TRUST INDENTURE AND MORTGAGE 645 Dated as of September 30, 1997 Between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, except as expressly stated herein, but solely as Owner Trustee, Owner Trustee and WILMINGTON TRUST...
Dated as
of September 30, 1997
Between
FIRST
SECURITY BANK, NATIONAL ASSOCIATION,
not in
its individual capacity,
except as
expressly stated herein,
but
solely as Owner Trustee,
Owner
Trustee
and
WILMINGTON
TRUST COMPANY,
not in
its individual capacity,
except as
expressly stated herein,
but
solely as Mortgagee,
Mortgagee
EQUIPMENT
NOTES COVERING
ONE
BOEING 737-524 AIRCRAFT
BEARING
U.S. REGISTRATION XXXX N14645
LEASED BY
CONTINENTAL AIRLINES, INC.
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TABLE
OF CONTENTS |
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Page | ||
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GRANTING
CLAUSE |
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1 |
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ARTICLE
I - DEFINITIONS |
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ARTICLE
II - THE EQUIPMENT NOTES |
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SECTION
2.01. |
Form
of Equipment Notes |
7 |
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SECTION
2.02. |
Issuance
and Terms of Equipment Notes |
12 |
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SECTION
2.03. |
Payments
from Trust Indenture Estate Only |
14 |
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SECTION
2.04. |
Method
of Payment |
15 |
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SECTION
2.05. |
Application
of Payments |
17 |
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SECTION
2.06. |
Termination
of Interest in Trust Indenture Estate |
18 |
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SECTION
2.07. |
Registration
Transfer and Exchange of Equipment Notes |
18 |
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SECTION
2.08. |
Mutilated,
Destroyed, Lost or Stolen Equipment Notes |
19 |
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SECTION
2.09. |
Payment
of Expenses on Transfer; Cancellation |
20 |
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SECTION
2.10. |
Mandatory
Redemptions of Equipment Notes |
20 |
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SECTION
2.11. |
Voluntary
Redemptions of Equipment Notes |
20 |
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SECTION
2.12. |
Redemptions;
Notice of Redemption |
20 |
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SECTION
2.13. |
Option
to Purchase Equipment Notes |
21 |
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SECTION
2.14. |
Subordination |
22 |
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ARTICLE
III - RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM THE TRUST INDENTURE ESTATE |
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SECTION
3.01. |
Basic
Rent Distribution |
23 |
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SECTION
3.02. |
Event
of Loss; Replacement; Voluntary Termination; Optional
Redemption |
24 |
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SECTION
3.03. |
Payments
After Event of Default |
25 |
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SECTION
3.04. |
Certain
Payments |
27 |
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SECTION
3.05. |
Other
Payments |
28 |
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SECTION
3.06. |
Payments
to Owner Trustee |
28 |
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ARTICLE
IV - COVENANTS OF OWNER TRUSTEE; EVENTS OF DEFAULT;REMEDIES OF
MORTAGEE |
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SECTION
4.01. |
Covenants
of Owner Trustee |
29 |
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SECTION
4.02. |
Event
of Default |
30 |
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SECTION
4.03. |
Certain
Rights |
32 |
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SECTION
4.04. |
Remedies |
33 |
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SECTION
4.05. |
Return
of Aircraft, Etc. |
36 |
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SECTION
4.06. |
Remedies
Cumulative |
37 |
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SECTION
4.07. |
Discontinuance
of Proceedings |
38 |
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SECTION
4.08. |
Waiver
of Past Defaults |
38 |
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SECTION
4.09. |
Appointment
of Receiver |
38 |
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SECTION
4.10. |
Mortgagee
Authorized to Execute Bills of Sale, Etc. |
38 |
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SECTION
4.11. |
Rights
of Note Holders to Receive Payment |
39 |
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ARTICLE
V - DUTIES OF THE MORTGAGEE |
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SECTION
5.01. |
Notice
of Event of Default |
39 |
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SECTION
5.02. |
Action
Upon Instructions; Certain Rights and Limitations |
39 |
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SECTION
5.03. |
Indemnification |
42 |
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SECTION
5.04. |
No
Duties Except as Specified in Trust Indenture or
Instructions |
43 |
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SECTION
5.05. |
No
Action Except Under Lease, Trust Indenture or Instructions |
43 |
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SECTION
5.06. |
Replacement
Airframes and Replacement Engines |
43 |
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SECTION
5.07. |
Indenture
Supplements for Replacements |
44 |
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SECTION
5.08. |
Effect
of Replacement |
44 |
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SECTION
5.09. |
Investment
of Amounts Held by Mortgagee |
44 |
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ARTICLE
VI - THE OWNER TRUSTEE AND THE MORTGAGEE |
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SECTION
6.01. |
Acceptance
of Trusts and Duties |
45 |
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SECTION
6.02. |
Absence
of Duties |
45 |
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SECTION
6.03. |
No
Representations or Warranties as to Aircraft or Documents |
46 |
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SECTION
6.04. |
No
Segregation of Monies; No Interest |
46 |
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SECTION
6.05. |
Reliance;
Agreements; Advice of Counsel |
47 |
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SECTION
6.06. |
Capacity
in Which Acting |
47 |
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SECTION
6.07. |
Compensation |
47 |
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SECTION
6.08. |
Instructions
from Note Holders |
48 |
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ARTICLE
VII - INDEMNIFICATION OF MORTGAGEE BY OWNER
TRUSTEE |
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SECTION
7.01. |
Scope
of Indemnification |
48 |
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ARTICLE
VIII - SUCCESSOR AND SEPARATE TRUSTEES |
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SECTION
8.01. |
Notice
of Successor Owner Trustee |
49 |
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SECTION
8.02. |
Resignation
of Mortgagee; Appointment of Successor |
49 |
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SECTION
8.03. |
Appointment
of Additional and Separate Trustees |
50 |
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ARTICLE
IX - SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER
DOCUMENTS |
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SECTION
9.01. |
Instructions
of Majority; Limitations |
52 |
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SECTION
9.02. |
Trustees
Protected |
54 |
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SECTION
9.03. |
Documents
Mailed to Note Holders |
54 |
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SECTION
9.04. |
No
Request Necessary for Lease Supplement or Trust Indenture
Supplement |
54 |
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ARTICLE
X - MISCELLANEOUS |
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SECTION
10.01. |
Termination
of Trust Indenture |
54 |
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SECTION
10.02. |
No
Legal Title to Trust Indenture Estate in Note Holders |
55 |
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SECTION
10.03. |
Sale
of Aircraft by Mortgagee Is Binding |
55 |
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SECTION
10.04. |
Trust
Indenture for Benefit of Owner Trustee, Mortgagee, Owner Participant, Note
Holders and the other Indenture Indemnitees |
55 |
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SECTION
10.05. |
Notices |
55 |
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SECTION
10.06. |
Severability |
56 |
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SECTION
10.07. |
No
Oral Modification or Continuing Waivers |
56 |
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SECTION
10.08. |
Successors
and Assigns |
56 |
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SECTION
10.09. |
Headings |
56 |
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SECTION
10.10. |
Normal
Commercial Relations |
56 |
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SECTION
10.11. |
Governing
Law; Counterpart Form |
57 |
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SECTION
10.12. |
Voting
By Note Holders |
57 |
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SECTION
10.13. |
Bankruptcy |
57 |
EXHIBIT
A Form of
Trust Indenture and Mortgage Supplement
SCHEDULE
I Equipment
Notes Amortization and Interest Rates
TRUST
INDENTURE AND MORTGAGE 645, dated as of September 30, 1997 (“Trust
Indenture” or this “Agreement”), 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 WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except as expressly stated
herein, but solely as Mortgagee hereunder (together with its successors
hereunder, the “Mortgagee”).
