Exhibit 4(a)(xxi)
Owned Aircraft Indenture
N___U_
INDENTURE AND SECURITY AGREEMENT
(N___U_)
Dated as of __________ __, ____
Between
US AIRWAYS, INC.
Owner
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A3__-___ AIRCRAFT
BEARING U.S. REGISTRATION XXXX N___U_
OWNED BY US AIRWAYS, INC.
Page
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.............................................................5
SECTION 1.01. Definitions...................................5
ARTICLE II
THE EQUIPMENT NOTES.....................................................6
SECTION 2.01. Form of Equipment Notes.......................6
SECTION 2.02. Issuance and Terms of Equipment Notes........10
SECTION 2.03. [Reserved]...................................13
SECTION 2.04. Method of Payment............................13
SECTION 2.05. Application of Payments......................16
SECTION 2.06. Termination of Interest in Indenture Estate..16
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes..............................16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes..............................18
SECTION 2.09. Payment of Expenses on Transfer;
Cancellation.................................19
SECTION 2.10. Mandatory Redemptions of Equipment Notes.....19
SECTION 2.11. Voluntary Redemptions of Equipment Notes.....19
SECTION 2.12. Redemptions; Notice of Redemption............19
SECTION 2.13. [Reserved]...................................20
SECTION 2.14. [Reserved]...................................21
SECTION 2.15. Subordination................................21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
INDENTURE ESTATE.......................................................21
SECTION 3.01. Basic Distributions..........................21
SECTION 3.02. Event of Loss; Optional Redemption...........22
SECTION 3.03. Payments After Event of Default..............23
SECTION 3.04. Certain Payments.............................25
SECTION 3.05. Other Payments...............................26
SECTION 3.06. Payments to Owner............................26
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF DEFAULT; REMEDIES OF
INDENTURE TRUSTEE......................................................26
SECTION 4.01. Certain Covenants of Owner...................26
SECTION 4.02. Event of Default.............................27
SECTION 4.03. [Reserved]...................................28
SECTION 4.04. Remedies.....................................28
SECTION 4.05. Return of Aircraft, Etc......................30
SECTION 4.06. Remedies Cumulative..........................32
SECTION 4.07. Discontinuance of Proceedings................32
SECTION 4.08. Waiver of Past Defaults......................32
SECTION 4.09. Appointment of Receiver......................33
SECTION 4.10. Indenture Trustee Authorized to Execute
Bills of Sale, Etc...........................33
SECTION 4.11. Rights of Note Holders to Receive Payment....33
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE........................................34
SECTION 5.01. Notice of Event of Default...................34
SECTION 5.02. Action upon Instructions;
Certain Rights and Limitations...............34
SECTION 5.03. Indemnification..............................35
SECTION 5.04. No Duties Except as Specified in Indenture
or Instructions..............................35
SECTION 5.05. No Action Except Under Indenture or
Instructions.................................36
SECTION 5.06. Replacement Airframes and Replacement
Engines......................................36
SECTION 5.07. Indenture Supplements for Replacements.......38
SECTION 5.08. Effect of Replacement........................39
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee......................................39
ARTICLE VI
THE INDENTURE TRUSTEE..................................................40
SECTION 6.01. Acceptance of Trusts and Duties...............40
SECTION 6.02. Absence of Duties.............................40
SECTION 6.03. No Representations or Warranties as to
Aircraft or
Documents.....................................40
SECTION 6.04. No Segregation of Monies; No Interest.........41
SECTION 6.05. Reliance; Agreements; Advice of Counsel.......41
SECTION 6.06. [Reserved]....................................42
SECTION 6.07. Compensation..................................42
SECTION 6.08. Instructions from Note Holders................42
ARTICLE VII
OPERATING COVENANTS OF THE OWNER.......................................43
SECTION 7.01. Liens........................................43
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia..............43
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions.....49
SECTION 7.04. Insurance....................................52
SECTION 7.05. Inspection...................................52
SECTION 7.06. Filings; Delivery of Financial Statements....53
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER..........................54
SECTION 8.01. Scope of Indemnification.....................54
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES........................................55
SECTION 9.01. [Reserved.]..................................55
SECTION 9.02. Resignation of Indenture Trustee;
Appointment of Successor.....................55
SECTION 9.03. Appointment of Additional and Separate
Trustees.....................................56
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS ...................................................59
SECTION 10.01. Instructions of Majority; Limitations........59
SECTION 10.02. Trustees Protected. .........................61
SECTION 10.03. Documents Mailed to Note Holders. ...........61
SECTION 10.04. No Request Necessary for Indenture
Supplement...................................61
ARTICLE XI
MISCELLANEOUS..........................................................61
SECTION 11.01. Termination of Indenture. ...................61
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders. ....................................62
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding......................................62
SECTION 11.04. Indenture for Benefit of Owner, Indenture ...62
SECTION 11.05. Notices. ....................................63
SECTION 11.06. Severability. ...............................63
SECTION 11.07. No Oral Modification or Continuing Waivers. .63
SECTION 11.08. Successors and Assigns. .....................64
SECTION 11.09. Headings. ...................................64
SECTION 11.10. Normal Commercial Relations. ................64
SECTION 11.11. Governing Law; Counterpart Form. ............64
SECTION 11.12. Voting By Note Holders. .....................65
SECTION 11.13. Bankruptcy. .................................65
SECTION 11.14. References. .................................65
EXHIBIT B INDENTURE AND SECURITY AGREEMENT................Exhibit B-1
EXHIBIT C INDENTURE AND SECURITY AGREEMENT................Exhibit C-1
SCHEDULE I. .....................................................Schedule I-1
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS
THROUGH TRUST SUPPLEMENTS.......................Schedule II-1
Owned Aircraft Indenture
N___U_
INDENTURE AND SECURITY AGREEMENT
(N___U_)
INDENTURE AND SECURITY AGREEMENT (N___U_), dated as of
_________ __, ____ (as amended, modified or supplemented from time to time,
this "Indenture") between US AIRWAYS, INC., a Delaware corporation
(together with its successors and permitted assigns, "Owner"), and STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (together with
its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the parties desire by this Indenture, among other
things, (i) to provide for the issuance by Owner to the Pass Through
Trustees (or their designee) of the Equipment Notes evidencing the
participation of the Pass Through Trustees in the financing of Owner's Cost
for the Aircraft, as provided in the Participation Agreement and (ii) to
provide for the assignment, mortgage and pledge by Owner to the Indenture
Trustee, as part of the Indenture Estate hereunder, among other things, of
all of Owner's right, title and interest in and to the Aircraft, as
security for, among other things, Owner's obligations to the Indenture
Trustee, for the ratable benefit and security of the Note Holders, subject
to Section 2.15 and Article III;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by Owner and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations
of Owner; and
WHEREAS, all things necessary to make this Indenture the
valid, binding and legal obligation of Owner for the uses and purposes
herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding hereunder and
(ii) the performance and observance by Owner of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Equipment Notes contained, for the benefit of the Note Holders, the Loan
Participants and each of the Indenture Indemnitees and the prompt payment
of all amounts from time to time owing hereunder and under the
Participation Agreement to the Note Holders, the Loan Participants or any
Indenture Indemnitee by Owner (the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of
the acceptance of the Equipment Notes by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, Owner has granted, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, assign, transfer,
convey, mortgage, pledge and confirm, unto the Indenture Trustee, its
successors in trust and assigns, for the security and benefit of the Note
Holders, a first priority security interest in and mortgage lien on all
right, title and interest of Owner in, to and under the following described
property, rights and privileges, to wit:
(1) the Aircraft (including the Airframe and the Engines
and all replacements thereof and substitutions therefor to which Owner
shall from time to time acquire title as provided herein), all as more
particularly described in the Indenture Supplement executed and delivered
with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture;
(2) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Xxxx of Sale;
(3) all rents, issues, profits, revenues and other income
of the property subjected or required to be subjected to the Lien of this
Indenture;
(4) all insurance and requisition proceeds with respect to
the Aircraft, including but not limited to the insurance required under
Section 7.04;
(5) all monies and securities from time to time deposited
or required to be deposited with the Indenture Trustee pursuant to any
terms of this Indenture or required hereby to be held by the Indenture
Trustee hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, Owner is delivering
to the Indenture Trustee executed copies of the Participation Agreement,
the French Pledge Agreement and the Purchase Agreement Assignment with the
Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid
property unto the Indenture Trustee, and its successors and assigns, in
trust for the benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.15 and Article III 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 (6) inclusive above, subject to the terms and
provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to
the contrary notwithstanding, Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Indenture Indemnitees, Indenture Trustee and the Note Holders shall
have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Indenture
Indemnitees, Indenture Trustee or the Note Holders be required or obligated
in any manner to perform or fulfill any obligations of Owner under or
pursuant to any of the Indenture Agreements to which it is a party, or,
except as herein expressly provided, to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or
present or file any claim, or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
Notwithstanding the above, the Indenture Trustee agrees,
for the benefit of AVSA, S.A.R.L., that in exercising or assigning its
rights under the Purchase Agreement Assignment, the terms and conditions of
the Purchase Agreement Assignment shall apply, and be binding upon, the
Indenture Trustee.
Owner does hereby constitute the Indenture Trustee the
true and lawful attorney of Owner, irrevocably, granted for good and
valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any
and all monies and claims for monies (in each case including insurance and
requisition proceeds) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Indenture Estate, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings which the Indenture Trustee
may deem to be necessary or advisable in the premises. Without limiting the
generality of the foregoing, but subject to the rights of Owner hereunder,
during the continuance of any Event of Default under this Indenture, the
Indenture Trustee shall have the right under such power of attorney to
accept any offer in connection with the exercise of remedies as set forth
herein of any purchaser to purchase the Airframe and Engines and upon such
purchase to execute and deliver in the name of and on behalf of Owner an
appropriate xxxx of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, 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 Owner or otherwise,
which the Indenture Trustee may deem necessary or appropriate to protect
and preserve the right, title and interest of the Indenture Trustee in and
to such rents and other sums and the security intended to be afforded
hereby; provided, however, that no action of the Indenture Trustee pursuant
to this paragraph shall increase the obligations or liabilities of Owner to
any Person beyond those obligations and liabilities specifically set forth
in this Indenture and in the other Operative Documents. Owner agrees that
promptly upon receipt thereof, it will transfer to the Indenture Trustee
any and all monies from time to time received by it constituting part of
the Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Indenture.
Owner agrees that at any time and from time to time, upon
the written request of the Indenture Trustee, Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect the
mortgage, security interests and assignments created or intended to be
created hereby or to obtain for the Indenture Trustee the full benefits of
the assignment hereunder and of the rights and powers herein granted.
Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that, except as
permitted by the terms hereof, it will not assign or pledge, so long as the
assignment hereunder shall remain in effect, and the Lien hereof shall not
have been released pursuant to Section 11.01, any of its right, title or
interest hereby assigned, to anyone other than the Indenture Trustee, and
that it will not, except as otherwise provided in this Indenture, (i) enter
into any agreement amending or supplementing any Indenture Agreement, (ii)
execute any waiver or modification of, or consent under, the terms of, or
exercise any rights, powers or privileges under, any Indenture Agreement,
(iii) settle or compromise any claim arising under any Indenture Agreement
or (iv) 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.
Owner does hereby further agree that, except as permitted
by the terms hereof, it will not without the written consent of the
Indenture Trustee sell, mortgage, transfer, assign or hypothecate (other
than to the Indenture Trustee hereunder) its interest in the Airframe and
Engines or any part thereof or in any amount to be received by it from the
use or disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III.
It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is hereafter
acquired by Owner shall ipso facto, and without any further conveyance,
assignment or act on the part of Owner or the Indenture Trustee, become and
be subject to the Lien herein granted as fully and completely as though
specifically described herein, but nothing contained in this paragraph
shall be deemed to modify or change the obligations of Owner contained in
the foregoing paragraphs.
Owner does hereby agree that it will not violate any
covenant or agreement made by it, herein or in any of the other Owner
Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the
parties hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.Definitions. For all purposes of this
Indenture, capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01.Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set
forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF
ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT
AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
US AIRWAYS, INC. SERIES [___] EQUIPMENT NOTE DUE [___]
ISSUED IN CONNECTION WITH THE AIRBUS A- AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
US AIRWAYS, INC., hereby promises to pay to ___________, or
the registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the Principal
Amount remaining unpaid from time to time (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Interest Rate indicated
above. The Principal Amount of this Equipment Note shall be payable on the
dates and in the installments as set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semi-annual installments
commencing _______ 20, ____, and thereafter on January 20 and July 20 of
each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Equipment Note becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
For purposes hereof, the term "Indenture" means the
Indenture and Security Agreement (N___U_), dated as of ___________ __,
____, between Owner and State Street Bank and Trust Company of Connecticut,
National Association (the "Indenture Trustee"), as the same may be amended
or supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand,
at the Past Due Rate (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on any overdue Principal Amount, any
overdue Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest and any other amounts payable
hereunder which are overdue, in each case for the period the same is
overdue. Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).
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 Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Indenture.
The Principal Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, or as otherwise provided
in the Indenture. Each such payment shall be made on the date such payment
is due and without any presentment or surrender of this Equipment Note,
except that in the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Indenture, each payment of an
installment of the Principal 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 Principal Amount, any overdue Make-Whole Amount, if any, or, to the
extent permitted by Law, any overdue interest and other amounts hereunder)
to the date of such payment, second, to the payment of the Principal Amount
of this Equipment Note (or portion hereof) then due (other than by reason
of redemption), third, to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Indenture, and fourth, the balance,
if any, remaining thereafter, to the payment of the Principal Amount hereof
remaining unpaid and due by reason of redemption. The amounts paid pursuant
to clause fourth of the preceding sentence shall be applied to installments
of the Principal Amount of this Equipment Note remaining unpaid in the
inverse order of their normal maturity.
