Note
Holders may (but shall not be obligated to), by written instrument filed
with the Indenture Trustee, rescind and annul the Indenture Trustee's
declaration and its consequences; but no such rescission or annulment shall
extend to or affect any subsequent Default or Event of Default or impair
any right consequent thereon.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in
accordance with Section 4.03 hereof, the Event of Default that resulted in
such acceleration or declaration.
(c) Any Note Holder shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any
purchase price bid at such sale by such holder all or any part of the
unpaid obligations owing to such Note Holder and secured by the Lien of
this Trust Indenture (but only to the extent that such purchase price would
have been paid to such Note Holder pursuant to Article III hereof if such
purchase price were paid in cash and the foregoing provisions of this
subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or
any part thereof, pursuant to any judgment or decree of any court or
otherwise in connection with the enforcement of any of the terms of this
Trust Indenture, the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued interest thereon, and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Trust to fail
to qualify as a "grantor trust" for federal income tax purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof and unless the Owner
Trustee or the Owner Participant shall have elected to purchase the
Equipment Notes, at the request of the Indenture Trustee, the Owner Trustee
shall promptly execute and deliver to the Indenture Trustee such
instruments and other documents as the Indenture Trustee may deem necessary
or advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or
places as the Indenture Trustee may specify, to obtain possession of all or
any part of the Mortgaged Property included in the Trust Indenture Estate
to which the Indenture Trustee shall at the time be entitled hereunder. If
the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture
Trustee the right to immediate possession and requiring the Owner Trustee
to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner Trustee hereby
specifically consents to the fullest extent permitted by applicable law,
and (ii) pursue all or part of such Mortgaged Property wherever it may be
found and, in the event that a Lease Event of Default has occurred and is
continuing, may enter any of the premises of Lessee wherever such Mortgaged
Property may be or be supposed to be and search for such Mortgaged Property
and take possession of and remove such Mortgaged Property. All expenses of
obtaining such judgment or of pursuing, searching for and taking such
property shall, until paid, be secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee
may, from time to time, at the expense of the Mortgaged Property, make all
such expenditures for maintenance, use, operation, storage, insurance,
leasing, control, management, disposition, modifications or alterations to
and of the Mortgaged Property, as it may deem proper. In each such case,
the Indenture Trustee shall have the right to maintain, use, operate,
store, insure, lease, control, manage, dispose of, modify or alter the
Mortgaged Property and to carry on the business and to exercise all rights
and powers of the Owner Participant and the Owner Trustee relating to the
Mortgaged Property, as the Indenture Trustee shall deem best, including the
right to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modification or alteration of the Mortgaged
Property or any part thereof as the Indenture Trustee may determine, and
the Indenture Trustee shall be entitled to collect and receive directly all
tolls, rents (including Rent), revenues, issues, income, products and
profits of the Mortgaged Property and every part thereof, except Excluded
Payments, without prejudice, however, to the right of the Indenture Trustee
under any provision of this Trust Indenture to collect and receive all cash
held by, or required to be deposited with, the Indenture Trustee hereunder
other than Excluded Payments. Such tolls, rents (including Rent),
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration
of the Mortgaged Property and of conducting the business thereof, and to
make all payments which the Indenture Trustee may be required or may elect
to make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property or any part thereof (including the employment
of engineers and accountants to examine, inspect and make reports upon the
properties and books and records of the Owner Trustee), and all other
payments which the Indenture Trustee may be required or authorized to make
under any provision of this Trust Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all persons
properly engaged and employed by the Indenture Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power
or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Trust Indenture
by foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner
Trustee, the Indenture Trustee and Lessee shall, subject to any
determination in such proceedings, be restored to their former positions
and rights hereunder with respect to the Mortgaged Property, and all
rights, remedies and powers of the Owner Trustee, the Indenture Trustee or
Lessee shall continue as if no such proceedings had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, and subject to Section 5.02 the Indenture Trustee shall waive any
past Default hereunder and its consequences and upon any such waiver such
Default shall cease to exist and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Trust
Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon; provided, that in the
absence of written instructions from all the Note Holders, the Indenture
Trustee shall not waive any Default (i) in the payment of the Principal
Amount, Make-Whole Amount, if any, and interest and other amounts due under
any Equipment Note then outstanding, or (ii) in respect of a covenant or
provision hereof which, under Article IX hereof, cannot be modified or
amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
Mortgaged Property or the taking of possession thereof or otherwise, and
the Owner Trustee hereby consents to the appointment of such a receiver and
will not oppose any such appointment. Any receiver appointed for all or any
part of the Mortgaged Property shall be entitled to exercise all the rights
and powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc.