W I T
N E S S E T H
WHEREAS,
all capitalized terms used herein shall have the respective meanings set forth
or referred to in Article I hereof;
WHEREAS,
the Owner Participant and the Owner Trustee in its individual capacity 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 Agreement;
WHEREAS,
the parties hereto desire by this Trust Indenture, among other things, (i) to
provide for the issuance by the Owner Trustee of the Equipment Notes and (ii) to
provide for the assignment, mortgage and pledge by the Owner Trustee to the
Mortgagee, 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 the Participation Agreement
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 and the Lessee’s obligations to the Note Holders and
the Indenture Indemnitees;
WHEREAS,
all things have been done to make the Equipment Notes, when executed by the
Owner Trustee and authenticated and delivered by the Mortgagee 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 MORTGAGE WITNESSETH, that, to secure the
prompt payment of the Original 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 according to their tenor and effect and to secure the
performance and observance by the Owner Trustee of all the agreements, covenants
and provisions contained herein and in the Participation Agreement and the
Equipment Notes, 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 the Lease to
the Loan Participants, the Note Holders or any Indenture Indemnitee by the Owner
Trustee or the Lessee 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 Mortgagee, its successors in trust and assigns, for the
security and benefit of the Loan Participants, the Note Holders and each of the
Indenture Indemnitees, 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, whether now or hereafter
acquired, other than Excluded Payments (which, collectively, excluding Excluded
Payments but including all property hereafter specifically subject to the Lien
of this Trust Indenture by the terms hereof or any supplement hereto, are
included within, and are referred to as, the “Trust Indenture Estate”), to
wit:
(1) The
Airframe which is one Boeing 737-524 aircraft with the FAA Registration number
of N14645 and the manufacturer’s serial number of 28906 and Engines, each of
which Engines is a CFM International, Inc. model 56-3B-1 engine with the
manufacturer’s serial numbers of 858653 and 858654, is of 750 or more rated
takeoff horsepower or the equivalent of such horsepower (such Airframe and
Engines more particularly described in the Trust Indenture Supplement executed
and delivered as provided herein) as the same is now and will hereafter be
constituted, whether now owned by the Owner Trustee or hereafter acquired,
leased or intended to be leased under the Lease, and in the case of such
Engines, whether or not any such Engine shall be installed in or attached to the
Airframe or any other airframe, together with (a) all Parts of whatever nature,
which are from time to time included within the definitions of “Airframe” or
“Engines”, 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) and (b) all Aircraft Documents;
(2) All
right, title, interest, claims and demands of the Owner Trustee, as Lessor, in,
to and under the Lease, together with all rights, powers, privileges, options
and other benefits of the Owner Trustee as lessor under the Lease, including the
immediate and continuing right to receive and collect all Rent, income,
revenues, issues, profits, insurance proceeds, condemnation awards and other
payments, tenders and security now or hereafter payable to or receivable by the
Lessor under the Lease pursuant thereto, and, subject to Section 5.02 hereof,
the right to make all waivers and agreements, to give and receive copies of all
notices and other instruments or communications, to accept surrender or
redelivery of the Aircraft or any part thereof, as well as all the rights,
powers and remedies on the part of the Owner Trustee as Lessor under the Lease,
to take such action upon the occurrence of a Lease Event of Default thereunder,
including the commencement, conduct and consummation of legal, administrative or
other proceedings, as shall be permitted by the Lease or by Law, and to do any
and all other things whatsoever which the Owner Trustee or any lessor is or may
be entitled to do under or in respect of the Lease and any right to restitution
from the Lessee or any other Person in respect of any determination of
invalidity of the Lease;
(3) Each
Permitted Sublease assignment and each assigned Permitted Sublease (to the
extent assigned under such Permitted Sublease assignment), and including,
without limitation, all rents or other payments of any kind made under such
assigned Permitted Sublease (to the extent assigned under such Permitted
Sublease assignment);
(4) All
right, title, interest, claims and demands of the Owner Trustee in, to and
under:
(a) the
Purchase Agreement and the GTA;
(b) the
Purchase Agreement Assignment, with the Consent and Agreement and the Engine
Consent and Agreement attached thereto;
(c) the Bills
of Sale; and
(d) any and
all other contracts, agreements and instruments relating to the Airframe and
Engines or any rights or interests therein to which the Owner Trustee is now or
may hereafter be a party;
together
with all rights, powers, privileges, licenses, easements, options and other
benefits of the Owner Trustee under each contract, agreement and instrument
referred to in this clause (4), including the right to receive and collect all
payments to the Owner Trustee thereunder now or hereafter payable to or
receivable by the Owner Trustee pursuant thereto and, subject to Section 5.02
hereof, the right to make all waivers and agreements, to give and receive
notices and other instruments or communications, or to take any other action
under or in respect of any thereof or to take such action upon the occurrence of
a default thereunder, including the commencement, conduct and consummation of
legal, administrative or other proceedings, as shall be permitted thereby or by
Law, and to do any and all other things which the Owner Trustee is or may be
entitled to do thereunder and any right to restitution from the Lessee, the
Owner Participant or any other Person in respect of any determination of
invalidity of any thereof;
(5) All
rents, issues, profits, revenues and other income of the property subjected or
required to be subjected to the Lien of this Trust Indenture, including all
payments or proceeds payable to the Owner Trustee after termination of the Lease
with respect to the Aircraft as the result of the sale, lease or other
disposition thereof, and all estate, right, title and interest of every nature
whatsoever of the Owner Trustee in and to the same;
(6) Without
limiting the generality of the foregoing, all insurance and requisition proceeds
with respect to the Aircraft or any part thereof, including the insurance
required under Section 11 of the Lease;
(7) Without
limiting the generality of the foregoing, all rights of the Owner Trustee to
amounts paid or payable by Lessee to the Owner Trustee under the Participation
Agreement and all rights of the Owner Trustee to enforce payments of any such
amounts thereunder;
(8) Without
limiting the generality of the foregoing, all monies and securities from time to
time deposited or required to be deposited with the Mortgagee pursuant to any
terms of this Trust Indenture or the Lease or required hereby or by the Lease to
be held by the Mortgagee hereunder as security for the obligations of the Lessee
under the Lease or of the Owner Trustee hereunder; and
(9) All
proceeds of the foregoing; excluding, however, in all events from each of
foregoing clauses (1) through (9) inclusive all Excluded Payments and the right
to specifically enforce the same or to xxx for damages for the breach thereof as
provided in Section 5.02 hereof.
Concurrently
with the delivery of this Trust Indenture, the Owner Trustee will deliver to the
Mortgagee 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, the Purchase Agreement and the
GTA (to the extent assigned by the Purchase Agreement Assignment), the Purchase
Agreement Assignment, with the Consent and Agreement and the Engine Consent and
Agreement attached thereto.
TO HAVE
AND TO HOLD all and singular the aforesaid property unto the Mortgagee, and its
successors and assigns, in trust for the equal and proportionate benefit and
security of the Loan Participants, the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.14 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 (9)
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 the Indenture Agreements, 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
Mortgagee, the Loan Participants, the Note Holders and the Indenture Indemnitees
shall have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Mortgagee, the Loan
Participants, the Note Holders or the Indenture Indemnitees be required or
obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Agreements, 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 Mortgagee 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 Mortgagee 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 under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
of any Event of Default under this Trust Indenture, the Mortgagee 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 Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Mortgagee in and to such Rents and other sums and the security intended to be
afforded hereby; provided,
however, that no
action of the Mortgagee 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 Agreements. 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 Mortgagee at
such address or addresses as the Mortgagee shall specify, for application as
provided in this Trust Indenture. The Owner Trustee agrees that promptly upon
receipt thereof, it will transfer to the Mortgagee any and all monies from time
to time received by it constituting part of the Trust Indenture Estate, for
distribution by the Mortgagee 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 Mortgagee under this Trust
Indenture.
The Owner
Trustee agrees that at any time and from time to time, upon the written request
of the Mortgagee, 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 Mortgagee 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 Mortgagee the full
benefits of the assignment hereunder and of the rights and powers herein
granted.
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 Mortgagee, 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 or any Permitted Sublessee 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 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 agree that it will not without the written consent of the
Mortgagee:
(a) receive
or collect or agree to the receipt or collection of any payment (other than
Excluded Payments) of Rent, including Basic Rent, Stipulated Loss Value,
Termination Value or any other payment to be made pursuant to Section 9 or 10 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 Mortgagee hereunder) any
payment of Rent, including Basic Rent, Stipulated Loss Value, Termination Value
or any other payment to be made pursuant to Section 9 or 10 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 Mortgagee 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 other conveyance, assignment or act on the part of the Owner Trustee
or the Mortgagee, 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
other Owner Trustee Agreement.
Notwithstanding
the Granting Clause or any of the preceding paragraphs, there is hereby excluded
from the foregoing sale, transfer, assignment, grant, pledge and security
interest all Excluded Payments. Further, nothing in the Granting Clause or the
preceding paragraphs shall impair any of the rights of the Owner Trustee or the
Owner Participant under Section 2.13, 4.03, 4.04, 4.08, 5.02 or 5.03
hereof.
IT IS
HEREBY COVENANTED AND AGREED by and between the parties hereto as
follows:
ARTICLE
I
DEFINITIONS
Capitalized
terms used but not defined herein shall have the respective meanings set forth
or incorporated by reference, and shall be construed in the manner described, in
Annex A to the Lease.
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 645
DATED AS
OF SEPTEMBER 30, 1997.
SERIES
[_____] LIMITED RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE
BOEING MODEL 737-524 AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER
N14645.
|
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 645, dated as of September 30, 1997, between the Owner
Participant named therein and First Security Bank, National Association (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 “Original
Amount”), together with interest on the amount of the Original 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 Debt Rate. The Original Amount of this Equipment
Note shall be payable in installments on the dates set forth in Schedule I
hereto equal to the corresponding percentage of the Original Amount of this
Equipment Note set forth in Schedule I hereto. Accrued but unpaid interest shall
be due and payable in semiannual installments commencing on October 1,
1997, and thereafter on April 1 and October 1 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
Original 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 and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such
extension.
For
purposes hereof, the term “Trust Indenture” means the Trust Indenture and
Mortgage 645, dated as of September 30, 1997, between the Owner Trustee and
Wilmington Trust Company (the “Mortgagee”), 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 Payment Due Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on any overdue Original 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).
The
interest rate borne by this Equipment Note shall be subject to adjustments to
the extent, and under the circumstances, specified by the Registration Rights
Agreement.