This Equipment Note is one of the Equipment Notes referred
to in the Indenture which have been or are to be issued by Owner pursuant
to the terms of the Indenture. The Indenture Estate is held by the
Indenture Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Indenture. Reference
is hereby made to the Indenture and the Participation Agreement for a
complete statement of the rights and obligations of the holder of, and the
nature and extent of the security for, this Equipment Note and the rights
and obligations of the holders of, and the nature and extent of the
security for, any other Equipment Notes executed and delivered under the
Indenture, as well as for a statement of the terms and conditions of the
Trust created by the Indenture, to all of which terms and conditions in the
Indenture and the Participation Agreement each holder hereof agrees by its
acceptance of this Equipment Note.
As provided in the Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a
like aggregate Principal Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of
this Equipment Note, Owner and the Indenture Trustee shall deem and treat
the Person in whose name this Equipment Note is registered on the Equipment
Note Register as the absolute owner and holder hereof for the purpose of
receiving all amounts payable with respect to this Equipment Note and for
all purposes, and neither of Owner nor the Indenture Trustee shall be
affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to
the extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Indenture) in respect of [Series A Equipment
Notes](1) [Series A and Series B Equipment Notes](2), and this Equipment Note
is issued subject to such provisions. The Note Holder of this Equipment
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Indenture Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Indenture
Trustee its attorney-in-fact for such purpose.](3)
-----------
1 To be inserted in the case of a Series B Equipment Note.
2 To be inserted in the case of a Series C Equipment Note.
3 To be inserted for each Equipment Note other than any Series A
Equipment Note.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the 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, Owner has caused this Equipment Note to
be executed in its corporate name by its officer thereunto duly authorized
on the date hereof.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
------------ ---------------------------
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in three separate series consisting of Series A,
Series B and Series C and in the maturities and principal amounts and shall
bear interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations
of $1,000 and integral multiples thereof, except that one Equipment Note of
each Series may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on _________ 20, ____, and on each January
20 and July 20 thereafter until maturity. The Principal Amount of each
Equipment Note shall be payable on the dates and in the installments 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 Principal Amount and all
accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve
30-day months) on any part of the Principal Amount, Make-Whole Amount, if
any, and to the extent permitted by applicable law, interest and any other
amounts payable thereunder not paid when due for any period during which
the same shall be overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated maturity,
by acceleration or otherwise). Notwithstanding anything to the contrary
contained herein, if any date on which a payment under any Equipment Note
becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled
date and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment from and after such
scheduled date.
Owner agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 (i) to the extent not payable
(whether or not in fact paid) under Section 7(a) of the Note Purchase
Agreement (as originally in effect or as amended with the consent of the
Owner) an amount or amounts equal to the fees payable to the Liquidity
Provider under Section 2.03 of each Liquidity Facility and the related Fee
Letter (as defined in the Intercreditor Agreement) multiplied by a fraction
the numerator of which shall be the then outstanding aggregate principal
amount of the Series A Equipment Notes, Series B Equipment Notes and Series
C Equipment Notes and the denominator of which shall be the then
outstanding aggregate principal amount of all "Series A Equipment Notes",
"Series B Equipment Notes" and "Series C Equipment Notes" (in each case as
defined in the relevant Operative Indenture) issued under the Operative
Indentures; (ii) (x) the amount equal to interest on any Downgrade Advance
(other than any Applied Downgrade Advance) payable under Section 3.07 of
each Liquidity Facility minus Investment 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
of each Liquidity Facility minus Investment Earnings from such
Non-Extension Advance multiplied by (y) the fraction specified in the
foregoing clause (i); (iv) if any payment default shall have occurred and
be continuing with respect to interest on any Series A Equipment Note,
Series B Equipment Note or Series C Equipment Note, (x) the excess, if any,
of (1) the amount equal to interest on any Unpaid Advance, Applied
Downgrade Advance or Applied Non-Extension Advance payable under Section
3.07 of each Liquidity Facility over (2) the sum of Investment Earnings
from any Final Advance plus any amount of interest at the Past Due Rate
actually payable (whether or not in fact paid) by Owner in respect of the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
was made multiplied by (y) a fraction the numerator of which shall be the
then aggregate overdue amounts of interest on the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes (other than interest
becoming due and payable solely as a result of acceleration of any such
Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (in each case as defined in
the relevant Operative Indenture) issued under the Operative Indentures
(other than interest becoming due and payable solely as a result of
acceleration of any such "Equipment Notes"), (v) any other amounts owed to
the Liquidity Provider by the Subordination Agent as borrower under each
Liquidity Facility (other than amounts due as repayment of advances
thereunder or as interest on such advances), except to the extent payable
pursuant to clause (i), (ii), (iii) or (iv) above multiplied by the
fraction specified in the foregoing clause (i), (vi) all compensation and
reimbursement of expenses, disbursements and advances payable by Owner
under the Pass Through Trust Agreements multiplied by the fraction
specified in the foregoing clause (i), and (vii) all compensation and
reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income
or franchise taxes incurred by the Subordination Agent in connection with
the transactions contemplated by the Intercreditor Agreement multiplied by
the fraction specified in the foregoing clause (i). For purposes of this
paragraph, the terms "Applied Downgrade Advance", "Applied Non-Extension
Advance", "Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall
have the meanings specified in each Liquidity Facility or the Intercreditor
Agreement.
The Equipment Notes shall be executed on behalf of Owner 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
Owner shall bind Owner, 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. Owner may from time to time
execute and deliver Equipment Notes with respect to the Aircraft to the
Indenture Trustee for authentication upon original issue and such Equipment
Notes shall thereupon be authenticated and delivered by the Indenture
Trustee upon the written request of Owner signed by a Vice President or
Assistant Vice President or other authorized officer of Owner; provided,
however, that each such request shall specify the aggregate Principal
Amount of all Equipment Notes to be authenticated hereunder on original
issue with respect to the Aircraft. No Equipment Note shall be secured by
or entitled to any benefit under this Indenture or be valid or obligatory
for any purposes, unless there appears on such Equipment Note a certificate
of authentication in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes shall be conclusive evidence, and the
only evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. [Reserved].
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount,
if any, and other amounts due under each Equipment Note or hereunder will
be payable in Dollars by wire transfer of immediately available funds not
later than 11:00 a.m., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution among
the Note Holders in the manner provided herein. Owner shall not have any
responsibility for the distribution of such payment to any Note Holder.
Notwithstanding the foregoing or any provision in any Equipment Note to the
contrary, the Indenture Trustee will use reasonable efforts to pay or cause
to be paid, if so directed in writing by any Note Holder (with a copy to
Owner), all amounts paid by Owner 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
Indenture) by transferring, or causing to be transferred, by wire transfer
of immediately available funds in Dollars, prior to 2:00 p.m., New York
City time, on the due date of payment, to an account maintained by such
holder with a bank located in the continental United States the amount to
be distributed to such holder, for credit to the account of such holder
maintained at such bank. If the Indenture Trustee shall fail to make any
such payment as provided in the immediately preceding sentence after its
receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such holders for loss of use of funds at the Federal Funds Rate
until such payment is made and the Indenture Trustee shall be entitled to
any interest earned on such funds until such payment is made. Any payment
made hereunder shall be made without any presentment or surrender of any
Equipment Note, except that, in the case of the final payment in respect of
any Equipment Note, such Equipment Note shall be surrendered to the
Indenture Trustee for cancellation promptly after such payment.
Notwithstanding any other provision of this Indenture to the contrary, the
Indenture Trustee shall not be required to make, or cause to be made, wire
transfers as aforesaid prior to the first Business Day on which it is
practicable for the Indenture Trustee to do so in view of the time of day
when the funds to be so transferred were received by it if such funds were
received after 11:00 a.m., New York City time, at the place of payment.
Prior to the due presentment for registration of transfer of any Equipment
Note, Owner and the Indenture Trustee shall deem and treat the Person in
whose name any Equipment Note is registered on the Equipment Note Register
as the absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither Owner nor the Indenture
Trustee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for Owner, shall exclude
and withhold at the appropriate rate from each payment of Principal Amount
of, interest on, Make-Whole Amount, if any, and other amounts due hereunder
or under each Equipment Note (and such exclusion and withholding shall
constitute payment in respect of such Equipment Note) any and all United
States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Equipment Notes, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Equipment Note) and timely pay the same to the appropriate authority in the
name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to Owner) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as any such
Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the Equipment Note(s)
held by such holder is made (but prior to the making of such payment), or
in either of the two preceding calendar years, and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such form prior to the
date of such payment (and the Indenture Trustee has no reason to know that
any information set forth in such form is inaccurate), the Indenture
Trustee shall withhold only the amount, if any, required by Law (after
taking into account any applicable exemptions claimed by the Note Holder)
to be withheld from payments hereunder or under the Equipment Notes held by
such holder in respect of United States federal income tax (and such
withholding shall constitute payment in respect of such Equipment Note). If
a Note Holder (x) which is a Non-U.S. Person has furnished to the Indenture
Trustee a properly completed and currently effective U.S. Internal Revenue
Service Form 4224 in duplicate (or such successor certificate, form or
forms as may be required by the United States Treasury Department as
necessary in order to avoid withholding of United States federal income
tax), during the calendar year in which the payment is made (but prior to
the making of such payment), and has not notified the Indenture Trustee of
the withdrawal or inaccuracy of such certificate or form prior to the date
of such payment (and the Indenture Trustee has no reason to know that any
information set forth in such form is inaccurate) or (y) which is a U.S.
Person has furnished to the Indenture Trustee a properly completed and
currently effective U.S. Internal Revenue Service Form W-9, if applicable,
prior to a payment hereunder or under the Equipment Notes held by such
holder, no amount shall be withheld from payments in respect of United
States federal income tax. If any Note Holder has notified the Indenture
Trustee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such holder has not filed a form claiming an exemption
from United States withholding tax or if the Code or the regulations
thereunder or the administrative interpretation thereof are at any time
after the date hereof amended to require such withholding of United States
federal income taxes from payments under the Equipment Notes held by such
holder, the Indenture Trustee agrees to withhold from each payment due to
the relevant Note Holder withholding taxes at the appropriate rate under
Law and will, on a timely basis as more fully provided above, deposit such
amounts with an authorized depository and make such returns, statements,
receipts and other documentary evidence in connection therewith as required
by applicable law. Owner shall not be liable if the Indenture Trustee fails
to withhold withholding taxes in accordance with this Section 2.04 or if
any Note Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of
Principal Amount, Make-Whole Amount, if any, and interest or other amounts
due thereon shall be applied:
First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Principal Amount, any overdue
Make-Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such
Equipment Note (or a portion thereof) then due thereunder (other than by
reason of redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid and
due by reason of redemption (provided that such Equipment Note shall not be
subject to redemption except as provided in Sections 2.10, 2.11 and 2.12).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity.
SECTION 2.06. Termination of Interest in Indenture Estate.
A Note Holder and Indenture Indemnitees shall not, as such,
have any further interest in, or other right with respect to, the Indenture
Estate when and if the Secured Obligations due to such Note Holder or
Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes.
The Indenture Trustee shall keep a register (the "Equipment
Note Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer
of any Equipment Note, Owner shall execute, and the Indenture Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Equipment Notes of a like aggregate Principal
Amount and of the same series. At the option of the Note Holder, Equipment
Notes may be exchanged for other Equipment Notes of any authorized
denominations of a like aggregate Principal Amount, upon surrender of the
Equipment Notes to be exchanged to the Indenture Trustee at the Corporate
Trust Office. Whenever any Equipment Notes are so surrendered for exchange,
Owner shall execute, and the Indenture Trustee shall authenticate and
deliver, the Equipment Notes which the Note Holder making the exchange is
entitled to receive. All Equipment Notes issued upon any registration of
transfer or exchange of Equipment Notes (whether under this Section 2.07 or
under Section 2.08 or otherwise under this Indenture) shall be the valid
obligations of Owner evidencing the same respective obligations, and
entitled to the same security and benefits under this Indenture, as the
Equipment Notes surrendered upon such registration of transfer or exchange.
