Exhibit 99(j)
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
Dated as of [______________]
Between
NORTHWEST AIRLINES, INC.,
Owner
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,
Indenture Trustee
SECURED CERTIFICATES COVERING
ONE [AIRBUS A319-114] [BOEING 757-351] [AIRBUS A330-323] AIRCRAFT
BEARING U.S. REGISTRATION XXXX N[______]
OWNED BY NORTHWEST AIRLINES, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates..................................4
SECTION 2.02. Issuance and Terms of Secured Certificates...................10
SECTION 2.03. [Intentionally Omitted]......................................13
SECTION 2.04. Method of Payment............................................13
SECTION 2.05. Application of Payments......................................15
SECTION 2.06. Termination of Interest in Collateral........................16
SECTION 2.07. Registration, Transfer and Exchange of Secured Certificates..16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured Certificates....17
SECTION 2.09. Payment of Expenses on Transfer; Cancellation................18
SECTION 2.10. Mandatory Redemptions of Secured Certificates................18
SECTION 2.11. Voluntary Redemptions of Secured Certificates................18
SECTION 2.12. Redemptions; Notice of Redemption............................19
SECTION 2.13. [Intentionally Omitted]......................................20
SECTION 2.14. [Intentionally Omitted]......................................20
SECTION 2.15. Subordination................................................20
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. Basic Distributions..........................................21
SECTION 3.02. Event of Loss; Replacement; Optional Redemption..............23
SECTION 3.03. Payments After Event of Default..............................24
SECTION 3.04. Certain Payments.............................................26
SECTION 3.05. Other Payments...............................................26
SECTION 3.06. Payments to the Owner........................................27
SECTION 3.07. Application of Payments Under Guarantee......................27
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Event of Default.............................................27
SECTION 4.02. Remedies.....................................................29
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SECTION 4.03. Return of Aircraft, Etc......................................30
SECTION 4.04. Remedies Cumulative..........................................31
SECTION 4.05. Discontinuance of Proceedings................................32
SECTION 4.06. Waiver of Past Defaults......................................32
SECTION 4.07. Appointment of Receiver......................................32
SECTION 4.08. Indenture Trustee Authorized to Execute Bills of Sale, Etc...32
SECTION 4.09. Rights of Certificate Holders to Receive Payment.............33
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default...................................33
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations.....34
SECTION 5.03. Indemnification..............................................34
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions...............................................34
SECTION 5.05. No Action Except Under Trust Indenture or Instructions.......35
SECTION 5.06. Investment of Amounts Held by Indenture Trustee..............35
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties..............................35
SECTION 6.02. Absence of Duties............................................36
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents..................................................36
SECTION 6.04. No Segregation of Monies; No Interest........................36
SECTION 6.05. Reliance; Agreements; Advice of Counsel......................37
SECTION 6.06. Compensation.................................................37
SECTION 6.07. Instructions from Certificate Holders........................37
ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. Liens........................................................38
SECTION 7.02. Registration, Maintenance and Operation; Possession and
Leases; Insignia...........................................38
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions................................43
SECTION 7.04. Insurance....................................................45
SECTION 7.05. Inspection...................................................51
SECTION 7.06. Loss, Destruction, Requisition, etc..........................51
SECTION 7.07. Interests in the Purchase Agreement..........................56
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Scope of Indemnification.....................................60
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. Resignation of Indenture Trustee; Appointment of Successor...61
SECTION 9.02. Appointment of Additional and Separate Trustees..............62
ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations........................64
SECTION 10.02. Indenture Trustee Protected..................................65
SECTION 10.03. Documents Mailed to Certificate Holders......................65
SECTION 10.04. No Request Necessary for Trust Indenture Supplement..........66
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Trust Indenture...............................66
SECTION 11.02. No Legal Title to Collateral in Certificate Holders..........66
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is Binding.............66
SECTION 11.04. Trust Indenture for Benefit of the Owner
Trustee, and Certificate Holders...........................67
SECTION 11.05. Notices......................................................67
SECTION 11.06. Severability.................................................67
SECTION 11.07. No Oral Modification or Continuing Waivers...................67
SECTION 11.08. Successors and Assigns.......................................68
SECTION 11.09. Headings.....................................................68
SECTION 11.10. Normal Commercial Relations..................................68
SECTION 11.11. Governing Law; Counterpart Form..............................68