All
payments of Original Amount, interest, Make-Whole Amount, if any, and other
amounts, if any, to be made by the Owner Trustee hereunder and under the Trust
Indenture or the Participation Agreement 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 Mortgagee 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 and the Mortgagee 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 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
Mortgagee, 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 as provided under the Trust
Indenture.
There
shall be maintained an Equipment Note Register for the purpose of registering
transfers and exchanges of Equipment Notes at the Corporate Trust Office of the
Mortgagee or at the office of any successor in the manner provided in Section
2.07 of the Trust Indenture.
The
Original Amount and interest and other amounts due hereunder shall be payable in
Dollars in immediately available funds at the Corporate Trust Office of the
Mortgagee, 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 Mortgagee for cancellation.
The
holder hereof, by its acceptance of this Equipment Note, agrees that, except as
provided in the Trust Indenture, each payment of the Original Amount, Make-Whole
Amount, 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 Original 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 Original Amount of this Equipment Note then due, third, to the
payment of Make-Whole Amount, if any, and any other amount due hereunder or
under the Trust Indenture, and fourth, the
balance, if any, remaining thereafter, to the payment of installments of the
Original Amount of this Equipment Note remaining unpaid in the inverse order of
their 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 Mortgagee 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 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 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 Original Amount
of Equipment Notes of different authorized denominations, as requested by the
holder surrendering the same.
Prior to
due presentment for registration of transfer of this Equipment Note, the Owner
Trustee and the Mortgagee shall treat the person in whose name this Equipment
Note is registered as the owner hereof for all purposes, whether or not this
Equipment Note be overdue, and neither the Owner Trustee nor the Mortgagee 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 exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.13 of the Trust Indenture but not otherwise. In
addition, this Equipment Note may be accelerated as provided in Section 4.04 of
the Trust Indenture.
[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 Mortgagee 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 Mortgagee his
attorney-in-fact for such purpose.]3
Unless
the certificate of authentication hereon has been executed by or on behalf of
the Mortgagee 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:
MORTGAGEE’S
CERTIFICATE OF AUTHENTICATION
This is
one of the Equipment Notes referred to in the within-mentioned Trust
Indenture.
WILMINGTON
TRUST COMPANY, as Mortgagee
By____________________________
Name:
Title:
SCHEDULE
I
EQUIPMENT
NOTE AMORTIZATION
|
Payment
Date |
Percentage
of
Original
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 of the consummation of the Transactions, each
Equipment Note shall be issued to the Subordination Agent on behalf of the Pass
Through Trustees under the Pass Through Trust Agreements. 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 Original
Amount thereof from time to time outstanding, payable in arrears on October 1,
1997, and on each April 1 and October 1 thereafter until maturity. The Original
Amount of each Equipment Note shall be payable on the dates and in the
installments equal to the corresponding percentage of the Original Amount as set
forth in Schedule I hereto which shall be attached as Schedule I 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 Original 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 Payment Due Rate (calculated on the basis of a year of 360 days comprised
of twelve 30-day months) on any part of the Original 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 and if such
payment is made on such next succeeding Business Day, no interest shall accrue
on the amount of such payment during such extension.
The Owner
Trustee agrees to pay to the Mortgagee for distribution in accordance with
Section 3.04 hereof: (i) to the extent not payable (whether or not in fact paid)
under Section 6(a) of the Note Purchase Agreement (as originally in effect or
amended with the consent of the Owner Participant), an amount equal to the fees
payable to the relevant 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” (each as defined in
the Note Purchase Agreement); (ii) (x) the amount equal to interest on any
Downgrade Advance (other than any Applied Downgrade Advance) payable under
Section 3.07(e) of each Liquidity Facility minus Investment Earnings 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(a)(i)
of each Liquidity Facility minus Investment Earnings from such Non-Extension
Advance multiplied by (y) the fraction specified in the foregoing clause (i);
and (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(a)(i) of each Liquidity
Facility over (2) the
sum of Investment Earnings from any Final Advance plus any
amount of interest at the Payment Due Rate actually payable (whether or not in
fact paid) by the Owner Trustee on 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” (each as
defined in the Note Purchase Agreement) (other than interest becoming due and
payable solely as a result of acceleration of any such “Equipment Notes”). 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 referred to therein.
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 Mortgagee for
authentication upon original issue and such Equipment Notes shall thereupon be
authenticated and delivered by the Mortgagee 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 Original 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 Mortgagee by the manual signature of one of
its authorized officers and such certificate upon any Equipment Notes be
conclusive evidence, and the only evidence, that such Equipment Note has been
duly authenticated and delivered hereunder.
The
aggregate Original Amount of the Equipment Notes issued hereunder shall not
exceed [80]% of Lessor’s Cost.
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 an 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 Agreement, (i) the obligation to
make all payments of the Original 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 Agreements, 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 Mortgagee 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 Mortgagee 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, and no recourse shall be had against any of them for, any amounts payable
hereunder, under the Participation Agreement or any of the other Operative
Agreements or under the Equipment Notes except as expressly provided herein, in
the Lease 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 Indenture 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 Mortgagee, directly or
indirectly (other than the recourse liability of the Owner Trustee (in its
individual capacity) or the Owner Participant under the Participation Agreement,
the Lease or this Trust Indenture or by separate agreement), to make payment on
account of any amount payable as principal, Make-Whole Amount, if any, interest
or other amounts on the Equipment Notes and (iii) any Note Holder or the
Mortgagee actually receives any 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
Mortgagee, 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 Excess Amount.
For
purposes of this Section 2.03(b), “Excess Amount” means the amount by which such
payment exceeds the amount that would have been received by a Note Holder or the
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 Mortgagee 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, the Lease
or this Trust Indenture (and any exhibits or annexes hereto or thereto) or from
retaining any amount paid by Owner Participant under Section 2.13 or 4.03
hereof.
SECTION
2.04. Method of Payment
(a) The
Original 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 12:30 p.m., New York City
time, on the due date of payment to the Mortgagee 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 Mortgagee 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 Mortgagee shall fail to make any such payment as provided in the
immediately foregoing sentence after its receipt of funds at the place and prior
to the time specified above, the Mortgagee, in its individual capacity and not
as trustee, agrees to compensate such holders for loss of use of funds at Debt
Rate until such payment is made and the Mortgagee 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 Mortgagee for cancellation
promptly after such payment. Notwithstanding any other provision of this Trust
Indenture to the contrary, the Mortgagee 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 Mortgagee to do so in view of the time of day when the
funds to be so transferred were received by it if such funds were received after
12:30 p.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 Mortgagee 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 none of the Owner Trustee or the Mortgagee 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 Mortgagee consistent with this Section 2.04.
(b) The
Mortgagee, as agent for the Owner Trustee, shall exclude and withhold at the
appropriate rate from each payment of Original 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 Mortgagee 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 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 the 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 Mortgagee a properly
completed, accurate 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 Mortgagee of the withdrawal or inaccuracy of
such form prior to the date of such payment (and the Mortgagee has no reason to
believe that any information set forth in such form is inaccurate), the
Mortgagee shall withhold only the amount, if any, required by Law (after taking
into account any applicable exemptions properly 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. If a Note Holder (x)
which is a Non-U.S. Person has furnished to the Mortgagee a properly completed,
accurate 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 properly avoid
withholding of United States federal income tax), for each calendar year in
which a payment is made (but prior to the making of any payment for such year),
and has not notified the Mortgagee of the withdrawal or inaccuracy of such
certificate or form prior to the date of such payment (and the Mortgagee has no
reason to believe that any information set forth in such form is inaccurate) or
(y) which is a U.S. Person has furnished to the Mortgagee a properly completed,
accurate 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 Mortgagee 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 is 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 Mortgagee 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 Law.
Neither
the Owner Trustee nor the Owner Participant shall have any liability for the
failure of the Mortgagee to withhold taxes in the manner provided for herein or
as required by law, or for any false, inaccurate or untrue evidence provided by
any Note Holder hereunder.
SECTION
2.05. Application of Payments
In the
case of each Equipment Note, each payment of Original Amount, Make-Whole Amount,
if any, and interest due thereon shall be applied:
First: to
the payment of accrued interest on such Equipment Note (as well as any interest
on any overdue Original 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 Original Amount of such Equipment Note (or a portion
thereof) then due thereunder;
Third: to
the payment of Make-Whole Amount, if any, and any other amount due hereunder or
under such Equipment Note; and
Fourth:
the balance, if any, remaining thereafter, to the payment of the Original Amount
of such Equipment Note remaining unpaid (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 Original Amount of such Equipment Note in the inverse order of
their normal maturity.
SECTION
2.06. Termination of Interest in Trust Indenture Estate
No Note
Holder nor any other Indenture Indemnitee shall, as such, have any further
interest in, or other right with respect to, the Trust Indenture Estate when and
if the Original Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Equipment Notes held by such Note Holder and all other
sums then due and payable to such Note Holder, such Indenture Indemnitee or the
Mortgagee hereunder (including, without limitation, under the third paragraph of
Section 2.02 hereof) and under the other Operative Agreements by the Owner
Trustee and the Lessee (collectively, the “Secured Obligations”) shall have been
paid in full.