Every Equipment Note presented or surrendered for registration of transfer,
shall (if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of Principal Amount previously made on
the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old
Equipment Note or Equipment Notes has been paid. Interest shall be deemed
to have been paid on such new Equipment Note to the date on which interest
shall have been paid on such old Equipment Note, and all payments of the
Principal Amount marked on such new Equipment Note, as provided above,
shall be deemed to have been made thereon. Owner 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. Owner 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 Owner with respect to such Equipment Note and for all purposes
until a notice stating otherwise is received from the Indenture Trustee and
such change is reflected on the Equipment Note Register. The Indenture
Trustee will promptly notify Owner 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
represented and warranted (except as provided above), and covenanted, to
the parties to the Participation Agreement as to the matters represented,
warranted and covenanted by the Loan Participants in the Participation
Agreement. Subject to compliance by the Note Holder and its transferee (if
any) of the requirements set forth in this Section 2.07, the Indenture
Trustee and the Owner shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within ten (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, Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Principal Amount dated the same date and captioned as issued in connection
with the Aircraft. If the Equipment Note being replaced has become
mutilated, such Equipment Note shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to Owner. If the
Equipment Note being replaced has been destroyed, lost or stolen, the
holder of such Equipment Note shall furnish to Owner and the Indenture
Trustee such security or indemnity as may be required by them to save Owner
and the Indenture Trustee harmless and evidence satisfactory to Owner and
the Indenture Trustee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof. If a "qualified institutional buyer" of
the type referred to in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule
144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of
such QIB, signed by an authorized officer thereof, in favor of, delivered
to and in form reasonably satisfactory to Owner and the Indenture Trustee
shall be accepted as satisfactory indemnity and security and no further
indemnity or security shall be required as a condition to the execution and
delivery of such new Equipment Note. Subject to compliance by the Note
Holder of the requirements set forth in this Section 2.08, the Indenture
Trustee and Owner shall use all reasonable efforts to issue new Equipment
Notes within ten (10) Business Days of the date of the written request
therefor from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Indenture
Trustee, as Equipment Note Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Equipment Notes.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
On the date on which Owner is required pursuant to Section
5.06 to make payment for an Event of Loss with respect to the Aircraft, all
of the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with all
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement to the Note Holders
but without the Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than all, of the Equipment Notes may be
redeemed by Owner upon at least twenty (20) days' revocable prior written
notice to the Indenture Trustee at a redemption price equal to 100% of the
unpaid Principal Amount thereof, together with accrued interest thereon to
the date of redemption and all other amounts payable hereunder or under the
Participation Agreement to the Note Holders plus the Make-Whole Amount, if
any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by Owner of any Equipment Note may be made except to the extent
and in the manner expressly permitted by this Indenture. No purchase of any
Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than fifteen (15) nor more than
sixty (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. 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, Owner (or any person
on behalf of Owner) 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 Indenture Estate, deposit or cause to be
deposited with the Indenture Trustee by 11:00 a.m. New York City time on
the redemption date in immediately available funds the redemption price of
the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not revoked at least three (3) days prior to the redemption
date), the Equipment Notes to be redeemed or purchased shall, on the
redemption date, become due and payable at the Corporate Trust Office of
the Indenture Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price)
any such Equipment Notes then outstanding shall cease to bear interest.
Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice, such Equipment Note shall be redeemed at the
redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such
Equipment Note as of such redemption date.
SECTION 2.13. [Reserved].
SECTION 2.14. [Reserved].
SECTION 2.15. Subordination.
(a) Owner 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(e), except as expressly provided in
Article III.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15
or Article III, it will hold any amount so received in trust for the Senior
Holder (as defined in Section 2.15(c)) and will forthwith turn over such
payment to the Indenture Trustee in the form received to be applied as
provided in Article III.
(c) As used in this Section 2.15, the term "Senior Holder"
shall mean, (i) the Note Holders of Series A until the Secured Obligations
in respect of Series A Equipment Notes have been paid in full and (ii)
after the Secured Obligations in respect of Series A Equipment Notes have
been paid in full, the Note Holders of Series B until the Secured
Obligations in respect of Series B Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE
SECTION 3.01. Basic Distributions.
Except as otherwise provided in Sections 3.02 and 3.03, each
periodic payment of principal or interest on the Equipment Notes received
by the Indenture Trustee shall be promptly distributed in the following
order of priority: (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series A Equipment Notes shall be distributed to the Note Holders of
Series A ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series A
Equipment Note bears to the aggregate amount of the payments then due under
all Series A Equipment Notes; (ii) after giving effect to paragraph (i)
above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series B Equipment Notes shall be distributed to the Note Holders of
Series B ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series B
Equipment Note bears to the aggregate amount of the payments then due under
all Series B Equipment Notes; and (iii) after giving effect to paragraph
(ii) above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on
any overdue Principal Amount and, to the extent permitted by applicable
law, on any overdue interest and any other overdue amounts) then due under
all Series C Equipment Notes shall be distributed to the Note Holders of
Series C ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the payments then due under
all Series C Equipment Notes.
SECTION 3.02. Event of Loss; Optional Redemption.
Except as otherwise provided in Section 3.03, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss or (ii) in connection with any optional
redemption of the Equipment Notes effected in accordance with the Operative
Documents, shall be applied to redemption of the Equipment Notes, to
payment of the Secured Obligations or to the Indenture Trustee or any Note
Holder under the Participation Agreement by applying such funds in the
following order of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or indemnity
by Owner, under the Operative Documents and then (ii) to pay any other
amounts then due to the Indenture Trustee and the Note Holders under this
Indenture, the Participation Agreement or the Equipment Notes (other than
the amounts specified in clause Second below);
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 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 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 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.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Article IV) after both an Event of Default shall have
occurred and be continuing and the Equipment Notes shall have become due
and payable pursuant to Section 4.04(b), as well as all payments or amounts
then held by the Indenture Trustee as part of the Indenture Estate, shall
be promptly distributed by the Indenture Trustee in the following order of
priority:
First, so much of such payments or amounts as shall be
required to reimburse the Indenture Trustee for any tax, expense or other
loss (including, without limitation, all amounts to be expended at the
expense of, or charged upon the tolls, rents, revenues, issues, products
and profits of, the property included in the Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to Section
4.05(b)) incurred by the Indenture Trustee (to the extent not previously
reimbursed), the expenses of any sale, taking or other proceeding,
reasonable attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by the Indenture
Trustee or the Note Holders in the protection, exercise or enforcement of
any right, power or remedy or any damages sustained by the Indenture
Trustee or any Note Holder, liquidated or otherwise, upon such Event of
Default shall be applied by the Indenture Trustee as between itself and the
Note Holders in reimbursement of such expenses and any other expenses for
which the Indenture Trustee or the Note Holders are entitled to
reimbursement under any Operative Document and all amounts payable to the
other Indenture Indemnitees hereunder and under the Participation Agreement
excluding those amounts described in clauses "Second" and "Third" below,
and in the case the aggregate amount to be so distributed is insufficient
to pay as aforesaid, then ratably, without priority of one over the other,
in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as
shall be required to reimburse the then existing or prior Note Holders for
payments made pursuant to Section 5.03 (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;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series A Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Equipment Notes to the date of distribution, shall be distributed
to the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series A Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series A Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; (ii) after giving effect to paragraph (i)
above, so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series B
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and (iii) after giving effect to paragraph
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of all Series
C Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon and all other Secured Obligations in respect of the Series C
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series C Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner free and clear of
the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the
Equipment Notes as a consequence of the acceleration of the Equipment
Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Indenture and
for which such provision is made in the Participation Agreement or any
other Operative Document shall be applied forthwith to the purpose for
which such payment was made in accordance with the terms of the
Participation Agreement or such other Operative Document, as the case may
be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from Owner in respect of (i)
the Indenture Trustee in its individual capacity or any other Indenture
Indemnitees, (ii) any Note Holder, (iii) the Subordination Agent, (iv) the
Liquidity Provider, and (v) the Pass Through Trustees, in each case
pursuant to Section 6 of the Participation Agreement, directly to the
Person entitled thereto. Any payment received by the Indenture Trustee the
third paragraph of Section 2.02 shall be distributed to the Subordination
Agent to be distributed in accordance with the terms of the Intercreditor
Agreement.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee in the manner provided in
Section 3.03. Further, and except as otherwise provided in Sections 3.02,
3.03 and 3.04, all payments received and amounts realized by the Indenture
Trustee with respect to the Aircraft, to the extent received or realized at
any time after payment in full of all Secured Obligations due the Note
Holders, shall be distributed by the Indenture Trustee to Owner.
SECTION 3.06. Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee
to Owner shall be paid to Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner to the
Indenture Trustee from time to time. Owner hereby notifies the Indenture
Trustee that unless and until the Indenture Trustee receives notice to the
contrary from the Owner, all amounts to be distributed to the Owner
pursuant to this Indenture shall be distributed by wire transfer of funds
of the type received by the Indenture Trustee to the Owner's account
specified in Schedule I to the Participation Agreement.
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Certain Covenants of Owner.
Owner hereby covenants and agrees that it will duly and
punctually pay the Principal Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under the Equipment Notes and hereunder
in accordance with the terms of the Equipment Notes and this Indenture and
all amounts, if any, payable by it to the Note Holders under the
Participation Agreement.
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) the failure of Owner to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder and such
failure shall have continued unremedied for ten Business Days in the case
of any payment of Principal Amount or interest or Make-Whole Amount, if
any, thereon and, in the case of any other amount, for ten Business Days
after Owner receives written demand from the Indenture Trustee or any Note
Holder; or
(b) any representation or warranty made by Owner herein, in
the Participation Agreement or in any certificate furnished by Owner to the
Indenture Trustee or any Note Holder in connection with the transactions
contemplated by the Operative Documents shall prove to have been false or
incorrect when made in any material respect and continues to be material
and adverse to the interests of the Indenture Trustee or the Note Holders;
and if such misrepresentation is capable of being corrected and if such
correction is being sought diligently, such misrepresentation shall not
have been corrected within sixty (60) days following notice thereof from
the Indenture Trustee or any Note Holder to the Owner; or
(c) other than as provided in (d) below, any failure by
Owner to observe or perform any other covenant or obligation of the Owner
for the benefit of the Indenture Trustee or the Note Holders contained in
the Participation Agreement, the Equipment Notes or this Indenture which is
not remedied within a period of sixty (60) days after notice thereof has
been given to Owner; or
(d) if at any time when the Aircraft is registered under the
laws of the United States, Owner shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under
the Transportation Code, and regulations then applicable thereunder, shall
cease to be effective; provided that no Event of Default shall be deemed to
have occurred under this paragraph (d) unless such circumstances continue
unremedied for more than sixty (60) days after Owner has actual knowledge
of the state of facts that resulted in such ineffectiveness and of such
loss of citizenship; or
(e) at any time either (i) the commencement of an
involuntary case or other proceeding in respect of Owner 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 Owner
or for all or substantially all of its property, or seeking the winding-up
or liquidation of its affairs and the continuation of any such case or
other proceeding undismissed and unstayed for a period of ninety (90)
consecutive days; or (ii) the commencement by Owner 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
Owner to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of
Owner or for all or substantially all of its property, or the making by
Owner of any assignment for the benefit of creditors or Owner shall take
any action to authorize any of the foregoing; or
(f) Owner shall fail to carry and maintain or with respect
to the Aircraft (or cause to be carried or maintained) insurance required
to be maintained in accordance with Section 7.04.
SECTION 4.03. [Reserved].
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 Indenture Trustee may 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 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 Owner and all
persons claiming under Owner wholly or partly therefrom; provided, however,
that during any period the Aircraft is subject to the Civil Reserve Air
Fleet Program and in possession of the United States Government or an
agency or instrumentality of the United States, the Indenture Trustee shall
not, on account of any Event of Default, be entitled to exercise or pursue
any of the powers, rights or remedies described in this Section 4.04 in
such manner as to limit Owner's control (or any Lessee's control under any
Lease) of any Airframe or any Engines installed thereon, unless at least
sixty (60) days (or such lesser period as may then be applicable under the
Air Mobility Command program of the United States Government) written
notice of default hereunder shall have been given by the Indenture Trustee
by registered or certified mail to Owner (and any Lessee) with a copy
addressed to the Contracting Office Representative of the Air Mobility
Command of the United States Air Force under any contract with Owner (or
any Lessee) relating to the Aircraft; provided further, that the Indenture
Trustee shall give Owner twenty (20) days' prior written notice of its
intention to sell the Aircraft. Without limiting any of the foregoing, it
is understood and agreed that the Indenture Trustee may exercise any right
of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at
the time of such sale.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), at any time, by delivery of written notice or
notices to Owner, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately
become due and payable without presentment, demand, protest or notice, all
of which are hereby waived; provided that if an Event of Default referred
to in clause (e) of Section 4.02 shall have occurred and be continuing,
then and in every such case the unpaid Principal Amount then outstanding,
together with accrued but unpaid interest and all other amounts due
thereunder and hereunder shall immediately and without further act become
due and payable without presentment, demand, protest or notice, all of
which are hereby waived.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable under the Equipment Notes (except the Principal Amount of the
Equipment Notes which by such declaration shall have become payable) shall
have been duly paid, and every other Default and Event of Default with
respect to any covenant or provision of this Indenture shall have been
cured, then and in every such case a Majority in Interest of Note Holders
may (but shall not be obligated to), by written instrument filed with the
Indenture Trustee, rescind and annul the Indenture Trustee's declaration
and its consequences; but no such rescission or annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereon.
(c) Any Note Holder shall be entitled, at any sale pursuant
to 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 Indenture (but only to the extent
that such purchase price would have been paid to such Note Holder pursuant
to Article III 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 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 Indenture,
the unpaid Principal Amount of all Equipment Notes then outstanding,
together with accrued interest thereon, and other amounts due thereunder,
shall immediately become due and payable without presentment, demand,
protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as
the Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
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, at the request of the Indenture Trustee, Owner shall promptly
execute and deliver to the Indenture Trustee such instruments and other
documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by
the Indenture Trustee, at such time or times and place or places as the
Indenture Trustee may specify, to obtain possession of all or any part of
the Mortgaged Property included in the Indenture Estate to which the
Indenture Trustee shall at the time be entitled hereunder. If Owner shall
for any reason fail to execute and deliver such instruments and documents
after such request by the Indenture Trustee, the Indenture Trustee may (i)
obtain a judgment conferring on the Indenture Trustee the right to
immediate possession and requiring the Owner to execute and deliver such
instruments and documents to the Indenture Trustee, to the entry of which
judgment Owner hereby specifically consents to the fullest extent permitted
by applicable law, and (ii) pursue all or part of such Mortgaged Property
wherever it may be found and may enter any of the premises of Owner
wherever such Mortgaged Property may be or be supposed to be and search for
such Mortgaged Property and take possession of and remove such Mortgaged
Property. All expenses of obtaining such judgment or of pursuing, searching
for and taking such property shall, until paid, be secured by the Lien of
this Indenture.
