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TRUST INDENTURE AND MORTGAGE [TN]
Dated as of [DD]
Between
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Mortgagee,
Mortgagee
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EQUIPMENT NOTES COVERING
ONE EMBRAER EMB-145 XR AIRCRAFT
BEARING U.S. REGISTRATION XXXX N[REG]
LEASED BY CONTINENTAL AIRLINES, INC.
TABLE OF CONTENTS
PAGE
GRANTING CLAUSE...............................................................1
ARTICLE I
DEFINITIONS
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes........................................7
SECTION 2.02. Issuance and Terms of Equipment Notes..........................11
SECTION 2.03. Payments from Trust Indenture Estate Only......................13
SECTION 2.04. Method of Payment..............................................14
SECTION 2.05. Application of Payments........................................17
SECTION 2.06. Termination of Interest in Trust Indenture Estate..............17
SECTION 2.07. Registration Transfer and Exchange of Equipment Notes..........17
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. [Reserved].....................................................20
SECTION 2.12. Redemptions; Notice of Redemption..............................20
SECTION 2.13. Option to Purchase Equipment Notes.............................20
SECTION 2.14. Priority of Distributions......................................21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution........................................22
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination; Optional
Redemption....................................................22
SECTION 3.03. Payments After Event of Default................................23
SECTION 3.04. Certain Payments...............................................24
SECTION 3.05. Other Payments.................................................25
SECTION 3.06. Payments to Owner Trustee......................................25
(i)
TABLE OF CONTENTS
(Continued)
PAGE
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. Covenants of Owner Trustee.....................................26
SECTION 4.02. Event of Default...............................................27
SECTION 4.03. Certain Rights.................................................29
SECTION 4.04. Remedies.......................................................30
SECTION 4.05. Return of Aircraft, Etc........................................33
SECTION 4.06. Remedies Cumulative............................................34
SECTION 4.07. Discontinuance of Proceedings..................................34
SECTION 4.08. Waiver of Past Defaults........................................34
SECTION 4.09. Appointment of Receiver.......................................34
SECTION 4.10. Mortgagee Authorized to Execute Bills of Sale, Etc.............35
SECTION 4.11. Rights of Note Holders to Receive Payment......................35
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. Notice of Event of Default.....................................35
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations.......36
SECTION 5.03. Indemnification................................................38
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instruction...................................................39
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instruction...................................................39
SECTION 5.06. Replacement Airframes and Replacement Engines..................39
SECTION 5.07. Indenture Supplements for Replacements.........................40
SECTION 5.08. Effect of Replacement..........................................40
SECTION 5.09. Investment of Amounts Held by Mortgagee........................40
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. Acceptance of Trusts and Duties................................41
SECTION 6.02. Absence of Duties..............................................41
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents.....................................................42
(ii)
TABLE OF CONTENTS
(Continued)
PAGE
SECTION 6.04. No Segregation of Monies; No Interest..........................42
SECTION 6.05. Reliance; Agreements; Advice of Counsel........................42
SECTION 6.06. Capacity in Which Acting.......................................43
SECTION 6.07. Compensation...................................................43
SECTION 6.08. Instructions from Note Holders.................................43
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.......................................44
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee..............................45
SECTION 8.02. Resignation of Mortgagee; Appointment of Successor.............45
SECTION 8.03. Appointment of Additional and Separate Trustees................46
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations..........................48
SECTION 9.02. Trustees Protected.............................................50
SECTION 9.03. Documents Mailed to Note Holders...............................50
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Indenture Supplement..........................................50
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture................................50
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note Holders......51
SECTION 10.03. Sale of Aircraft by Mortgagee Is Binding......................51
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee, Mortgagee,
Owner Participant, Note Holders and the Other Indenture
Indemnitees..................................................51
SECTION 10.05. Notices.......................................................51
SECTION 10.06. Severability..................................................52
(iii)
TABLE OF CONTENTS
(Continued)
PAGE
SECTION 10.07. No Oral Modification or Continuing Waivers....................52
SECTION 10.08. Successors and Assigns........................................52
SECTION 10.09. Headings......................................................52
SECTION 10.10. Normal Commercial Relations...................................52
SECTION 10.11. Governing Law; Counterpart Form...............................53
SECTION 10.12. Voting by Note Holders........................................53
SECTION 10.13. Bankruptcy....................................................53
EXHIBIT A Form of Trust Indenture and Mortgage Supplement
SCHEDULE I Equipment Notes Amortization and Interest Rates
(iv)
TRUST INDENTURE AND MORTGAGE [TN]
TRUST INDENTURE AND MORTGAGE [TN], dated as of [DD] ("Trust
Indenture"), between XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "Mortgagee").
W I T N E S S E T H
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust for the use and
benefit of the Owner Participant subject, however, to the Trust Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of Equipment Notes issued hereunder, and (ii) the Owner
Trustee has been authorized and directed to execute and deliver this Trust
Indenture;
WHEREAS, the parties hereto desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate
hereunder, among other things, of all of the Owner Trustee's right, title and
interest in and to the Aircraft and, except as hereinafter expressly provided,
all of the Owner Trustee's right, title and interest in, to and under the Lease
and the Participation Agreement and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof or thereof, as
security for, among other things, the Owner Trustee's and the Lessee's
obligations to the Note Holders and the Indenture Indemnitees;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner Trustee and authenticated and delivered by the Mortgagee
hereunder, the valid, binding and enforceable obligations of the Owner Trustee;
and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that,
to secure the prompt payment of the Original Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due with respect to, all Equipment Notes
from time to time outstanding hereunder according to their tenor and effect and
to secure the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions contained herein and in the Participation
Agreement and the Equipment Notes, for the benefit of the Note Holders, the Loan
Participant and each of the Indenture Indemnitees and the prompt payment of all
amounts from time to time owing hereunder, under the Participation Agreement and
the Lease to the Loan Participant, the Note Holders or any Indenture Indemnitee
by the Owner Trustee or the Lessee and for the uses and purposes and subject to
the terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
holders thereof, and for other good and valuable consideration the receipt and
adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors in trust and
assigns, for the security and benefit of the Loan Participant, the Note Holders
and each of the Indenture Indemnitees, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to and
under the following described property, rights and privileges, whether now or
hereafter acquired, other than Excluded Payments (which, collectively, excluding
Excluded Payments but including all property hereafter specifically subject to
the Lien of this Trust Indenture by the terms hereof or any supplement hereto,
are included within, and are referred to as, the "Trust Indenture Estate"), to
wit:
(1) The Airframe which is one EMBRAER EMB-145 XR aircraft with the
FAA Registration number of N[REG] and the manufacturer's serial number of [MSN]
and two Engines, with the manufacturer's serial numbers of CAE[E1] and CAE[E2],
each of which is an Xxxxxxx engine and is of 750 or more rated takeoff
horsepower or the equivalent of such horsepower (such Airframe and Engines more
particularly described in the Trust Indenture Supplement executed and delivered
as provided herein) as the same is now and will hereafter be constituted,
whether now owned by the Owner Trustee or hereafter acquired, leased or intended
to be leased under the Lease, and in the case of such Engines, whether or not
any such Engine shall be installed in or attached to the Airframe or any other
airframe, together with (a) all Parts of whatever nature, which are from time to
time included within the definitions of "Airframe" or "Engines", whether now
owned or hereafter acquired, including all substitutions, renewals and
replacements of and additions, improvements, accessions and accumulations to the
Airframe and Engines (other than additions, improvements, accessions and
accumulations which constitute appliances, parts, instruments, appurtenances,
accessories, furnishings or other equipment excluded from the definition of
Parts) and (b) all Aircraft Documents;
(2) All right, title, interest, claims and demands of the Owner
Trustee, as Lessor, in, to and under the Lease, together with all rights,
powers, privileges, options and other benefits of the Owner Trustee as lessor
under the Lease, including the immediate and continuing right to receive and
collect all Rent, income, revenues, issues, profits, insurance proceeds,
condemnation awards and other payments, tenders and security now or hereafter
payable to or receivable by the Lessor under the Lease pursuant thereto, and,
subject to Section 5.02 hereof, the right to make all waivers and agreements, to
give and receive copies of all notices and other instruments or communications,
to accept surrender or redelivery of the Aircraft or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner Trustee as
Lessor under the Lease, to take such action upon the occurrence of a Lease Event
of Default thereunder, including the commencement, conduct and consummation of
legal, administrative or other proceedings, as shall be permitted by the Lease
or by Law, and to do any and all other things whatsoever which the Owner Trustee
or any lessor is or may be entitled to do under or in respect of the Lease and
any right to restitution from the Lessee or any other Person in respect of any
determination of invalidity of the Lease;
(3) All right, title, interest, claims and demands of the Owner
Trustee in, to and under:
(a) the Purchase Agreement;
(b) the Purchase Agreement Assignment, with the Consent and
Agreement attached thereto;
(c) the Bills of Sale; and
(d) any and all other contracts, agreements and instruments
relating to the Airframe and Engines or any rights or interests therein to which
the Owner Trustee is now or may hereafter be a party;
together with all rights, powers, privileges, licenses, easements, options and
other benefits of the Owner Trustee under each contract, agreement and
instrument referred to in this clause (3), including the right to receive and
collect all payments to the Owner Trustee thereunder now or hereafter payable to
or receivable by the Owner Trustee pursuant thereto and, subject to Section 5.02
hereof, the right to make all waivers and agreements, to give and receive
notices and other instruments or communications, or to take any other action
under or in respect of any thereof or to take such action upon the occurrence of
a default thereunder, including the commencement, conduct and consummation of
legal, administrative or other proceedings, as shall be permitted thereby or by
Law, and to do any and all other things which the Owner Trustee is or may be
entitled to do thereunder and any right to restitution from the Lessee, the
Owner Participant or any other Person in respect of any determination of
invalidity of any thereof;
(4) All rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this Trust
Indenture, including all payments or proceeds payable to the Owner Trustee after
termination of the Lease with respect to the Aircraft as the result of the sale,
lease or other disposition thereof, and all estate, right, title and interest of
every nature whatsoever of the Owner Trustee in and to the same;
(5) Without limiting the generality of the foregoing, all
insurance and requisition proceeds with respect to the Aircraft or any part
thereof, including the insurance required under Section 11 of the Lease;
(6) Without limiting the generality of the foregoing, all rights
of the Owner Trustee to amounts paid or payable by Lessee to the Owner Trustee
under the Participation Agreement and all rights of the Owner Trustee to enforce
payments of any such amounts thereunder;
(7) Without limiting the generality of the foregoing, all monies
and securities from time to time deposited or required to be deposited with the
Mortgagee pursuant to any terms of this Trust Indenture or the Lease or required
hereby or by the Lease to be held by the Mortgagee hereunder as security for the
obligations of the Lessee under the Lease or of the Owner Trustee hereunder; and
(8) All proceeds of the foregoing;
excluding, however, in all events from each of foregoing clauses (1) through (8)
inclusive all Excluded Payments and the right to specifically enforce the same
or to xxx for damages for the breach thereof as provided in Section 5.02 hereof.
Concurrently with the delivery of this Trust Indenture, the Owner
Trustee will deliver to the Mortgagee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement and the
Purchase Agreement (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, with the Consent and Agreement
attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participant, the Note Holders and
the Indenture Indemnitees, except as provided in Section 2.14 and Article III
hereof without any preference, distinction or priority of any one Equipment Note
over any other by reason of priority of time of issue, sale, negotiation, date
of maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and in all cases and as to all property specified in paragraphs (1)
through (8) inclusive above, subject to the terms and provisions set forth in
this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Agreements, to perform all of the obligations assumed by it
thereunder, except to the extent prohibited or excluded from doing so pursuant
to the terms and provisions thereof, and the Mortgagee, the Loan Participant,
the Note Holders and the Indenture Indemnitees shall have no obligation or
liability under the Indenture Agreements, by reason of or arising out of the
assignment hereunder, nor shall the Mortgagee, the Loan Participant, the Note
Holders or the Indenture Indemnitees be required or obligated in any manner to
perform or fulfill any obligations of the Owner Trustee under or pursuant to the
Indenture Agreements, or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
The Owner Trustee does hereby constitute the Mortgagee the true and
lawful attorney of the Owner Trustee, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Owner Trustee or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition proceeds
but in all cases excluding Excluded Payments) due and to become due under or
arising out of the Indenture Agreements, and all other property which now or
hereafter constitutes part of the Trust Indenture Estate, to endorse any checks
or other instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Mortgagee may deem
to be necessary or advisable in the premises. Without limiting the generality of
the foregoing, but subject to the rights of the Owner Trustee and the Owner
Participant under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
of any Event of Default under this Trust Indenture, the Mortgagee shall have the
right under such power of attorney to accept any offer in connection with the
exercise of remedies as set forth herein of any purchaser to purchase the
Airframe and Engines and upon such purchase to execute and deliver in the name
of and on behalf of the Owner Trustee an appropriate xxxx of sale and other
instruments of transfer relating to the Airframe and Engines, when purchased by
such purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of the
Owner Trustee or otherwise, which the Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Mortgagee in and to such Rents and other sums and the security intended to be
afforded hereby; PROVIDED, HOWEVER, that no action of the Mortgagee pursuant to
this paragraph shall increase the obligations or liabilities of the Owner
Trustee to any Person beyond those obligations and liabilities specifically set
forth in this Trust Indenture and in the other Operative Agreements. Under the
Lease, Lessee is directed, so long as this Trust Indenture shall not have been
fully discharged, to make all payments of Rent (other than Excluded Payments)
and all other amounts which are required to be paid to or deposited with the
Owner Trustee pursuant to the Lease (other than Excluded Payments) directly to,
or as directed by, the Mortgagee at such address or addresses as the Mortgagee
shall specify, for application as provided in this Trust Indenture. The Owner
Trustee agrees that promptly upon receipt thereof, it will transfer to the
Mortgagee any and all monies from time to time received by it constituting part
of the Trust Indenture Estate, for distribution by the Mortgagee pursuant to
this Trust Indenture, except that the Owner Trustee shall accept for
distribution pursuant to the Trust Agreement any amounts distributed to it by
the Mortgagee under this Trust Indenture.
The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Mortgagee, the Owner Trustee will promptly and
duly execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Mortgagee may reasonably deem
necessary or desirable to perfect, preserve or protect the mortgage, security
interests and assignments created or intended to be created hereby or to obtain
for the Mortgagee the full benefits of the assignment hereunder and of the
rights and powers herein granted.
The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 10.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Mortgagee,
and that it will not, except as otherwise provided in this Trust Indenture and
except with respect to Excluded Payments to which it is entitled, (i) accept any
payment from Lessee under any Indenture Agreement, (ii) enter into any agreement
amending or supplementing any Indenture Agreement, (iii) execute any waiver or
modification of, or consent under, the terms of, or exercise any rights, powers
or privileges under, any Indenture Agreement, (iv) settle or compromise any
claim arising under any Indenture Agreement or (v) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.