The Owner Trustee irrevocably appoints the Indenture Trustee the
true and lawful attorney-in-fact of the Owner Trustee in its name and stead
and on its behalf, for the purpose, if an Event of Default shall have
occurred and be continuing, of effectuating in accordance with applicable
law any sale, assignment, transfer or delivery for the enforcement of the
Lien of this Trust Indenture, whether pursuant to foreclosure or power of
sale, assignments and other instruments as may be necessary or appropriate,
with full power of substitution, the Owner Trustee hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue
hereof in accordance with applicable law. Nevertheless, if so requested by
the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium,
if any, and interest on a Equipment Note on or after the respective due
dates expressed in such Equipment Note, or to bring suit for the
enforcement of any such payment on or after such respective dates in
accordance with the terms hereof, shall not be impaired or affected without
the consent of such Note Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event
of Default or of a Default arising from a failure to pay Rent, the
Indenture Trustee shall give prompt written notice thereof to the Owner
Trustee, the Owner Participant, Lessee and each Note Holder. Subject to
the terms of Sections 2.14, 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the
Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in Interest
of Note Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to
the Note Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section
5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the
best interests of the Note Holders. If the Indenture Trustee shall at any
time declare the Lease to be in default pursuant to Section 15 thereof or
shall elect to foreclose or otherwise enforce this Trust Indenture, the
Indenture Trustee shall forthwith notify the Owner Participant, the Note
Holders, the Owner Trustee and Lessee. For all purposes of this Trust
Indenture, in the absence of Actual Knowledge on the part of the Indenture
Trustee, the Owner Trustee or the Owner Participant, the Indenture Trustee,
the Owner Trustee or the Owner Participant, as the case may be, shall not
be deemed to have knowledge of a Default or an Event of Default (except, in
the case of the Indenture Trustee, the failure of Lessee to pay any
installment of Basic Rent within one (1) Business Day after the same shall
become due, if any portion of such installment was then required to be paid
to the Indenture Trustee, which failure shall constitute knowledge of a
Default) unless notified in writing by Lessee, the Owner Trustee, the Owner
Participant or one or more Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a) and
(b), 4.08, 5.01 and 5.03 hereof, upon the written instructions at any time
and from time to time of a Majority in Interest of Note Holders, the
Indenture Trustee shall, subject to the terms of this Section 5.02, take
such of the following actions as may be specified in such instructions: (i)
give such notice or direction or exercise such right, remedy or power
hereunder as shall be specified in such instructions; (ii) give such notice
or direction or exercise such right, remedy or power under the Lease, the
Participation Agreement, the Purchase Agreement, or any other part of the
Trust Indenture Estate as shall be specified in such instructions; and
(iii) after the occurrence and during the continuance of an Event of
Default, approve as satisfactory to the Indenture Trustee all matters
required by the terms of the Lease to be satisfactory to the Owner Trustee,
it being understood that without the written instructions of a Majority in
Interest of Note Holders, the Indenture Trustee shall not approve any such
matter as satisfactory to the Indenture Trustee; provided, that anything
contained in this Trust Indenture, the Lease or the other Operative
Documents to the contrary notwithstanding:
(1) the Owner Trustee or the Owner Participant may,
without the consent of the Indenture Trustee, demand, collect, xxx for
or otherwise obtain all amounts included in Excluded Payments from
Lessee, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or
equitable remedies to require Lessee to maintain the insurance
coverage referred to in Section 11 of the Lease; provided, that the
rights referred to in this clause (1) shall not be deemed to include
the exercise of any remedies provided for in Section 15 of the Lease
other than the right to proceed by appropriate court action, either at
law or in equity, to enforce payment by Lessee of such amounts
included in Excluded Payments or performance by Lessee of such
insurance covenant, or to recover damages for the breach thereof or
for specific performance of any covenant of Lessee;
(2) the Indenture Trustee shall not, without the consent
of the Owner Trustee and the Owner Participant, which consent shall
not be withheld if no right or interest of the Owner Trustee or the
Owner Participant shall be diminished or impaired thereby, (i) enter
into, execute and deliver amendments, modifications, waivers or
consents in respect of any of the provisions of the Lease or any other
Operative Document, or (ii) approve any accountants, engineers,
appraisers or counsel as satisfactory to render services for or issue
opinions to the Owner Trustee pursuant to the Operative Documents;
(3) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
and the Owner Participant shall have the right, together with the
Indenture Trustee, (i) to receive from Lessee all notices,
certificates, reports, filings, opinions of counsel and other
documents and all information which any thereof is permitted or
required to give or furnish to the Owner Trustee or Lessor pursuant to
any Operative Document, (ii) to exercise inspection rights pursuant to
Section 12 of the Lease and (iii) to give notices of default under
Section 14 of the Lease;
(4) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
shall have the right to the exclusion of the Indenture Trustee to (i)
adjust upwards Rent, EBO Amount and Termination Values as provided in
Section 3(c) of the Lease, (ii) to extend the Term, (iii) to retain
all rights with respect to insurance maintained for its own account
which Section 11(b) of the Lease specifically confers on Lessor or the
Owner Participant, (iv) to exercise, to the extent necessary to enable
it to exercise its rights under Section 4.03 hereof, the rights of
Lessor under Section 22 of the Lease and (v) to select counsel with
respect to any opinion relating to tax matters to be delivered solely
to the Owner Participant;
(5) so long as no Indenture Trustee Event has occurred
and is continuing, the Owner Trustee shall have the right, to the
exclusion of the Indenture Trustee, to adjust EBO Amounts and
Termination Values as provided in Section 3(c) of the Lease or to
adjust downward any installment or amount of Basic Rent, EBO Amount or
Termination Value, as such installments and amounts are set forth in
Exhibits B, C and D, respectively, to the Lease, to the extent of the
portion of such installment or amount that would, under Section 3.01,
3.02 or 3.03 hereof, as the case may be, be distributable to the Owner
Trustee or the Owner Participant;
(6) whether or not a Default or Event of Default under
the Trust Indenture has occurred and is continuing, the Owner Trustee
may, without the consent of the Indenture Trustee, (i) solicit and
make bids with respect to the Aircraft under Section 9 of the Lease in
respect of a termination of the Lease by Lessee pursuant to Section 9
thereof, (ii) determine "fair market sales value" and "fair market
rental value" under Section 19 of the Lease for all purposes except
following an Event of Default pursuant to Section 15 of the Lease, and
(iii) make an election pursuant to and in accordance with the
provisions of Section 9(b) of the Lease; and
(7) so long as no Indenture Trustee Event shall have
occurred and be continuing, except as provided in clauses (2) and (3)
above, all other rights of the "Lessor" under the Lease shall be
exercised by the Owner Trustee to the exclusion of the Indenture
Trustee including, without limitation, the right to (i) exercise all
rights with respect to Lessee's use and operation, modification or
maintenance of the Aircraft and any Engine which the Lease
specifically confers on Lessor, and (ii) consent to and approve any
assignment pursuant to Section 13 of the Lease; provided that the
foregoing shall not (A) limit any rights separately granted to the
Indenture Trustee under the Operative Documents, (B) limit the right
of the Indenture Trustee to receive any funds to be delivered to the
"Lessor" under the Lease (except with respect to Excluded Payments)
and under the Purchase Agreement or confer upon the Owner Trustee the
right to adversely affect the validity or enforceability of the Lien
of this Indenture by depriving the Note Holders or other Indenture
Indemnitees of the benefit thereof or (C) confer on the Owner Trustee
the right to agree to any amendment or supplement to the Lease except
in accordance with Article IX.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, to the exclusion of the Owner
Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the remedies set
forth in such Section 15 (other than in connection with Excluded Payments)
at any time that a Lease Event of Default shall have occurred and be
continuing.