(b) Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property,
make all such expenditures for maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modifications or
alterations to and of the Mortgaged Property, as it may deem proper. In
each such case, the Indenture Trustee shall have the right to maintain,
use, operate, store, insure, lease, control, manage, dispose of, modify or
alter the Mortgaged Property and to carry on the business and to exercise
all rights and powers of Owner relating to the Mortgaged Property, as the
Indenture Trustee shall deem best, including the right to enter into any
and all such agreements with respect to the maintenance, use, operation,
storage, insurance, leasing, control, management, disposition, modification
or alteration of the Mortgaged Property or any part thereof as the
Indenture Trustee may determine, and the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents, revenues,
issues, income, products and profits of the Mortgaged Property and every
part thereof. Such tolls, rents, revenues, issues, income, products and
profits shall be applied to pay the expenses of the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
improvement, modification or alteration of the Mortgaged Property and of
conducting the business thereof, and to make all payments which the
Indenture Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Mortgaged Property
or any part thereof, and all other payments which the Indenture Trustee may
be required or authorized to make under any provision of this Indenture, as
well as just and reasonable compensation for the services of the Indenture
Trustee, and of all persons properly engaged and employed by the Indenture
Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the
Indenture Trustee specifically or otherwise in this Indenture shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at
the same time or thereafter any other right, power or remedy. No delay or
omission by the Indenture Trustee in the exercise of any right, remedy or
power or in the pursuance of any remedy shall impair any such right, power
or remedy or be construed to be a waiver of any default on the part of
Owner or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, and all rights, remedies and powers
of the Indenture Trustee or Owner 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 Indenture Trustee shall waive any past Default hereunder and
its consequences and upon any such waiver such Default shall cease to exist
and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon;
provided, that in the absence of written instructions from all the Note
Holders, the Indenture Trustee shall not waive any Default (i) in the
payment of the Principal Amount, Make-Whole Amount, if any, and interest
and other amounts due under any Equipment Note then outstanding, or (ii) in
respect of a covenant or provision hereof which, under Article IX, cannot
be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall, as a matter of right, be entitled
to the appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
Mortgaged Property or the taking of possession thereof or otherwise, and
Owner hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of
the Mortgaged Property shall be entitled to exercise all the rights and
powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills
of Sale, Etc.
Owner irrevocably appoints the Indenture Trustee the true
and lawful attorney-in-fact of Owner in its name and stead and on its
behalf, for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating in accordance with applicable law any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate, with full power
of substitution, Owner hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law. Nevertheless, if so requested by the Indenture Trustee or
any purchaser, Owner shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Indenture Trustee
or such purchaser all bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this 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 INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure by Owner to pay
when due any payment of Principal Amount of, interest on, or Make-Whole
Amount, if any, due and payable under any Equipment Note, the Indenture
Trustee shall give prompt written notice thereof to the Owner and each Note
Holder. Subject to the terms of Sections 4.04, 4.08, 5.02 and 5.03, the
Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in Interest
of Note Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to
the Note Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section
5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the
best interests of the Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.04, 4.08, 5.01 and 5.03,
upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Indenture Trustee shall, subject
to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in
such instructions; and (ii) give such notice or direction or exercise such
right, remedy or power under the Participation Agreement, the Purchase
Agreement, or any other part of the Indenture Estate as shall be specified
in such instructions.
The Indenture Trustee will execute and Owner will file or
cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Indenture Estate as specified by Owner pursuant to Section 7(j) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Note Holders (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement so to be filed). The
Indenture Trustee will furnish to each Note Holder, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to the Indenture Trustee
hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any
action or refrain from taking any action under Sections 5.01 (other than
the first sentence thereof) or 5.02 or Article IV unless the Indenture
Trustee shall have been indemnified to its reasonable satisfaction against
any liability, cost or expense (including counsel fees) which may be
incurred in connection therewith pursuant to a written agreement with one
or more Note Holders. The Indenture Trustee shall not be under any
obligation to take any action under this Indenture and nothing herein or
therein shall require the Indenture Trustee to expend or risk its own funds
or otherwise incur the risk of any financial liability in the performance
of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (the written indemnity of
any Note Holder who is a QIB, signed by an authorized officer thereof, in
favor of, delivered to and in form reasonably satisfactory to Indenture
Trustee shall be accepted as reasonable assurance of adequate indemnity).
The Indenture Trustee shall not be required to take any action under
Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV,
nor shall any other provision of this Indenture or any other Operative
Document be deemed to impose a duty on the Indenture Trustee to take any
action, if the Indenture Trustee shall have been advised by counsel that
such action is contrary to the terms hereof or is otherwise contrary to
Law.
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation
to use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Indenture Estate,
or to otherwise take or refrain from taking any action under, or in
connection with, this Indenture or any part of the Indenture Estate, except
as expressly provided by the terms of this Indenture or as expressly
provided in written instructions from Note Holders as provided in this
Indenture; and no implied duties or obligations shall be read into this
Indenture against the Indenture Trustee. The Indenture Trustee agrees that
it will in its individual capacity and at its own cost and expense (but
without any right of indemnity in respect of any such cost or expense under
Section 8.01), promptly take such action as may be necessary duly to
discharge all liens and encumbrances on any part of the Indenture Estate
which result from claims against it in its individual capacity not related
to its interest in the Aircraft or the administration of the Indenture
Estate or any other transaction pursuant to this Indenture or any document
included in the Indenture Estate.
SECTION 5.05. No Action Except Under Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Indenture Estate except in accordance
with the powers granted to, or the authority conferred upon, the Indenture
Trustee pursuant to this Indenture and in accordance with the express terms
hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Owner shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of
Loss, and, within sixty (60) days after such Event of Loss, Owner shall
give the Indenture Trustee written notice of its election to perform one of
the following options (it being agreed that if Owner shall not have given
such notice of election within such period, Owner shall be deemed to have
elected the option set forth in clause (i) below). Owner may elect either
to:
(i) redeem the Equipment Notes in the
manner set forth in Section 2.10 on the earlier of (x) the Business
Day next succeeding the 120th day following the occurrence of such
Event of Loss or (y) an earlier Business Day irrevocably specified
fifteen (15) days in advance by notice from Owner to the Indenture
Trustee; or
(ii) substitute an aircraft or an airframe
or an airframe and one or more engines, as the case may be;
provided that, if Owner does not perform its obligation to effect
such substitution in accordance with this Section 5.06(a), during
the period of time provided herein, then Owner shall redeem the
Equipment Notes in the manner set forth in Section 2.10 on the
Business Day next succeeding the 120th day following the occurrence
of such Event of Loss.
In the event Owner shall elect to substitute an aircraft (or
an airframe or an airframe and one or more engines, as the case may be)
Owner shall, at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss,
(1) furnish the Indenture Trustee with such evidence as the Indenture
Trustee may reasonably request that Owner holds title to such aircraft (or
such airframe or such airframe and one or more engines which, together with
the Engines constituting a part of the Aircraft but not installed thereon
at the time of such Event of Loss, constitute the Aircraft) free and clear
of all Liens (other than Permitted Liens) and having a value, utility and
remaining useful life at least equal to the Aircraft subject to such Event
of Loss assuming that the Aircraft had been maintained in accordance with
the requirements of this Indenture, and Owner shall cause an Indenture
Supplement to be duly executed by Owner and filed for recording pursuant to
the Transportation Code, or the applicable laws, rules and regulations of
any other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(b) of the Participation Agreement with respect to
such substituted property, (2) cause a financing statement or statements
with respect to such substituted property to be filed in such place or
places, if any, as may be deemed necessary or desirable by the Indenture
Trustee to perfect the Indenture Trustee's interest therein, (3) furnish
the Indenture Trustee with such evidence of compliance with the insurance
provisions hereof with respect to such substituted property as the
Indenture Trustee may reasonably request and (4) furnish the Indenture
Trustee with an opinion of counsel (which shall be Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP or Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) and,
if not, other counsel chosen by Owner and reasonably acceptable to the
Indenture Trustee) reasonably satisfactory to the Indenture Trustee to the
effect that the Indenture Trustee will be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to the substitute
aircraft, provided that such opinion need not be delivered to the extent
that immediately prior to such substitution the benefits of Section 1110 of
the Bankruptcy Code were not, solely by reason of a change in law or
governmental interpretation thereof after the date hereof, available to the
Indenture Trustee with respect to the Aircraft. For all purposes hereof,
the property so substituted shall be deemed part of the property subject to
the Lien of this Indenture and shall be deemed an "Aircraft", "Airframe"
and "Engine", as the case may be, as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect
to the Airframe, Owner shall forthwith (and in any event, within fifteen
(15) days after such occurrence) give the Indenture Trustee written notice
thereof and shall, within one hundred twenty (120) days after the
occurrence of such Event of Loss, (i) cause an Indenture Supplement to be
duly executed by Owner and to be filed for recording pursuant to the
Transportation Code, or the applicable laws, rules and regulations of any
other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(b) of the Participation Agreement with respect to an
Acceptable Alternate Engine and, (ii) furnish the Indenture Trustee with
such evidence of compliance with the insurance provisions hereof with
respect to such replacement engine as the Indenture Trustee may reasonably
request. For all purposes hereof, each such replacement engine shall, after
such designation, be deemed part of the property subject to the Lien of
this Indenture hereunder, and shall be deemed an "Engine".
(c) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof, Owner shall replace such Engine hereunder
by complying (or causing any Lessee to comply) with the terms of Section
5.06(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 5.06(b), any payments received
by Owner from such government with respect to such requisition shall be
paid over to, or retained by, Owner.
(d) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 5.06 which is payable to or
retainable by Owner shall not be paid to or retained by Owner if at the
time of such payment or retention an Event of Default has occurred and is
continuing, but shall be held by or paid over to the Indenture Trustee as
security for the obligations of Owner hereunder and, if an Event of Default
has occurred and is continuing hereunder, applied against Owner's
obligations hereunder as and when due. At such time as there shall not be
continuing any such Event of Default, such amount shall be paid to Owner to
the extent not previously applied in accordance with the preceding
sentence.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 5.06, Owner and the Indenture
Trustee agree for the benefit of the Note Holders and Owner, subject to
fulfillment of the conditions precedent and compliance by Owner with the
requirements of Section 5.06 with respect to such Replacement Airframe or
Replacement Engine, to execute and deliver an Indenture Supplement.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of an
Engine or Engines pursuant to Section 5.06, (a) all provisions of this
Indenture relating to the Airframe or Engine or Engines being replaced
shall be applicable to such Replacement Airframe or Replacement Engine or
Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or engines,
as the case may be, as the Airframe or Engine or Engines being replaced but
for the Event of Loss with respect to the Airframe or Engine or Engines
being replaced, and (b) the provisions of this Indenture shall no longer be
applicable to the Airframe or Engine or Engines being replaced, which shall
be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee.
Any amounts held by the Indenture Trustee pursuant to any
provision of any other Operative Document providing for amounts to be held
by the Indenture Trustee which are not distributed pursuant to the other
provisions of Article III shall be invested by the Indenture Trustee from
time to time in Cash Equivalents as directed by Owner so long as the
Indenture Trustee may acquire the same using its best efforts. Unless
otherwise expressly provided in this Indenture, any income realized as a
result of any such investment, net of the Indenture Trustee's reasonable
fees and expenses in making such investment, shall be held and applied by
the Indenture Trustee in the same manner as the principal amount of such
investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Indenture Trustee shall not be liable for any loss resulting
from any investment required to be made by it under this Indenture other
than by reason of its willful misconduct or gross negligence, and any such
investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever such sale is necessary to make a
distribution required by this Indenture.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Indenture and agrees to receive and disburse all monies constituting
part of the Indenture Estate in accordance with the terms hereof. The
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for 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)
as provided in the fourth sentence of Section 2.04(a) and the last sentence
of Section 5.04, and (iii) for liabilities that may result from the
inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) in the Participation Agreement or expressly made
hereunder.
SECTION 6.02. Absence of Duties.
Except in accordance with written instructions furnished
pursuant to Section 5.01 or 5.02 , and except as provided in, and without
limiting the generality of, Sections 5.03 and 5.04, the Indenture Trustee
shall have no duty (i) to see to any registration of the Aircraft or any
recording or filing of this 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 Owner shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of any
kind against any part of the Indenture Estate, or (iv) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants hereunder with respect to the
Aircraft.