The Owner Trustee does hereby agree that it will not without the
written consent of the Mortgagee:
(a) receive or collect or agree to the receipt or collection of
any payment (other than Excluded Payments) of Rent, including Basic Rent,
Stipulated Loss Value, Termination Value or any other payment to be made
pursuant to Section 9 or 10 of the Lease prior to the date for the payment
thereof provided for by the Lease or assign, transfer or hypothecate
(other than to the Mortgagee hereunder) any payment of Rent, including
Basic Rent, Stipulated Loss Value, Termination Value or any other payment
to be made pursuant to Section 9 or 10 of the Lease, then due or to accrue
in the future under the Lease in respect of the Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in connection
with the appointment of a successor owner trustee, sell, mortgage,
transfer, assign or hypothecate (other than to the Mortgagee hereunder)
its interest in the Airframe and Engines or any part thereof or in any
amount to be received by it from the use or disposition of the Airframe
and Engines, other than amounts distributed to it pursuant to Article III
hereof.
It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall IPSO FACTO, and without any other conveyance, assignment or
act on the part of the Owner Trustee or the Mortgagee, become and be subject to
the Lien herein granted as fully and completely as though specifically described
herein, but nothing contained in this paragraph shall be deemed to modify or
change the obligations of the Owner Trustee contained in the foregoing
paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Owner Trustee Agreement.
Notwithstanding the Granting Clause or any of the preceding
paragraphs, all Excluded Payments are hereby excluded from the foregoing sale,
transfer, assignment, grant, pledge and security interest. Further, nothing in
the Granting Clause or the preceding paragraphs shall impair any of the rights
of the Owner Trustee or the Owner Participant under Section 2.13, 4.03, 4.04,
4.08, 5.02 or 5.03 hereof.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A to the Lease.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. FORM OF EQUIPMENT NOTES.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER [AMENDED AND RESTATED](1) TRUST AGREEMENT [TN]
DATED AS OF [DDC].
LIMITED RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH
THE EMBRAER MODEL EMB-145 XR AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N[REG].
No. Date:[ ]
---- -------------, -----
$
---------------------------
INTEREST RATE MATURITY DATE
[ ] [ ]
---------- ------------
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity called
---------------
(1) Delete for New Aircraft.
the "Owner Trustee") under that certain [Amended and Restated](2) Trust
Agreement [TN], dated as of [DD], between the Owner Participant named therein
and Xxxxx Fargo Bank Northwest, National Association (herein as such Trust
Agreement may be supplemented or amended from time to time called the "Trust
Agreement"), hereby promises to pay to WILMINGTON TRUST COMPANY, or the
registered assignee thereof, the principal sum of $____________ (the "Original
Amount"), together with interest on the amount of the Original Amount remaining
unpaid from time to time (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) from the date hereof until paid in full at a
rate per annum equal to the Debt Rate. The Original Amount of this Equipment
Note shall be payable in installments on the dates set forth in Schedule I
hereto equal to the corresponding percentage of the Original Amount of this
Equipment Note set forth in Schedule I hereto. Accrued but unpaid interest shall
be due and payable in monthly installments commencing on [__________, 200_], and
thereafter on the first day of each month, to and including [_______________].
Notwithstanding the foregoing, the final payment made on this Equipment Note
shall be in an amount sufficient to discharge in full the unpaid Original Amount
and all accrued and unpaid interest on, and any other amounts due under, this
Equipment Note. Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Equipment Note becomes due and payable is
not a Business Day, then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage [TN], dated as of [DD], between the Owner Trustee and
Wilmington Trust Company (the "Mortgagee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
All payments of Original Amount, interest, Make-Whole Amount, if
any, and other amounts, if any, to be made by the Owner Trustee hereunder and
under the Trust Indenture or the Participation Agreement shall be payable only
from the income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Trust Indenture Estate to enable the Mortgagee to make such payments in
accordance with the terms of Section 2.03 and Article III of the Trust
Indenture, and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee and
---------------
(2) Delete for New Aircraft.
the Mortgagee is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Equipment Note or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; PROVIDED,
HOWEVER, that nothing herein contained shall limit, restrict or impair the right
of the Mortgagee, subject always to the terms and provisions of the Trust
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Event of Default under the Trust Indenture in accordance with Section 4.04(b)
of the Trust Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Trust
Indenture Estate and to exercise all rights and remedies provided under the
Trust Indenture or otherwise realize upon the Trust Indenture Estate as provided
under the Trust Indenture.
There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate Trust
Office of the Mortgagee or at the office of any successor in the manner provided
in Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Mortgagee, or as otherwise provided in the Trust Indenture.
Each such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in the case of any
final payment with respect to this Equipment Note, the Equipment Note shall be
surrendered promptly thereafter to the Mortgagee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of the Original
Amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied, FIRST, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, or, to the extent permitted by Law, any overdue interest and
other amounts hereunder) to the date of such payment, SECOND, to the payment of
the Original Amount of this Equipment Note then due, THIRD, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and FOURTH, the balance, if any, remaining thereafter, to the payment
of installments of the Original Amount of this Equipment Note remaining unpaid
in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the
Trust Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Trust Indenture. The Trust Indenture Estate is held
by the Mortgagee as security, in part, for the Equipment Notes. The provisions
of this Equipment Note are subject to the Trust Indenture. Reference is hereby
made to the Trust Indenture for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Equipment Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes executed and
delivered under the Trust Indenture, as well as for a statement of the terms and
conditions of the Trust created by the Trust Indenture, to all of which terms
and conditions in the Trust Indenture each holder hereof agrees by its
acceptance of this Equipment Note.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate Original Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Mortgagee shall treat the person in
whose name this Equipment Note is registered as the owner hereof for all
purposes, whether or not this Equipment Note be overdue, and neither the Owner
Trustee nor the Mortgagee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections
2.10 and 2.12 of the Trust Indenture but not otherwise. This Equipment Note is
also subject to exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.13 of the Trust Indenture but not otherwise. In
addition, this Equipment Note may be accelerated as provided in Section 4.04 of
the Trust Indenture.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Mortgagee by manual signature, this Equipment Note shall not
be entitled to any benefit under the Trust Indenture or be valid or obligatory
for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Note
to be executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
By:
------------------------------------
Name:
Title:
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY, as Mortgagee
By:
------------------------------------
Name:
Title:
SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
Percentage of
Original Amount
Payment Date to Be Paid
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES.
The Equipment Notes shall be dated the date of issuance thereof and
shall have the maturity date and shall bear interest as specified in Schedule I
hereto. On the date of the consummation of the Transactions, the initial
Equipment Note shall be issued in the initial Original Amount set forth in
Schedule I hereto to the Subordination Agent on behalf of the Pass Through
Trustee under the Pass Through Trust Agreement. 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 may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate (calculated
on the basis of a year of 360 days comprised of twelve 30-day months) on the
unpaid Original Amount thereof from time to time outstanding, payable in arrears
on [_________, 200_], and on the first day of each month thereafter until
maturity. The Original Amount of each Equipment Note shall be payable on the
dates and in the installments equal to the corresponding percentage of the
Original Amount as set forth in Schedule I hereto which shall be attached as
Schedule I to the Equipment Notes. Notwithstanding the foregoing, the final
payment made under each Equipment Note shall be in an amount sufficient to
discharge in full the unpaid Original Amount and all accrued and unpaid interest
on, and any other amounts due under, such Equipment Note. Each Equipment Note
shall bear interest at the Payment Due Rate (calculated on the basis of a year
of 360 days comprised of twelve 30-day months) on any part of the Original
Amount, Make-Whole Amount, if any, and, to the extent permitted by applicable
Law, interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything to the
contrary contained herein, if any date on which a payment under any Equipment
Note becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) to the extent not payable (whether or
not in fact paid) under Section 6(a) of the Note Purchase Agreement (as
originally in effect or amended with the consent of the Owner Participant), an
amount or amounts equal to the fees payable to the Liquidity Providers 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 Equipment Notes
and the denominator of which shall be the then outstanding aggregate principal
amount of all "Equipment Notes" (as defined in the Intercreditor Agreement);
(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 CNAI Special Termination Advance (other than any Applied CNAI
Special Termination Advance) payable under Section 3.07 of the CNAI Liquidity
Facility minus Investment Earnings from such CNAI Special Termination Advance
multiplied by (y) the fraction specified in the foregoing clause (i); (iv) (x)
the amount equal to interest on any WestLB Expiration Advance (other than an
Applied WestLB Expiration Advance) payable under Section 3.07 of the WestLB
Liquidity Facility minus Investment Earnings from such WestLB Expiration Advance
multiplied by (y) the fraction specified in the foregoing clause (i); (v) (x)
the amount equal to interest on any Non-Extension Advance (other than any
Applied Non-Extension Advance) payable under Section 3.07 of the CNAI Liquidity
Facility minus Investment Earnings from such Non-Extension Advance multiplied by
(y) the fraction specified in the foregoing clause (i); (vi) (x) the amount
equal to interest on any WestLB Early Termination Advance (other than any
Applied WestLB Early Termination Advance) payable under Section 3.07 of the
WestLB Liquidity Facility minus Investment Earnings from such WestLB Early
Termination Advance multiplied by (y) the fraction specified in the foregoing
clause (i); and (vii) if any payment default shall have occurred and be
continuing with respect to interest on any Equipment Notes, (x) the excess, if
any, of (1) an amount equal to interest on any Unpaid Advance, Applied Downgrade
Advance, Applied CNAI Special Termination Advance, Applied WestLB Early
Termination Advance, Applied WestLB Expiration Advance or Applied Non-Extension
Advance payable under Section 3.07 of the applicable Liquidity Facility over (2)
the sum of Investment Earnings from any Final Advance plus any amount of
interest at the Payment Due Rate actually payable (whether or not in fact paid)
by Owner Trustee on the overdue scheduled interest on the Equipment Notes in
respect of which such Unpaid Advance, Applied Downgrade Advance, Applied CNAI
Special Termination Advance, Applied WestLB Early Termination Advance, Applied
WestLB Expiration 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 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 "Equipment Notes" (as defined in the Intercreditor Agreement) (other than
interest becoming due and payable solely as a result of acceleration of any such
"Equipment Notes"). For purposes of this paragraph, (i) the terms "Applied
Downgrade Advance", "Cash Collateral Account", "Downgrade Advance", "Final
Advance", "Investment Earnings", and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility, (ii) the terms "Applied WestLB Early
Termination Advance", "Applied WestLB Expiration Advance", "WestLB Expiration
Advance" and "WestLB Early Termination Advance" shall have the meanings
specified in the WestLB Liquidity Facility and (iii) the terms "Applied
Non-Extension Advance", "Applied CNAI Special Termination Advance",
"Non-Extension Advance" and "CNAI Special Termination Advance" shall have the
meanings specified in the CNAI Liquidity Facility.
The Equipment Notes shall be executed on behalf of the Owner Trustee
by its President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing the
signatures of individuals who were at any time the proper officers of the Owner
Trustee shall bind the Owner Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the respective
dates of such Equipment Notes. The Owner Trustee may from time to time execute
and deliver Equipment Notes with respect to the Aircraft to the Mortgagee for
authentication upon original issue and such Equipment Notes shall thereupon be
authenticated and delivered by the Mortgagee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or other
authorized officer of the Owner Trustee; PROVIDED, HOWEVER, that each such
request shall specify the aggregate Original Amount of all Equipment Notes to be
authenticated hereunder on original issue with respect to the Aircraft. No
Equipment Note shall be secured by or entitled to any benefit under this Trust
Indenture or be valid or obligatory for any purposes, unless there appears on
such Equipment Note a certificate of authentication in the form provided for
herein executed by the Mortgagee by the manual signature of one of its
authorized officers and such certificate upon any Equipment Notes shall be
conclusive evidence, and the only evidence, that such Equipment Note has been
duly authenticated and delivered hereunder.
SECTION 2.03. PAYMENTS FROM TRUST INDENTURE ESTATE ONLY.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this
Trust Indenture, each Note Holder, by its acceptance of an Equipment Note,
agrees that as between it and the Owner Trustee, except as expressly
provided in this Trust Indenture, the Participation Agreement or any other
Operative Agreement, (i) the obligation to make all payments of the
Original Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Equipment Notes, and the performance by
the Owner Trustee of every obligation or covenant contained in this Trust
Indenture and in the Participation Agreement or any of the other Operative
Agreements, shall be payable only from the income and proceeds from the
Trust Estate to the extent included in the Trust Indenture Estate and only
to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Mortgagee to make such payments in
accordance with the terms of Article III hereof, and all of the
statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Trust Indenture and
any agreement referred to herein other than the Trust Agreement, unless
expressly otherwise stated, are made and intended only for the purpose of
binding the Trust Estate and establishing the existence of rights and
remedies which can be exercised and enforced against the Trust Estate;
therefore, anything contained in this Trust Indenture or such other
agreements to the contrary notwithstanding (except for any express
provisions or representations that the Owner Trustee is responsible for,
or is making, in its individual capacity, for which there would be
personal liability of the Owner Trustee), no recourse shall be had with
respect to this Trust Indenture or such other agreements against the Owner
Trustee in its individual capacity or against any institution or person
which becomes a successor trustee or co-trustee or any officer, director,
trustee, servant or direct or indirect parent or controlling Person or
Persons of any of them, and (ii) none of the Owner Trustee, in its
individual capacity, the Owner Participant, the Mortgagee and any officer,
director, trustee, servant, employee, agent or direct or indirect parent
or controlling Person or Persons of any of them shall have any personal
liability for any amounts payable hereunder, under the Participation
Agreement or any of the other Operative Agreements or under the Equipment
Notes except as expressly provided herein, in the Lease or in the
Participation Agreement; PROVIDED, HOWEVER, that nothing contained in this
Section 2.03(a) shall be construed to limit the exercise and enforcement
in accordance with the terms of this Trust Indenture or such other
agreements of rights and remedies against the Trust Indenture Estate.
(b) If (i) all or any part of the Trust Estate becomes the
property of, or the Owner Trustee or Owner Participant becomes, a debtor
subject to the reorganization provisions of the Bankruptcy Code, (ii)
pursuant to such reorganization provisions, including Section 1111(b) of
the Bankruptcy Code, the Owner Trustee (in its individual capacity) or the
Owner Participant is required, by reason of the Owner Trustee (in its
individual capacity) or the Owner Participant being held to have recourse
liability to any Note Holder or the Mortgagee, directly or indirectly
(other than the recourse liability of the Owner Trustee (in its individual
capacity) or the Owner Participant under the Participation Agreement, the
Lease or this Trust Indenture or by separate agreement), to make payment
on account of any amount payable as Original Amount, Make-Whole Amount, if
any, interest or other amounts on the Equipment Notes and (iii) any Note
Holder or the Mortgagee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in
its individual capacity) or the Owner Participant on account of clause
(ii) above, then such Note Holder or the Mortgagee, as the case may be,
shall promptly refund to the Owner Trustee (in its individual capacity) or
the Owner Participant (whichever shall have made such payment) such Excess
Amount.