The Indenture Trustee will execute and the Owner Trustee will
file or cause to be filed such continuation statements with respect to
financing statements relating to the security interest created hereunder in
the Trust Indenture Estate as specified by Lessee pursuant to Section 7(d)
of the Participation Agreement or as may be specified from time to time in
written instructions of a Majority in Interest of Note Holders (which
instructions may, by their terms, be operative only at a future date and
which shall be accompanied by the form of such continuation statement so to
be filed). The Indenture Trustee will furnish to each Note Holder (and,
during the continuation of an Indenture Trustee Event, to the Owner Trustee
and Owner Participant), promptly upon receipt thereof, duplicates or copies
of all reports, notices, requests, demands, certificates and other
instruments furnished to the Indenture Trustee under the Lease or
hereunder, including, without limitation, a copy of any Termination Notice
and a copy of each report or notice received pursuant to Sections 9(a) and
11(c) of the Lease, respectively, to the extent that the same shall not
have been furnished to such Note Holder pursuant hereto or to the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease
Event of Default under and in accordance with Section 4.03 hereof, on
request of a Majority in Interest of Note Holders, the Indenture Trustee
shall declare the Lease to be in default pursuant to Section 15 thereof and
exercise those remedies specified by such Note Holders. The Indenture
Trustee agrees to provide to the Note Holders, the Owner Trustee, the Owner
Participant and Lessee concurrently with such declaration by the Indenture
Trustee, notice of such declaration by the Indenture Trustee.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Section 5.01 (other than the first
sentence thereof), 5.02 or Article IV hereof unless the Indenture Trustee
shall have been indemnified to its reasonable satisfaction against any
liability, cost or expense (including counsel fees) which may be incurred
in connection therewith pursuant to a written agreement with one or more
Note Holders. The Indenture Trustee shall not be under any obligation to
take any action under this Trust Indenture and nothing herein or therein
shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur the risk of any financial liability in the performance of
any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (the written indemnity of
any Note Holder who is a QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Indenture
Trustee shall be accepted as reasonable assurance of adequate indemnity).
The Indenture Trustee shall not be required to take any action under
Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Document be deemed to impose a duty on the Indenture Trustee to
take any action, if the Indenture Trustee shall have been advised by
counsel that such action is contrary to the terms hereof or of the Lease or
is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust Indenture
or Instructions.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Trust Indenture Estate, or
to otherwise take or refrain from taking any action under, or in connection
with, this Trust Indenture or any part of the Trust Indenture Estate,
except as expressly provided by the terms of this Trust Indenture or as
expressly provided in written instructions from Note Holders as provided in
this Trust Indenture; and no implied duties or obligations shall be read
into this Trust Indenture against the Indenture Trustee. The Indenture
Trustee agrees that it will in its individual capacity and at its own cost
and expense (but without any right of indemnity in respect of any such cost
or expense under Section 7.01 hereof), promptly take such action as may be
necessary duly to discharge all liens and encumbrances on any part of the
Trust Indenture Estate which result from claims against it in its
individual capacity not related to the ownership of the Aircraft or the
administration of the Trust Indenture Estate or any other transaction
pursuant to this Trust Indenture or any document included in the Trust
Indenture Estate.
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions.