SECTION
2.07. Registration Transfer and Exchange of Equipment
Notes
The
Mortgagee shall keep a register (the “Equipment Note Register”) in which the
Mortgagee 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
Mortgagee. The Mortgagee 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 Mortgagee 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 Mortgagee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original 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 Original Amount, upon
surrender of the Equipment Notes to be exchanged to the Mortgagee at the
Corporate Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Mortgagee 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 Mortgagee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Mortgagee duly executed by the Note Holder or such holder’s attorney duly
authorized in writing, and the Mortgagee 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 Mortgagee shall make a notation on
each new Equipment Note of the amount of all payments of Original 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 Original
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 Mortgagee and such change is reflected on
the Equipment Note Register. The Mortgagee will promptly notify the Owner
Trustee and the Lessee of each registration of a transfer of an Equipment Note.
Any such transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to the provisions of the Participation Agreement applicable to Note
Holders, and shall be deemed to have covenanted to the parties to the
Participation Agreement as to the matters covenanted by the original Loan
Participant 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, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within 10 Business Days of the date an
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 Mortgagee shall authenticate and deliver in replacement thereof
a new Equipment Note, payable in the same Original 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 Mortgagee 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 and the
Mortgagee such security or indemnity as may be required by them to save the
Owner Trustee and the Mortgagee harmless and evidence satisfactory to the Owner
Trustee and the Mortgagee 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)(1)(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, Owner Trustee and Mortgagee 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, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes within 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 Mortgagee, 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
Mortgagee 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 10.1.2 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 Original Amount thereof, together with all accrued interest thereon to
the date of redemption and all other Secured Obligations owed or then due and
payable to the Note Holders but without Make-Whole Amount.
(b) If the
Lease is terminated with respect to the Aircraft by Lessee pursuant to Section 9
thereof, 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 Original
Amount thereof, together with accrued interest thereon to the date of redemption
and all other amounts then due and payable hereunder and under the Participation
Agreement and all other Operative Agreements to the Note Holders plus, if such
redemption is made prior to the Premium Termination Date, 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
in connection with a transaction described in, and subject to the terms and
conditions of, Section 11 of the Participation Agreement upon at least 30 days’
revocable prior written notice to the Mortgagee and the Note Holders, and the
Equipment Notes shall, as provided in Section 11 of the Participation Agreement,
be redeemed in whole at a redemption price equal to 100% of the unpaid Original
Amount thereof, together with accrued interest thereon to the date of redemption
and all other Secured Obligations owed or then due and payable to the Note
Holders plus (except as provided in Section 11 of the Participation Agreement),
if such redemption is made prior to the Premium Termination Date, 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 Mortgagee.
(b) Notice of
redemption or purchase with respect to the Equipment Notes shall be given by the
Mortgagee by first-class mail, postage prepaid, mailed not less than 25 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 Mortgagee receives written notice of such revocation
from the 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 Mortgagee by 12:00 noon 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 Mortgagee 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. Option to Purchase Equipment Notes
The Owner
Trustee and the Owner Participant may, upon the events and subject to the terms
and conditions and for the price set forth in this Section 2.13, 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
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 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 Original Amount thereof, plus
accrued and unpaid interest thereon to, but not including, the date of purchase
and all other Secured Obligations owed, or then due and payable hereunder, to
the holder thereof (including under the third paragraph of Section 2.02 hereof).
Such option to purchase the Equipment Notes may be exercised (x) upon a
Mortgagee Event or (y) in the event there shall have occurred and be continuing
a Lease Event of Default or (z) upon either the Equipment Notes becoming due and
payable pursuant to Section 4.04(b) hereof or the Mortgagee taking action or
notifying the Owner Trustee that it intends to take action to foreclose the Lien
of this Trust Indenture or otherwise commence the exercise of any significant
remedy under this Trust Indenture or the Lease, provided that if
such option is exercised pursuant to clause (y) at a time when there shall have
occurred and be continuing for less than 120 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 irrevocable written notice of its election of such
option to the Mortgagee, which notice shall specify a date for such purchase
within 15 days of the date of such notice. The Mortgagee shall not exercise any
of the remedies hereunder and, without the consent of the Owner Trustee or the
Owner Participant, under the Lease, during the period from the date of the
giving of such notice until the date on which such purchase is required to occur
pursuant to the terms of the preceding sentence.
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
2.14. 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 2.14 or Article III hereof, it will hold any amount
so received in trust for the Senior Holder (as defined in Section 2.14(c)
hereof) and will forthwith turn over such payment to the Mortgagee in the form
received to be applied as provided in Article III hereof.
(c) As used
in this Section 2.14, 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, (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 and (iii) after the Secured Obligations in respect of Series B Equipment
Notes have been paid in full, the Note Holders of Series C until the Secured
Obligations in respect of Series C 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 3.03 hereof, each installment of Basic Rent, any
payment of interest on overdue installments of Basic Rent and any payment
received by the Mortgagee 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 Original Amount and interest (as well as
any interest on any overdue Original Amount and, to the extent permitted by Law,
on any overdue interest) 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 Original Amount and interest (as well as any interest on
any overdue Original Amount and, to the extent permitted by Law, on interest)
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 Original Amount and interest (as well as any interest on
any overdue Original Amount and, to the extent permitted by Law, on any overdue
interest) 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; 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 Mortgagee 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”, (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”.
SECTION
3.02. Event of Loss; Replacement; Voluntary Termination; Optional
Redemption
Except as
otherwise provided in Section 3.03 hereof, any payments received by the
Mortgagee (i) with respect to the Airframe or the Airframe and one or more
Engines as the result of an Event of Loss, (ii) pursuant to a voluntary
termination of the Lease pursuant to Section 9 thereof, or (iii) pursuant to an
optional redemption of the Equipment Notes pursuant to Section 11 of the
Participation Agreement shall be applied to redemption of the Equipment Notes
and to all other Secured Obligations by applying such funds in the following
order of priority:
First,(a)to
reimburse the Mortgagee 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 Agreements and
then (b) to pay any other amounts then due to the Mortgagee, the Note Holders
and the other Indenture Indemnitees 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 in accordance with Section 5.06 hereof, any insurance,
condemnation or similar proceeds which result from such Event of Loss and are
paid over to the Mortgagee shall be held by the Mortgagee 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 Operative Agreements and, unless otherwise applied pursuant to the
Lease, such proceeds (and such investment earnings) shall be released to the
Lessee at the 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 Mortgagee (including any amounts realized by the
Mortgagee from the exercise of any remedies pursuant to Section 15 of the Lease
or Article IV hereof) after an Event of Default shall have occurred and be
continuing and after the declaration specified in Section 4.04(b) hereof, as
well as all payments or amounts then held by the Mortgagee as part of the Trust
Indenture Estate, shall be promptly distributed by the Mortgagee in the
following order of priority:
First,so much
of such payments or amounts as shall be required to (i) reimburse the Mortgagee
or WTC for any tax (except to the extent resulting from a failure of the
Mortgagee to withhold taxes pursuant to Section 2.04(b) hereof), expense or
other loss (including, without limitation, all amounts to be expended at the
expense of, or charged upon the 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 Mortgagee or WTC (to the extent not previously reimbursed), the
expenses of any sale, or other proceeding, reasonable attorneys’ fees and
expenses, court costs, and any other expenditures incurred or expenditures or
advances made by the Mortgagee, WTC or the Note Holders in the protection,
exercise or enforcement of any right, power or remedy or any damages sustained
by the Mortgagee, WTC or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Mortgagee as between itself, WTC and
the Note Holders in reimbursement of such expenses and any other expenses for
which the Mortgagee, WTC or the Note Holders are entitled to reimbursement under
any Operative Agreement and (ii) all amounts payable to the other Indenture
Indemnitees hereunder and under the Participation Agreement and the Lease; and
in the case the aggregate amount to be so distributed is insufficient to pay as
aforesaid in clauses (i) and (ii), 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 Original Amount of all Series A Equipment Notes, and the
accrued but unpaid interest and other amounts due thereon (other than Make-Whole
Amount which shall not be due and payable) and all other Secured Obligations in
respect of the Series A Equipment Notes (other than Make-Whole Amount) 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 Original Amount of all Series A
Equipment Notes held by each holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (other than Make-Whole Amount, if any)
to the date of distribution, bears to the aggregate unpaid Original Amount of
all Series A Equipment Notes held by all such holders plus the accrued but
unpaid interest and other amounts due thereon (other than Make-Whole Amount) 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 Original
Amount of all Series B Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon (other than Make-Whole Amount which shall not be due
and payable) and all other Secured Obligations in respect of the Series B
Equipment Notes (other than Make-Whole Amount) 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 Original Amount of all Series B Equipment Notes held by each
holder plus the accrued but unpaid interest and other amounts due hereunder or
thereunder (other than the Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original Amount of all Series B
Equipment Notes held by all such holders plus the accrued but unpaid interest
and other amounts due thereon (other than the Make-Whole Amount) 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 Original
Amount of all Series C Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon (other than Make-Whole Amount which shall not be due
and payable) and all other Secured Obligations in respect of the Series C
Equipment Notes (other than Make-Whole Amount) 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 Original Amount of all Series C Equipment Notes held by each
holder plus the accrued but unpaid interest and other amounts due hereunder or
thereunder (other than the Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original Amount of all Series C
Equipment Notes held by all such holders plus the accrued but unpaid interest
and other amounts due thereon (other than the Make-Whole Amount) 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.