SECTION 11.12. Voting By Certificate Holders................................68
SECTION 11.13. Bankruptcy...................................................68
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ANNEX A Definitions
EXHIBIT A Form of Trust Indenture Supplement
SCHEDULE I Secured Certificates Principal Amount, Maximum Aggregate
Principal Amount, Certain Defined Terms and Amortization
SCHEDULE II Pass Through Trust Agreements
SCHEDULE III Schedule of Domiciles of Permitted Lessees
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _], dated as of
[_______________] ("Trust Indenture") between NORTHWEST AIRLINES, INC., a
Minnesota corporation (the "Owner") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity, except as
expressly stated herein, but solely as Indenture Trustee hereunder (together
with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, the parties desire by this Trust Indenture, among other
things, (i) to provide for the issuance by the Owner to the Pass Through
Trustees (or their designee) of the Secured Certificates specified on Schedule
I hereto (it being understood that not all Series may be issued, in which
case, reference in this Trust Indenture to Series not issued shall be
disregarded) and (ii) to provide for the assignment, mortgage and pledge by
the Owner to the Indenture Trustee, as part of the Collateral hereunder, among
other things, of all of the Owner's right, title and interest in and to the
Aircraft and, except as hereinafter expressly provided, all payments and other
amounts received hereunder in accordance with the terms hereof, as security
for, among other things, the Owner's obligations to the Indenture Trustee, for
the ratable benefit and security of the Certificate Holders, subject to
Section 2.15 and Article III hereof;
WHEREAS, all things have been done to make the Secured Certificates,
when executed by the Owner and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of the
Owner; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed
and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the Principal Amount of,
interest on, Make-Whole Premium, if any, and all other amounts due with
respect to, all Secured Certificates from time to time outstanding hereunder
and the performance and observance by the Owner of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Secured Certificates contained, for the benefit of the Certificate Holders and
the Indenture Indemnitees, and the prompt payment of all amounts from time to
time owing hereunder and under the Participation Agreement to the Certificate
Holders and the Indenture Indemnitees by the Owner 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 Secured Certificates by the holders thereof, and for other good and
valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge and confirm, unto the Indenture
Trustee, its successors in trust and assigns, for the security and benefit of
the Certificate Holders, a first priority security interest in and mortgage
lien on all right, title and interest of the Owner in, to and under the
following described property, rights and privileges, (including all property
hereafter specifically subjected to the Lien of this Trust Indenture by the
Trust Indenture Supplement or any mortgage supplemental hereto), to wit:
(a) the Aircraft (including the Airframe and the Engines and all
replacements thereof and substitutions therefor as provided herein), all as
more particularly described in the Trust Indenture Supplement executed and
delivered with respect to the Aircraft or any such replacements or
substitutions therefor, as provided in this Trust Indenture and all logs,
manuals maintained on the Aircraft and modification and maintenance records at
any time required to be maintained with respect to the Aircraft, in accordance
with the rules and regulations of the FAA if the Aircraft is registered under
the laws of the United States or the rules and regulations of the government
of the country of registry of the Aircraft if the Aircraft is registered under
the laws of a jurisdiction other than the United States;
(b) the Contract Rights, but subject always to the provisions of
Section 7.07 hereof;
(c) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section
7.04 hereof, but excluding any insurance maintained by the Owner and not
required under Section 7.04 hereof;
(d) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms of
this Indenture or required hereby to be held by the Indenture Trustee
hereunder; and
(e) all proceeds of the foregoing.
SUBJECT TO all of the terms and conditions of this Trust Indenture
and the rights of the Owner hereunder.
Concurrently with the delivery hereof, the Owner is delivering to
the Indenture Trustee executed copies of the Participation Agreement and the
Consent and Agreement.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, and its successors and assigns, in trust for the benefit
and security of the Certificate Holders, except as provided in Section 2.15
and Article III hereof without any preference, distinction or priority of any
one Secured Certificate 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 (a) through (e) inclusive above, subject to
the terms and provisions set forth in this Trust Indenture.
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It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the obligations
assumed by it thereunder, except to the extent prohibited or excluded from
doing so pursuant to the terms and provisions thereof, and the Indenture
Trustee and the Certificate Holders shall have no obligation or liability
under the Indenture Agreements, by reason of or arising out of the assignment
hereunder, nor shall the Indenture Trustee or the Certificate Holders be
required or obligated in any manner to perform or fulfill any obligations of
the Owner under or pursuant to any of the Indenture Agreements to which it is
a party, or, except as herein expressly provided, to make any payment, or to
make any inquiry as to the nature or sufficiency of any payment received by
it, or present or file any claim, or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may
be entitled at any time or times.