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
DOES NOT MAKES AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR
USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER. The Indenture Trustee, in
its individual or trust capacity, does not make and shall not be deemed to
have made any representation or warranty as to the validity, legality or
enforceability of this Indenture, the Participation Agreement, the
Equipment Notes, the Purchase Agreement, the Purchase Agreement Assignment
or the Consent and Agreement, or as to the correctness of any statement
contained in any thereof.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed to
the Note Holders or the Owner as provided in Article III need not be
segregated in any manner except to the extent required by Law and Section
5.09, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee shall invest all monies
held as directed by Owner so long as no Event of Default has occurred and
is continuing (or in the absence of such direction, by the Majority In
Interest of Note Holders) in Cash Equivalents; provided, however, that any
payments received, or applied hereunder, by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to
anyone in acting upon any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Indenture Trustee may accept a
copy of a resolution of the Board of Directors of any party to the
Participation Agreement, certified by the Secretary or an Assistant
Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the
same is in full force and effect. As to the aggregate unpaid Principal
Amount of Equipment Notes outstanding as of any date, Owner may for all
purposes hereof rely on a certificate signed by any Vice President or other
authorized corporate trust officer of the Indenture Trustee. As to any fact
or matter relating to the Owner the manner of ascertainment of which is not
specifically described herein, the Indenture Trustee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of Owner,
as to such fact or matter, and such certificate shall constitute full
protection to the Indenture Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of the
trusts hereunder, the Indenture Trustee may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may at the expense of the Indenture Estate,
consult with counsel, accountants and other skilled persons to be selected
and retained by it, and the Indenture Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. [Reserved].
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Owner, 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 Indenture
Estate toward such payments. The Indenture Trustee agrees that it shall
have no right against the Loan Participants or the Note Holders for any fee
as compensation for its services as trustee under this Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Note Holders should any provision of this Indenture appear
to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture
Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.08.
ARTICLE VII
OPERATING COVENANTS OF THE OWNER
SECTION 7.01. Liens. Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein, except (i) the Lien of the
Indenture, the rights of any Lessee under a Lease permitted hereunder and
any other rights of any Person existing pursuant to the Operative
Documents, (ii) the rights of others under agreements or arrangements to
the extent permitted by the terms of Sections 7.02 and 7.03, (iii) Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Owner (or any Lessee) either not yet due or being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Owner's (or, if a Lease is then in effect, Lessee's) business (including
those arising under maintenance agreements entered into in the ordinary
course of business) securing obligations that are not overdue for a period
of more than sixty (60) days or are being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (vi) Liens arising out of any judgment or award
against Owner (or any Lessee), unless the judgment secured shall not,
within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Owner
(or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. Owner will
promptly, at its own expense, take (or cause to be taken) such actions as
may be necessary duly to discharge any such Lien not excepted above if the
same shall arise at any time.
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia.
(a) Registration, Maintenance and Operation.
(i) Registration and Maintenance. Owner,
at its own cost and expense, shall (or shall cause any Lessee to):
(A) cause the Aircraft to be duly registered in the name of Owner
(or any Lessee), and, subject to clause (ii) of this Section
7.02(a) and Section 7(b) of the Participation Agreement, to remain
duly registered in the name of Owner (or any Lessee) under the
Transportation Code, and shall not register the Aircraft or permit
the Aircraft to be registered under any laws other than the
Transportation Code at any time except as provided in Section 7(b)
of the Participation Agreement and, shall cause the Indenture to be
duly recorded and maintained of record as a first mortgage on the
Aircraft; (B) maintain, service, repair and/or overhaul (or cause
to be maintained, serviced, repaired and/or overhauled) the
Aircraft so as to keep the Aircraft in as good an operating
condition as when delivered by the Seller to Owner, ordinary wear
and tear excepted, and as may be necessary to enable the applicable
airworthiness certification for the Aircraft to be maintained in
good standing at all times (other than during temporary periods of
storage or during maintenance or modification permitted hereunder)
under the Transportation Code, except when all of Owner's Airbus
Model A___ aircraft powered by engines of the same type as those
with which the Airframe shall be equipped at the time of such
grounding and registered in the United States have been grounded by
the FAA (although such certification need actually be maintained
only during such periods as the Aircraft is registered in the
United States), or the applicable laws of any other jurisdiction in
which the Aircraft may then be registered from time to time in
accordance with Section 7(b) of the Participation Agreement,
utilizing, except during any period that a Lease is in effect, the
same manner and standard of maintenance, service, repair or
overhaul used by Owner with respect to similar aircraft operated by
Owner in similar circumstances and utilizing, during any period
that a Lease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by the Lessee with
respect to similar aircraft operated by the Lessee in similar
circumstances; and (C) maintain or cause to be maintained in
English all records, logs and other materials required to be
maintained in respect of the Aircraft by the FAA or the applicable
regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered.
(ii) Operation. Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or permit
any Lessee to maintain, use, service, repair, overhaul or operate
the Aircraft) in violation of any law or any rule, regulation,
order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction over the Aircraft, or in
violation of any airworthiness certificate, license or registration
relating to the Aircraft issued by any such authority, except to
the extent Owner (or, if a Lease is then in effect, any Lessee) is
contesting in good faith the validity or application of any such
law, rule, regulation or order in any reasonable manner which does
not involve any material risk of sale, forfeiture or loss of the
Aircraft. Owner will not operate the Aircraft, or permit any Lessee
to operate the Aircraft, in any area excluded from coverage by any
insurance required by the terms of Section 7.04; provided, however,
that the failure of Owner to comply with the provisions of this
sentence shall not give rise to an Event of Default hereunder if
indemnification complying with Section 7.04 has been provided or
where such failure is attributable to extraordinary circumstances
involving an isolated occurrence or series of incidents not in the
ordinary course of the regular operations of Owner (or any Lessee)
such as a hijacking, medical emergency, equipment malfunction,
weather condition, navigational error or other causes beyond the
reasonable control of Owner (or any Lessee).
(b) Possession and Leases. Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Owner (or any Lessee)
shall comply with the provisions of Section 7.02(a) and Section 7.04, Owner
may (or may permit any Lessee to), without the prior written consent of the
Indenture Trustee:
(i) subject the Airframe and the Engines or
engines then installed thereon to interchange agreements or any
Engine to pooling or similar arrangements, in each case customary
in the airline industry and entered into by Owner (or, if a Lease
is then in effect, by Lessee) in the ordinary course of its
business; provided that (A) no such agreement or arrangement
contemplates or requires the transfer of title to the Airframe, (B)
if Owner's title to any Engine shall be divested under any such
agreement or arrangement, such divestiture shall be deemed to be an
Event of Loss with respect to such Engine and Owner shall (or shall
cause Lessee to) comply with Section 5.06(b) in respect thereof,
and (C) any interchange agreement to which the Airframe may be
subject shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery thereto) or
to any organization (or for delivery thereto) for testing, service,
repair, maintenance or overhaul work on the Airframe or Engine or
any part of any thereof or for alterations or modifications in or
additions to such Airframe or Engine to the extent required or
permitted by the terms of Section 7.03;
(iii) install an Engine on an airframe owned
by Owner (or any Lessee) free and clear of all Liens, except: (A)
Permitted Liens and those which apply only to the engines (other
than Engines), appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment (other than Parts)
installed on such airframe (but not to the airframe as an
entirety), (B) the rights of third parties under interchange
agreements or pooling or similar arrangements which would be
permitted under clause (i) above, provided that Owner's title to
such Engine and the first priority Lien of the Indenture shall not
be divested or impaired as a result thereof and (C) mortgage liens
or other security interests, provided that (as regards this clause
(C)) the documents creating such mortgage liens or other security
interests (or, if applicable, another written agreement governing
such mortgage liens or other security interests) effectively
provide that such Engine shall not become subject to the lien of
such mortgage or security interest, notwithstanding the
installation thereof on such airframe;
(iv) install an Engine on an airframe leased
to Owner (or any Lessee) or purchased by Owner (or any Lessee)
subject to a conditional sale or other security agreement, provided
that (x) such airframe is free and clear of all Liens, except: (A)
the rights of the parties to the lease or conditional sale or other
security agreement covering such airframe, or their assignees, and
(B) Liens of the type permitted by clause (iii) of this paragraph
(b) and (y) such lease, conditional sale or other security
agreement effectively provides that such Engine shall not become
subject to the lien of such lease, conditional sale or other
security agreement, notwithstanding the installation thereof on
such airframe;
(v) install an Engine on an airframe owned
by Owner (or any Lessee), leased to Owner (or any Lessee) or
purchased by Owner (or any Lessee) subject to a conditional sale or
other security agreement under circumstances where neither clause
(iii) nor clause (iv) of this paragraph (b) is applicable, provided
that such installation shall be deemed an Event of Loss with
respect to such Engine and Owner shall (or shall cause any Lessee
to) comply with Section 5.06(b) in respect thereof;
(vi) to the extent permitted by this Section
7.02(b), subject any appliances, Parts or other equipment removed from
the Airframe or any Engine to any pooling arrangement referred to in
this Section 7.02(b);
(vii) subject (or permit any Lessee to
subject) the Airframe or any Engine to the Civil Reserve Air Fleet
Program and transfer (or permit any Lessee to transfer) possession
of the Airframe or any Engine to the United States Government or
any instrumentality or agency thereof pursuant to the Civil Reserve
Air Fleet Program, so long as Owner (or any Lessee) shall (A)
promptly notify the Indenture Trustee upon subjecting the Airframe
or any Engine to the Civil Reserve Air Fleet Program in any
contract year and provide the Indenture Trustee with the name and
address of the Contracting Office Representative for the Air
Mobility Command of the United States Air Force to whom notice must
be given pursuant to Section 4.04(a), and (B) promptly notify the
Indenture Trustee upon transferring possession of the Airframe or
any Engine to the United States of America or any agency or
instrumentality thereof pursuant to such program;
(viii) enter into a Wet Lease for the
Airframe and Engines or engines then installed thereon with any
third party;
(ix) transfer possession of the Airframe or
any Engine to the United States Government or any instrumentality
or agency thereof pursuant to a contract, a copy of which shall be
provided to the Indenture Trustee; or
(x) at any time, in Owner's sole
discretion, enter into any lease with respect to the Aircraft,
Airframe or any Engine to any Permitted Lessee that is not then
subject to any bankruptcy, insolvency, liquidation, reorganization,
dissolution or similar proceeding and shall not have substantially
all of its property in the possession of any liquidator, trustee,
receiver or similar person; provided, however, with respect to a
lease to a Permitted Lessee not domiciled in the United States,
Owner shall deliver to the Indenture Trustee an opinion of counsel
to the effect that (I) the terms of the lease constitute valid and
binding obligations of the Lessee and (subject to customary
bankruptcy and equitable remedies exceptions and to other similar
exceptions customary in such opinions) enforceable against Lessee
(it being understood that such opinion may be an opinion as to the
form of the lease only and may assume due authorization, execution,
delivery, requisite approvals and absence of conflicts with laws,
contracts or organizational documents) under the laws of the
jurisdiction governing the lease and (II) unless Owner shall have
agreed to provide insurance covering the risk of requisition of use
of the Aircraft by the government of the jurisdiction of the
proposed Lessee, that the laws of such jurisdiction require fair
compensation by the government of such jurisdiction payable in
currency freely convertible into Dollars for the loss of use of the
Aircraft in the event of the requisition by such government of such
use; and provided, further, that, with respect to any lease to any
Affiliate of Owner, (I) such Lessee shall be a Certificated Air
Carrier and (II) Owner shall deliver to the Indenture Trustee an
opinion of counsel to the effect that Owner would be entitled to
the benefits of Section 1110 of the Bankruptcy Code with respect to
the Aircraft if such Affiliate were to be a debtor in a case under
Chapter 11 of the Bankruptcy Code, such opinion to be subject to
customary assumptions and qualifications. Owner shall provide the
Indenture Trustee with a copy of any sublease which has a term of
more than one (1) year.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to the Indenture Trustee's
rights to repossess and to void such Lease upon such repossession, and
Owner shall remain primarily liable hereunder for the performance of all of
the terms of this Indenture and the terms of any such Lease shall not
permit any Lessee to take any action not permitted to be taken by Owner
hereunder with respect to the Aircraft. No pooling agreement, sublease or
other relinquishment of possession of the Airframe or any Engine or Wet
Lease shall in any way discharge or diminish any of Owner's obligations
hereunder or constitute a waiver of the Indenture Trustee's rights or
remedies hereunder. The Indenture Trustee agrees, for the benefit of Owner
(and any Lessee) and for the benefit of any mortgagee or other holder of a
security interest in any engine (other than an Engine) owned by Owner (or
any Lessee), any lessor of any engine (other than an Engine) leased to
Owner (or any Lessee) and any conditional vendor of any engine (other than
an Engine) purchased by Owner (or any Lessee) subject to a conditional sale
agreement or any other security agreement, that no interest shall be
created hereunder in any engine so owned, leased or purchased and that none
of the Indenture Trustee, its successors or assigns will acquire or claim,
as against Owner (or any Lessee) or any such mortgagee, lessor or
conditional vendor or other holder of a security interest or any successor
or assignee of any thereof, any right, title or interest in such engine as
the result of such engine being installed on the Airframe.
Any Wet Lease or similar arrangement under which Owner
maintains operational control of the Aircraft shall not constitute a
delivery, transfer or relinquishment of possession of the Aircraft for
purposes of this Section.