The Owner Trustee and the Indenture Trustee agree that they will
not use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Trust Indenture
Estate except (i) as required by the terms of the Lease or (ii) in
accordance with the powers granted to, or the authority conferred upon, the
Owner Trustee and the Indenture Trustee pursuant to this Trust Indenture
and in accordance with the express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or
Replacement Engine, if no Lease Event of Default is continuing, the Owner
Trustee shall direct the Indenture Trustee to execute and deliver to the
Owner Trustee an appropriate instrument releasing such Airframe and/or
Engine as appropriate from the Lien of this Trust Indenture and the
Indenture Trustee shall execute and deliver such instrument as aforesaid,
but only upon compliance by Lessee with the applicable provisions of
Section 10 of the Lease and upon receipt by the Indenture Trustee of a
written request from the Owner Trustee, requesting such release and
specifically describing the Airframe and/or Engine(s) so to be released.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 10 of the Lease, the Owner Trustee
and the Indenture Trustee agree for the benefit of the Note Holders and
Lessee, subject to fulfillment of the conditions precedent and compliance
by Lessee with its obligations set forth in Section 10 of the Lease and the
requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver a Lease Supplement
and a Trust Agreement and Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a
Replacement Engine pursuant to Section 10 of the Lease, (a) all provisions
of this Trust Indenture relating to the Airframe or Engine or Engines being
replaced shall be applicable to such Replacement Airframe or Replacement
Engine or Engines with the same force and effect as if such Replacement
Airframe or Replacement Engine or Engines were the same airframe or engine
or engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine
or Engines being replaced, and (b) the provisions of this Trust Indenture
shall no longer be applicable to the Airframe or Engine or Engines being
replaced, which shall be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee as assignee of the
Owner Trustee's rights to hold monies for security pursuant to Section 21
of the Lease shall be held in accordance with the terms of such Section and
the Indenture Trustee agrees, for the benefit of Lessee, to perform the
duties of the Owner Trustee under such Section. Any amounts held by the
Indenture Trustee pursuant to the proviso to the first sentence of Section
3.01, pursuant to Section 3.02, or pursuant to any provision of any other
Operative Document providing for amounts to be held by the Indenture
Trustee which are not distributed pursuant to the other provisions of
Article III hereof shall be invested by the Indenture Trustee from time to
time in Cash Equivalents as directed by Lessee so long as the Indenture
Trustee may acquire the same using its best efforts. Unless otherwise
expressly provided in this Trust Indenture, any income realized as a result
of any such investment, net of the Indenture Trustee's reasonable fees and
expenses in making such investment, shall be held and applied by the
Indenture Trustee in the same manner as the principal amount of such
investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Indenture Trustee shall not be liable for any loss resulting
from any investment required to be made by it under this Trust Indenture
other than by reason of its willful misconduct or gross negligence, and any
such investment may be sold (without regard to its maturity) by the
Indenture Trustee without instructions whenever such sale is necessary to
make a distribution required by this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Trust Indenture and agrees to receive and disburse all monies
constituting part of the Trust Indenture Estate in accordance with the
terms hereof. The Owner Trustee, in its individual capacity, and the
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for their own willful
misconduct or gross negligence (other than for the handling of funds, for
which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Indenture Trustee, as provided in the
fourth sentence of Section 2.04(a) hereof and the last sentence of Section
5.04 hereof, and (iii) for liabilities that may result, in the case of the
Owner Trustee, from the inaccuracy of any representation or warranty of the
Owner Trustee expressly made in its individual capacity in the
Participation Agreement or in Section 6.03 hereof (or in any certificate
furnished to the Indenture Trustee or any Note Holder in connection with
the transactions contemplated by the Operative Documents) or, in the case
of the Indenture Trustee (in its individual capacity), from the inaccuracy
of any representation or warranty of the Indenture Trustee (in its
individual capacity) in the Participation Agreement or expressly made
hereunder. Neither the Owner Trustee nor the Indenture Trustee shall be
liable for any action or inaction of the other or of the Owner Participant.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections
5.03 and 5.04 hereof and, in the case of the Owner Trustee, the Owner
Trustee and the Indenture Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of
this Trust Indenture or any other document, or to see to the maintenance of
any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not
Lessee shall be in default with respect thereto, (iii) to see to the
payment or discharge of any lien or encumbrance of any kind against any
part of the Trust Estate or the Trust Indenture Estate, (iv) to confirm,
verify or inquire into the failure to receive any financial statements from
Lessee, or (v) to inspect the Aircraft at any time or ascertain or inquire
as to the performance or observance of any of Lessee's covenants under the
Lease with respect to the Aircraft. The Owner Participant shall not have
any duty or responsibility hereunder, including, without limitation, any of
the duties mentioned in clauses (i) through (v) above; provided, that
nothing contained in this sentence shall limit any obligations of the Owner
Participant under the Participation Agreement or relieve the Owner
Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
NEITHER THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER
THE TRUST AGREEMENT, NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO
HAVE MADE AND EACH HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE,
COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF
THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY
PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, except the Owner Trustee in its individual capacity warrants
that (i) the Owner Trustee has received on the Delivery Date whatever title
was conveyed to it by Lessee, and (ii) the Aircraft is free and clear of
Lessor Liens attributable to the Owner Trustee in its individual capacity.
Neither the Owner Trustee, in its individual capacity or as Owner Trustee
under the Trust Agreement, nor the Indenture Trustee, in its individual or
trust capacities, makes or shall be deemed to have made any representation
or warranty as to the validity, legality or enforceability of this Trust
Indenture, the Trust Agreement, the Participation Agreement, the Equipment
Notes, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, or the Consent and Agreement, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Indenture Trustee, in each case
expressly made in this Trust Indenture or in the Participation Agreement.
The Loan Participants, the Note Holders and the Owner Participant make no
representation or warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant
to any provision hereof and not then required to be distributed to the Note
Holders, Lessee or the Owner Trustee as provided in Article III hereof need
not be segregated in any manner except to the extent required by Law or as
specifically provided in the Lease and Section 5.09 hereof, and may be
deposited under such general conditions as may be prescribed by Law, and
the Indenture Trustee shall not be liable for any interest thereon (except
that the Indenture Trustee shall invest all monies held as directed by
Lessee so long as no Lease Event of Default has occurred and is continuing
(or in the absence of such direction, by the Majority In Interest of Note
Holders)) in Cash Equivalents; provided, however, that any payments
received, or applied hereunder, by the Indenture Trustee shall be accounted
for by the Indenture Trustee so that any portion thereof paid or applied
pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
Neither the Owner Trustee nor the Indenture Trustee shall incur
any liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee and the
Indenture Trustee may accept a copy of a resolution of the Board of
Directors (or, in the case of the Owner Participant which originally
executed the Participation Agreement, evidence of the approval by the
Executive Committee thereof) of any party to the Participation Agreement,
certified by the Secretary or an Assistant Secretary thereof as duly
adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted and that the same is in full force and
effect. As to the aggregate unpaid Principal Amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof
rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or matter
relating to Lessee the manner of ascertainment of which is not specifically
described herein, the Owner Trustee and the Indenture Trustee may for all
purposes hereof rely on a certificate, signed by a duly authorized officer
of Lessee, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee and the Indenture Trustee for any
action taken or omitted to be taken by them in good faith in reliance
thereon. The Indenture Trustee shall assume, and shall be fully protected
in assuming, that the Owner Trustee is authorized by the Trust Agreement to
enter into this Trust Indenture and to take all action to be taken by it
pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the
administration of the trusts hereunder, the Owner Trustee and the Indenture
Trustee each may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and may
at the expense of the Trust Indenture Estate, consult with counsel,
accountants and other skilled persons to be selected and retained by it,
and the Owner Trustee and the Indenture Trustee shall not be liable for
anything done, suffered or omitted in good faith by them in accordance with
the advice or opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. Capacity in Which Acting.