The Owner does hereby constitute the Indenture Trustee the true and
lawful attorney of the Owner, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any and
all monies and claims for monies (in each case including insurance and
requisition proceeds) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Collateral, to endorse any checks or other instruments
or orders in connection therewith and to file any claims or to take any action
or to institute any proceedings which the Indenture Trustee may deem to be
necessary or advisable in the premises. Without limiting the generality of the
foregoing, but subject to the rights of the Owner hereunder, during the
continuance of any Event of Default under this Trust Indenture, the Indenture
Trustee shall have the right under such power of attorney to accept any offer
in connection with the exercise of remedies as set forth herein of any
purchaser to purchase the Airframe and Engines and upon such purchase to
execute and deliver in the name of and on behalf of the Owner 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 or otherwise, which the Indenture Trustee may
deem necessary or appropriate to protect and preserve the right, title and
interest of the Indenture Trustee in and to such other sums and the security
intended to be afforded hereby; provided, however, that no action of the
Indenture Trustee pursuant to this paragraph shall increase the obligations or
liabilities of the Owner to any Person beyond those obligations and
liabilities specifically set forth in this Trust Indenture and in the other
Operative Documents.
The Owner agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, the Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Indenture Trustee may reasonably
deem necessary or desirable to perfect, preserve or protect the mortgage,
security interests and assignments created or intended to be created hereby or
to obtain for the Indenture Trustee the full benefits of the assignment
hereunder and of the rights and powers herein granted.
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The Owner 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 11.01 hereof, any of
its right, title or interest hereby assigned, to anyone other than the
Indenture Trustee and its predecessor(s) in this transaction.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein or the context requires otherwise,
capitalized terms utilized but not defined herein shall have the respective
meanings set forth or incorporated by reference in Annex A hereto for all
purposes of the Trust Indenture.
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates.
The Secured Certificates shall be substantially in the form set
forth below:
THIS SECURED CERTIFICATE 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 SECURED CERTIFICATE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
NORTHWEST AIRLINES, INC. SERIES [___] SECURED CERTIFICATE DUE [_____] ISSUED
IN CONNECTION WITH THE [AIRBUS A319-114] [BOEING 757-351] [AIRBUS A330-323]
AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N[_____].
No.____ Date: [________]
$_________________
[INTEREST RATE MATURITY DATE
[________]]1 [________,_______]
NORTHWEST AIRLINES, INC. (the "Owner"), hereby promises to pay to
___________, or the registered assignee thereof, the principal sum of
$_________ (the "Principal Amount"), together with interest on the amount of
the Principal Amount remaining
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1 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
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unpaid from time to time from the date hereof until paid in full at a rate per
annum [for each Interest Period equal to the Debt Rate for Series [__] for
such Interest Period (calculated on the basis of a year of 360 days and actual
days elapsed during the period for which such amount accrues)]2 [(calculated
on the basis of a year of 360 days comprised of twelve 30 day months) equal to
the interest rate indicated above]3. [Interest shall be payable with respect
to the first but not the last day of each Interest Period.]4 The Principal
Amount of this Secured Certificate shall be payable in installments on the
dates set forth in Schedule I hereto equal to the corresponding percentage of
the Principal Amount of this Secured Certificate set forth in Schedule I
hereto. Accrued but unpaid interest shall be due and payable in quarterly
installments commencing [February/May/August/November 20], and thereafter on
[February 20], [May 20], [August 20] and [November 20] of each year, to and
including [____________]. Notwithstanding the foregoing, the final payment
made on this Secured Certificate shall be in an amount sufficient to discharge
in full the unpaid Principal Amount and all accrued and unpaid interest on,
and any other amounts due under, this Secured Certificate. Notwithstanding
anything to the contrary contained herein, if any date on which a payment
under this Secured Certificate 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 such extension of time shall be
included in the computation of interest payable]5 [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]6.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement [NW ____ _], dated as of [_______________],
between the Owner and State Street Bank and Trust Company (the "Indenture
Trustee"), as the same may be amended or supplemented from time to time. All
other capitalized terms used in this Secured Certificate and not defined
herein shall have the respective meanings assigned in the Trust Indenture.
This Secured Certificate shall bear interest, payable on demand, at
the Past Due Rate [(calculated on the basis of a year of 360 days and actual
days elapsed during which such amount accrues]7 [(calculated on the basis of a
year of 360 days comprised of twelve 30-day months)]8 on any overdue Principal
Amount, [any overdue Make-Whole Amount, if any,]9 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).