The Indenture Trustee acknowledges that any consolidation or
merger of Owner or conveyance, transfer or lease of all or substantially
all of Owner's assets otherwise permitted by the Operative Documents shall
not be prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon
as practicable thereafter, Owner agrees to affix and maintain (or cause to
be affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company of Connecticut,
National Association,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Indenture Trustee, as permitted under the
Operative Documents). Except as above provided, Owner will not allow the
name of any Person to be placed on the Airframe or on any Engine as a
designation that might be interpreted as a claim of ownership; provided
that nothing herein contained shall prohibit Owner (or any Lessee) from
placing its customary colors and insignia on the Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and
expense, will promptly replace or cause to be replaced all Parts which may
from time to time be incorporated or installed in or attached to the
Airframe or any Engine and which may from time to time become worn out,
lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever, except as
otherwise provided in paragraph (c) of this Section 7.03 or if the Airframe
or an Engine to which a Part relates has suffered an Event of Loss. In
addition, Owner (or any Lessee) may, at its own cost and expense, remove in
the ordinary course of maintenance, service, repair, overhaul or testing,
any Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that Owner (or any Lessee), except as otherwise provided in
paragraph (c) of this Section 7.03, will, at its own cost and expense,
replace such Parts as promptly as practicable. All replacement Parts shall
be free and clear of all Liens (except for Permitted Liens and pooling
arrangements to the extent permitted by paragraph (b) of this Section 7.03
and except in the case of replacement property temporarily installed on an
emergency basis) and shall be in as good operating condition as, and shall
have a value and utility at least equal to, the Parts replaced assuming
such replaced Parts were in the condition and repair required to be
maintained by the terms hereof. Except as otherwise provided in paragraph
(c) of this Section 7.03, all Parts at any time removed from the Airframe
or any Engine shall remain the property of Owner, no matter where located.
Immediately upon any replacement part becoming incorporated or installed in
or attached to the Airframe or any Engine as above provided, without
further act (subject only to Permitted Liens and any pooling arrangement to
the extent permitted by paragraph (b) of this Section 7.03 and except in
the case of replacement property temporarily installed on an emergency
basis), such replacement Part shall become subject to the Lien of this
Indenture and be deemed part of the Airframe or such Engine for all
purposes hereof to the same extent as the Parts originally incorporated or
installed in or attached to the Airframe or such Engine, and the replaced
Part shall be free and clear of the Lien of this Indenture and shall no
longer be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as provided in paragraph (a) of this Section 7.03 may be
subjected by Owner (or any Lessee) to a normal pooling arrangement
customary in the airline industry of which Owner (or, if a Lease is then in
effect, any Lessee) is a party entered into in the ordinary course of
Owner's (or any Lessee's) business; provided that the Part replacing such
removed Part shall be incorporated or installed in or attached to such
Airframe or Engine in accordance with such paragraph (a) as promptly as
practicable after the removal of such removed Part. In addition, any
replacement Part when incorporated or installed in or attached to the
Airframe or any Engine in accordance with such paragraph (a) may be owned
by any third party subject to such a normal pooling arrangement, provided
that Owner (or any Lessee), at its expense, as promptly thereafter as
practicable, either (i) causes title to such replacement Part to vest in
Owner in accordance with such paragraph (a) free and clear of all Liens
except Permitted Liens (other than pooling arrangements) or (ii) replaces
such replacement Part by incorporating or installing in or attaching to the
Airframe or Engine a further replacement Part owned by Owner (or any
Lessee) free and clear of all Liens except Permitted Liens (other than
pooling arrangements) and by causing title to such further replacement Part
to vest in Owner in accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Owner, at its
own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or
any applicable regulatory agency or body of any other jurisdiction in which
the Aircraft may then be registered as permitted by Section 7(b) of the
Participation Agreement; provided, however, that Owner (or, if a Lease is
then in effect, any Lessee) may, in good faith, contest the validity or
application of any such law, rule, regulation or order in any reasonable
manner which does not adversely affect the Indenture Trustee. In addition,
Owner (or any Lessee), at its own expense, may from time to time add
further parts or accessories and make such alterations and modifications in
and additions to the Airframe or any Engine as Owner (or any Lessee) may
deem desirable in the proper conduct of its business, including, without
limitation, removal of Parts which Owner (or any Lessee) has determined in
its reasonable judgment to be obsolete or no longer suitable or appropriate
for use on the Airframe or such Engine (such parts, "Obsolete Parts");
provided that no such alteration, modification or addition shall materially
diminish the value, utility or remaining useful life of the Airframe or
such Engine below the value, utility or remaining useful life thereof
immediately prior to such alteration, modification or addition (it being
agreed that the modification that makes an Engine a CFM 56-5B-5/P engine
shall be deemed not to diminish the value, utility and remaining useful
life of an Engine), assuming the Airframe or such Engine was then in the
condition required to be maintained by the terms of this Indenture, except
that the value (but not the utility or remaining useful life) of the
Airframe or any Engine may be reduced by the value of Obsolete Parts which
shall have been removed so long as the aggregate value of all Obsolete
Parts which shall have been removed and not replaced shall not exceed
$350,000 in aggregate value at the time of removal. Owner (or any Lessee)
may remove or suffer to be removed any Part incorporated or installed in or
attached or added to the Airframe or an Engine as the result of any such
alteration, modification or addition, provided that such additional Part
(i) is in addition to, and not in replacement of or substitution for, any
Part originally incorporated or installed in or attached to the Airframe or
any Engine at the time of delivery thereof hereunder or any Part in
replacement of, or substitution for, any such Part, (ii) is not required to
be incorporated or installed in or attached or added to the Airframe or any
Engine pursuant to the terms of Section 7.02 or the first sentence of this
paragraph (c) and (iii) can be removed from the Airframe or such Engine
without diminishing or impairing the value, utility or remaining useful
life which the Airframe or such Engine would have had at the time of
removal had such alteration, modification or addition not occurred.
Upon the removal by Owner (or Lessee) of any Part as
provided above, such Part shall no longer be deemed part of the Airframe or
Engine from which it was removed.
(d) Certain Matters Regarding Passenger Convenience
Equipment. Owner may install on the Airframe, subject to the requirements
of Section 7.03(c) above, Passenger Convenience Equipment that is (i) owned
by another Person and leased to Owner, (ii) sold to Owner by another Person
subject to a conditional sale contract or other retained security interest,
(iii) leased to Owner pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Owner by another Person, and in any such
case the Indenture Trustee will not acquire or claim, as against any such
other Person, any right, title or interest in any such Passenger
Convenience Equipment solely as a result of its installation on the
Airframe. Owner agrees that if any such Person repossesses such Passenger
Convenience Equipment, Owner will (or cause such Person to) restore the
Aircraft to the condition it would have been in had the installation of
such Passenger Convenience Equipment not occurred.
SECTION 7.04. Insurance.
(a) Owner's Obligation to Insure. Owner shall comply with,
or cause to be complied with, each of the provisions of Exhibit B, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) [Reserved.]
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance,
the Indenture Trustee agrees to accept, in lieu of insurance against any
risk with respect to the Aircraft, indemnification from, or insurance
provided by, the United States Government or any agency or instrumentality
thereof, or, upon the written consent of the Indenture Trustee, other
government of registry of the Aircraft or agency or instrumentality
thereof, against such risk in an amount which, when added to the amount of
insurance against such risk maintained by Owner (or any Lessee) shall be at
least equal to the amount of insurance against such risk otherwise required
by this Section 7.04 (taking into account self-insurance permitted by
Exhibit B hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit B which is
payable to or retainable by Owner (or any Lessee) shall not be paid to or
retained by Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but
shall be held by or paid over to the Indenture Trustee as security for the
obligations of Owner hereunder if the Indenture Trustee declares this
Indenture to be in default pursuant to Section 4.02, applied against
Owner's obligations hereunder as and when due. At such time as there shall
not be continuing any such Event of Default, such amount shall be paid to
Owner to the extent not previously applied in accordance with the preceding
sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior
written notice to Owner, the Indenture Trustee, or its authorized
representatives, may inspect the Aircraft and inspect and make copies of
the books and records of Owner and any Lessee required to be maintained by
the FAA or the regulatory agency or body of another jurisdiction in which
the Aircraft is then registered relating to the maintenance of the Aircraft
(at the Indenture Trustee's risk and expense) and shall keep any
information or copies obtained thereby confidential and shall not disclose
the same to any Person, except (A) to the Note Holders and to prospective
and permitted transferees of the Note Holders' or the Indenture Trustee's
interest (and such prospective and permitted transferee's counsel,
independent insurance advisors or other agents) who agree to hold such
information confidential, (B) to the Note Holders' or the Indenture
Trustee's counsel, independent insurance advisors or other agents who agree
to hold such information confidential, or (C) as may be required by any
statute, court or administrative order or decree or governmental ruling or
regulation, provided, however, that any and all disclosures permitted by
clause (C) above shall be made only to the extent necessary to meet the
specific requirements or needs of the Persons for whom such disclosures are
hereby permitted. Any such inspection of the Aircraft shall be subject to
Owner's safety and security rules applicable to the location of the
Aircraft, shall be a visual, walk-around inspection of the interior and
exterior of the Aircraft and shall not include opening any panels, bays or
the like without the express consent of Owner (except in connection with a
heavy maintenance visit when a panel, bay or the like is scheduled or
required to be opened), which consent Owner may in its sole discretion
withhold; provided that no exercise of such inspection right shall
interfere with the normal operation or maintenance of the Aircraft by, or
the business of, Owner (or any Lessee). The Indenture Trustee shall not
have any duty to make any such inspection nor shall it incur any liability
or obligation by reason of not making such inspection. Except during the
continuance of an Event of Default, all inspections by the Indenture
Trustee and its authorized representatives provided for under this Section
7.05 shall be limited to one (1) inspection of any kind contemplated by
this Section 7.05 during any calendar year.
SECTION 7.06. Filings; Delivery of Financial Statements.
Forthwith upon the execution and delivery of each Indenture
Supplement from time to time required by the terms hereof and upon
execution and delivery of any amendment to this Indenture, Owner will cause
such Indenture Supplement (and, in the case of the initial Indenture
Supplement and the Indenture as well) or amendment to be duly filed and
recorded, and maintained of record, in accordance with the applicable laws
of the government of registry of the Aircraft. Owner agrees to furnish to
the Indenture Trustee promptly after execution and delivery of any
supplement and amendment hereto (except for any such supplement or
amendment which does not require or receive the approval of Owner pursuant
to the Operative Documents and is not required pursuant to the terms of the
Operative Documents), an opinion of counsel (which may be Owner's General
Counsel, Deputy General Counsel, Assistant General Counsel or Associate
General Counsel) reasonably satisfactory to the Indenture Trustee as to the
due recording or filing of such supplement or amendment. Owner will deliver
to the Indenture Trustee (a) within sixty (60) days after the end of each
of the first three quarterly periods of each fiscal year of Owner, the
publicly filed Form 10-Q report of Owner; and (b) within one hundred twenty
(120) days after the close of such fiscal year, the publicly filed annual
report and Form 10-K report of Owner.
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER
SECTION 8.01. Scope of Indemnification.
Owner hereby agrees, except as otherwise provided in Section
2.04(b), to assume liability for, and does hereby indemnify, protect, save
and keep harmless the Indenture Trustee (in its individual and trust
capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture Trustee on or measured
by any compensation received by the Indenture Trustee for its services
under this Indenture), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind
and nature whatsoever, which may be imposed on, incurred by or asserted
against the Indenture Trustee (whether or not also indemnified against by
any other Person under any other document) in any way relating to or
arising out of this Indenture or any other Operative Document to which it
is a party or the enforcement of any of the terms of any thereof, or in any
way relating to or arising out of the manufacture, purchase, acceptance,
non-acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the
administration of the Indenture Estate or the action or inaction of the
Indenture Trustee hereunder. Notwithstanding the foregoing, the Indenture
Trustee shall not be entitled to any indemnification for any Expenses to
the extent relating to or arising from the willful misconduct or gross
negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) referred to in Section 6.03, or as provided in
Section 6.01 or in the last sentence of Section 5.04, or as otherwise
excluded by the terms of Section 6(b) of the Participation Agreement from
Owner's indemnities under such Section. In addition, if necessary, the
Indenture Trustee shall be entitled to indemnification from the Indenture
Estate for any liability, obligation, loss, damage, penalty, claim, action,
suit, cost, expense or disbursement indemnified against pursuant to this
Section 8.01 to the extent not reimbursed by Owner or others, but without
releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on the
Indenture Estate. Owner shall be subrogated to the Indenture Trustee's
rights, if any, to payment from Owner for amounts payable by the Owner
under this Section 8.01.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. [Reserved.]
SECTION 9.02. Resignation of Indenture Trustee;
Appointment of Successor.
(a) The Indenture Trustee or any successor thereto may
resign at any time without cause by giving at least 30 days' prior written
notice to Owner and each Note Holder, such resignation to be effective upon
the acceptance of the trusteeship by a successor Indenture Trustee. In
addition, a Majority in Interest of Note Holders may at any time (but only
with the consent of Owner, which consent shall not be unreasonably
withheld, except that such consent shall not be necessary if an Event of
Default shall have occurred and be continuing) remove the Indenture Trustee
without cause by an instrument in writing delivered to Owner and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the case
of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Event of
Default shall have occurred and be continuing, shall be subject to Owner's
reasonable approval. If a successor Indenture Trustee shall not have been
appointed within 30 days after such notice of resignation or removal, the
Indenture Trustee, Owner or any Note Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. The successor Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by any successor
Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed,
shall execute and deliver to the predecessor Indenture Trustee and Owner an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee hereunder and under the Participation Agreement arising
from and after the time of such appointment, and thereupon such successor
Indenture Trustee, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor Indenture
Trustee hereunder in the trust hereunder applicable to it with like effect
as if originally named the Indenture Trustee herein; but nevertheless upon
the written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to
such successor Indenture Trustee, upon the trusts herein expressed
applicable to it, all the estates, properties, rights and powers of such
predecessor Indenture Trustee, and such predecessor Indenture Trustee shall
duly assign, transfer, deliver and pay over to such successor Indenture
Trustee all monies or other property then held by such predecessor
Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed,
shall be a bank or trust company having its principal place of business in
the United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined capital
and surplus of at least $100,000,000, if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this
Section 9.02, be a successor Indenture Trustee and the Indenture Trustee
under this Indenture without further act.