For purposes of this Section 2.03(b), "Excess Amount" means the
amount by which such payment exceeds the amount that would have been received by
a Note Holder or the Mortgagee if the Owner Trustee (in its individual capacity)
or the Owner Participant had not become subject to the recourse liability
referred to in clause (ii) above. Nothing contained in this Section 2.03(b)
shall prevent a Note Holder or the Mortgagee from enforcing any personal
recourse obligation (and retaining the proceeds thereof) of the Owner Trustee
(in its individual capacity) or the Owner Participant under the Participation
Agreement, the Lease or this Trust Indenture (and any exhibits or annexes hereto
or thereto) or from retaining any amount paid by Owner Participant under Section
2.13 or 4.03 hereof.
SECTION 2.04. METHOD OF PAYMENT.
(a) The Original Amount of, interest on, Make-Whole Amount, if
any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not
later than 12:30 p.m., New York City time, on the due date of payment to
the Mortgagee at the Corporate Trust Office for distribution among the
Note Holders in the manner provided herein. The Owner Trustee shall not
have any responsibility for the distribution of such payment to any Note
Holder. Notwithstanding the foregoing or any provision in any Equipment
Note to the contrary, the Mortgagee will use reasonable efforts to pay or
cause to be paid, if so directed in writing by any Note Holder (with a
copy to the Owner Trustee), all amounts paid by the Owner Trustee
hereunder and under such holder's Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed
pursuant to Article III of this Trust Indenture) by transferring, or
causing to be transferred, by wire transfer of immediately available funds
in Dollars, prior to 2:00 p.m., New York City time, on the due date of
payment, to an account maintained by such holder with a bank located in
the continental United States the amount to be distributed to such holder,
for credit to the account of such holder maintained at such bank. If the
Mortgagee shall fail to make any such payment as provided in the
immediately foregoing sentence after its receipt of funds at the place and
prior to the time specified above, the Mortgagee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss of
use of funds at the Debt Rate until such payment is made and the Mortgagee
shall be entitled to any interest earned on such funds until such payment
is made. Any payment made hereunder shall be made without any presentment
or surrender of any Equipment Note, except that, in the case of the final
payment in respect of any Equipment Note, such Equipment Note shall be
surrendered to the Mortgagee for cancellation promptly after such payment.
Notwithstanding any other provision of this Trust Indenture to the
contrary, the Mortgagee shall not be required to make, or cause to be
made, wire transfers as aforesaid prior to the first Business Day on which
it is practicable for the Mortgagee to do so in view of the time of day
when the funds to be so transferred were received by it if such funds were
received after 12:30 p.m., New York City time, at the place of payment.
Prior to the due presentment for registration of transfer of any Equipment
Note, the Owner Trustee and the Mortgagee shall deem and treat the Person
in whose name any Equipment Note is registered on the Equipment Note
Register as the absolute owner and holder of such Equipment Note for the
purpose of receiving payment of all amounts payable with respect to such
Equipment Note and for all other purposes, and none of the Owner Trustee
or the Mortgagee shall be affected by any notice to the contrary. So long
as any signatory to the Participation Agreement or nominee thereof shall
be a registered Note Holder, all payments to it shall be made to the
account of such Note Holder specified in Schedule I thereto and otherwise
in the manner provided in or pursuant to the Participation Agreement
unless it shall have specified some other account or manner of payment by
notice to the Mortgagee consistent with this Section 2.04.
(b) The Mortgagee, as agent for the Owner Trustee, shall exclude
and withhold at the appropriate rate from each payment of Original Amount
of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Equipment Note (and such exclusion and withholding
shall constitute payment in respect of such Equipment Note) any and all
United States withholding taxes applicable thereto as required by Law. The
Mortgagee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future United States taxes or similar
charges are required to be withheld with respect to any amounts payable
hereunder or in respect of the Equipment Notes, to withhold such amounts
and timely pay the same to the appropriate authority in the name of and on
behalf of the Note Holders, that it will file any necessary United States
withholding tax returns or statements when due, and that as promptly as
possible after the payment thereof it will deliver to each Note Holder
(with a copy to the Owner Trustee and the Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary
evidence as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form W-8BEN (or such successor form or forms as may be required
by the United States Treasury Department) for each calendar year in which a
payment is made hereunder or under the Equipment Note(s) held by such holder is
made (but prior to the making of such payment), or in either of the two
preceding calendar years, and has not notified the Mortgagee of the withdrawal
or inaccuracy of such form prior to the date of such payment (and the Mortgagee
has no reason to believe that any information set forth in such form is
inaccurate), the Mortgagee shall withhold only the amount, if any, required by
Law (after taking into account any applicable exemptions properly claimed by the
Note Holder) to be withheld from payments hereunder or under the Equipment Notes
held by such holder in respect of United States federal income tax. If a Note
Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
W-8ECI in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made hereunder or under any Equipment Note
(but prior to the making of any payment for such year), and has not notified the
Mortgagee of the withdrawal or inaccuracy of such certificate or form prior to
the date of such payment (and the Mortgagee has no reason to believe that any
information set forth in such form is inaccurate) or (y) which is a U.S. Person
has furnished to the Mortgagee a properly completed, accurate and currently
effective U.S. Internal Revenue Service Form W-9, if applicable, prior to a
payment hereunder or under the Equipment Notes held by such holder, no amount
shall be withheld from payments in respect of United States federal income tax.
If any Note Holder has notified the Mortgagee that any of the foregoing forms or
certificates is withdrawn or inaccurate, or if such holder has not filed a form
claiming an exemption or reduced withholding from United States withholding tax
or if the Code or the regulations thereunder or the administrative
interpretation thereof is at any time after the date hereof amended to require
such withholding of United States federal income taxes from payments hereunder
or under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.
Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Mortgagee to withhold taxes in the manner
provided for herein or for any false, inaccurate or untrue evidence provided by
any Note Holder hereunder.
SECTION 2.05. APPLICATION OF PAYMENTS.
In the case of each Equipment Note, each payment of Original Amount,
Make-Whole Amount, if any, and interest due thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and to the extent permitted by Law, any overdue interest and any
other overdue amounts thereunder) to the date of such payment;
Second: to the payment of the Original Amount of such Equipment
Note (or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Original Amount of such Equipment Note remaining unpaid (provided that such
Equipment Note shall not be subject to redemption except as provided in Sections
2.10 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied
to the installments of Original Amount of such Equipment Note in the inverse
order of their normal maturity.
SECTION 2.06. TERMINATION OF INTEREST IN TRUST INDENTURE ESTATE.
No Note Holder nor any other Indenture Indemnitee shall, as such,
have any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the Original Amount of, Make-Whole Amount, if any,
and interest on and other amounts due under all Equipment Notes held by such
Note Holder and all other sums then due and payable to such Note Holder, such
Indenture Indemnitee or the Mortgagee hereunder (including, without limitation,
under the third paragraph of Section 2.02 hereof) and under the other Operative
Agreements by the Owner Trustee and the Lessee (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT
NOTES.
The Mortgagee shall keep a register (the "Equipment Note Register")
in which the Mortgagee shall provide for the registration of Equipment Notes and
the registration of transfers of Equipment Notes. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Mortgagee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, the Owner
Trustee shall execute, and the Mortgagee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original Amount. At the option of the Note Holder,
Equipment Notes may be exchanged for other Equipment Notes of any authorized
denominations of a like aggregate Original Amount, upon surrender of the
Equipment Notes to be exchanged to the Mortgagee at the Corporate Trust Office.
Whenever any Equipment Notes are so surrendered for exchange, the Owner Trustee
shall execute, and the Mortgagee shall authenticate and deliver, the Equipment
Notes which the Note Holder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof or
otherwise under this Trust Indenture) shall be the valid obligations of the
Owner Trustee evidencing the same respective obligations, and entitled to the
same security and benefits under this Trust Indenture, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every Equipment Note
presented or surrendered for registration of transfer, shall (if so required by
the Mortgagee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Mortgagee duly executed by the Note Holder
or such holder's attorney duly authorized in writing, and the Mortgagee shall
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act, and the securities Laws of any applicable state. The
Mortgagee shall make a notation on each new Equipment Note of the amount of all
payments of Original Amount previously made on the old Equipment Note or
Equipment Notes with respect to which such new Equipment Note is issued and the
date to which interest on such old Equipment Note or Equipment Notes has been
paid. Interest shall be deemed to have been paid on such new Equipment Note to
the date on which interest shall have been paid on such old Equipment Note, and
all payments of the Original Amount marked on such new Equipment Note, as
provided above, shall be deemed to have been made thereon. The Owner Trustee
shall not be required to exchange any surrendered Equipment Notes as provided
above during the ten-day period preceding the due date of any payment on such
Equipment Note. The Owner Trustee shall in all cases deem the Person in whose
name any Equipment Note shall have been issued and registered as the absolute
owner and holder of such Equipment Note for the purpose of receiving payment of
all amounts payable by the Owner Trustee with respect to such Equipment Note and
for all purposes until a notice stating otherwise is received from the Mortgagee
and such change is reflected on the Equipment Note Register. The Mortgagee will
promptly notify the Owner Trustee and the Lessee of each registration of a
transfer of an Equipment Note. Any such transferee of an Equipment Note, by its
acceptance of an Equipment Note, agrees to the provisions of the Participation
Agreement applicable to Note Holders, and shall be deemed to have covenanted to
the parties to the Participation Agreement as to the matters covenanted by the
original Loan Participant in the Participation Agreement. Subject to compliance
by the Note Holder and its transferee (if any) of the requirements set forth in
this Section 2.07, Mortgagee and Owner Trustee shall use all reasonable efforts
to issue new Equipment Notes upon transfer or exchange within 10 Business Days
of the date an Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT
NOTES.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
to the Owner Trustee. If the Equipment Note being replaced has been destroyed,
lost or stolen, the holder of such Equipment Note shall furnish to the Owner
Trustee and the Mortgagee such security or indemnity as may be required by them
to save the Owner Trustee and the Mortgagee harmless and evidence satisfactory
to the Owner Trustee and the Mortgagee of the destruction, loss or theft of such
Equipment Note and of the ownership thereof. If a "qualified institutional
buyer" of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of
Rule 144A under the Securities Act (a "QIB") or the Subordination Agent is the
holder of any such destroyed, lost or stolen Equipment Note, then the written
indemnity of such QIB or the Subordination Agent, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably satisfactory
to Lessee, Owner Trustee and Mortgagee shall be accepted as satisfactory
indemnity and security and no further indemnity or security shall be required as
a condition to the execution and delivery of such new Equipment Note. Subject to
compliance by the Note Holder with the requirements set forth in this Section
2.08, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes within 10 Business Days of the date of the written request
therefor from the Note Holder.
SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the
Mortgagee, as Equipment Note Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Equipment Notes.
(b) The Mortgagee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation and
shall destroy the canceled Equipment Notes.
SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES.
(a) On the date on which Lessee is required pursuant to Section
10.1.2 of the Lease to make payment for an Event of Loss with respect to
the Aircraft, all of the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Original Amount thereof,
together with all accrued interest thereon to the date of redemption and
all other Secured Obligations owed or then due and payable to the Note
Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9 thereof, on the date the Lease is so
terminated, all the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Original Amount thereof,
together with accrued interest thereon to the date of redemption and all
other amounts then due and payable hereunder and under the Participation
Agreement and all other Operative Agreements to the Note Holders plus, if
such redemption is made prior to the Premium Termination Date, Make-Whole
Amount, if any.
SECTION 2.11. [RESERVED.]
SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION.
(a) Neither any redemption of any Equipment Note nor any purchase
by the Owner Trustee of any Equipment Note may be made except to the
extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Equipment Note may be made by the Mortgagee.
(b) Notice of redemption with respect to the Equipment Notes shall
be given by the Mortgagee by first-class mail, postage prepaid, mailed not
less than 15 nor more than 60 days prior to the applicable redemption
date, to each Note Holder of such Equipment Notes to be redeemed, at such
Note Holder's address appearing in the Equipment Note Register; PROVIDED,
HOWEVER, that, in the case of a redemption to be made pursuant to Section
2.10(b), such notice shall be revocable and shall be deemed revoked in the
event that the Lease does not in fact terminate on the specified
termination date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become
due and payable upon each such Equipment Note, and that, if any such
Equipment Notes are then outstanding, interest on such Equipment Notes
shall cease to accrue on and after such redemption date, and (4) the place
or places where such Equipment Notes are to be surrendered for payment of
the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount
equal to the redemption price for the Equipment Notes to be redeemed on
the redemption date shall not then be held in the Trust Indenture Estate,
deposit or cause to be deposited with the Mortgagee by 12:00 noon on the
redemption date in immediately available funds the redemption price of the
Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid (and not
deemed revoked as contemplated in the proviso to Section 2.12(b)), the
Equipment Notes to be redeemed shall, on the redemption date, become due
and payable at the Corporate Trust Office of the Mortgagee or at any
office or agency maintained for such purposes pursuant to Section 2.07,
and from and after such redemption date (unless there shall be a default
in the payment of the redemption price) any such Equipment Notes then
outstanding shall cease to bear interest. Upon surrender of any such
Equipment Note for redemption in accordance with said notice, such
Equipment Note shall be redeemed at the redemption price. If any Equipment
Note called for redemption shall not be so paid upon surrender thereof for
redemption, the principal amount thereof shall, until paid, continue to
bear interest from the applicable redemption date at the interest rate in
effect for such Equipment Note as of such redemption date.
SECTION 2.13. OPTION TO PURCHASE EQUIPMENT NOTES.
The Owner Trustee and the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.13, purchase all but not less than all of the Equipment Notes outstanding
hereunder, and each Note Holder agrees that it will, upon such events and
subject to such terms and conditions and upon receipt of such price, sell,
assign, transfer and convey to such purchaser or its nominee (without recourse
or warranty of any kind except against Liens on such Equipment Notes arising by,
through or under such holder), all of the right, title and interest of such Note
Holder in and to the Equipment Notes held by it, and such purchaser or its
nominee shall assume all of such holder's obligations under the Participation
Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant at any time following the occurrence of
any of the following events, and in any such event the purchase price thereof
shall equal for each Equipment Note, the aggregate unpaid Original Amount
thereof, plus accrued and unpaid interest thereon to, but not including, the
date of purchase and all other Secured Obligations owed, or then due and payable
hereunder, to the holder thereof (including under the third paragraph of Section
2.02 hereof). Such option to purchase the Equipment Notes may be exercised (x)
upon a Mortgagee Event or (y) in the event there shall have occurred and be
continuing a Lease Event of Default, PROVIDED, HOWEVER, that if such option is
exercised prior to the Premium Termination Date pursuant to clause (y) at a time
when there shall have occurred and be continuing for less than 120 days a Lease
Event of Default, the purchase price thereof shall equal the price provided in
the preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant giving irrevocable written notice of its
election of such option to the Mortgagee, which notice shall specify a date for
such purchase at least 15 days but not more than 20 days from the date of such
notice. The Mortgagee shall not exercise any of the remedies hereunder and,
without the consent of the Owner Trustee or the Owner Participant, under the
Lease, during the period from the date of the giving of such notice until the
date on which such purchase is required to occur pursuant to the terms of the
preceding sentence.