No
Make-Whole Amount shall be due and payable on the Equipment Notes as a
consequence of the acceleration of the Equipment Notes as a result of an Event
of Default.
SECTION
3.04. Certain Payments
(a) Any
payments received by the Mortgagee 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 or the Participation Agreement shall be applied forthwith to the
purpose for which such payment was made in accordance with the terms of the
Lease or the Participation Agreement, as the case may be.
(b) Notwithstanding
anything to the contrary contained in this Article III, the Mortgagee will
distribute promptly upon receipt any indemnity payment received by it from the
Owner Trustee or Lessee in respect of the Mortgagee in its individual capacity,
any Note Holder or any other Indenture Indemnitee, in each case whether pursuant
to Section 9 of the Participation Agreement or as Supplemental Rent, directly to
the Person entitled thereto. Any payment received by the Mortgagee under the
third paragraph of Section 2.02 shall be distributed to the Subordination Agent
to be distributed in accordance with the terms of the Intercreditor
Agreement.
(c) Notwithstanding
anything to the contrary contained in this Article III, any payments received by
the Mortgagee which constitute Excluded Payments shall be distributed promptly
upon receipt by the Mortgagee directly to the Person or Persons entitled
thereto.
(d) Notwithstanding
any provision of this Trust Indenture to the contrary, any amounts held by
Mortgagee pursuant to the terms of the Lease or any Permitted Sublease
assignment shall be held by the Mortgagee as security for the obligations of
Lessee under the Lessee Operative Agreements and, if and when required by the
Lease, paid and/or applied in accordance with the applicable provisions of the
Lease.
SECTION
3.05. Other Payments
Any
payments received by the Mortgagee 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 Agreement shall be distributed by the
Mortgagee 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, 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 Agreements or for which
the 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 Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee from time to time.
The Owner Trustee hereby notifies the Mortgagee that unless and until the
Mortgagee 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
or clause “Fourth” of Section 3.03 hereof shall be distributed by wire transfer
of funds of the type received by the Mortgagee to the Owner Participant’s
account (within the time limits contemplated by Section 2.04(a)) specified in
Schedule 1 to the Participation Agreement.
ARTICLE
IV
COVENANTS
OF OWNER TRUSTEE; EVENTS OF
DEFAULT;
REMEDIES OF MORTGAGEE
SECTION
4.01. Covenants of Owner Trustee
The Owner
Trustee hereby covenants and agrees (the covenants and agreements only in clause
(b) below being made by the Owner Trustee in its individual capacity) as
follows:
(a) the Owner
Trustee will duly and punctually pay the Original 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 or Section 9 of the Lease;
(b) the Owner
Trustee in its individual capacity covenants and agrees that it shall not,
directly or indirectly, cause or permit to exist a Lessor Lien attributable to
it in its individual capacity with respect to the Aircraft or any other portion
of the Trust Estate; that it will promptly, at its own expense, take such action
as may be necessary to duly discharge such Lessor Lien attributable to it in its
individual capacity; and that it will make restitution to the Trust Indenture
Estate for any actual diminution of the assets of the Trust Estate resulting
from such Lessor Liens attributable to it in its individual
capacity;
(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 Mortgagee, each Note
Holder, Lessee and the Owner Participant;
(d) the Owner
Trustee will furnish to the Note Holders and the Mortgagee, 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 notice given pursuant to
Section 9.1 of the Lease and a copy of each report or notice received pursuant
to Section 9 or 8.2 or Annex D, Paragraph E of the Lease to the extent that the
same shall not have been furnished or is not required to be furnished by the
Lessee to the Note Holders or the Mortgagee pursuant to the Lease;
(e) except
with the consent of the Mortgagee (acting pursuant to instructions given in
accordance with Section 9.01 hereof) or as provided in Sections 2 and 11 of the
Participation Agreement, 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 and the Trust Agreement and the other Operative
Agreements.
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 Mortgagee that such failure shall constitute an Event of Default);
or
(b) the
failure of the Owner Trustee to pay when due any payment of Original Amount of,
interest on, Make-Whole Amount, if any, or other amount due and payable under
any Equipment Note or hereunder (other than as a result of a Lease Event of
Default or a Lease Default) and such failure shall have continued unremedied for
ten Business Days in the case of any payment of Original Amount or interest or
Make-Whole Amount, if any, thereon and, in the case of any other amount, for ten
Business Days after the Owner Trustee or the Owner Participant receives written
demand from the Mortgagee or any Note Holder; or
(c) any Lien
required to be discharged by the Owner Trustee, in its individual capacity
pursuant to Section 4.01(b) hereof or in its individual or trust capacity
pursuant to Section 7.3.1 of the Participation Agreement, or by the Owner
Participant pursuant to Section 7.2.1 of the Participation Agreement shall
remain undischarged for a period of 30 days after the Owner Trustee or the Owner
Participant, as the case may be, shall have received written notice from the
Mortgagee or any Note Holder of such Lien; or
(d) any
representation or warranty made by the Owner Participant or the Owner Trustee in
the Participation Agreement or this Trust Indenture or in any certificate
furnished by the Owner Participant or the Owner Trustee to the Mortgagee or any
Note Holder in connection with the transactions contemplated by the Operative
Agreements 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
Mortgagee 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 60 days (or, without
affecting Section 4.02(f) hereof, in the case of the representation made in
Section 6.3.6 or 6.2.6 of the Participation Agreement as to citizenship of the
Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within 60
days) following notice thereof from the Mortgagee or any Note Holder to the
Owner Trustee or the Owner Participant, as the case may be; or
(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
Mortgagee or the Note Holders contained in the Participation Agreement, Section
4.2.1 of the Trust Agreement, the Equipment Notes or this Trust Indenture which
is not remedied within a period of 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” within the
meaning of Section 40102(a)(15) of Part A of Subtitle VII of Xxxxx 00, Xxxxxx
Xxxxxx Code, and as the result thereof the registration of the Aircraft under
the Federal Aviation Act, 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 30 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, the Trust 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, the Trust 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 60 consecutive days; or (ii)
the commencement by the Owner Participant, the Owner Trustee, the Trust 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, the Trust 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, the Trust or the Trust Estate or for all
or substantially all of its property, or the making by the Owner Participant,
the Owner Trustee, the Trust 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 30 days of the commencement
of the case or proceeding a final non-appealable order, judgment 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
Mortgagee shall give the Note Holders, the Owner Trustee and the Owner
Participant prompt written notice of any Event of Default of which the Mortgagee
has Actual Knowledge and shall give the Note Holders, the Owner Trustee and the
Owner Participant not less than ten Business Days’ prior written notice of the
date (the “Enforcement Date”) on or after which the Mortgagee may, subject to
the limitation 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; provided, however, that in the event the Mortgagee shall have validly
terminated the Lease, the Mortgagee shall not sell or lease, or otherwise afford
the use of, the Aircraft or any portion thereof to the Lessee or any Affiliate
thereof. Without limiting the generality of the foregoing, the Mortgagee shall
give the Owner Trustee, the Owner Participant and the Lessee at least ten
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 or
of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
If an Event of Default shall have occurred and be continuing, the Owner Trustee
shall have the rights set forth below, 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 Mortgagee shall have insufficient
funds to make any payment of Original Amount and interest on any Equipment Note
on the day it becomes due and payable, the Owner Trustee may, but shall not be
obligated to pay the Mortgagee 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 Original Amount and interest
(including interest, if any, on any overdue payments of such portion of Original
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 immediately preceding Basic Rent payment dates, or the
Owner Trustee has cured six 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 the
Lessee) which can be cured by the payment of money has occurred, the Owner
Trustee 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 to
the party entitled to the same.
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 Mortgagee in and to the Mortgaged Property. Upon any
payment by the Owner Trustee pursuant to the first or second preceding
paragraphs of this Section 4.03, the Owner Trustee shall be subrogated to the
rights of the Mortgagee and the Note Holders in respect of the Basic Rent which
was overdue at the time of such payment and interest payable by the 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 shall be entitled (so long as the
application thereof shall not give rise to an Event of Default hereunder) to
receive such overdue Basic Rent or Supplemental Rent, as the case may be, and
interest thereon upon receipt thereof by the Mortgagee; provided,
however, that
(i) if the Original Amount and interest on the Equipment Notes shall have become
due and payable pursuant to Section 4.04(b) hereof, such subrogation shall,
until the Secured Obligations shall have been paid in full, be subordinate to
the rights of the Mortgagee, the Note Holders and the Indenture Indemnitees in
respect of such payment of overdue Basic Rent, Supplemental Rent and such
interest and (ii) the Owner Trustee shall not otherwise attempt to recover any
such amount paid by it on behalf of the Lessee pursuant to this Section 4.03
except by demanding of the Lessee payment of such amount, or by commencing an
action at law against the Lessee and obtaining and enforcing a judgment against
the Lessee for the payment of such amount or taking appropriate action in a
pending action at law against the Lessee (provided, that at
no time while an Event of Default shall have occurred and be continuing shall
any such demand be made or shall any such action be commenced (or continued) and
any amounts nevertheless received by the Owner Trustee in respect thereof shall
be held in trust for the benefit of, and promptly paid to, the Mortgagee for
distribution as provided in Section 3.03 hereof).