The Owner Trustee acts hereunder solely as trustee as herein and
in the Trust Agreement provided, and not in its individual capacity, except
as otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Trust Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Lessee, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the Trust
Indenture Estate toward such payments. The Indenture Trustee agrees that
it shall have no right against the Loan Participants, the Note Holders, the
Owner Trustee or the Owner Participant for any fee as compensation for its
services as trustee under this Trust Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Note Holders should any provision of this Trust Indenture
appear to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture
Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.08.
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.
The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, except as otherwise provided in Section 2.03
or 2.04(b) hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual
and trust capacities), and its successors, assigns, agents and servants,
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on
or measured by any compensation received by the Indenture Trustee for its
services under this Trust Indenture), claims, actions, suits, costs,
expenses or disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever, which may be imposed on, incurred by or
asserted against the Indenture Trustee (whether or not also indemnified
against by any other Person under any other document) in any way relating
to or arising out of this Trust Indenture or any other Operative Document
to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to or
arising out of the administration of the Trust Indenture Estate or the
action or inaction of the Indenture Trustee hereunder, to the extent not
reimbursed by Lessee. Notwithstanding any provision to the contrary
herein, the scope of the Owner Trustee's indemnity obligations under this
Section 7.01 shall not exceed the scope of the indemnity obligations of
Lessee under the Participation Agreement and the Lease; and the Indenture
Trustee agrees that, prior to seeking indemnification from the Trust
Indenture Estate, it will demand, and take such action as it may determine
to be reasonable to pursue, indemnification available to the Indenture
Trustee under the Lease or the Participation Agreement. Notwithstanding
the foregoing, the Indenture Trustee shall not be entitled to any
indemnification for any Expenses to the extent relating to or arising from
the willful misconduct or gross negligence (or negligence in the case of
handling funds) of the Indenture Trustee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or
warranty of the Indenture Trustee (in its individual capacity) referred to
in Section 6.03 hereof, or as provided in Section 6.01 hereof or in the
last sentence of Section 5.04 hereof, or as otherwise excluded by the terms
of Sections 6(b) and 6(c) of the Participation Agreement from Lessee's
indemnities under such Sections. In addition, if necessary, the Indenture
Trustee shall be entitled to indemnification from the Trust Indenture
Estate for any liability, obligation, loss, damage, penalty, claim, action,
suit, cost, expense or disbursement indemnified against pursuant to this
Section 7.01 to the extent not reimbursed by Lessee or others, but without
releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on the
Trust Indenture Estate. The Owner Trustee shall be subrogated to the
Indenture Trustee's rights, if any, to payment from Lessee for amounts paid
by the Owner Trustee under this Section 7.01.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.
In the case of any appointment of a successor to the Owner
Trustee pursuant to the Trust Agreement including upon any merger,
conversion, consolidation or sale of substantially all of the corporate
trust business of the Owner Trustee pursuant to the Trust Agreement, the
successor Owner Trustee shall give prompt written notice thereof to the
Indenture Trustee, Lessee and the Note Holders.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at
any time without cause by giving at least 30 days prior written notice to
Lessee, the Owner Trustee, the Owner Participant and each Note Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee. In addition, a Majority in Interest of Note
Holders may at any time (but only with the consent of Lessee, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if a Lease Event of Default shall have occurred and be
continuing) remove the Indenture Trustee without cause by an instrument in
writing delivered to the Owner Trustee, Lessee, the Owner Participant and
the Indenture Trustee, and the Indenture Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the
case of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Lease
Event of Default shall have occurred and be continuing, shall be subject to
Lessee's reasonable approval. If a successor Indenture Trustee shall not
have been appointed within 30 days after such notice of resignation or
removal, the Indenture Trustee, the Owner Trustee, the Owner Participant or
any Note Holder may apply to any court of competent jurisdiction to appoint
a successor Indenture Trustee to act until such time, if any, as a
successor shall have been appointed as above provided. The successor
Indenture Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Indenture Trustee appointed as
above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Indenture Trustee
and Lessee an instrument accepting such appointment and assuming the
obligations of the Indenture Trustee under the Participation Agreement
arising from and after the time of such appointment, and thereupon such
successor Indenture Trustee, without further act, shall become vested with
all the estates, properties, rights, powers and duties of the predecessor
Indenture Trustee hereunder in the trust hereunder applicable to it with
like effect as if originally named the Indenture Trustee herein; but
nevertheless upon the written request of such successor Indenture Trustee,
such predecessor Indenture Trustee shall execute and deliver an instrument
transferring to such successor Indenture Trustee, upon the trusts herein
expressed applicable to it, all the estates, properties, rights and powers
of such predecessor Indenture Trustee, and such predecessor Indenture
Trustee shall duly assign, transfer, deliver and pay over to such successor
Indenture Trustee all monies or other property then held by such
predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be
a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined capital
and surplus of at least $100,000,000, if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this
Section 8.02, be a successor Indenture Trustee and the Indenture Trustee
under this Trust Indenture without further act.