If the Owner Trustee or the Owner Participant on or before the date
of such purchase shall so request, the Note Holders will comply with all the
provisions of Section 2.07 to enable new Equipment Notes to be issued to the
Owner Trustee or the Owner Participant or its nominee in such denominations as
the Owner Trustee or the Owner Participant shall request. All taxes, charges and
expenses required pursuant to Section 2.09 in connection with the issuance of
such new Equipment Note shall be borne by the Owner Participant.
SECTION 2.14. PRIORITY OF DISTRIBUTIONS.
The Owner Trustee and, by acceptance of its Equipment Notes, each
Note Holder, hereby agree that no payment or distribution shall be made on or in
respect of the Secured Obligations owed to such Note Holder, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. BASIC RENT DISTRIBUTION.
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Mortgagee pursuant to Section 4.03
hereof shall be promptly distributed in the following order of priority:
FIRST, so much of such installment or payment as shall be required to
pay in full the aggregate amount of the payment or payments of
Original Amount and interest (as well as any interest on any
overdue Original Amount and, to the extent permitted by Law, on
any overdue interest) then due under all Equipment Notes shall be
distributed to the Note Holders ratably, without priority of one
over the other, in the proportion that the amount of such payment
or payments then due under each Equipment Note bears to the
aggregate amount of the payments then due under all Equipment
Notes;
SECOND, the balance, if any, of such installment remaining thereafter shall
be distributed to the Owner Trustee; PROVIDED, HOWEVER, that if an
Event of Default shall have occurred and be continuing, then such
balance shall not be distributed as provided in this clause "Second"
but shall be held by the Mortgagee as part of the Trust Indenture
Estate and invested in accordance with Section 5.09 hereof until
whichever of the following shall first occur: (i) all Events of
Default shall have been cured or waived, in which event such balance
shall be distributed as provided in this clause "Second", (ii)
Section 3.03 hereof shall be applicable, in which event such balance
shall be distributed in accordance with the provisions of such
Section 3.03, or (iii) the 120th day after the receipt of such
payment in which case such payment shall be distributed as provided
in this clause "Second".
SECTION 3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION;
OPTIONAL REDEMPTION.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee (i) with respect to the Airframe or the Airframe and
one or more Engines as the result of an Event of Loss, or (ii) pursuant to a
voluntary termination of the Lease pursuant to Section 9 thereof shall be
applied to redemption of the Equipment Notes and to all other Secured
Obligations by applying such funds in the following order of priority:
FIRST, (a) to reimburse the Mortgagee and the Note Holders for any
reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or
indemnity by Lessee, under the Operative Agreements and then (b)
to pay any other Secured Obligations then due to the Mortgagee,
the Note Holders and the other Indenture Indemnitees under this
Trust Indenture, the Participation Agreement or the Equipment
Notes (other than amounts specified in clause Second below);
SECOND, to pay the amounts specified in clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Equipment Notes;
THIRD, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 10 of the Lease and in accordance with Section 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to the Mortgagee shall be held by the Mortgagee as permitted
by Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.09 hereof) as additional security for the obligations of Lessee
under the Lessee Operative Agreements and, unless otherwise applied pursuant to
the Lease, such proceeds (and such investment earnings) shall be released to the
Lessee at the Lessee's written request upon the release of such damaged Airframe
or Engine and the replacement thereof as provided in the Lease.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Section
15 of the Lease or Article IV hereof) after an Event of Default shall have
occurred and be continuing and after the declaration or other acceleration of
the Equipment Notes specified in Section 4.04(b) hereof, as well as all payments
or amounts then held by the Mortgagee as part of the Trust Indenture Estate,
shall be promptly distributed by the Mortgagee in the following order of
priority:
FIRST, so much of such payments or amounts as shall be required to (i)
reimburse the Mortgagee or WTC for any tax (except to the extent
resulting from a failure of the Mortgagee to withhold taxes
pursuant to Section 2.04(b) hereof), expense or other loss
(including, without limitation, all amounts to be expended at the
expense of, or charged upon the rents, revenues, issues, products
and profits of, the property included in the Trust Indenture
Estate (all such property being herein called the "Mortgaged
Property") pursuant to Section 4.05(b) hereof) incurred by the
Mortgagee or WTC (to the extent not previously reimbursed), the
expenses of any sale, or other proceeding, reasonable attorneys'
fees and expenses, court costs, and any other expenditures
incurred or expenditures or advances made by the Mortgagee, WTC
or the Note Holders in the protection, exercise or enforcement of
any right, power or remedy or any damages sustained by the
Mortgagee, WTC or any Note Holder, liquidated or otherwise, upon
such Event of Default shall be applied by the Mortgagee as
between itself, WTC and the Note Holders in reimbursement of such
expenses and any other expenses for which the Mortgagee, WTC or
the Note Holders are entitled to reimbursement under any
Operative Agreement and (ii) pay all Secured Obligations payable
to the other Indenture Indemnitees hereunder and under the
Participation Agreement and the Lease (other than amounts
specified in clauses Second and Third below); and in the case the
aggregate amount to be so distributed is insufficient to pay as
aforesaid in clauses (i) and (ii), then ratably, without priority
of one over the other, in proportion to the amounts owed each
hereunder;
SECOND, so much of such payments or amounts remaining as shall be required
to reimburse the then existing or prior Note Holders for payments
made pursuant to Section 5.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in
accordance with the amount of the payment or payments made by each
such then existing or prior Note Holder pursuant to said Section
5.03 hereof;
THIRD, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Original Amount of
all Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon (other than Make-Whole Amount which
shall not be due and payable) and all other Secured Obligations
in respect of the Equipment Notes (other than Make-Whole Amount)
to the date of distribution, shall be distributed to the Note
Holders, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Original Amount of all Equipment Notes held
by each holder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder (other than Make-Whole
Amount, if any) to the date of distribution, bears to the
aggregate unpaid Original Amount of all Equipment Notes held by
all such holders plus the accrued but unpaid interest and other
amounts due thereon (other than Make-Whole Amount) to the date of
distribution; and
FOURTH, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner Trustee.
No Make-Whole Amount shall be due and payable on the Equipment Notes
as a consequence of the acceleration of the Equipment Notes as a result of an
Event of Default.
SECTION 3.04. CERTAIN PAYMENTS.
(a) Any payments received by the Mortgagee for which no provision
as to the application thereof is made in this Trust Indenture and for
which such provision is made in the Lease or the Participation Agreement
shall be applied forthwith to the purpose for which such payment was made
in accordance with the terms of the Lease or the Participation Agreement,
as the case may be.
(b) Notwithstanding anything to the contrary contained in this
Article III, the Mortgagee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or Lessee in
respect of the Mortgagee in its individual capacity, any Note Holder or
any other Indenture Indemnitee, in each case whether pursuant to Section 9
of the Participation Agreement or as Supplemental Rent, directly to the
Person entitled thereto. Any payment received by the Mortgagee under the
third paragraph of Section 2.02 shall be distributed to the Subordination
Agent to be distributed in accordance with the terms of the Intercreditor
Agreement.
(c) Notwithstanding anything to the contrary contained in this
Article III, any payments received by the Mortgagee which constitute
Excluded Payments shall be distributed promptly upon receipt by the
Mortgagee directly to the Person or Persons entitled thereto.
(d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by Mortgagee pursuant to the terms of the Lease
shall be held by the Mortgagee as security for the obligations of Lessee
under the Lessee Operative Agreements and, if and when required by the
Lease, paid and/or applied in accordance with the applicable provisions of
the Lease.
SECTION 3.05. OTHER PAYMENTS.
Any payments received by the Mortgagee for which no provision as to
the application thereof is made in the Lease, the Participation Agreement,
elsewhere in this Trust Indenture or in any other Operative Agreement shall be
distributed by the Mortgagee to the extent received or realized at any time (i)
prior to the payment in full of all Secured Obligations due the Note Holders, in
the order of priority specified in Section 3.01 hereof subject to the proviso
thereto, and (ii) after payment in full of all Secured Obligations, in the
following order of priority:
FIRST, to the extent payments or amounts described in clause "First" of
Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Agreements or for which the Lessee is obligated to
indemnify against thereunder, in the manner provided in clause
"First" of Section 3.03 hereof, and
SECOND, in the manner provided in clause "Fourth" of Section 3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the Mortgagee under
the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft after
the termination of the Lease with respect thereto), to the extent received or
realized at any time after payment in full of all Secured Obligations due the
Note Holders, shall be distributed by the Mortgagee in the order of priority
specified in clause (ii) of the immediately preceding sentence of this Section
3.05.
SECTION 3.06. PAYMENTS TO OWNER TRUSTEE.
Any amounts distributed hereunder by the Mortgagee to the Owner
Trustee shall be paid to the Owner Trustee (within the time limits contemplated
by Section 2.04(a)) by wire transfer of funds of the type received by the
Mortgagee at such office and to such account or accounts of such entity or
entities as shall be designated by notice from the Owner Trustee to the
Mortgagee from time to time. The Mortgagee shall not pay an amount due to Owner
Trustee hereunder to any Person other than Owner Trustee, unless the Lessee
shall have given its written consent thereto.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. COVENANTS OF OWNER TRUSTEE.
The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the Original
Amount of, Make-Whole Amount, if any, and interest on and other amounts
due under the Equipment Notes and hereunder in accordance with the terms
of the Equipment Notes and this Trust Indenture and all amounts, if any,
payable by it to the Note Holders under the Participation Agreement or
Section 9 of the Lease;
(b) the Owner Trustee in its individual capacity covenants and
agrees that it shall not, directly or indirectly, cause or permit to exist
a Lessor Lien attributable to it in its individual capacity with respect
to the Aircraft or any other portion of the Trust Estate; that, subject to
the proviso in Section 7.3.1 of the Participation Agreement, it will
promptly, at its own expense, take such action as may be necessary to duly
discharge such Lessor Lien attributable to it in its individual capacity;
and that it will make restitution to the Trust Indenture Estate for any
actual diminution of the assets of the Trust Estate resulting from such
Lessor Liens attributable to it in its individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will
give prompt written notice of such Event of Default, Default or Event of
Loss to the Mortgagee, each Note Holder, Lessee and the Owner Participant;
(d) the Owner Trustee will furnish to the Note Holders and the
Mortgagee, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates and other instruments
furnished to the Owner Trustee under the Lease, including, without
limitation, a copy of each report or notice received pursuant to Section 9
or 8.2 or Annex D, Paragraph E of the Lease to the extent that the same
shall not have been furnished or is not required to be furnished by the
Lessee to the Note Holders or the Mortgagee pursuant to the Lease;
(e) except with the consent of the Mortgagee (acting pursuant to
instructions given in accordance with Section 9.01 hereof) or as provided
in Section 2 of the Participation Agreement, the Owner Trustee will not
contract for, create, incur, assume or suffer to exist any Debt, and will
not guarantee (directly or indirectly or by an instrument having the
effect of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the Debt
of any other person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement and the Trust
Agreement and the other Operative Agreements.
SECTION 4.02. EVENT OF DEFAULT.
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) any Lease Event of Default (provided that any such Lease Event
of Default caused solely by a failure of Lessee to pay to the Owner
Trustee or the Owner Participant when due any amount that is included in
the definition of Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Trustee to the Mortgagee that
such failure shall constitute an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment
of Original Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder (other than
as a result of a Lease Event of Default or a Lease Default) and such
failure shall have continued unremedied for ten Business Days in the case
of any payment of Original Amount or interest or Make-Whole Amount, if
any, thereon and, in the case of any other amount, for ten Business Days
after the Owner Trustee or the Owner Participant receives written demand
from the Mortgagee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee, in
its individual capacity pursuant to Section 4.01(b) hereof or in its
individual or trust capacity pursuant to Section 7.3.1 of the
Participation Agreement, or by the Owner Participant pursuant to Section
7.2.1 of the Participation Agreement shall remain undischarged for a
period of 30 days after the Owner Trustee or the Owner Participant, as the
case may be, shall have received written notice from the Mortgagee or any
Note Holder of such Lien; or
(d) any representation or warranty made by the Owner Participant
or the Owner Trustee in the Participation Agreement or this Trust
Indenture or in any certificate furnished by the Owner Participant or the
Owner Trustee to the Mortgagee or any Note Holder in connection with the
transactions contemplated by the Operative Agreements shall prove to have
been false or incorrect when made in any material respect and continues to
be material and adverse to the interests of the Mortgagee or the Note
Holders; and if such misrepresentation is capable of being corrected and
if such correction is being sought diligently, such misrepresentation
shall not have been corrected within 60 days (or, without affecting
Section 4.02(f) hereof, in the case of the representation made in Section
6.3.6 or 6.2.6 of the Participation Agreement as to citizenship of the
Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within
60 days) following notice thereof from the Mortgagee or any Note Holder to
the Owner Trustee or the Owner Participant, as the case may be; or
(e) other than as provided in (c) above or (f) below, any failure
by the Owner Trustee or Owner Participant to observe or perform any other
covenant or obligation of the Owner Trustee or Owner Participant, as the
case may be, for the benefit of the Mortgagee or the Note Holders
contained in the Participation Agreement, Section 4.2.1 of the Trust
Agreement, the Equipment Notes or this Trust Indenture which is not
remedied within a period of 60 days after notice thereof has been given to
the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the Laws
of the United States, the Owner Participant shall not be a "citizen of the
United States" within the meaning of Section 40102(a)(15) of Part A of
Subtitle VII of Xxxxx 00, Xxxxxx Xxxxxx Code, and as the result thereof
the registration of the Aircraft under the Act, and regulations then
applicable thereunder, shall cease to be effective; provided that no Event
of Default shall be deemed to have occurred under this paragraph (f)
unless such circumstances continue unremedied for more than 30 days after
the Owner Participant has Actual Knowledge of the state of facts that
resulted in such ineffectiveness and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary case
or other proceeding in respect of the Owner Participant, the Owner
Trustee, the Trust or the Trust Estate under the federal bankruptcy Laws,
as now constituted or hereafter amended, or any other applicable federal
or state bankruptcy, insolvency or other similar Law in the United States
or seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Owner Participant, the
Owner Trustee, the Trust or the Trust Estate or for all or substantially
all of its property, or seeking the winding-up or liquidation of its
affairs and the continuation of any such case or other proceeding
undismissed and unstayed for a period of 60 consecutive days; or (ii) the
commencement by the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate of a voluntary case or proceeding under the federal
bankruptcy Laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar Law in
the United States, or the consent by the Owner Participant, the Owner
Trustee, the Trust or the Trust Estate to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Owner Participant, the
Owner Trustee, the Trust or the Trust Estate or for all or substantially
all of its property, or the making by the Owner Participant, the Owner
Trustee, the Trust or the Trust Estate of any assignment for the benefit
of creditors or the Owner Participant or the Owner Trustee shall take any
action to authorize any of the foregoing; PROVIDED, HOWEVER, that an event
referred to in this Section 4.02(g) with respect to the Owner Participant
shall not constitute an Event of Default if within 30 days of the
commencement of the case or proceeding a final non-appealable order,
judgment or decree shall be entered in such case or proceeding by a court
or a trustee, custodian, receiver or liquidator, to the effect that, no
part of the Trust Estate (except for the Owner Participant's beneficial
interest therein) and no right, title or interest under the Trust
Indenture Estate shall be included in, or be subject to, any declaration
or adjudication of, or proceedings with respect to, the bankruptcy,
insolvency or liquidation of the Owner Participant referred to in this
Section 4.02(g).