Neither
the Owner Trustee nor the Owner Participant shall have the right to cure any
Lease Event of Default or Lease Default except as specified in this Section
4.03.
SECTION
4.04. Remedies
(a) 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 Mortgagee may,
subject to the second and third paragraphs of this Section 4.04(a), 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 pursuant to any Permitted
Sublease assignment 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
the Mortgagee shall give the Owner Trustee and the Owner Participant twenty
days’ prior written notice of its intention to sell the Aircraft, and provided,
further, that in the event the Mortgagee shall have validly terminated the
Lease, the Mortgagee shall not sell or lease, or otherwise afford the use of,
the Aircraft or any portion thereof to the 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 the
sale and become the purchaser. Without limiting any of the foregoing, it is
understood and agreed that the Mortgagee 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 Mortgagee 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 Mortgagee as security assignee of
the Owner Trustee shall have exercised or concurrently be exercising one or more
of the dispossessory remedies provided for in Section 15 of the Lease with
respect to 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 Mortgagee is, and has been, for a
continuous period in excess of 60 days 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 “New 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 New Section 1110 Period to the extent that the continuation of
such Continuous Stay Period subsequent to the expiration of the New Section 1110
Period (A) results from an agreement by the trustee or the debtor-in-possession
in such proceeding during the New 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 continues to perform as required by Section
1110(a)(1)(A-B) of the Bankruptcy Code or (B) is an extension of the New Section
1110 Period with the consent of the Mortgagee pursuant to Section 1110(b) of the
Bankruptcy Code or (C) results from the Lessee’s assumption during the New
Section 1110 Period with the approval of the relevant court of the Lease
pursuant to Section 365 of the Bankruptcy Code and Lessee’s continuous
performance of the Lease as so assumed or (D) is the consequence of the
Mortgagee’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 of the Mortgagee and the
Owner Trustee shall have the right to participate in such proceedings; provided
that any such participation by the Owner Trustee shall not affect in any way any
rights or remedy of the Mortgagee hereunder.
It is
expressly understood and agreed that, subject only to the two preceding
paragraphs, the inability, described in such paragraphs, of the Mortgagee to
exercise any right or remedy under the Lease shall in no event and under no
circumstances prevent the Mortgagee 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 Mortgagee 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 Original 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 or a Lease Event of Default under Section 14.5 of the Lease shall have
occurred, then and in every such case the unpaid Original 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 the Lessee instituted under
Chapter 11 of the Bankruptcy Code, if no Lease Event of Default (including any
Lease Event of Default set forth in Section 14.3 of the Lease) and no other
Event of Default (other than the failure to pay the Original Amount of the
Equipment Notes which by such declaration shall 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 Original 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
Original 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 Mortgagee, rescind and annul the Mortgagee’s declaration (or such automatic
acceleration) 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) The Note
Holders 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 (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 Original
Amount of all Equipment Notes then outstanding, together with accrued 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.
(e) Notwithstanding
anything contained herein, so long as the Pass Through Trustee under any Pass
Through Trust Agreement (or its designee) is a Note Holder, the Mortgagee 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 and the Equipment Notes
have been accelerated, subject to Section 4.03 hereof and unless the Owner
Trustee or the Owner Participant shall have elected to purchase the Equipment
Notes, at the request of the Mortgagee, the Owner Trustee shall promptly execute
and deliver to the Mortgagee such instruments of title and other documents as
the Mortgagee may deem necessary or advisable to enable the Mortgagee or an
agent or representative designated by the Mortgagee, at such time or times and
place or places as the Mortgagee may specify, to obtain possession of all or any
part of the Mortgaged Property included in the Trust Indenture Estate to which
the Mortgagee 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 Mortgagee, the Mortgagee may (i) obtain a
judgment conferring on the Mortgagee the right to immediate possession and
requiring the Owner Trustee to execute and deliver such instruments and
documents to the Mortgagee, to the entry of which judgment the Owner Trustee
hereby specifically consents to the fullest extent permitted by 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 Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee may
determine, and the Mortgagee 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 Mortgagee under any
provision of this Trust Indenture to collect and receive all cash held by, or
required to be deposited with, the Mortgagee 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 Mortgagee
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 Mortgagee 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 Mortgagee, and of all persons properly
engaged and employed by the Mortgagee with respect hereto.
SECTION
4.06. Remedies Cumulative
Each and
every right, power and remedy given to the Mortgagee 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 Mortgagee, 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 Mortgagee 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 Mortgagee 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 Mortgagee, then and in every such
case the Owner Trustee, the Mortgagee 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 Mortgagee 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, the Mortgagee
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 Mortgagee shall not waive any
Default (i) in the payment of the Original 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
The
Mortgagee shall, as a matter of right, be entitled to the appointment of a
receiver (who may be the Mortgagee 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 Mortgagee with respect to the Mortgaged
Property.
SECTION
4.10. Mortgagee Authorized to Execute Bills of Sale,
Etc.
Subject
to the provisions of this Trust Indenture, the Owner Trustee irrevocably
appoints the Mortgagee the true and lawful attorney-in-fact of the Owner Trustee
(which appointment is coupled with an interest) in its name and stead and on its
behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien of this Trust Indenture, whether
pursuant to foreclosure or power of sale, assignments and other instruments as
may be necessary or appropriate, with full power of substitution, the Owner
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 Mortgagee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Mortgagee 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 an
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 MORTGAGEE
SECTION
5.01. Notice of Event of Default
If the
Mortgagee shall have Actual Knowledge of an Event of Default or of a Default
arising from a failure to pay Rent, the Mortgagee shall give prompt written
notice thereof to the Owner Trustee, the Owner Participant, Lessee, and each
Note Holder. Subject to the terms of Sections 2.13, 4.03, 4.04, 4.08, 5.02 and
5.03 hereof, the Mortgagee 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 Mortgagee shall be
instructed in writing by a Majority in Interest of Note Holders. Subject to the
provisions of Section 5.03, if the Mortgagee shall not have received
instructions as above provided within 20 days after mailing notice of such Event
of Default to the Note Holders, the Mortgagee 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; provided,
however, that
the Mortgagee may not sell the Aircraft or any Engine without the consent of a
Majority in Interest of Note Holders. For all purposes of this Trust Indenture,
in the absence of Actual Knowledge on the part of the Mortgagee, the Owner
Trustee or the Owner Participant, the Mortgagee, 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 Mortgagee, the
failure of Lessee to pay any installment of Basic Rent within one Business Day
after the same shall become due, if any portion of such installment was then
required to be paid to the Mortgagee, 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 2.13, 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 Mortgagee 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, the Purchase
Agreement Assignment, or any other part of the Trust Indenture Estate as shall
be specified in such instructions; and (iii) approve as satisfactory to the
Mortgagee 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 Mortgagee shall not approve any such
matter as satisfactory to the Mortgagee; provided, that anything contained in
this Trust Indenture, the Lease or the other Operative Agreements to the
contrary notwithstanding, but subject to the next paragraph hereof:
(1) the Owner
Trustee or the Owner Participant, may, without the consent of the Mortgagee,
demand, collect, xxx for or otherwise obtain all amounts included in Excluded
Payments from Lessee and seek legal or equitable remedies to require Lessee to
maintain the insurance coverage referred to in Section 11 of the Lease (or the
comparable provisions of any assigned Permitted Sublease) 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 other term of the Lease (or
the comparable provisions of any assigned Permitted Sublease);
(2) (A) the
Mortgagee shall not, without the consent of the Owner Trustee, enter into,
execute or deliver amendments or modifications in respect of any of the
provisions of the Lease[, any assigned Permitted Sublease or any Permitted
Sublease assignment]*, and (B)
unless a Mortgagee Event shall have occurred and be continuing, the Mortgagee
shall not, without the consent of the Owner Trustee, 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 or deliver
waivers or consents in respect of any of the provisions of the Lease, 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 Agreements, provided that whether or not any Mortgagee Event has
occurred and is continuing, the Owner Trustee’s consent shall be required with
respect to any waivers or consents in respect of any of the provisions of
Section 5, 7 or 11 of the Lease, or of any other Section of the Lease to the
extent such action shall affect (y) the amount or timing of, or the right to
enforce payment of any Excluded Payment or (z) the amount or timing of any
amounts payable by the Lessee under the Lease as originally executed (or as
subsequently modified with the consent of the Owner Trustee) which, absent the
occurrence and continuance of an Event of Default hereunder, would be
distributable to the Owner Trustee under Article III hereof;
(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 Mortgagee, (i) to receive from Lessee or any Permitted
Sublessee certificates and other documents and information which Lessee is
required to give or furnish to the Owner Trustee or the Lessor pursuant to any
Operative Agreement and (ii) to inspect in accordance with the Lease the
Airframe and Engines and all Aircraft Documents;
(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 adjust upwards Rent,
Stipulated Loss Values and Termination Values as provided in Section 3.2.1 of
the Lease;
(5) so long
as no Mortgagee Event has occurred and is continuing, the Owner Trustee shall
have the right, to the exclusion of the Mortgagee, to adjust Basic Rent,
Stipulated Loss Values and Termination Values as provided in Section 3.2 of the
Lease or to adjust downward any installment or amount of Basic Rent, Stipulated
Loss Value or Termination Value, as such installments and amounts are set forth
in Schedules 2, 3 and 4, 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 Mortgagee, (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 17 of the Lease for all purposes except following a Mortgagee
Event pursuant to Section 15 of the Lease, and (iii) make an election pursuant
to and in accordance with the provisions of Sections 9.1(b), 9.2 and 9.3 of the
Lease; and
(7) so long
as no Mortgagee Event shall have occurred and be continuing, all other rights of
the “Lessor” under the Lease or any assigned Permitted Sublease shall be
exercised by the Owner Trustee to the exclusion of the Mortgagee 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 the Lessor, and (ii) consent
to and approve any assignment pursuant to Section 13 of the Lease; provided that the
foregoing shall not (x) limit (A) any rights separately granted to the Mortgagee
under the Operative Agreements or (B) the right of the Mortgagee 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 (y) confer upon the Owner
Trustee the right to adversely affect the validity or enforceability of the Lien
of this Indenture.