SECTION 9.03. Appointment of Additional and Separate
Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it
necessary or desirable in order to conform to any law of any jurisdiction
in which all or any part of the Indenture Estate shall be situated or to
make any claim or bring any suit with respect to or in connection with the
Indenture Estate, this Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Indenture Trustee shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
Owner), or (iii) the Indenture Trustee shall have been requested to do so
by a Majority in Interest of Note Holders, then in any such case, the
Indenture Trustee and, upon the written request of the Indenture Trustee,
Owner, shall execute and deliver an indenture supplemental hereto and such
other instruments as may from time to time be necessary or advisable either
(1) to constitute one or more bank or trust companies or one or more
Persons approved by the Indenture Trustee, either to act jointly with the
Indenture Trustee as additional trustee or trustees of all or any part of
the Indenture Estate, or to act as separate trustee or trustees of all or
any part of the Indenture Estate, in each case with such rights, powers,
duties and obligations consistent with this Indenture as may be provided in
such supplemental indenture or other instruments as the Indenture Trustee
or a Majority in Interest of Note Holders may deem necessary or advisable,
or (2) to clarify, add to or subtract from the rights, powers, duties and
obligations theretofore granted any such additional and separate trustee,
subject in each case to the remaining provisions of this Section 9.03. If
Owner shall not have taken any action requested of it under this Section
9.03(a) that is permitted or required by its terms within 15 days after the
receipt of a written request from the Indenture Trustee so to do, or if an
Event of Default shall have occurred and be continuing, the Indenture
Trustee may act under the foregoing provisions of this Section 9.03(a)
without the concurrence of Owner; and Owner hereby irrevocably appoints
(which appointment is coupled with an interest) the Indenture Trustee, its
agent and attorney-in-fact to act for it under the foregoing provisions of
this Section 9.03(a) in either of such contingencies. The Indenture Trustee
may, in such capacity, execute, deliver and perform any such supplemental
indenture, or any such instrument, as may be required for the appointment
of any such additional or separate trustee or for the clarification of,
addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case any
additional or separate trustee appointed under this Section 9.03(a) shall
die, become incapable of acting, resign or be removed, all the assets,
property, rights, powers, trusts, duties and obligations of such additional
or separate trustee shall revert to the Indenture Trustee until a successor
additional or separate trustee is appointed as provided in this Section
9.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Indenture Estate or otherwise payable
under any Operative Document to the Indenture Trustee shall be promptly
paid over by it to the Indenture Trustee. All other rights, powers, duties
and obligations conferred or imposed upon any additional or separate
trustee shall be exercised or performed by the Indenture Trustee and such
additional or separate trustee jointly except to the extent that applicable
Law of any jurisdiction in which any particular act is to be performed
renders the Indenture Trustee incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations (including
the holding of title to all or part of the Indenture Estate in any such
jurisdiction) shall be exercised and performed by such additional or
separate trustee. No additional or separate trustee shall take any
discretionary action except on the instructions of the Indenture Trustee or
a Majority in Interest of Note Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Indenture Trustee shall be liable for the
consequences of its lack of reasonable care in selecting, and Indenture
Trustee's own actions in acting with, any additional or separate trustee.
Each additional or separate trustee appointed pursuant to this Section 9.03
shall be subject to, and shall have the benefit of Articles IV through IX
and Article XI insofar as they apply to the Indenture Trustee. The powers
of any additional or separate trustee appointed pursuant to this Section
9.03 shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or desirable in order to conform to any such law or take
any such action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Note Holders, or in the event
that the Indenture Trustee shall have been requested to do so in writing by
a Majority in Interest of Note Holders, the Indenture Trustee and, upon the
written request of the Indenture Trustee, Owner, shall execute and deliver
an indenture supplemental hereto and all other instruments and agreements
necessary or proper to remove any additional or separate trustee. The
Indenture Trustee may act on behalf of Owner under this Section 9.03(c)
when and to the extent it could so act under Section 9.03(a).
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) Owner agrees it shall not enter into any amendment of or
supplement to Article 12 of the Purchase Agreement (to the extent assigned
by the Purchase Agreement Assignment), the Purchase Agreement Assignment,
the Consent and Agreement, or execute and deliver any written waiver or
modification of, or consent under, the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Indenture
Trustee and a Majority in Interest of Note Holders.
(b) Without limiting the provisions of Section 10.01(a) the
Indenture Trustee agrees with the Note Holders that it shall not enter into
any amendment, waiver or modification of, supplement or consent to this
Indenture, the Purchase Agreement (to the extent assigned by the Purchase
Agreement Assignment), the Purchase Agreement Assignment, the Consent and
Agreement or the Participation Agreement, or any other agreement included
in the Indenture Estate, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by a Majority in
Interest of Note Holders, or does not adversely effect the Note Holders,
but upon the written request of a Majority in Interest of Note Holders, the
Indenture Trustee shall from time to time enter into any such supplement or
amendment, or execute and deliver any such waiver, modification or consent,
as may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by Owner or, as may be appropriate, the Manufacturer;
provided, however, that, without the consent of each holder of an affected
Equipment Note then outstanding, no such amendment of or supplement to this
Indenture, the Purchase Agreement (to the extent assigned by the Purchase
Agreement Assignment), the Purchase Agreement Assignment, the Consent and
Agreement or the Participation Agreement or waiver or modification of the
terms of, or consent under, any thereof, shall (i) modify any of the
provisions of this Section 10.01, or of Sections 2.02, 2.10, 2.11, 2.15,
4.02, 4.04(c), 4.04(d), 5.02 or 5.06, the definitions of "Event of
Default", "Default", "Majority in Interest of Note Holders", "Make-Whole
Amount" or "Note Holder", or the percentage of Note Holders required to
take or approve any action hereunder, (ii) reduce the amount, or change the
time of payment or method of calculation of any amount, of Principal
Amount, Make-Whole Amount, if any, or interest with respect to any
Equipment Note, or alter or modify the provisions of Article III with
respect to the order of priorities in which distribution thereunder shall
be made as among the Note Holders and Owner, (iii) reduce, modify or amend
any indemnities in favor of the Note Holders, (iv) consent to any change in
the Indenture which would permit redemption of Equipment Notes earlier than
permitted under Section 2.10 or 2.11 or the purchase of the Equipment Notes
or (v) permit the creation of any Lien on the Indenture Estate or any part
thereof other than Permitted Liens or deprive any Note Holder of the
benefit of the Lien of this Indenture on the Indenture Estate, except as
provided in connection with the exercise of remedies under Article IV.
Without the consent of Owner, no amendment or supplement to this Indenture
or waiver or modification of the terms hereof shall adversely affect Owner.
(c) At any time after the date hereof, Owner and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Note Holder for any of the following purposes:
(i) (a) to cure any defect or inconsistency herein or in the Equipment
Notes, or to make any change not inconsistent with the provisions hereof
(provided that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or
the appointment of any co-trustee or co-trustees or any separate or
additional trustee or trustees; (iii) to convey, transfer, assign, mortgage
or pledge any property to or with the Indenture Trustee or to make any
other provisions with respect to matters or questions arising hereunder so
long as such action shall not adversely affect the interests of the Note
Holders in its capacity solely as Note Holder; (iv) to correct or amplify
the description of any property at any time subject to the Lien of this
Indenture or better to assure, convey and confirm unto the Indenture
Trustee any property subject or required to be subject to the Lien of this
Indenture, the Airframe or Engines or any Replacement Airframe or
Replacement Engine; (v) to add to the covenants of Owner for the benefit of
the Note Holders, or to surrender any rights or power herein conferred upon
Owner; (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 10.02. Trustees Protected.
If, in the opinion of the institution acting as Indenture
Trustee hereunder, any document required to be executed by it pursuant to
the terms of Section 10.01 adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Indenture, such
institution may in its discretion decline to execute such document.
SECTION 10.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner or the Indenture
Trustee of any document entered into pursuant to Section 10.01, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to Owner and to each Note Holder at its address last set forth in
the Equipment Note Register, but the failure of the Indenture Trustee to
mail such copies shall not impair or affect the validity of such document.
SECTION 10.04. No Request Necessary for Indenture Supplement.
No written request or consent of the Indenture Trustee or
the Note Holders pursuant to Section 10.01 shall be required to enable
Owner to enter into any Indenture Supplement specifically required by the
terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no
other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the Participation
Agreement, Owner shall direct the Indenture Trustee to execute and deliver
to or as directed in writing by Owner an appropriate instrument releasing
the Aircraft, the Engines, the Purchase Agreement and the Purchase
Agreement Assignment with the Consent and Agreement attached thereto from
the Lien of this Indenture and the Indenture Trustee shall execute and
deliver such instrument as aforesaid and give written notice thereof to
Owner; provided, however, that this Indenture and the trusts created hereby
shall earlier terminate and this Indenture shall be of no further force or
effect upon any sale or other final disposition by the Indenture Trustee of
all property constituting part of the Indenture Estate and the final
distribution by the Indenture Trustee of all monies or other property or
proceeds constituting part of the Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Indenture and
the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders.
No holder of an Equipment Note shall have legal title to any
part of the 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 Indenture Estate or hereunder shall operate to
terminate this 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 Indenture Estate.
SECTION 11.03. Sale of Aircraft by Indenture Trustee
Is Binding.
Any sale or other conveyance of the Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Indenture shall bind
the Note Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, Owner and such holders in and
to such Indenture Estate or part thereof. No purchaser or other grantee
shall be required to inquire as to the authorization, necessity, expediency
or regularity of such sale or conveyance or as to the application of any
sale or other proceeds with respect thereto by the Indenture Trustee.
SECTION 11.04. Indenture for Benefit of Owner, Indenture
Trustee, Note Holders and the Other Indenture Indemnitees.
Nothing in this Indenture, whether express or implied, shall
be construed to give any person other than Owner, the Indenture Trustee,
the Indenture Indemnitees and the Note Holders, any legal or equitable
right, remedy or claim under or in respect of this Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this 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 Owner, addressed to it at its office at 0000
Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Vice President and
Treasurer, Telecopy No.: (000) 000-0000, (ii) if to the Indenture Trustee,
addressed to it at its office at 000 Xxxxxx Xxxxxx, Xxxxxxx Square,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate Trust Administration,
Telecopy No.: (000) 000-0000, (iii) if to any Participant or any Note
Holder, addressed to such party at such address as such party shall have
furnished by notice to the Owner and the Indenture Trustee, or, until an
address is so furnished, addressed to the address of such party (if any)
set forth on the signature pages to the Participation Agreement or in the
Equipment Note Register. Whenever any notice in writing is required to be
given by Owner, any Participant, the Indenture Trustee 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 Indenture.
SECTION 11.06. Severability.
Any provision of this Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Indenture or the Equipment
Notes may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by Owner and the Indenture Trustee, in
compliance with Section 10.01. 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 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, each of the parties hereto and
the permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
Each Note Holder by its acceptance of an Equipment Note agrees to be bound
by this Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 11.09. Headings.
The headings of the various Articles and Sections herein and
in the table of contents hereto are for convenience of reference only and
shall not define or limit any
of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Indenture to the contrary
notwithstanding, the Indenture Trustee, any Participant or any bank or
other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking or other commercial relationships,
with Owner, fully to the same extent as if this Indenture were not in
effect, including without limitation the making of loans or other
extensions of credit to Owner for any purpose whatsoever, whether related
to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. Governing Law; Counterpart Form.
THIS INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS INDENTURE IS BEING DELIVERED
IN THE STATE OF NEW YORK. This Indenture may be executed by the parties
hereto in separate counterparts (or upon separate signature pages bound
together into one or more counterparts), each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.12. Voting By 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 11.13. Bankruptcy.
It is the intention of the parties that the Indenture
Trustee shall be entitled to the benefits of Section 1110 of the Bankruptcy
Code with respect to the right to take possession of the Aircraft,
Airframe, Engines and Parts in the event of a case under Chapter 11 of the
Bankruptcy Code in which Owner is a debtor, and in any instance where more
than one construction is possible of the terms and conditions hereof or any
other pertinent Operative Document, each such party agrees that a
construction which would preserve such benefits shall control over any
construction which would not preserve such benefits.
SECTION 11.14. References.
Unless otherwise specified, references in this Indenture to
Sections, Exhibits, Schedules and Annexes are references to Sections,
Exhibits, Schedules and Annexes herein or hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
US AIRWAYS, INC.
By:_______________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Indenture
Trustee
By:_______________________________
Name:
Title:
================================
EXHIBIT A
TO
INDENTURE AND SECURITY AGREEMENT
================================
INDENTURE SUPPLEMENT
(No. N___U_)
This Indenture Supplement N___U_) dated _______ __, _____
(herein called this "Indenture Supplement") of US Airways, Inc.
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement N___U_) dated
as of _________ __, ____ (as amended and supplemented to the date hereof,
the "Indenture") between Owner and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture Trustee (the "Indenture
Trustee"), provides for the execution and delivery of a supplement thereto
substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Indenture
Trustee; and
WHEREAS, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto and
made a part hereof and this Indenture Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Indenture Supplement witnesseth that
Owner hereby confirms that the Lien of the Indenture on the Indenture
Estate covers all of Owner's right, title and interest in and to the
following described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
-------------------- -------------------- -------------------- --------------------
Airbus A3__
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are
from time to time incorporated or installed in or attached to said
airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more
rated take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Manufacturer Model Number Serial Number
------------------------ -------------------------- --------------------
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to any of such
engines.