SECTION 4.03. CERTAIN RIGHTS.
The Mortgagee shall give the Note Holders, the Owner Trustee and the
Owner Participant prompt written notice of any Event of Default of which the
Mortgagee has Actual Knowledge and shall give the Note Holders, the Owner
Trustee and the Owner Participant not less than ten Business Days' prior written
notice of the date (the "Enforcement Date") on or after which the Mortgagee may,
subject to the limitation set forth in Section 4.04(a), commence and consummate
the exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof. Without limiting the generality of the foregoing, the Mortgagee shall
give the Owner Trustee, the Owner Participant and the Lessee at least ten
Business Days' prior written notice (which may be given concurrently with notice
of the Enforcement Date) of any declaration of the Lease to be in default
pursuant to Sections 14 and 15 of the Lease or any termination of the Lease or
of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
If an Event of Default shall have occurred and be continuing, the Owner Trustee
shall have the rights set forth below, any of which may be exercised directly by
the Owner Participant.
If as a result of the occurrence of an Event of Default in respect
of the nonpayment by Lessee of Basic Rent due under the Lease, the Mortgagee
shall have insufficient funds to make any payment of Original Amount and
interest on any Equipment Note on the day it becomes due and payable, the Owner
Trustee may, but shall not be obligated to pay the Mortgagee prior to the
Enforcement Date, in the manner provided in Section 2.04 hereof, for application
in accordance with Section 3.01 hereof, an amount equal to the portion of the
Original Amount and interest (including interest, if any, on any overdue
payments of such portion of Original Amount and interest) then due and payable
on the Equipment Notes, and, unless the Owner Trustee has cured Events of
Default in respect of payments of Basic Rent on each of the 18 immediately
preceding Basic Rent payment dates, or the Owner Trustee has cured 36 previous
Events of Default in respect of payments of Basic Rent, such payment by the
Owner Trustee shall, solely for purposes of this Trust Indenture be deemed to
cure any Event of Default which would otherwise have arisen on account of the
nonpayment by Lessee of such installment of Basic Rent (but not any other
Default or Event of Default which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment of
Basic Rent by the Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee may, but shall not be obligated to, cure such Event
of Default by making such payment prior to the Enforcement Date as is necessary
to accomplish the observance or performance of the defaulted covenant, condition
or agreement to the party entitled to the same.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such Event of
Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
under the Lease for or on account of costs or expenses incurred in connection
with the exercise of such right, nor shall any claim of the Owner Trustee
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of the Mortgagee in and to the
Mortgaged Property. Upon any payment by the Owner Trustee pursuant to the first
or second preceding paragraphs of this Section 4.03, the Owner Trustee shall be
subrogated to the rights of the Mortgagee and the Note Holders in respect of the
Basic Rent which was overdue at the time of such payment and interest payable by
the Lessee on account of its being overdue and any Supplemental Rent in respect
of the reimbursement of amounts paid by Owner Trustee pursuant to the
immediately preceding paragraph (but in either case shall have no rights as a
secured party hereunder), and thereafter, the Owner Trustee shall be entitled
(so long as the application thereof shall not give rise to an Event of Default
hereunder) to receive such overdue Basic Rent or Supplemental Rent, as the case
may be, and interest thereon upon receipt thereof by the Mortgagee; PROVIDED,
HOWEVER, that (i) if the Original Amount and interest on the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) hereof, such
subrogation shall, until the Secured Obligations shall have been paid in full,
be subordinate to the rights of the Mortgagee, the Note Holders and the
Indenture Indemnitees in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not
otherwise attempt to recover any such amount paid by it on behalf of the Lessee
pursuant to this Section 4.03 except by demanding of the Lessee payment of such
amount, or by commencing an action at law against the Lessee and obtaining and
enforcing a judgment against the Lessee for the payment of such amount or taking
appropriate action in a pending action at law against the Lessee (PROVIDED,
HOWEVER, that at no time while an Event of Default shall have occurred and be
continuing shall any such demand be made or shall any such action be commenced
(or continued) and any amounts nevertheless received by the Owner Trustee in
respect thereof shall be held in trust for the benefit of, and promptly paid to,
the Mortgagee for distribution as provided in Section 3.03 hereof).
Neither the Owner Trustee nor the Owner Participant shall have the
right to cure any Lease Event of Default or Lease Default except as specified in
this Section 4.03.
SECTION 4.04. REMEDIES.
(a) If an Event of Default shall have occurred and be continuing
and so long as the same shall continue unremedied, then and in every such
case the Mortgagee may, subject to the second and third paragraphs of this
Section 4.04(a), exercise any or all of the rights and powers and pursue
any and all of the remedies pursuant to this Article IV and shall have and
may exercise all of the rights and remedies of a secured party under the
Uniform Commercial Code and, in the event such Event of Default is also a
Lease Event of Default, any and all of the remedies pursuant to Section 15
of the Lease and may take possession of all or any part of the properties
covered or intended to be covered by the Lien created hereby or pursuant
hereto and may exclude the Owner Participant, the Owner Trustee and Lessee
and all persons claiming under any of them wholly or partly therefrom;
PROVIDED, HOWEVER, that the Mortgagee shall give the Owner Trustee and the
Owner Participant twenty days' prior written notice of its intention to
sell the Aircraft. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at the sale and become the purchaser. Without
limiting any of the foregoing, it is understood and agreed that the
Mortgagee may exercise any right of sale of the Aircraft available to it,
even though it shall not have taken possession of the Aircraft and shall
not have possession thereof at the time of such sale.
Anything in this Trust Indenture to the contrary notwithstanding,
the Mortgagee shall not be entitled to exercise any remedy hereunder as a result
of an Event of Default which arises solely by reason of one or more events or
circumstances which constitute a Lease Event of Default unless the Mortgagee as
security assignee of the Owner Trustee shall have exercised or concurrently be
exercising one or more of the dispossessory remedies provided for in Section 15
of the Lease with respect to the Aircraft; PROVIDED, however, that such
requirement to exercise one or more of such remedies under the Lease shall not
apply in circumstances where the Mortgagee is, and has been, involuntarily
stayed or prohibited by applicable law or court order for a continuous period (a
"Continuous Stay Period") in excess of 60 days subsequent to an entry of an
order for relief pursuant to Chapter 11 of the Bankruptcy Code (such 60 day
period, the "Section 1110 Period"); PROVIDED FURTHER, HOWEVER that the
requirement to exercise one or more of such remedies under the Lease shall
nonetheless be applicable during a Continuous Stay Period subsequent to the
expiration of the Section 1110 Period to the extent that the continuation of
such Continuous Stay Period subsequent to the expiration of the Section 1110
Period (A) results from an agreement by the trustee or the debtor-in-possession
in such proceeding during the Section 1110 Period with the approval of the
relevant court to perform the Lease in accordance with Section 1110(a)(2)(A) of
the Bankruptcy Code and continues to perform as required by Section 1110(a)(2)
of the Bankruptcy Code and cures any default (other than a default of the kind
specified in Section 365(b)(2) of the Bankruptcy Code) within the applicable
time period specified in Section 1110(a)(2)(B) of the Bankruptcy Code or (B) is
an extension of the Section 1110 Period with the consent of the Mortgagee
pursuant to Section 1110(b) of the Bankruptcy Code or (C) is the consequence of
the Mortgagee's own failure to give any requisite notice or demand to any
person. In the event that the applicability of Section 1110 of the Bankruptcy
Code to the Aircraft is being contested by Lessee in judicial proceedings, both
of the Mortgagee and the Owner Trustee shall have the right to participate in
such proceedings; PROVIDED, HOWEVER, that any such participation by the Owner
Trustee shall not affect in any way any rights or remedy of the Mortgagee
hereunder.
It is expressly understood and agreed that, subject only to the two
preceding paragraphs, the inability, described in such paragraphs, of the
Mortgagee to exercise any right or remedy under the Lease shall in no event and
under no circumstances prevent the Mortgagee from exercising any or all of its
rights, powers and remedies under this Trust Indenture, including, without
limitation, this Article IV.
(b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Mortgagee may (and shall, upon receipt of
a written demand therefor from a Majority in Interest of Note Holders),
subject to Section 4.03 hereof, at any time, by delivery of written notice
or notices to the Owner Trustee and the Owner Participant, declare all the
Equipment Notes to be due and payable, whereupon the unpaid Original
Amount of all Equipment Notes then outstanding, together with accrued but
unpaid interest thereon (without Make-Whole Amount) and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived; PROVIDED,
HOWEVER, that if an Event of Default referred to in clause (g) of Section
4.02 hereof shall have occurred or a Lease Event of Default under Section
14.5 of the Lease shall have occurred, then and in every such case the
unpaid Original Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived;
PROVIDED FURTHER that in the event of a reorganization proceeding
involving the Lessee instituted under Chapter 11 of the Bankruptcy Code,
if no Lease Event of Default (including any Lease Event of Default set
forth in Section 14.3 of the Lease) and no other Event of Default (other
than the failure to pay the Original Amount of the Equipment Notes which
by such declaration shall have become payable) exists at any time after
the consummation of such proceeding, such declaration shall be
automatically rescinded without any further action on the part of any Note
Holder.
This Section 4.04(b), however, is subject to the condition that, if
at any time after the Original Amount of the Equipment Notes shall have become
so due and payable, and before any judgment or decree for the payment of the
money so due, or any thereof, shall be entered, all overdue payments of interest
upon the Equipment Notes and all other amounts payable under the Equipment Notes
(except the Original Amount of the Equipment Notes which by such declaration
shall have become payable) shall have been duly paid, and every other Default
and Event of Default with respect to any covenant or provision of this Trust
Indenture shall have been cured, then and in every such case a Majority in
Interest of Note Holders may (but shall not be obligated to), by written
instrument filed with the Mortgagee, rescind and annul the Mortgagee's
declaration (or such automatic acceleration) and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in accordance
with Section 4.03 hereof, the Event of Default that resulted in such
acceleration or declaration.
(c) The Note Holders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any
purchase price bid at such sale by such holder all or any part of the
unpaid obligations owing to such Note Holder and secured by the Lien of
this Trust Indenture (only to the extent that such purchase price would
have been paid to such Note Holder pursuant to Article III hereof if such
purchase price were paid in cash and the foregoing provisions of this
subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise
in connection with the enforcement of any of the terms of this Trust
Indenture, the unpaid Original Amount of all Equipment Notes then
outstanding, together with accrued interest thereon (without Make-Whole
Amount), and other amounts due thereunder, shall immediately become due
and payable without presentment, demand, protest or notice, all of which
are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under the Pass Through Trust Agreement (or its designee)
is a Note Holder, the Mortgagee will not be authorized or empowered to
acquire title to any Mortgaged Property or take any action with respect to
any Mortgaged Property so acquired by it if such acquisition or action
would cause any Trust to fail to qualify as a "grantor trust" for federal
income tax purposes.
SECTION 4.05. RETURN OF AIRCRAFT, ETC.
(a) If an Event of Default shall have occurred and be continuing
and the Equipment Notes have been accelerated, subject to Section 4.03
hereof and unless the Owner Trustee or the Owner Participant shall have
elected to purchase the Equipment Notes, at the request of the Mortgagee,
the Owner Trustee shall promptly execute and deliver to the Mortgagee such
instruments of title and other documents as the Mortgagee may deem
necessary or advisable to enable the Mortgagee or an agent or
representative designated by the Mortgagee, at such time or times and
place or places as the Mortgagee may specify, to obtain possession of all
or any part of the Mortgaged Property included in the Trust Indenture
Estate to which the Mortgagee shall at the time be entitled hereunder. If
the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Mortgagee, the
Mortgagee may (i) obtain a judgment conferring on the Mortgagee the right
to immediate possession and requiring the Owner Trustee to execute and
deliver such instruments and documents to the Mortgagee, to the entry of
which judgment the Owner Trustee hereby specifically consents to the
fullest extent permitted by Law, and (ii) pursue all or part of such
Mortgaged Property wherever it may be found and, in the event that a Lease
Event of Default has occurred and is continuing, may enter any of the
premises of Lessee wherever such Mortgaged Property may be or be supposed
to be and search for such Mortgaged Property and take possession of and
remove such Mortgaged Property. All expenses of obtaining such judgment or
of pursuing, searching for and taking such property shall, until paid, be
secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Mortgagee may, from
time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of
the Mortgaged Property, as it may deem proper. In each such case, the
Mortgagee shall have the right to maintain, use, operate, store, insure,
lease, control, manage, dispose of, modify or alter the Mortgaged Property
and to carry on the business and to exercise all rights and powers of the
Owner Participant and the Owner Trustee relating to the Mortgaged
Property, as the Mortgagee shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
modification or alteration of the Mortgaged Property or any part thereof
as the Mortgagee may determine, and the Mortgagee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Mortgaged Property and every
part thereof, except Excluded Payments, without prejudice, however, to the
right of the Mortgagee under any provision of this Trust Indenture to
collect and receive all cash held by, or required to be deposited with,
the Mortgagee hereunder other than Excluded Payments. Such tolls, rents
(including Rent), revenues, issues, income, products and profits shall be
applied to pay the expenses of the maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, improvement,
modification or alteration of the Mortgaged Property and of conducting the
business thereof, and to make all payments which the Mortgagee may be
required or may elect to make, if any, for taxes, assessments, insurance
or other proper charges upon the Mortgaged Property or any part thereof
(including the employment of engineers and accountants to examine, inspect
and make reports upon the properties and books and records of the Owner
Trustee), and all other payments which the Mortgagee may be required or
authorized to make under any provision of this Trust Indenture, as well as
just and reasonable compensation for the services of the Mortgagee, and of
all persons properly engaged and employed by the Mortgagee with respect
hereto.