Notwithstanding
anything to the contrary contained herein (including this Section 5.02),
the Mortgagee 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 2.13 hereof, exercise the remedies set forth in such Section 15 (other
than in connection with Excluded Payments and provided that each of the Owner
Trustee, Owner Participant and Mortgagee shall independently retain the rights
set forth in clause (ii) of Section 15.1.5 of the Lease) at any time that a
Lease Event of Default shall have occurred and be continuing. Further and for
the avoidance of doubt, and anything to the contrary contained herein (including
this Section 5.02), in no event may the Owner Trustee amend or otherwise modify
the provisions of Section 3.2.1(e) of the Lease or of the final sentence of the
definition of Stipulated Loss Value or Termination Value, in any such case,
without the prior written consent of the Mortgagee.
The
Mortgagee 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 may be
specified from time to time in written instructions of a Majority in Interest of
Note Holders (which instructions shall be accompanied by the form of such
continuation statement so to be filed). The Mortgagee will furnish to each Note
Holder (and, during the continuation of a Mortgagee 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 Mortgagee under the Lease or hereunder, including, without
limitation, a copy of any notice given pursuant to Section 9.1 of the Lease and
a copy of each report or notice received pursuant to Section 9 and Paragraph E
of Annex D of the Lease, respectively to the extent that the same shall not have
been furnished to such holder pursuant hereto or 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 Mortgagee shall declare the Lease to be in default pursuant to
Section 15 thereof and exercise those remedies specified by such Note Holders.
The Mortgagee agrees to provide to the Note Holders, the Owner Trustee and the
Owner Participant concurrently with such declaration by the Mortgagee, notice of
such declaration by the Mortgagee.
SECTION
5.03. Indemnification
The
Mortgagee 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 Mortgagee 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 Mortgagee agrees that it
shall look solely to the Note Holders for the satisfaction of any indemnity
(except expenses for foreclosure of the type referred to in clause “First” of
Section 3.03 hereof) owed to it pursuant to this Section 5.03. The Mortgagee
shall not be under any obligation to take any action under this Trust Indenture
or any other Operative Agreement and nothing herein or therein shall require the
Mortgagee 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 the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee 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 Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee 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
Mortgagee 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 Mortgagee. The
Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee shall execute and deliver such instrument as aforesaid, but only
upon compliance by Lessee with the applicable provisions of Section 10 of the
Lease.
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 Mortgagee 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 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, 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.
SECTION
5.09. Investment of Amounts Held by Mortgagee
Any
amounts held by the Mortgagee as assignee of the Owner Trustee’s rights to hold
monies for security pursuant to Section 4.4 of the Lease shall be held in
accordance with the terms of such Section and the Mortgagee agrees, for the
benefit of Lessee, to perform the duties of the Owner Trustee under such
Section. Any amounts held by the Mortgagee pursuant to the proviso to Clause
“Second” of the first sentence of Section 3.01, pursuant to Section 3.02, or
pursuant to any provision of any other Operative Agreement providing for amounts
to be held by the Mortgagee which are not distributed pursuant to the other
provisions of Article III hereof shall be invested by the Mortgagee from time to
time in Cash Equivalents as directed by the Owner Trustee so long as the
Mortgagee 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 Mortgagee’s reasonable fees and expenses in
making such investment, shall be held and applied by the Mortgagee 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 Mortgagee 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
Mortgagee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture.
ARTICLE
VI
THE
OWNER TRUSTEE AND THE MORTGAGEE
SECTION
6.01. Acceptance of Trusts and Duties
The
Mortgagee 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 Mortgagee, 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 Mortgagee, 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 4.01(b)
or 6.03 hereof (or in any certificate furnished to the Mortgagee or any Note
Holder in connection with the transactions contemplated by the Operative
Agreements) or, in the case of the Mortgagee (in its individual capacity), from
the inaccuracy of any representation or warranty of the Mortgagee (in its
individual capacity) in the Participation Agreement or expressly made hereunder.
Neither the Owner Trustee nor the Mortgagee 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 Mortgagee, 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, 5.04 and 6.08 hereof and, in the case
of the Owner Trustee, except as provided in Section 4.01(b) hereof, the Owner
Trustee and the Mortgagee 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 or any of the Permitted Sublessee’s covenants under
any assigned Permitted Sublease 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 MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE OWNER TRUSTEE IN ITS
INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST AGREEMENT, 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, 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 Mortgagee, 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 or the Purchase Agreement Assignment with the Consent and
Agreement and the Engine Consent and Agreement attached thereto, 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 Mortgagee in its
individual capacity, 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 Mortgagee 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 Section 4.4 of the Lease and Section
5.09 hereof, and may be deposited under such general conditions as may be
prescribed by Law, and the Mortgagee shall not be liable for any interest
thereon (except that the Mortgagee shall invest all monies held as directed by
Lessee so long as no Lease Event of Default or Lease 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 Mortgagee shall be accounted
for by the Mortgagee 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 Mortgagee 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 Mortgagee may accept a copy of a resolution of the
Board of Directors (or Executive Committee thereof) of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid Original 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 Mortgagee. As to any fact or matter relating to Lessee the
manner of which is not specifically described herein, the Owner Trustee and the
Mortgagee 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 Mortgagee for any
action taken or omitted to be taken by them in good faith in reliance thereon.
The Mortgagee 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 Mortgagee 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, advise with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Owner Trustee and the Mortgagee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the written
advice or written opinion of any such counsel, accountants or other skilled
persons.
SECTION
6.06. 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
Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee’s duties or obligations hereunder be
unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section
6.08.
ARTICLE
VII
INDEMNIFICATION
OF MORTGAGEE BY OWNER TRUSTEE
SECTION
7.01. Scope of Indemnification
The Owner
Trustee, not in its individual capacity, but solely as Owner Trustee, hereby
agrees, whether or not any of the transactions contemplated hereby shall be
consummated, except as to matters covered by any indemnity furnished as
contemplated by Section 5.03 hereof and 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 Mortgagee (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 Mortgagee on or measured by any compensation
received by the Mortgagee for its services under this Trust Indenture), claims,
actions, suits, costs, expenses or disbursements (including legal fees and
expenses) of any kind and nature whatsoever, which may be imposed on, incurred
by or asserted against the Mortgagee (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 Agreement 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 Mortgagee hereunder except only in the case of
willful misconduct or gross negligence (or negligence in the case of handling
funds) of the Mortgagee in the performance of its duties hereunder or resulting
from the inaccuracy of any representation or warranty of the Mortgagee (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 Section 9.1 or 9.3 of the Participation
Agreement from Lessee’s indemnities under such Sections. In addition, if
necessary, the Mortgagee 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 Mortgagee shall have a prior Lien on the Trust Indenture
Estate. Without limiting the foregoing, the Mortgagee agrees that, prior to
seeking indemnification from the Trust Indenture Estate, it will demand, and
diligently pursue in good faith (but with no duty to exhaust all legal remedies
therefor), indemnification available to the Mortgagee from Lessee under the
Lease or the Participation Agreement.
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 Mortgagee, Lessee and the Note Holders.
SECTION
8.02. Resignation of Mortgagee; Appointment of Successor
(a) The
Mortgagee 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 Mortgagee. In addition, a
Majority in Interest of Note Holders may at any time (but only with the consent
of the Lessee, which consent shall not be unreasonably withheld, except that
such consent shall not be necessary if a Lease Event of Default is continuing)
remove the Mortgagee without cause by an instrument in writing delivered to the
Owner Trustee, Lessee, the Owner Participant and the Mortgagee, and the
Mortgagee shall promptly notify each Note Holder thereof in writing, such
removal to be effective upon the acceptance of the trusteeship by a successor
Mortgagee. In the case of the resignation or removal of the Mortgagee, a
Majority in Interest of Note Holders may appoint a successor Mortgagee 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 Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner Trustee, the Owner Participant or any Note Holder may apply to any court
of competent jurisdiction to appoint a successor Mortgagee to act until such
time, if any, as a successor shall have been appointed as above provided. The
successor Mortgagee so appointed by such court shall immediately and without
further act be superseded by any successor Mortgagee appointed as above
provided.