SECTION 8.03. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Trust Indenture Estate shall be situated or to make
any claim or bring any suit with respect to or in connection with the Trust
Indenture Estate, this Trust Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Indenture Trustee shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
the Owner Trustee and Lessee), or (iii) the Indenture Trustee shall have
been requested to do so by a Majority in Interest of Note Holders, then in
any such case, the Indenture Trustee and, upon the written request of the
Indenture Trustee, the Owner Trustee, shall execute and deliver an
indenture supplemental hereto and such other instruments as may from time
to time be necessary or advisable either (1) to constitute one or more bank
or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Trust Indenture Estate, or to
act as separate trustee or trustees of all or any part of the Trust
Indenture Estate, in each case with such rights, powers, duties and
obligations consistent with this Trust Indenture as may be provided in such
supplemental indenture or other instruments as the Indenture Trustee or a
Majority in Interest of Note Holders may deem necessary or advisable, or
(2) to clarify, add to or subtract from the rights, powers, duties and
obligations theretofore granted any such additional and separate trustee,
subject in each case to the remaining provisions of this Section 8.03. If
the Owner Trustee shall not have taken any action requested of it under
this Section 8.03(a) that is permitted or required by its terms within 15
days after the receipt of a written request from the Indenture Trustee so
to do, or if an Event of Default shall have occurred and be continuing, the
Indenture Trustee may act under the foregoing provisions of this Section
8.03(a) without the concurrence of the Owner Trustee; and the Owner Trustee
hereby irrevocably appoints (which appointment is coupled with an interest)
the Indenture Trustee, its agent and attorney-in-fact to act for it under
the foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute,
deliver and perform any such supplemental indenture, or any such
instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction
from the rights, powers, duties or obligations theretofore granted to any
such additional or separate trustee. In case any additional or separate
trustee appointed under this Section 8.03(a) shall die, become incapable of
acting, resign or be removed, all the assets, property, rights, powers,
trusts, duties and obligations of such additional or separate trustee shall
revert to the Indenture Trustee until a successor additional or separate
trustee is appointed as provided in this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Trust Indenture Estate or otherwise
payable under any Operative Document to the Indenture Trustee shall be
promptly paid over by it to the Indenture Trustee. All other rights,
powers, duties and obligations conferred or imposed upon any additional or
separate trustee shall be exercised or performed by the Indenture Trustee
and such additional or separate trustee jointly except to the extent that
applicable Law of any jurisdiction in which any particular act is to be
performed renders the Indenture Trustee incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations (including the holding of title to all or part of the Trust
Indenture Estate in any such jurisdiction) shall be exercised and performed
by such additional or separate trustee. No additional or separate trustee
shall take any discretionary action except on the instructions of the
Indenture Trustee or a Majority in Interest of Note Holders. No trustee
hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder, except that the Indenture Trustee shall be
liable for the consequences of its lack of reasonable care in selecting,
and Indenture Trustee's own actions in acting with, any additional or
separate trustee. Each additional or separate trustee appointed pursuant
to this Section 8.03 shall be subject to, and shall have the benefit of
Articles IV through VIII and Article X hereof insofar as they apply to the
Indenture Trustee. The powers of any additional or separate trustee
appointed pursuant to this Section 8.03 shall not in any case exceed those
of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Note Holders, or in the event
that the Indenture Trustee shall have been requested to do so in writing by
a Majority in Interest of Note Holders, the Indenture Trustee and, upon the
written request of the Indenture Trustee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate
trustee. The Indenture Trustee may act on behalf of the Owner Trustee
under this Section 8.03(c) when and to the extent it could so act under
Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.
(a) Except as expressly provided in Section 5.02 hereof, and
except with respect to Excluded Payments, the Owner Trustee agrees it shall
not enter into any amendment of or supplement to the Lease, the Purchase
Agreement (to the extent assigned in the Purchase Agreement Assignment),
the Purchase Agreement Assignment, the Consent and Agreement, or execute
and deliver any written waiver or modification of, or consent under, the
terms of the Lease, the Purchase Agreement (to the extent assigned in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by the Indenture Trustee
and a Majority in Interest of Note Holders. Anything to the contrary
contained herein notwithstanding, without the necessity of the consent of
any of the Note Holders or the Indenture Trustee, (i) any Excluded Payments
payable to the Owner Participant may be modified, amended, changed or
waived in such manner as shall be agreed to by the Owner Participant and
Lessee and (ii) the Owner Trustee and Lessee may enter into amendments of
or additions to the Lease to modify Section 5 (except to the extent that
such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease), Section 9, Section 19 or Section 20 of the Lease
so long as such amendments, modifications and changes do not and would not
affect the time of, or reduce the amount of, Rent payments (except to the
extent expressly permitted by Section 5.02) until after the payment in full
of all Secured Obligations or otherwise adversely affect the Note Holders.