SECTION 4.06. REMEDIES CUMULATIVE.
Each and every right, power and remedy given to the Mortgagee
specifically or otherwise in this Trust Indenture shall be cumulative and shall
be in addition to every other right, power and remedy herein specifically given
or now or hereafter existing at Law, in equity or by statute, and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in such order as may be
deemed expedient by the Mortgagee, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by the Mortgagee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS.
In case the Mortgagee shall have instituted any proceeding to
enforce any right, power or remedy under this Trust Indenture by foreclosure,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Mortgagee, then and in every such case the Owner Trustee, the Mortgagee and
Lessee shall, subject to any determination in such proceedings, be restored to
their former positions and rights hereunder with respect to the Mortgaged
Property, and all rights, remedies and powers of the Owner Trustee, the
Mortgagee or Lessee shall continue as if no such proceedings had been
instituted.
SECTION 4.08. WAIVER OF PAST DEFAULTS.
Upon written instruction from a Majority in Interest of Note
Holders, the Mortgagee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; PROVIDED,
HOWEVER, that in the absence of written instructions from all the Note Holders,
the Mortgagee shall not waive any Default (i) in the payment of the Original
Amount, Make-Whole Amount, if any, and interest and other amounts due under any
Equipment Note then outstanding, or (ii) in respect of a covenant or provision
hereof which, under Article IX hereof, cannot be modified or amended without the
consent of each Note Holder.
SECTION 4.09. APPOINTMENT OF RECEIVER.
The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the Owner Trustee hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Mortgaged Property shall be
entitled to exercise all the rights and powers of the Mortgagee with respect to
the Mortgaged Property.
SECTION 4.10. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.
Subject to the provisions of this Trust Indenture, the Owner Trustee
irrevocably appoints the Mortgagee the true and lawful attorney-in-fact of the
Owner Trustee (which appointment is coupled with an interest) in its name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien of this Trust Indenture,
whether pursuant to foreclosure or power of sale, assignments and other
instruments as may be necessary or appropriate, with full power of substitution,
the Owner Trustee hereby ratifying and confirming all that such attorney or any
substitute shall do by virtue hereof in accordance with applicable law.
Nevertheless, if so requested by the Mortgagee or any purchaser, the Owner
Trustee shall ratify and confirm any such sale, assignment, transfer or
delivery, by executing and delivering to the Mortgagee or such purchaser all
bills of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium
(including, without limitation, Make-Whole Amount), if any, and interest on an
Equipment Note on or after the respective due dates expressed in such Equipment
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates in accordance with the terms hereof, shall not be impaired or
affected without the consent of such Note Holder.
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. NOTICE OF EVENT OF DEFAULT.
If the Mortgagee shall have Actual Knowledge of an Event of Default
or of a Default arising from a failure to pay Rent, the Mortgagee shall give
prompt written notice thereof to the Owner Trustee, the Owner Participant,
Lessee, and each Note Holder. Subject to the terms of Sections 2.13, 4.03, 4.04,
4.08, 5.02 and 5.03 hereof, the Mortgagee shall take such action, or refrain
from taking such action, with respect to such Event of Default or Default
(including with respect to the exercise of any rights or remedies hereunder) as
the Mortgagee shall be instructed in writing by a Majority in Interest of Note
Holders. Subject to the provisions of Section 5.03, if the Mortgagee shall not
have received instructions as above provided within 20 days after mailing notice
of such Event of Default to the Note Holders, the Mortgagee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; PROVIDED, HOWEVER, that the Mortgagee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest of
Note Holders. For all purposes of this Trust Indenture, in the absence of Actual
Knowledge on the part of the Mortgagee, the Owner Trustee or the Owner
Participant, the Mortgagee, the Owner Trustee or the Owner Participant, as the
case may be, shall not be deemed to have knowledge of a Default or an Event of
Default (except, in the case of the Mortgagee, the failure of Lessee to pay any
installment of Basic Rent within one Business Day after the same shall become
due, if any portion of such installment was then required to be paid to the
Mortgagee, which failure shall constitute knowledge of a Default) unless
notified in writing by Lessee, the Owner Trustee, the Owner Participant or one
or more Note Holders.
SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS.
(a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and (b),
4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and
from time to time of a Majority in Interest of Note Holders, the Mortgagee
shall, subject to the terms of this Section 5.02, take such of the
following actions as may be specified in such instructions: (i) give such
notice or direction or exercise such right, remedy or power hereunder as
shall be specified in such instructions; (ii) give such notice or
direction or exercise such right, remedy or power under the Lease, the
Participation Agreement, the Purchase Agreement, the Purchase Agreement
Assignment, or any other part of the Trust Indenture Estate as shall be
specified in such instructions; and (iii) approve as satisfactory to the
Mortgagee all matters required by the terms of the Lease to be
satisfactory to the Owner Trustee, it being understood that without the
written instructions of a Majority in Interest of Note Holders, the
Mortgagee shall not approve any such matter as satisfactory to the
Mortgagee; PROVIDED, HOWEVER, that anything contained in this Trust
Indenture, the Lease or the other Operative Agreements to the contrary
notwithstanding, but subject to the next paragraph hereof:
(1) the Owner Trustee or the Owner Participant, may, without the
consent of the Mortgagee, demand, collect, xxx for or otherwise obtain all
amounts included in Excluded Payments from Lessee and seek legal or
equitable remedies to require Lessee to maintain the insurance coverage
referred to in Section 11 of the Lease; PROVIDED, HOWEVER, that the rights
referred to in this clause (1) shall not be deemed to include the exercise
of any remedies provided for in Section 15 of the Lease other than the
right to proceed by appropriate court action, either at Law or in equity,
to enforce payment by Lessee of such amounts included in Excluded Payments
or performance by Lessee of such insurance covenant or to recover damages
for the breach thereof or for specific performance of any other term of
the Lease;
(2) (A) so long as the Mortgagee has not foreclosed the Lien of
the Trust Indenture, the Mortgagee shall not, without the consent of the
Owner Trustee, enter into, execute or deliver amendments or modifications
in respect of any of the provisions of the Lease, and (B) unless a
Mortgagee Event shall have occurred and be continuing, the Mortgagee shall
not, without the consent of the Owner Trustee, which consent shall not be
withheld if no right or interest of the Owner Trustee or the Owner
Participant shall be diminished or impaired thereby, (i) enter into,
execute or deliver waivers or consents in respect of any of the provisions
of the Lease, or (ii) approve any accountants, engineers, appraisers or
counsel as satisfactory to render services for or issue opinions to the
Owner Trustee pursuant to the Operative Agreements, provided that whether
or not any Mortgagee Event has occurred and is continuing, the Owner
Trustee's consent shall be required with respect to any waivers or
consents in respect of any of the provisions of Section 5, 7 or 11 of the
Lease, or of any other Section of the Lease to the extent such action
shall affect (y) the amount or timing of, or the right to enforce payment
of any Excluded Payment or (z) the amount or timing of any amounts payable
by the Lessee under the Lease as originally executed (or as subsequently
modified with the consent of the Owner Trustee) which, absent the
occurrence and continuance of an Event of Default hereunder, would be
distributable to the Owner Trustee under Article III hereof;
(3) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee and the Owner
Participant shall have the right, together with the Mortgagee, (i) to
receive from Lessee certificates and other documents and information which
Lessee is required to give or furnish to the Owner Trustee or the Lessor
pursuant to any Operative Agreement and (ii) to inspect in accordance with
the Lease the Airframe and Engines and all Aircraft Documents;
(4) so long as no Mortgagee Event has occurred and is continuing,
the Owner Trustee shall have the right, to the exclusion of the Mortgagee,
to adjust Stipulated Loss Values and Termination Values as provided in
Section 3.2 of the Lease or to adjust any installment or amount of Basic
Rent, Stipulated Loss Value or Termination Value, as such installments and
amounts are set forth in Schedules 2, 3 and 4, respectively, to the Lease,
to the extent of the portion of such installment or amount that would,
under Section 3.01, 3.02 or 3.03 hereof, as the case may be, be
distributable to the Owner Trustee or the Owner Participant;
(5) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee may, without
the consent of the Mortgagee, (i) solicit and make bids with respect to
the Aircraft under Section 9 of the Lease in respect of a termination of
the Lease by Lessee pursuant to Section 9 thereof, (ii) determine Fair
Market Sales Value and Fair Market Rental Value under Section 17 of the
Lease for all purposes except following a Mortgagee Event pursuant to
Section 15 of the Lease, (iii) make an election pursuant to and in
accordance with the provisions of Sections 9.1(b), 9.2 and 9.3 of the
Lease, and (iv) obtain insurance for its own account in accordance with
Section 11.2 of the Lease; and
(6) so long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the "Lessor" under the Lease shall be
exercised by the Owner Trustee to the exclusion of the Mortgagee
including, without limitation, the right to (i) exercise all rights with
respect to Lessee's use and operation, modification or maintenance of the
Aircraft and any Engine which the Lease specifically confers on the
Lessor, and (ii) consent to and approve any assignment pursuant to Section
13 of the Lease; PROVIDED, HOWEVER, that the foregoing shall not (x) limit
(A) any rights separately granted to the Mortgagee under the Operative
Agreements or (B) the right of the Mortgagee to receive any funds to be
delivered to the "Lessor" under the Lease (except with respect to Excluded
Payments) and under the Purchase Agreement or (y) confer upon the Owner
Trustee the right to adversely affect the validity or enforceability of
the lien of this Trust Indenture.
Notwithstanding anything to the contrary contained herein (including
this Section 5.02), the Mortgagee shall have the right, to the exclusion of the
Owner Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.13 hereof, exercise the remedies set forth
in such Section 15 (other than in connection with Excluded Payments and provided
that each of the Owner Trustee, Owner Participant and Mortgagee shall
independently retain the rights set forth in clause (ii) of Section 15.1.5 of
the Lease) at any time that a Lease Event of Default shall have occurred and be
continuing. Further and for the avoidance of doubt, and anything to the contrary
contained herein (including this Section 5.02), in no event may the Owner
Trustee amend or otherwise modify the provisions of Section 3.2.1(b) of the
Lease or of the final sentence of the definition of Stipulated Loss Value or
Termination Value, in any such case, without the prior written consent of the
Mortgagee.
The Mortgagee will execute and the Owner Trustee will file or cause
to be filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of a
Majority in Interest of Note Holders (which instructions shall be accompanied by
the form of such continuation statement so to be filed). The Mortgagee will
furnish to each Note Holder (and, during the continuation of a Mortgagee Event,
to the Owner Trustee and Owner Participant), promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates
and other instruments furnished to the Mortgagee under the Lease, under the
Participation Agreement or hereunder, including, without limitation, a copy of
each report or notice received pursuant to Section 9 and Paragraph E of Annex D
of the Lease, respectively, to the extent that the same shall not have been
furnished to such holder pursuant hereto or the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease
Event of Default under and in accordance with Section 4.03 hereof, on
request of a Majority in Interest of Note Holders, the Mortgagee shall
declare the Lease to be in default pursuant to Section 15 thereof and
exercise those remedies specified by such Note Holders. The Mortgagee
agrees to provide to the Note Holders, the Owner Trustee and the Owner
Participant concurrently with such declaration by the Mortgagee, notice of
such declaration by the Mortgagee.
SECTION 5.03. INDEMNIFICATION.
The Mortgagee shall not be required to take any action or refrain
from taking any action under Section 5.01 (other than the first sentence
thereof), 5.02 or Article IV hereof unless the Mortgagee shall have been
indemnified to its reasonable satisfaction against any liability, cost or
expense (including counsel fees) which may be incurred in connection therewith
pursuant to a written agreement with one or more Note Holders. The Mortgagee
agrees that it shall look solely to the Note Holders for the satisfaction of any
indemnity (except expenses for foreclosure of the type referred to in clause
"First" of Section 3.03 hereof) owed to it pursuant to this Section 5.03. The
Mortgagee shall not be under any obligation to take any action under this Trust
Indenture or any other Operative Agreement and nothing herein or therein shall
require the Mortgagee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it (the written indemnity of any Note Holder who is a QIB, signed by
an authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or of the Lease or is otherwise contrary to Law.
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
INSTRUCTIONS.
The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Indenture Estate, or to otherwise take
or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Note Holders as provided in this Trust Indenture; and
no implied duties or obligations shall be read into this Trust Indenture against
the Mortgagee. The Mortgagee agrees that it will in its individual capacity and
at its own cost and expense (but without any right of indemnity in respect of
any such cost or expense under Section 7.01 hereof), promptly take such action
as may be necessary duly to discharge all liens and encumbrances on any part of
the Trust Indenture Estate which result from claims against it in its individual
capacity not related to the ownership of the Aircraft or the administration of
the Trust Indenture Estate or any other transaction pursuant to this Trust
Indenture or any document included in the Trust Indenture Estate.
SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, TRUST INDENTURE OR
INSTRUCTIONS.
The Owner Trustee and the Mortgagee agree that they will not use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate except (i) as
required by the terms of the Lease or (ii) in accordance with the powers granted
to, or the authority conferred upon, the Owner Trustee and the Mortgagee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.
SECTION 5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, if no Lease Event of Default is continuing, the Owner Trustee shall
direct the Mortgagee to execute and deliver to the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien of
this Trust Indenture and the Mortgagee shall execute and deliver such instrument
as aforesaid, but only upon compliance by Lessee with the applicable provisions
of Section 10 of the Lease.
SECTION 5.07. INDENTURE SUPPLEMENTS FOR REPLACEMENTS.
If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the Mortgagee
agree for the benefit of the Note Holders and Lessee, subject to fulfillment of
the conditions precedent and compliance by Lessee with its obligations set forth
in Section 10 of the Lease and the requirements of Section 5.06 hereof with
respect to such Replacement Airframe or Replacement Engine, to execute and
deliver a Lease Supplement and a Trust Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. EFFECT OF REPLACEMENT.
In the event of the substitution of a Replacement Airframe or of a
Replacement Engine pursuant to Section 10 of the Lease, all provisions of this
Trust Indenture relating to the Airframe or Engine or Engines being replaced
shall be applicable to such Replacement Airframe or Replacement Engine or
Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or engines, as
the case may be, as the Airframe or Engine or Engines being replaced but for the
Event of Loss with respect to the Airframe or Engine or Engines being replaced.
SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE.