(b) Any
successor Mortgagee, however appointed, shall execute and deliver to the Owner
Trustee, the predecessor Mortgagee and the Lessee an instrument accepting such
appointment and assuming the obligations of the Mortgagee under the
Participation Agreement arising from and after the time of such appointment, and
thereupon such successor Mortgagee, without further act, shall become vested
with all the estates, properties, rights, powers and duties of the predecessor
Mortgagee hereunder in the trust hereunder applicable to it with like effect as
if originally named the Mortgagee herein; but nevertheless upon the written
request of such successor Mortgagee, such predecessor Mortgagee shall execute
and deliver an instrument transferring to such successor Mortgagee, upon the
trusts herein expressed applicable to it, all the estates, properties, rights
and powers of such predecessor Mortgagee, and such predecessor Mortgagee shall
duly assign, transfer, deliver and pay over to such successor Mortgagee all
monies or other property then held by such predecessor Mortgagee
hereunder.
(c) Any
successor Mortgagee, however appointed, shall be a bank or trust company having
its principal place of business in the Borough of Manhattan, City and State of
New York; Chicago, Illinois; Hartford, Connecticut; Wilmington, Delaware; or
Boston, Massachusetts and having (or whose obligations under the Operative
Agreements 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 Mortgagee hereunder upon
reasonable or customary terms.
(d) Any
corporation into which the Mortgagee 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 Mortgagee shall be a party, or any corporation to
which substantially all the corporate trust business of the Mortgagee may be
transferred, shall, subject to the terms of paragraph (c) of this Section 8.02,
be a successor Mortgagee and the Mortgagee under this Trust Indenture without
further act.
SECTION
8.03. Appointment of Additional and Separate Trustees
(a) Whenever
(i) the Mortgagee 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 Mortgagee shall be advised
by counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Mortgagee shall so advise the Owner
Trustee and Lessee), or (iii) the Mortgagee shall have been requested to do so
by a Majority in Interest of Note Holders, then in any such case, the Mortgagee
and, upon the written request of the Mortgagee, 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 Mortgagee, either
to act jointly with the Mortgagee 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
Mortgagee 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 or 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 Mortgagee so to do, or if an Event of
Default shall have occurred and be continuing, the Mortgagee 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 Mortgagee, 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 Mortgagee 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 moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the Mortgagee
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 Mortgagee 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 Agreement to the Mortgagee shall
be promptly paid over by it to the Mortgagee. All other rights, powers, duties
and obligations conferred or imposed upon any additional or separate trustee
shall be exercised or performed by the Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee shall be liable for the consequences of its lack of
reasonable care in selecting, and the Mortgagee’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 Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Mortgagee hereunder.
(c) If at any
time the Trustee shall deem it no longer necessary or 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 Mortgagee shall have been requested to do so in writing by a
Majority in Interest of Note Holders, the Mortgagee and, upon the written
request of the Mortgagee, 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 Mortgagee 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
provided in Section 5.02 hereof, the Owner Trustee agrees it shall not enter
into any amendment of or supplement to the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement or the Engine Consent
and Agreement, or execute and deliver any written waiver or modification of, or
consent under, the terms of the Lease, the Purchase Agreement, the Purchase
Agreement Assignment, the Consent and Agreement or the Engine Consent and
Agreement, unless such supplement, amendment, waiver, modification or consent is
consented to in writing by the Mortgagee 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 Mortgagee, (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) or Section 17 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 hereof)
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 hereof, the Mortgagee 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, the
Engine 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, but upon the written request of a Majority
in Interest of Note Holders, the 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 Airframe Manufacturer or the Engine Manufacturer; provided,
however, that,
without the consent of each holder of an affected Equipment Note then
outstanding and of 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, the Engine 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 Article II or III or Section 4.02, 4.04(c), 4.04(d),
5.02 or 5.06 hereof, Section 13.3, 14 (except to add an Event of Default) or 16
of the Lease, Section 15.1 of the Participation Agreement, 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 Original 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 Owner Trustee, the
Mortgagee or the Note Holders (except that the Owner Trustee (in its individual
capacity) or the Mortgagee, as the case may be, may consent to any waiver or
reduction of an indemnity payable to it), (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 or
exchange of the Equipment Notes other than as permitted by Section 2.13 hereof,
(v) except as contemplated by the Lease or the Participation Agreement, reduce
the amount or extend the time of payment of Basic Rent, Stipulated Loss Value,
or Termination Value for the Aircraft in each case as set forth in 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, Stipulated Loss Value 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 16 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.
(c) At any
time after the date hereof, the Owner Trustee and the Mortgagee 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 Mortgagee 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 Mortgagee 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 the 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 Mortgagee hereunder, any document required to be
executed by it pursuant to the terms of Section 9.01 hereof 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 Mortgagee of any document
entered into pursuant to Section 9.01 hereof, the Mortgagee 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 Mortgagee 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 Indenture
Supplement
No
written request or consent of the Mortgagee, 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 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 Original 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
Indenture Indemnitees, the Note Holders and the Mortgagee hereunder or under the
Participation Agreement or other Operative Agreement, the Owner Trustee shall
direct the Mortgagee 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, the Purchase Agreement Assignment with the Consent and Agreement and
the Engine Consent and Agreement attached thereto from the assignment and pledge
thereof hereunder and the Mortgagee 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 Mortgagee of all property constituting part of
the Trust Indenture Estate and the final distribution by the Mortgagee 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 an 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 Mortgagee 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 Mortgagee 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 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 Mortgagee.
SECTION
10.04. Trust Indenture for Benefit of Owner Trustee, Mortgagee, Owner
Participant, 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 Mortgagee, the Owner Participant,
the Note Holders and the other Indenture Indemnitees, 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 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000
with a copy to the Owner Participant addressed as provided in clause (iii)
below, (ii) if to Mortgagee, addressed to it at its office at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Administration, facsimile number (000) 000-0000, (iii) if to any
Participant, Lessee, any Note Holder or any other Indenture Indemnitee,
addressed to such party at such address as such party shall have furnished by
notice to the Owner Trustee and the Mortgagee, or, until an address is so
furnished, addressed to the address of such party (if any) set forth on Schedule
1 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 Mortgagee or any Note Holder to any of the other of them, such notice
shall be deemed given and such requirement satisfied when such notice is
received, or if such notice is mailed by certified mail, postage prepaid, three
Business Days after being mailed, addressed as provided above. Any party hereto
may change the address to which notices to such party will be sent by giving
notice of such change to the other parties to this Trust Indenture.
SECTION
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 Mortgagee, 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 an 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, Owner
Trustee, Mortgagee, 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 or any Permitted
Sublessee, 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 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 Mortgagee 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 Agreement, each such party
agrees that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
[This
space intentionally left blank.]
|
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. |
IN
WITNESS WHEREOF, the parties hereto have caused this Trust Indenture and
Mortgage 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, as Owner
Trustee
By:__________________________________
Name:
Title:
WILMINGTON
TRUST COMPANY, as Mortgagee
By:__________________________________
Name:
Title:
EXHIBIT
A
TO TRUST
INDENTURE AND MORTGAGE 645
TRUST
INDENTURE AND MORTGAGE 645 SUPPLEMENT
This
TRUST INDENTURE AND MORTGAGE 645 SUPPLEMENT NO. 1, dated ___________, 199_
(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
___ dated as of September __, 1997 (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 Mortgage 645, dated as of September 30, 1997 (as amended
and supplemented to the date hereof, the “Trust Indenture”) between the Owner
Trustee and Wilmington Trust Company, as Mortgagee (the “Mortgagee”), 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 Mortgagee; and
WHEREAS,
each of the Trust Agreement and 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:
|
Manufacturer |
Model |
FAA
Registration
Number |
Manufacturer’s
Serial
Number |
|
The
Boeing Company |
|||
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 |
Manufacturer’s
Model |
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 either of such
engines.
Together
with all of Owner Trustee’s right, title and interest in and to (a) 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) and (b) all Aircraft Documents.
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
Mortgagee, its successors and assigns, for the security and benefit of the Loan
Participants, the Note Holders and the Indenture Indemnitees, 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 Mortgagee, its
successors and assigns, in trust for the equal and proportionate benefit and
security of the Loan Participants, the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.14 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.
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, except as
expressly provided herein but solely as Owner Trustee, Owner
Trustee
By:______________________________________
Name:
Title:
TRUST
INDENTURE AND MORTGAGE
SCHEDULE
I
|
Original
Amount |
Interest
Rate | |
|
Series
A: |
||
|
Series
B: |
||
|
Series
C: |
||
Trust
Indenture and Mortgage
Equipment
Note Amortization
|
Payment
Date |
Percentage
of
Original
Amount
to
be Paid |