Together with all of Owner's right, title and interest in
and to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or
hereafter acquired, including all substitutions, renewals and replacements
of and additions, improvements, accessions and accumulations to the
Airframe and Engines (other than additions, improvements, accessions and
accumulations which constitute appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment excluded from
the definition of Parts).
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
equal and proportionate benefit and security of the Note Holders, except as
provided in Section 2.15 and Article III of the 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
Indenture.
This Indenture Supplement shall be construed as supplemental
to the Indenture and shall form a part thereof. The Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved
and confirmed. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Indenture.
This Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, Owner hereby acknowledges that the Aircraft
referred to in this Indenture Supplement has been delivered to Owner and is
included in the property of Owner, subject to the pledge and mortgage
thereof under the Indenture.
IN WITNESS WHEREOF, Owner has caused this Indenture
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year
first above written.
US AIRWAYS, INC.
By:_______________________________
Name:
Title:
================================
EXHIBIT B
TO
INDENTURE AND SECURITY AGREEMENT
================================
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential
information.
(a) Public Liability and Property Damage Insurance. (1)
Except as provided in clause (2) of this subsection (a), and subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit B,
Owner will carry or cause to be carried with respect to the Aircraft at its
or any Lessee's expense (i) comprehensive airline liability (including,
without limitation, passenger, contractual, bodily injury and property
damage liability) insurance (exclusive of manufacturer's product liability
insurance) and (ii) cargo liability insurance, (A) in an amount not less
than the greater of (x) the amounts of comprehensive airline liability
insurance from time to time applicable to aircraft owned or leased, and
operated by Owner (or, if a Lease is then in effect, by Lessee) of the same
type as the Aircraft and (y) $300 million per occurrence, (B) of the type
and covering the same risks as from time to time applicable to aircraft
owned or leased and operated by Owner of the same type as the Aircraft, and
(C) which is maintained in effect with insurers of nationally or
internationally recognized reputation and responsibility; provided,
however, that Owner need not maintain such cargo liability insurance, or
may maintain such cargo liability insurance in an amount less than $300
million per occurrence, so long as the amount of cargo liability insurance,
if any, maintained with respect to the Aircraft is not less than the cargo
liability insurance, if any, maintained for other Airbus Model A___
aircraft owned or leased and operated by Owner.
(2) During any period that the Airframe or an Engine, as the
case may be, is on the ground and not in operation, Owner may carry or
cause to be carried as to such non-operating property, in lieu of the
insurance required by clause (1) above, and subject to the self-insurance
to the extent permitted by subsection (d), insurance by insurers of
nationally or internationally recognized reputation and responsibility
otherwise conforming with the provisions of said clause (1) except that (A)
the amounts of coverage shall not be required to exceed the amounts of
comprehensive airline liability from time to time applicable to property
owned or leased by Owner of the same type as such non-operating property
and which is on the ground and not in operation; and (B) the scope of the
risks covered and the type of insurance shall be the same as from time to
time shall be applicable to aircraft owned or leased by Owner of the same
type as such non-operating property and which is on the ground and not in
operation.
(b) Insurance Against Loss or Damage to the Aircraft. (1)
Except as provided in clause (2) of this subsection (b), and subject to the
provisions of subsection (d) of this Exhibit B permitting the
self-insurance, Owner shall maintain or cause to be maintained in effect,
at its or any Lessee's expense, with insurers of nationally or
internationally recognized responsibility, all-risk aircraft hull insurance
covering the Aircraft and fire and extended coverage and all-risk aircraft
hull insurance covering Engines and Parts while temporarily removed from
the Aircraft and not replaced by similar components; provided that such
insurance shall at all times while the Aircraft is subject to the Lien of
the Indenture be for an amount (taking into account the self-insurance to
the extent permitted by subsection (d) of this Exhibit B) not less than the
amount payable under Section 5.06(a) upon the occurrence of an Event of
Loss; provided further, that, subject to compliance with subsection (d) of
this Exhibit B, such all-risk property damage insurance covering Engines
and Parts temporarily removed from an Airframe or an airframe or (in the
case of Parts) an Engine need be obtained only to the extent available at
reasonable cost (as reasonably determined by Owner). In the case of a loss
with respect to an engine (other than an Engine) installed on the airframe
in circumstances which do not constitute an Event of Loss with respect to
the Airframe, the Indenture Trustee shall promptly remit any payment made
to it of any insurance proceeds in respect of such loss to Owner or any
other third party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing,
all losses will be adjusted by Owner with the insurers. As between the
Indenture Trustee and Owner, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be
applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed
thereon), (i) unless such property is replaced pursuant to
the last paragraph of Section 5.06(a), so much of such
payments remaining, after reimbursement of the Indenture
Trustee for reasonable costs and expenses, as shall not
exceed the amounts payable pursuant to Section 5.06(a),
shall be paid over to, or retained by, the Indenture Trustee
for the benefit of the Note Holders (but not in excess of
the amounts then due and payable under the Equipment Notes);
or (ii) if such property is replaced pursuant to the last
paragraph of Section 5.06(a), such payments shall be paid
over to, or retained by, Owner (or if directed by Owner, any
Lessee), provided that Owner shall have fully performed or,
concurrently therewith, will fully perform the terms of the
last paragraph of Section 5.06(a) with respect to the Event
of Loss for which such payments are made; and
(y) if such payments are received with respect to an
Engine under the circumstances contemplated by Section
5.06(b), so much of such payments remaining after
reimbursement of the Indenture Trustee for reasonable costs
and expenses, shall be paid over to, or retained by, Owner
(or if directed by Owner, any Lessee), provided that Owner
shall have fully performed or concurrently therewith will
fully perform the terms of Section 5.06(b) with respect to
the Event of Loss for which such payments are made.
As between the Indenture Trustee and Owner, the insurance
payments for any property damage loss to the Airframe or any engine not
constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the
terms of Sections 7.02 and 7.03, if not already paid for by Owner (or any
Lessee), and any balance (or if already paid for by Owner (or any Lessee),
all such insurance proceeds) remaining after compliance with such Sections
with respect to such loss shall be paid to Owner (or any Lessee if directed
by Owner).
(2) During any period that the Aircraft is on the ground and
not in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit B, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from time
to time applicable to aircraft owned or leased by Owner (or, if a Lease is
then in effect, by Lessee) of the same type as the Aircraft similarly on
the ground and not in operation, provided that, subject to self-insurance
to the extent permitted by subsection (d) of this Exhibit B, Owner shall
maintain insurance against risk of loss or damage to the Aircraft in an
amount at least equal to the amount payable upon the occurrence of an Event
of Loss pursuant to Section 5.06(a) during such period that the Aircraft is
on the ground and not in operation.
(3) If Owner (or any Lessee) shall at any time operate or
propose to operate the Aircraft, Airframe or any Engine (i) in any area of
recognized hostilities or (ii) on international routes, and war-risk,
hijacking or allied perils insurance is maintained by Owner (or any Lessee)
with respect to other aircraft owned and operated by Owner (or any Lessee)
on such routes or in such areas, Owner shall maintain or cause to be
maintained war-risk, hijacking and related perils insurance of
substantially the same type carried by major United States commercial air
carriers operating the same or comparable models of aircraft on similar
routes or in such areas and in no event in an amount less than the amount
payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a).
(c) Reports, etc. Owner will furnish, or cause to be
furnished, to the Indenture Trustee and the Pass Through Trustee, on or
before the Delivery Date and on each annual anniversary date of Owner's
applicable insurance, a report, signed by Owner's regular insurance broker
or any other independent firm of insurance brokers reasonably acceptable to
the Indenture Trustee which brokers may be in the regular employ of Owner
(the "Insurance Brokers"), describing in reasonable detail the hull and
liability insurance (and property insurance for detached engines and parts)
then carried and maintained with respect to the Aircraft and stating the
opinion of such firm that the insurance complies with the terms hereof;
provided, that all information contained in the foregoing report shall not
be made available by the Indenture Trustee or the Pass Through Trustee to
anyone except (i) to prospective and permitted transferees of the Indenture
Trustee's or the Pass Through Trustee's interest or their respective
counsel, independent certified public accountants and independent insurance
brokers or other agents, who agree to hold such information confidential,
(ii) the Indenture Trustee's or the Pass Through Trustee's counsel or
independent certified public accountants, independent insurance brokers or
agents who agree to hold such information confidential or (iii) as may be
required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Owner will cause such Insurance Brokers
to agree to advise the Indenture and the Pass Through Trustee in writing of
any act or omission on the part of Owner of which it has knowledge and
which might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise in writing at least thirty (30)
days (ten (10) days in the case of war risk, allied perils coverage and
with respect to the Electronic Date Recognition Exclusion Limited Coverage
Endorsement), prior to the cancellation or material adverse change of any
insurance maintained pursuant to Section 7.04, provided that if the notice
period specified above is not reasonably obtainable, the Insurance Broker
shall provide for as long a period of prior notice as shall then be
reasonably obtainable. In addition, Owner will also cause such Insurance
Brokers to deliver to the Indenture Trustee and the Pass Through Trustee,
on or prior to the date of expiration of any insurance policy referenced in
a previously delivered certificate of insurance, a new certificate of
insurance, substantially in the same form as delivered by Owner to such
parties on the Delivery Date except for such changes in the report or the
coverage consistent with the terms hereof. In the event that Owner or any
Lessee shall fail to maintain or cause to be maintained insurance as herein
provided, the Indenture Trustee may at its sole option, but shall be under
no duty to, provide such insurance and, in such event, Owner shall, upon
demand, reimburse the Indenture Trustee for the cost thereof to the
Indenture Trustee.
(d) Self-Insurance. Owner may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection (b)
of this Exhibit B, insuring for an amount that is less than the amounts
payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a)) the risks required to be insured against pursuant to Section 7.04
under a program applicable to all aircraft (whether owned or leased) in
Owner's fleet, but in no case shall the aggregate amount of self-insurance
in regard to subsection (a) and (b) of this Exhibit B exceed for any policy
year, with respect to all of the aircraft (whether owned or leased) in
Owner's fleet (including, without limitation, the Aircraft), the lesser of
(i) 50% of the highest replacement value of any single aircraft in Owner's
fleet or (ii) 1-1/2% of the average aggregate insurable value (during the
preceding policy year) of all aircraft (including, without limitation, the
Aircraft) on which Owner carries insurance, unless an insurance broker of
national standing shall certify that the standard among all other major
United States airlines is a higher level of self-insurance, in which case
Owner may insure the Aircraft to such higher level. In addition to the
foregoing right to self-insure, Owner (and any Lessee) may self-insure to
the extent of any applicable mandatory minimum per aircraft (or, if
applicable, per annum or other period) hull or liability insurance
deductible customary in the airline industry imposed by the aircraft hull
or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit B and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit B, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk, allied perils coverage and with respect to the Electronic Date
Recognition Limited Coverage Endorsement) after issuance to the Additional
Insureds, respectively, of written notice by such insurers of such
cancellation, lapse or change; provided, however, that if any notice period
specified above is not reasonably obtainable, such policies shall provide
for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests
of the Additional Insureds in such policies the insurance shall not be
invalidated by any action or inaction of Owner (or, if any Lease is then in
effect, any Lessee) or any other Person and shall insure the Additional
Insureds regardless of any breach or violation of any warranty, declaration
or condition contained in such policies by Owner (or, if any Lease is then
in effect, any Lessee), (E) shall be primary without right of contribution
from any other insurance which is carried by any Additional Insured, (F)
shall expressly provide that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured, (G) shall waive any right of the
insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional
Insured to the extent of any moneys due to any Additional Insured, and (H)
shall provide that (i) in the event of a loss involving proceeds in excess
of $5,000,000, the proceeds in respect of such loss up to an amount equal
to the amount payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a) shall be payable to the Indenture Trustee (so long as the
Indenture shall not have been discharged) in the manner set forth in
Sections 2.10 and 2.12 (except in the case of a loss with respect to an
Engine installed on an airframe other than the Airframe, in which case
Owner (or any Lessee) shall arrange for any payment of insurance proceeds
in respect of such loss to be held for the account of the Indenture Trustee
(so long as the Indenture shall not have been discharged) whether such
payment is made to Owner (or any Lessee) or any third party), it being
understood and agreed that in the case of any payment to the Indenture
Trustee otherwise than in respect of an Event of Loss, the Indenture
Trustee shall, upon receipt of evidence satisfactory to it that the damage
giving rise to such payment shall have been repaired or that such payment
shall then be required to pay for repairs then being made, pay the amount
of such payment (and all earnings thereon) to Owner or its order, and (ii)
the entire amount of any loss involving proceeds of $5,000,000 or less or
the amount of any proceeds of any loss in excess of the amount payable upon
the occurrence of an Event of Loss pursuant to Section 5.06(a) shall be
paid to Owner or its order unless an Event of Default shall have occurred
and be continuing and the insurers have been notified thereof by the
Indenture Trustee.
================================
EXHIBIT C
TO
INDENTURE AND SECURITY AGREEMENT
================================
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States
Malaysia Venezuela
*So long as on the date of the Sublease such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
SCHEDULE I
Principal Amount Interest Rate
------------------- ------------------- ------------------
Series A 8.36%
Series B 9.01%
Series C 7.96%
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 1999-1A, dated as of August 31, 1999, as supplemented by
Trust Supplement No. 1999-1B, dated as of August 31, 1999, as supplemented
by Trust Supplement No. 1999-1C, dated as of August 31, 1999.