(b) Without limiting the provisions of Section 9.01(a) hereof
and subject to Section 5.02(a)(2)(i) hereof, the Indenture Trustee agrees
with the Note Holders that it shall not enter into any amendment, waiver or
modification of, supplement or consent to this Trust Indenture, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement or the Participation Agreement, or any other agreement included
in the Trust Indenture Estate, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by a Majority in
Interest of Note Holders, or does not adversely effect the Note Holders,
but upon the written request of a Majority in Interest of Note Holders, the
Indenture Trustee shall from time to time enter into any such supplement or
amendment, or execute and deliver any such waiver, modification or consent,
as may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner Trustee and Lessee or, as may be
appropriate, the Manufacturer; provided, however, that, without the consent
of each holder of an affected Equipment Note then outstanding and each
Liquidity Provider, no such amendment of or supplement to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement or the Participation Agreement or
waiver or modification of the terms of, or consent under, any thereof,
shall (i) modify any of the provisions of this Section 9.01, or of Sections
2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof,
Section 14 (except to add an Event of Default) of the Lease, the
definitions of "Event of Default", "Default", "Lease Event of Default",
"Lease Default", "Majority in Interest of Note Holders", "Make-Whole
Amount" or "Note Holder", or the percentage of Note Holders required to
take or approve any action hereunder, (ii) reduce the amount, or change the
time of payment or method of calculation of any amount, of Principal
Amount, Make-Whole Amount, if any, or interest with respect to any
Equipment Note, or alter or modify the provisions of Article III hereof
with respect to the order of priorities in which distribution thereunder
shall be made as among the Note Holders, the Owner Trustee and Lessee,
(iii) reduce, modify or amend any indemnities in favor of the Note Holders,
(iv) consent to any change in the Trust Indenture or the Lease which would
permit redemption of Equipment Notes earlier than permitted under Section
2.10 or 2.11 hereof or the purchase of the Equipment Notes other than as
permitted by Section 2.14 hereof, (v) modify any of the provisions of
Section 3(c)(v) of the Lease, or modify, amend or supplement the Lease or
consent to any assignment of the Lease, in either case releasing Lessee
from its obligations in respect of the payment of Basic Rent, EBO Amount or
Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set
forth in Sections 3 and 19 of the Lease or (vi) permit the creation of any
Lien on the Trust Indenture Estate or any part thereof other than Permitted
Liens or deprive any Note Holder of the benefit of the Lien of this Trust
Indenture on the Trust Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV hereof. Without the consent
of Lessee, no amendment or supplement to this Trust Indenture or waiver or
modification of the terms hereof shall adversely affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Note Holder for any of the following purposes:
(i) (a) to cure any defect or inconsistency herein or in the Equipment
Notes, or to make any change not inconsistent with the provisions hereof
(provided that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of
another party as the Owner Trustee in accordance with the terms of the
Trust Agreement or to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other provisions
with respect to matters or questions arising hereunder so long as such
action shall not adversely affect the interests of the Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Trust Indenture or
better to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subject to the Lien of this Trust
Indenture, the Airframe or Engines or any Replacement Airframe or
Replacement Engine; (v) to add to the covenants of the Owner Trustee for
the benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or Lessee; (vi) to
add to the rights of the Note Holders; and (vii) to include on the
Equipment Notes any legend as may be required by law.
SECTION 9.02. Trustees Protected.
If, in the opinion of the institution acting as Owner Trustee
under the Trust Agreement or the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the terms
of Section 9.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Trust Indenture or
the Lease, such institution may in its discretion decline to execute such
document.
SECTION 9.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner Trustee or the
Indenture Trustee of any document entered into pursuant to Section 9.01
hereof, the Indenture Trustee shall mail, by first class mail, postage
prepaid, a copy thereof to Lessee and to each Note Holder at its address
last set forth in the Equipment Note Register, but the failure of the
Indenture Trustee to mail such copies shall not impair or affect the
validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Agreement and Indenture Supplement.
No written request or consent of the Indenture Trustee, the Note
Holders or the Owner Participant pursuant to Section 9.01 hereof shall be
required to enable the Owner Trustee to enter into any Lease Supplement
specifically required by the terms of the Lease or to execute and deliver a
Trust Agreement and Indenture Supplement specifically required by the terms
hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no
other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the Participation
Agreement, the Owner Trustee shall direct the Indenture Trustee to execute
and deliver to or as directed in writing by the Owner Trustee an
appropriate instrument releasing the Aircraft and the Engines from the Lien
of this Trust Indenture and releasing the Lease, the Purchase Agreement,
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto from the assignment and pledge thereof hereunder and the
Indenture Trustee shall execute and deliver such instrument as aforesaid
and give written notice thereof to Lessee; provided, however, that this
Trust Indenture and the trusts created hereby shall earlier terminate and
this Trust Indenture shall be of no further force or effect upon any sale
or other final disposition by the Indenture Trustee of all property
constituting part of the Trust Indenture Estate and the final distribution
by the Indenture Trustee of all monies or other property or proceeds
constituting part of the Trust Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Trust Indenture
and the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note
Holders.
No holder of a Equipment Note shall have legal title to any part
of the Trust Indenture Estate. No transfer, by operation of law or
otherwise, of any Equipment Note or other right, title and interest of any
Note Holder in and to the Trust Indenture Estate or hereunder shall operate
to terminate this Trust Indenture or entitle such holder or any successor
or transferee of such holder to an accounting or to the transfer to it of
any legal title to any part of the Trust Indenture Estate.
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Trust Indenture Estate, or
any part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Trust Indenture shall
bind the Note Holders and shall be effective to transfer or convey all
right, title and interest of the Indenture Trustee, the Owner Trustee, the
Owner Participant and such holders in and to such Trust Indenture Estate or
part thereof. No purchaser or other grantee shall be required to inquire
as to the authorization, necessity, expediency or regularity of such sale
or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Indenture Trustee.
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Indenture Trustee, Owner Participant, Lessee, Note Holders and the Other
Indenture Indemnitees.
Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner Trustee, the
Indenture Trustee, the Owner Participant, Lessee, the Indenture Indemnitees
and the Note Holders, any legal or equitable right, remedy or claim under
or in respect of this Trust Indenture.
SECTION 10.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Trust
Indenture to be made, given, furnished or filed shall be in writing,
personally delivered or mailed by certified mail, postage prepaid, or by
facsimile or confirmed telex, and (i) if to the Owner Trustee, addressed to
it at its office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000,
Attention: Corporate Trust Department (Telecopy No. (000) 000-0000), with a
copy to the Owner Participant addressed as provided in clause (iii) below,
(ii) if to the Indenture Trustee, addressed to it at its office at Two
Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Corporate Trust Department (Telecopy No. (000) 000-0000), (iii) if to any
Participant, Lessee or any Note Holder, addressed to such party at such
address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed
to the address of such party (if any) set forth on the signature pages to
the Participation Agreement or in the Equipment Note Register. Whenever
any notice in writing is required to be given by the Owner Trustee, any
Participant or the Indenture Trustee or any Note Holder or Lessee to any of
the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received, or if such notice is mailed by
certified mail, postage prepaid, three Business Days after being mailed,
addressed as provided above. Any party hereto may change the address to
which notices to such party will be sent by giving notice of such change to
the other parties to this Trust Indenture.