Any amounts held by the Mortgagee as assignee of the Owner Trustee's
rights to hold monies for security pursuant to Section 4.4 of the Lease shall be
held in accordance with the terms of such Section and the Mortgagee agrees, for
the benefit of Lessee, to perform the duties of the Owner Trustee under such
Section. Any amounts held by the Mortgagee pursuant to the proviso in Clause
"Second" of the first sentence of Section 3.01, pursuant to Section 3.02, or
pursuant to any provision of any other Operative Agreement providing for amounts
to be held by the Mortgagee which are not distributed pursuant to the other
provisions of Article III hereof shall be invested by the Mortgagee from time to
time in Cash Equivalents as directed by the Owner Trustee so long as the
Mortgagee may acquire the same using its best efforts. All Cash Equivalents held
by the Mortgagee pursuant to Section 4.4 of the Lease or this Section 5.09 shall
either be (a) registered in the name of, payable to the order of, or specially
endorsed to, the Mortgagee, or (b) held in an Eligible Account. Unless otherwise
expressly provided in this Trust Indenture, any income realized as a result of
any such investment, net of the Mortgagee's reasonable fees and expenses in
making such investment, shall be held and applied by the Mortgagee in the same
manner as the principal amount of such investment is to be applied and any
losses, net of earnings and such reasonable fees and expenses, shall be charged
against the principal amount invested. The Mortgagee shall not be liable for any
loss resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence,
and any such investment may be sold (without regard to its maturity) by the
Mortgagee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.
The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the Trust
Indenture Estate in accordance with the terms hereof. The Owner Trustee, in its
individual capacity, and the Mortgagee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for their own
willful misconduct or gross negligence (other than for the handling of funds,
for which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Mortgagee, as provided in the third
sentence of Section 2.04(a) hereof and the last sentence of Section 5.04 hereof,
and (iii) for liabilities that may result, in the case of the Owner Trustee,
from the inaccuracy of any representation or warranty of the Owner Trustee
expressly made in its individual capacity in the Participation Agreement or in
Section 4.01(b) or 6.03 hereof (or in any certificate furnished to the Mortgagee
or any Note Holder in connection with the transactions contemplated by the
Operative Agreements) or, in the case of the Mortgagee (in its individual
capacity), from the inaccuracy of any representation or warranty of the
Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder. Neither the Owner Trustee nor the Mortgagee shall be
liable for any action or inaction of the other or of the Owner Participant.
SECTION 6.02. ABSENCE OF DUTIES.
In the case of the Mortgagee, except in accordance with written
instructions furnished pursuant to Section 5.01 or 5.02 hereof, and except as
provided in, and without limiting the generality of, Sections 5.03, 5.04 and
6.08 hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Mortgagee shall have no duty (i) to
see to any registration of the Aircraft or any recording or filing of the Lease
or of this Trust Indenture or any other document, or to see to the maintenance
of any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not Lessee
shall be in default with respect thereto, (iii) to see to the payment or
discharge of any lien or encumbrance of any kind against any part of the Trust
Estate or the Trust Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements from Lessee, or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Lessee's covenants under the Lease with respect to the
Aircraft. The Owner Participant shall not have any duty or responsibility
hereunder, including, without limitation, any of the duties mentioned in clauses
(i) through (v) above; PROVIDED, HOWEVER, that nothing contained in this
sentence shall limit any obligations of the Owner Participant under the
Participation Agreement or relieve the Owner Participant from any restriction
under Section 4.03 hereof.
SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR
DOCUMENTS.
NEITHER THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, except the Owner Trustee in its individual capacity
warrants that (i) the Owner Trustee has received on the Delivery Date whatever
title was conveyed to it, and (ii) the Aircraft is free and clear of Lessor
Liens attributable to the Owner Trustee in its individual capacity. Neither the
Owner Trustee, in its individual capacity or as Owner Trustee under the Trust
Agreement, nor the Mortgagee, in its individual or trust capacities, makes or
shall be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Trust Indenture, the Trust Agreement, the
Participation Agreement, the Equipment Notes, the Lease, the Purchase Agreement
or the Purchase Agreement Assignment with the Consent and Agreement attached
thereto, or as to the correctness of any statement contained in any thereof,
except for the representations and warranties of the Owner Trustee made in its
individual capacity and the representations and warranties of the Mortgagee in
its individual capacity, in each case expressly made in this Trust Indenture or
in the Participation Agreement. The Loan Participant, the Note Holders and the
Owner Participant make no representation or warranty hereunder whatsoever.
SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST.
Any monies paid to or retained by the Mortgagee pursuant to any
provision hereof and not then required to be distributed to the Note Holders,
Lessee or the Owner Trustee as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law or Section 4.4 of
the Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Mortgagee shall not be liable
for any interest thereon (except that the Mortgagee shall invest all monies held
as directed by Lessee so long as no Lease Event of Default or Lease Default has
occurred and is continuing (or in the absence of such direction, by the Majority
in Interest of Note Holders) in Cash Equivalents; PROVIDED, HOWEVER, that any
payments received, or applied hereunder, by the Mortgagee shall be accounted for
by the Mortgagee so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.
SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL.
Neither the Owner Trustee nor the Mortgagee shall incur any
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee and the Mortgagee may accept a
copy of a resolution of the Board of Directors (or Executive Committee thereof)
of any party to the Participation Agreement, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to the aggregate unpaid Original Amount of
Equipment Notes outstanding as of any date, the Owner Trustee may for all
purposes hereof rely on a certificate signed by any Vice President or other
authorized corporate trust officer of the Mortgagee. As to any fact or matter
relating to Lessee the manner of ascertainment of which is not specifically
described herein, the Owner Trustee and the Mortgagee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of Lessee, as
to such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee and the Mortgagee for any action taken or omitted to be taken
by them in good faith in reliance thereon. The Mortgagee shall assume, and shall
be fully protected in assuming, that the Owner Trustee is authorized by the
Trust Agreement to enter into this Trust Indenture and to take all action to be
taken by it pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the administration
of the trusts hereunder, the Owner Trustee and the Mortgagee each may execute
any of the trusts or powers hereof and perform its powers and duties hereunder
directly or through agents or attorneys and may, at the expense of the Trust
Indenture Estate, advise with counsel, accountants and other skilled persons to
be selected and retained by it, and the Owner Trustee and the Mortgagee shall
not be liable for anything done, suffered or omitted in good faith by them in
accordance with the written advice or written opinion of any such counsel,
accountants or other skilled persons.
SECTION 6.06. CAPACITY IN WHICH ACTING.
The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. COMPENSATION.
The Mortgagee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and expenses
of counsel), for all services rendered hereunder and shall, on and subsequent to
an Event of Default hereunder, have a priority claim on the Trust Indenture
Estate for the payment of such compensation, to the extent that such
compensation shall not be paid by Lessee, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Trust Indenture Estate toward such payments. The Mortgagee
agrees that it shall have no right against the Loan Participant, the Note
Holders, the Owner Trustee or the Owner Participant for any fee as compensation
for its services as trustee under this Trust Indenture.
SECTION 6.08. INSTRUCTIONS FROM NOTE HOLDERS.
In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee's duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. SCOPE OF INDEMNIFICATION.
The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, except as to matters covered by any
indemnity furnished as contemplated by Section 5.03 hereof and except as
otherwise provided in Section 2.03 or 2.04(b) hereof, to assume liability for,
and does hereby indemnify, protect, save and keep harmless the Mortgagee (in its
individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Mortgagee on or
measured by any compensation received by the Mortgagee for its services under
this Trust Indenture), claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature whatsoever, which may
be imposed on, incurred by or asserted against the Mortgagee (whether or not
also indemnified against by any other person under any other document) in any
way relating to or arising out of this Trust Indenture or any other Operative
Agreement to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Trust Indenture Estate or the action or inaction of the Mortgagee hereunder
except only in the case of willful misconduct or gross negligence (or negligence
in the case of handling funds) of the Mortgagee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) referred to in Section 6.03 hereof,
or as provided in Section 6.01 hereof or in the last sentence of Section 5.04
hereof, or as otherwise excluded by the terms of Section 9.1 or 9.3 of the
Participation Agreement from Lessee's indemnities under such Sections. In
addition, if necessary, the Mortgagee shall be entitled to indemnification from
the Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against pursuant
to this Section 7.01 to the extent not reimbursed by Lessee or others, but
without releasing any of them from their respective agreements of reimbursement;
and to secure the same the Mortgagee shall have a prior Lien on the Trust
Indenture Estate. Without limiting the foregoing, the Mortgagee agrees that,
prior to seeking indemnification from the Trust Indenture Estate, it will
demand, and diligently pursue in good faith (but with no duty to exhaust all
legal remedies therefor), indemnification available to the Mortgagee from Lessee
under the Lease or the Participation Agreement.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE.
In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Mortgagee, Lessee and the Note
Holders.
SECTION 8.02. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR.
(a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to Lessee,
the Owner Trustee, the Owner Participant and each Note Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Mortgagee. In addition, a Majority in Interest of Note Holders
may at any time (but only with the consent of the Lessee, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if a Lease Event of Default is continuing) remove the Mortgagee
without cause by an instrument in writing delivered to the Owner Trustee,
Lessee, the Owner Participant and the Mortgagee, and the Mortgagee shall
promptly notify each Note Holder thereof in writing, such removal to be
effective upon the acceptance of the trusteeship by a successor Mortgagee.
In the case of the resignation or removal of the Mortgagee, a Majority in
Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Lease
Event of Default shall have occurred and be continuing, shall be subject
to Lessee's reasonable approval. If a successor Mortgagee shall not have
been appointed within 30 days after such notice of resignation or removal,
the Mortgagee, the Owner Trustee, the Owner Participant or any Note Holder
may apply to any court of competent jurisdiction to appoint a successor
Mortgagee to act until such time, if any, as a successor shall have been
appointed as above provided. The successor Mortgagee so appointed by such
court shall immediately and without further act be superseded by any
successor Mortgagee appointed as above provided.
(b) Any successor Mortgagee, however appointed, shall execute and
deliver to the Owner Trustee, the predecessor Mortgagee and the Lessee an
instrument accepting such appointment and assuming the obligations of the
Mortgagee under this Trust Indenture and the Participation Agreement
arising from and after the time of such appointment, and thereupon such
successor Mortgagee, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor
Mortgagee hereunder in the trust hereunder applicable to it with like
effect as if originally named the Mortgagee herein; but nevertheless upon
the written request of such successor Mortgagee, such predecessor
Mortgagee shall execute and deliver an instrument transferring to such
successor Mortgagee, upon the trusts herein expressed applicable to it,
all the estates, properties, rights and powers of such predecessor
Mortgagee, and such predecessor Mortgagee shall duly assign, transfer,
deliver and pay over to such successor Mortgagee all monies or other
property then held by such predecessor Mortgagee hereunder.
(c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford,
Connecticut; Wilmington, Delaware; or Boston, Massachusetts and having (or
whose obligations under the Operative Agreements are guaranteed by an
affiliated entity having) a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Mortgagee hereunder upon reasonable
or customary terms.
(d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Mortgagee shall be a party, or any corporation to which substantially all
the corporate trust business of the Mortgagee may be transferred, shall,
subject to the terms of paragraph (c) of this Section 8.02, be a successor
Mortgagee and the Mortgagee under this Trust Indenture without further
act.
SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.
(a) Whenever (i) the Mortgagee shall deem it necessary or
desirable in order to conform to any Law of any jurisdiction in which all
or any part of the Trust Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the Trust
Indenture Estate, this Trust Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Mortgagee shall be advised by counsel
satisfactory to it that it is so necessary or prudent in the interests of
the Note Holders (and the Mortgagee shall so advise the Owner Trustee and
Lessee), or (iii) the Mortgagee shall have been requested to do so by a
Majority in Interest of Note Holders, then in any such case, the Mortgagee
and, upon the written request of the Mortgagee, the Owner Trustee, shall
execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1)
to constitute one or more bank or trust companies or one or more persons
approved by the Mortgagee, either to act jointly with the Mortgagee as
additional trustee or trustees of all or any part of the Trust Indenture
Estate, or to act as separate trustee or trustees of all or any part of
the Trust Indenture Estate, in each case with such rights, powers, duties
and obligations consistent with this Trust Indenture as may be provided in
such supplemental indenture or other instruments as the Mortgagee or a
Majority in Interest of Note Holders may deem necessary or advisable, or
(2) to clarify, add to or subtract from the rights, powers, duties and
obligations theretofore granted any such additional or separate trustee,
subject in each case to the remaining provisions of this Section 8.03. If
the Owner Trustee shall not have taken any action requested of it under
this Section 8.03(a) that is permitted or required by its terms within 15
days after the receipt of a written request from the Mortgagee so to do,
or if an Event of Default shall have occurred and be continuing, the
Mortgagee may act under the foregoing provisions of this Section 8.03(a)
without the concurrence of the Owner Trustee, and the Owner Trustee hereby
irrevocably appoints (which appointment is coupled with an interest) the
Mortgagee, its agent and attorney-in-fact to act for it under the
foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Mortgagee may, in such capacity, execute, deliver and
perform any such supplemental indenture, or any such instrument, as may be
required for the appointment of any such additional or separate trustee or
for the clarification of, addition to or subtraction from the rights,
powers, duties or obligations theretofore granted to any such additional
or separate trustee. In case any additional or separate trustee appointed
under this Section 8.03(a) shall die, become incapable of acting, resign
or be moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the
Mortgagee until a successor additional or separate trustee is appointed as
provided in this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Mortgagee in respect of the custody, investment and payment of monies
and all monies received by any such additional or separate trustee from or
constituting part of the Trust Indenture Estate or otherwise payable under
any Operative Agreement to the Mortgagee shall be promptly paid over by it
to the Mortgagee. All other rights, powers, duties and obligations
conferred or imposed upon any additional or separate trustee shall be
exercised or performed by the Mortgagee and such additional or separate
trustee jointly except to the extent that applicable Law of any
jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations (including the holding of
title to all or part of the Trust Indenture Estate in any such
jurisdiction) shall be exercised and performed by such additional or
separate trustee. No additional or separate trustee shall take any
discretionary action except on the instructions of the Mortgagee or a
Majority in Interest of Note Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences
of its lack of reasonable care in selecting, and the Mortgagee's own
actions in acting with, any additional or separate trustee. Each
additional or separate trustee appointed pursuant to this Section 8.03
shall be subject to, and shall have the benefit of Articles IV through
VIII and Article X hereof insofar as they apply to the Mortgagee. The
powers of any additional or separate trustee appointed pursuant to this
Section 8.03 shall not in any case exceed those of the Mortgagee
hereunder.
(c) If at any time the Mortgagee shall deem it no longer necessary
or in order to conform to any such Law or take any such action or shall be
advised by such counsel that it is no longer so necessary or desirable in
the interest of the Note Holders, or in the event that the Mortgagee shall
have been requested to do so in writing by a Majority in Interest of Note
Holders, the Mortgagee and, upon the written request of the Mortgagee, the
Owner Trustee, shall execute and deliver an indenture supplemental hereto
and all other instruments and agreements necessary or proper to remove any
additional or separate trustee. The Mortgagee may act on behalf of the
Owner Trustee under this Section 8.03(c) when and to the extent it could
so act under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS.