SECTION 10.06. Severability.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 10.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Equipment
Notes may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the Owner Trustee and the Indenture
Trustee, in compliance with Section 9.01 hereof. Any waiver of the terms
hereof or of any Equipment Note shall be effective only in the specific
instance and for the specific purpose given.
SECTION 10.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
This Trust Indenture and the Trust Indenture Estate shall not be affected
by any amendment or supplement to the Trust Agreement or by any other
action taken under or in respect of the Trust Agreement, except that each
reference in this Trust Indenture to the Trust Agreement shall mean the
Trust Agreement as amended and supplemented from time to time to the extent
permitted hereby, thereby and by the Participation Agreement. Each Note
Holder by its acceptance of a Equipment Note agrees to be bound by this
Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 10.09. Headings.
The headings of the various Articles and Sections herein and in
the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 10.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner Trustee, the Indenture Trustee, any Participant
or any bank or other Affiliate of such Participant may conduct any banking
or other financial transactions, and have banking or other commercial
relationships, with Lessee, fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of
loans or other extensions of credit to Lessee for any purpose whatsoever,
whether related to any of the transactions contemplated hereby or
otherwise.
SECTION 10.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST INDENTURE IS BEING
DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may be executed
by the parties hereto in separate counterparts (or upon separate signature
pages bound together into one or more counterparts), each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.12. Voting By Note Holders.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 10.13. Bankruptcy.
It is the intention of the parties that the Owner Trustee, as
lessor under the Lease (and the Indenture Trustee as assignee of the Owner
Trustee hereunder), shall be entitled to the benefits of Section 1110 with
respect to the right to take possession of the Aircraft, Airframe, Engines
and Parts as provided in the Lease in the event of a case under Chapter 11
of the Bankruptcy Code in which Lessee is a debtor, and in any instance
where more than one construction is possible of the terms and conditions
hereof or any other pertinent Operative Document, each such party agrees
that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
SECTION 10.14. No Action Contrary to Lessee's Rights Under the
Lease.
Notwithstanding any of the provisions of this Trust Indenture or
the Trust Agreement to the contrary, the Indenture Trustee will not take
any action contrary to Lessee's rights under the Lease, including the right
to possession and use of, and the quiet enjoyment of, the Aircraft, except
in accordance with provisions of the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided
herein, but solely as Owner Trustee
By:_______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee
By:_______________________________________
Name:
Title:
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE
TRUST AGREEMENT AND INDENTURE SUPPLEMENT
(US Airways, Inc. Trust No. N7__UW)
This TRUST AGREEMENT AND INDENTURE SUPPLEMENT (US Airways, Inc.
Trust No. N7__UW) dated _______ __, _____ (herein called this "Trust
Indenture Supplement") of FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Owner Trustee (herein called the
"Owner Trustee") under that certain Trust Agreement (US Airways, Inc. Trust
No. N7__UW) dated as of ____________ __, 199_ (the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT (US Airways,
Inc. Trust No. N7__UW) dated as of _________ __, 199_ (as amended and
supplemented to the date hereof, the "Trust Indenture") between the Owner
Trustee and STATE STREET BANK AND TRUST COMPANY, as Indenture Trustee (the
"Indenture Trustee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall
particularly describe the Aircraft, and shall specifically mortgage such
Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and Engines
described below, and a counterpart of the Trust Indenture is attached
hereto and made a part hereof and this Trust Indenture Supplement, together
with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that
the Owner Trustee hereby confirms that the Lien of the Trust Indenture on
the Trust Indenture Estate covers all of Owner Trustee's right, title and
interest in and to the following described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
------------ ------------ ---------------- --------------
Airbus A319
together with all of the Owner Trustee's right, title and interest in and
to all Parts of whatever nature, whether now owned or hereinafter acquired
and which are from time to time incorporated or installed in or attached to
said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Manufacturer Model Number Serial Number
------------ -------------- -------------
together with all of Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to any
of such engines.
Together with all of Owner Trustee's right, title and interest in
and to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or
hereafter acquired, including all substitutions, renewals and replacements
of and additions, improvements, accessions and accumulations to the
Airframe and Engines (other than additions, improvements, accessions and
accumulations which constitute appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment excluded from
the definition of Parts).
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors
and assigns, for the security and benefit of the Loan Participants and of
the Note Holders, in the trust created by the Trust Indenture, all of the
right, title and interest of the Owner Trustee in, to and under the Lease
Supplement [of even date herewith] covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, in trust for the equal
and proportionate benefit and security of the Note Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof. The
Trust Indenture is each hereby incorporated by reference herein and is
hereby ratified, approved and confirmed.
This Trust Indenture Supplement is being delivered in the State
of New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid
Lease Supplement has been delivered to the Owner Trustee and is included in
the property of the Owner Trustee covered by all the terms and conditions
of the Trust Agreement, subject to the pledge and mortgage thereof under
the Trust Indenture.
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto
duly authorized, on the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee
By:________________________________________
Name:
Title:
SCHEDULE I
Principal Amount Interest Rate Maturity
--------- ------- ------------- --------
Series A %
Series B %
Series C %
Equipment Notes Amortization
SERIES A
Aircraft: _____
SERIES B
Aircraft: _____
SERIES C
Aircraft: _____
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998.