(a) Except as provided in Section 5.02 hereof, the Owner Trustee
agrees it shall not enter into any amendment of or supplement to the
Lease, the Purchase Agreement, the Purchase Agreement Assignment or the
Consent and Agreement, or execute and deliver any written waiver or
modification of, or consent under, the terms of the Lease, the Purchase
Agreement, the Purchase Agreement Assignment or the Consent and Agreement,
unless such supplement, amendment, waiver, modification or consent is
consented to in writing by the Mortgagee and a Majority in Interest of
Note Holders. Anything to the contrary contained herein notwithstanding,
without the necessity of the consent of any of the Note Holders or the
Mortgagee, (i) any Excluded Payments payable to the Owner Participant may
be modified, amended, changed or waived in such manner as shall be agreed
to by the Owner Participant and Lessee, (ii) the Owner Trustee and Lessee
may enter into amendments of or additions to the Lease to modify Section 5
(except to the extent that such amendment would affect the rights or
exercise of remedies under Section 15 of the Lease) or Section 17 of the
Lease so long as such amendments, modifications and changes do not and
would not affect the time of, or reduce the amount of, Rent payments
(except to the extent expressly permitted by Section 5.02 hereof) until
after the payment in full of all Secured Obligations or otherwise
adversely affect the Note Holders and (iii) the Owner Trustee may enter
into a Lease Supplement (x) to evidence the succession of another party as
the Owner Trustee in accordance with the terms of the Trust Agreement or
(y) to provide for subjecting any Replacement Airframe or Replacement
Engine to the Lease in accordance with the terms of the Lease.
(b) Without limiting the provisions of Section 9.01 hereof, the
Mortgagee agrees with the Note Holders that it shall not consent to or
enter into any amendment, waiver or modification of or supplement or
consent to this Trust Indenture, the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement or the
Participation Agreement, or any other agreement included in the Trust
Indenture Estate, unless such supplement, amendment, waiver, modification
or consent is consented to in writing by a Majority in Interest of Note
Holders, but upon the written request of a Majority in Interest of Note
Holders, the Mortgagee shall from time to time enter into any such
supplement or amendment, or execute and deliver any such waiver,
modification or consent, as may be specified in such request and as may be
(in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by the Owner Trustee and
Lessee or, as may be appropriate, the Airframe Manufacturer or the Engine
Manufacturer; PROVIDED, HOWEVER, that, without the consent of each holder
of an affected Equipment Note then outstanding and of each Liquidity
Provider, no such amendment of or supplement to this Trust Indenture, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i)
modify any of the provisions of this Section 9.01, or of Article II or III
or Section 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 13.3, 14
(except to add an Event of Default) or 16 of the Lease, Section 15.1 of
the Participation Agreement, the definitions of "Event of Default,"
"Default," "Lease Event of Default," "Lease Default," "Majority in
Interest of Note Holders," "Make-Whole Amount" or "Note Holder," or the
percentage of Note Holders required to take or approve any action
hereunder, (ii) reduce the amount, or change the time of payment or method
of calculation of any amount, of Original Amount, Make-Whole Amount, if
any, or interest with respect to any Equipment Note, or alter or modify
the provisions of Article III hereof with respect to the order of
priorities in which distribution thereunder shall be made as among the
Note Holders, the Owner Trustee and Lessee, (iii) reduce, modify or amend
any indemnities in favor of the Owner Trustee, the Mortgagee or the Note
Holders (except that the Owner Trustee (in its individual capacity) or the
Mortgagee, as the case may be, may consent to any waiver or reduction of
an indemnity payable to it) or the other Indenture Indemnitees, (iv)
consent to any change in the Trust Indenture or the Lease which would
permit redemption of Equipment Notes earlier than permitted under Section
2.10 hereof or the purchase or exchange of the Equipment Notes other than
as permitted by Section 2.13 hereof, (v) except as contemplated by the
Lease or the Participation Agreement, reduce the amount or extend the time
of payment of Basic Rent, Stipulated Loss Value, or Termination Value for
the Aircraft in each case as set forth in the Lease, or modify, amend or
supplement the Lease or consent to any assignment of the Lease, in either
case releasing Lessee from its obligations in respect of the payment of
Basic Rent, Stipulated Loss Value or Termination Value for the Aircraft or
altering the absolute and unconditional character of the obligations of
Lessee to pay Rent as set forth in Sections 3 and 16 of the Lease or (vi)
permit the creation of any Lien on the Trust Indenture Estate or any part
thereof other than Permitted Liens or deprive any Note Holder of the
benefit of the Lien of this Trust Indenture on the Trust Indenture Estate,
except as provided in connection with the exercise of remedies under
Article IV hereof.
(c) At any time after the date hereof, the Owner Trustee and the
Mortgagee may enter into one or more agreements supplemental hereto
without the consent of any Note Holder for any of the following purposes:
(i) (a) to cure any defect or inconsistency herein or in the Equipment
Notes, or to make any change not inconsistent with the provisions hereof
(provided that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of
another party as the Owner Trustee in accordance with the terms of the
Trust Agreement or to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment
of any co-trustee or co-trustees or any separate or additional trustee or
trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or to make any other provisions with
respect to matters or questions arising hereunder so long as such action
shall not adversely affect the interests of the Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Trust Indenture or
better to assure, convey and confirm unto the Mortgagee any property
subject or required to be subject to the Lien of this Trust Indenture, the
Airframe or Engines or any Replacement Airframe or Replacement Engine; (v)
to add to the covenants of the Owner Trustee for the benefit of the Note
Holders, or to surrender any rights or power herein conferred upon the
Owner Trustee, the Owner Participant or the Lessee; (vi) to add to the
rights of the Note Holders; and (vii) to include on the Equipment Notes
any legend as may be required by Law.
SECTION 9.02. TRUSTEES PROTECTED.
If, in the opinion of the institution acting as Owner Trustee under
the Trust Agreement or the institution acting as Mortgagee hereunder, any
document required to be executed by it pursuant to the terms of Section 9.01
hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in its
discretion decline to execute such document.
SECTION 9.03. DOCUMENTS MAILED TO NOTE HOLDERS.
Promptly after the execution by the Owner Trustee or the Mortgagee
of any document entered into pursuant to Section 9.01 hereof, the Mortgagee
shall mail, by first class mail, postage prepaid, a copy thereof to Lessee and
to each Note Holder at its address last set forth in the Equipment Note
Register, but the failure of the Mortgagee to mail such copies shall not impair
or affect the validity of such document.
SECTION 9.04. NO REQUEST NECESSARY FOR LEASE SUPPLEMENT OR TRUST
INDENTURE SUPPLEMENT.
No written request or consent of the Mortgagee, the Note Holders or
the Owner Participant pursuant to Section 9.01 hereof shall be required to
enable the Owner Trustee to enter into any Lease Supplement specifically
required by the terms of the Lease or to execute and deliver a Trust Indenture
Supplement specifically required by the terms hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. TERMINATION OF TRUST INDENTURE.
Upon (or at any time after) payment in full of the Original Amount
of, Make-Whole Amount, if any, and interest on and all other amounts due under
all Equipment Notes and provided that there shall then be no other Secured
Obligations due to the Indenture Indemnitees, the Note Holders and the Mortgagee
hereunder or under the Participation Agreement or other Operative Agreement, the
Owner Trustee shall direct the Mortgagee to execute and deliver to or as
directed in writing by the Owner Trustee an appropriate instrument releasing the
Aircraft and the Engines from the Lien of this Trust Indenture and releasing the
Lease, the Purchase Agreement, the Purchase Agreement Assignment with the
Consent and Agreement attached thereto from the assignment and pledge thereof
hereunder and the Mortgagee shall execute and deliver such instrument as
aforesaid and give written notice thereof to Lessee; PROVIDED, HOWEVER, that
this Trust Indenture and the trusts created hereby shall earlier terminate and
this Trust Indenture shall be of no further force or effect upon any sale or
other final disposition by the Mortgagee of all property constituting part of
the Trust Indenture Estate and the final distribution by the Mortgagee of all
monies or other property or proceeds constituting part of the Trust Indenture
Estate in accordance with the terms hereof. Except as aforesaid otherwise
provided, this Trust Indenture and the trusts created hereby shall continue in
full force and effect in accordance with the terms hereof.
SECTION 10.02. NO LEGAL TITLE TO TRUST INDENTURE ESTATE IN NOTE
HOLDERS.
No holder of an Equipment Note shall have legal title to any part of
the Trust Indenture Estate. No transfer, by operation of law or otherwise, of
any Equipment Note or other right, title and interest of any Note Holder in and
to the Trust Indenture Estate or hereunder shall operate to terminate this Trust
Indenture or entitle such holder or any successor or transferee of such holder
to an accounting or to the transfer to it of any legal title to any part of the
Trust Indenture Estate.
SECTION 10.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING.
Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the Mortgagee
made pursuant to the terms of this Trust Indenture shall bind the Note Holders
and shall be effective to transfer or convey all right, title and interest of
the Trustee, the Owner Trustee, the Owner Participant and such holders in and to
such Trust Indenture Estate or part thereof. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Mortgagee.
SECTION 10.04. TRUST INDENTURE FOR BENEFIT OF OWNER TRUSTEE,
MORTGAGEE, OWNER PARTICIPANT, NOTE HOLDERS AND THE OTHER INDENTURE INDEMNITEES.
Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner Trustee, the Mortgagee, the
Owner Participant, the Note Holders and the other Indenture Indemnitees, any
legal or equitable right, remedy or claim under or in respect of this Trust
Indenture.
SECTION 10.05. NOTICES.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner Trustee, addressed to it at MAC: U1228-120, 000 Xxxxx Xxxx Xxxxxx,
00xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 with a copy to the Owner Participant
addressed as provided in clause (iii) below, (ii) if to Mortgagee, addressed to
it at its office at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration, facsimile number
(000) 000-0000, (iii) if to any Participant, Lessee, any Note Holder or any
other Indenture Indemnitee, addressed to such party at such address as such
party shall have furnished by notice to the Owner Trustee and the Mortgagee, or,
until an address is so furnished, addressed to the address of such party (if
any) set forth on Schedule 1 to the Participation Agreement or in the Equipment
Note Register. Whenever any notice in writing is required to be given by the
Owner Trustee, any Participant or the Mortgagee or any Note Holder to any of the
other of them, such notice shall be deemed given and such requirement satisfied
when such notice is received, or if such notice is mailed by certified mail,
postage prepaid, three Business Days after being mailed, addressed as provided
above. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this Trust
Indenture.
SECTION 10.06. SEVERABILITY.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS.
No term or provision of this Trust Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Mortgagee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08. SUCCESSORS AND ASSIGNS.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. This Trust Indenture and
the Trust Indenture Estate shall not be affected by any amendment or supplement
to the Trust Agreement or by any other action taken under or in respect of the
Trust Agreement, except that each reference in this Trust Indenture to the Trust
Agreement shall mean the Trust Agreement as amended and supplemented from time
to time to the extent permitted hereby, thereby and by the Participation
Agreement. Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 10.09. HEADINGS.
The headings of the various Articles and sections herein and in the
table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 10.10. NORMAL COMMERCIAL RELATIONS.
Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner Trustee, Mortgagee, any Participant or any bank or other
Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee,
fully to the same extent as if this Trust Indenture were not in effect,
including without limitation the making of loans or other extensions of credit
to Lessee for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 10.11. GOVERNING LAW; COUNTERPART FORM.
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.12. VOTING BY NOTE HOLDERS.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 10.13. BANKRUPTCY.
It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Mortgagee as assignee of the Owner Trustee hereunder),
shall be entitled to the benefits of Section 1110 with respect to the right to
take possession of the Aircraft, Airframe, Engines and Parts and to enforce any
of its other rights or remedies as provided in the Lease in the event of a case
under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor, and in any
instance where more than one construction is possible of the terms and
conditions hereof or any other pertinent Operative Agreement, each such party
agrees that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture and Mortgage to be duly executed by their respective officers thereof
duly authorized as of the day and year first above written.
XXXXX FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly provided
herein, but solely as Owner Trustee, as
Owner Trustee
By:
---------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Mortgagee
By:
---------------------------------------
Name:
Title:
EXHIBIT A
TO TRUST INDENTURE AND MORTGAGE [TN]
TRUST INDENTURE AND MORTGAGE [TN] SUPPLEMENT
This TRUST INDENTURE AND MORTGAGE [TN] SUPPLEMENT NO. 1, dated
__________ (herein called this "Trust Indenture Supplement") of XXXXX FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as
Owner Trustee (herein called the "Owner Trustee") under that certain [Amended
and Restated](3) Trust Agreement [TN] dated as of [DD] (the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the Trust Indenture and Mortgage [TN], dated as of [DD] (as
amended and supplemented to the date hereof, the "Trust Indenture") between the
Owner Trustee and Wilmington Trust Company, as Mortgagee (the "Mortgagee"),
provides for the execution and delivery of a supplement thereto substantially in
the form hereof, which shall particularly describe the Aircraft, and shall
specifically mortgage such Aircraft to the Mortgagee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Indenture
Supplement, together with such counterpart of the Trust Indenture, is being
filed for recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the Trust
Indenture Estate covers all of Owner Trustee's right, title and interest in and
to the following described property:
AIRFRAME
One airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
Embraer-Empresa EMB-145 XR
Brasileira de
Aeronautica S.A.
together with all of the Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said airframe.
---------------
(3) Delete for New Aircraft.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's Model Serial Number
------------ -------------------- -------------
together with all of Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to either of such
engines.
Together with all of Owner Trustee's right, title and interest in
and to (a) all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts) and (b)
all Aircraft Documents.
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors and assigns,
for the security and benefit of the Loan Participant, the Note Holders and the
Indenture Indemnitees, in the trust created by the Trust Indenture, all of the
right, title and interest of the Owner Trustee in, to and under the Lease
Supplement of even date herewith covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, in trust for the equal and proportionate
benefit and security of the Loan Participant, the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.14 and Article III of the Trust
Indenture without any preference, distinction or priority of any one Equipment
Note over any other by reason of priority of time of issue, sale, negotiation,
date of maturity thereof or otherwise for any reason whatsoever, and for the
uses and purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as supplemental
to the Trust Indenture and shall form a part thereof. The Trust Indenture is
each hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
XXXXX FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee,
Owner Trustee
By:
-------------------------------------
Name:
Title:
TRUST INDENTURE AND MORTGAGE
SCHEDULE I
ORIGINAL AMOUNT INTEREST RATE
--------------- -------------
TRUST INDENTURE AND MORTGAGE
EQUIPMENT NOTE AMORTIZATION
PERCENTAGE OF
ORIGINAL AMOUNT
PAYMENT DATE TO BE PAID
------------ ---------------