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2 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
3 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
4 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
5 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
6 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
7 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
8 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
9 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
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There shall be maintained a Secured Certificate Register for the
purpose of registering transfers and exchanges of Secured Certificates at the
Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the Trust
Indenture. Each such payment shall be made on the date such payment is due and
without any presentment or surrender of this Secured Certificate, except that
in the case of any final payment with respect to this Secured Certificate, the
Secured Certificate shall be surrendered promptly thereafter to the Indenture
Trustee for cancellation.
The holder hereof, by its acceptance of this Secured Certificate,
agrees that, except as provided in the Trust Indenture, each payment received
by it hereunder shall be applied, first, [to the payment of Break Amount, if
any, on this Secured Certificate]10 [to the payment of accrued interest on
this Secured Certificate (as well as any interest on any overdue Principal
Amount, any overdue Make-Whole Amount, if any, or, to the extent permitted by
Law, any overdue interest and other amounts hereunder) to the date of such
payment]11, second, [to the payment of accrued interest on this Secured
Certificate (as well as any interest on any overdue Principal Amount or, to
the extent permitted by Law, any overdue interest and other amounts
hereunder)]12 [to the payment of the Principal Amount of this Secured
Certificate then due]13, third, [to the payment of the Principal Amount of
this Secured Certificate then due and any other amount due hereunder or under
the Trust Indenture]14 [to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Trust Indenture]15, and fourth, the
balance, if any, remaining thereafter, to the payment of Principal Amount of
this Secured Certificate remaining unpaid in the inverse order of their normal
maturity.
This Secured Certificate is one of the Secured Certificates referred
to in the Trust Indenture which have been or are to be issued by the Owner
pursuant to the terms of the Trust Indenture. The Collateral is held by the
Indenture Trustee as security, in part, for the Secured Certificates. The
provisions of this Secured Certificate are subject to the Trust Indenture.
Reference is hereby made to the Trust Indenture and the Participation
Agreement for a complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Secured Certificate
and the rights and obligations of the holders of, and the nature and extent of
the security for, any other Secured Certificates 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
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10 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
11 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
12 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
13 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
14 To be inserted in the case of a Series G-1, Series C-1 or Series D Secured
Certificate.
15 To be inserted in the case of a Series G-2 or Series C-2 Secured
Certificate.
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Indenture, to all of which terms and conditions in the Trust Indenture and the
Participation Agreement each holder hereof agrees by its acceptance of this
Secured Certificate.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Secured Certificate is exchangeable for a
like aggregate Principal Amount of Secured Certificates of different
authorized denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Secured Certificate, the Owner and the Indenture Trustee shall treat the
person in whose name this Secured Certificate is registered as the owner
hereof for all purposes whether or not this Secured Certificate be overdue,
and neither of the Owner nor the Indenture Trustee shall be affected by notice
to the contrary.
This Secured Certificate is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise.
The indebtedness evidenced by this Secured Certificate [shall rank
in right of payment equally with all Series G-2 Secured Certificates and all
other Series G-1 Secured Certificates but shall rank senior in right of
payment to all the other Secured Certificates.]16 [shall rank in right of
payment equally with all Series G-1 Secured Certificates and all other Series
G-2 Secured Certificates but shall rank senior in right of payment to all the
other Secured Certificates.]17 [is, to the extent and in the manner provided
in the Trust Indenture, subordinate and subject in right of payment to the
prior payment in full of the Secured Obligations (as defined in the Trust
Indenture) in respect of [Series G-1 Secured Certificates]18 [and] [Series G-2
Secured Certificates]19 [, and shall rank in right of payment equally with all
Series C-2 Secured Certificates and all other Series C-1 Secured
Certificates]20, [, and shall rank in right of payment equally with all Series
C-1 Secured Certificates and all other Series C-2 Secured Certificates]21
[[Series G-1 Secured Certificates], [Series G-2 Secured Certificates], [C-1
Secured Certificates] and [Series C-2 Secured Certificates]]22 and this
Secured Certificate is issued subject to such
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16 To be inserted in the case of a Series G-1 Secured Certificate if a Series
G-2 Secured Certificate is issued.
17 To be inserted in the case of a Series G-2 Secured Certificate if a Series
G-1 Secured Certificate is issued.
18 To be inserted in any Series C-1 or Series C-2 Secured Certificate issued
with respect to a particular Aircraft if Series G-1 Secured Certificates are
issued with respect to such Aircraft.
19 To be inserted in any Series C-1 or Series C-2 Secured Certificate issued
with respect to a particular Aircraft if Series G-2 Secured Certificates are
issued with respect to such Aircraft.
20 To be inserted in a Series C-1 Secured Certificate if both Series C-1 and
Series C-2 Secured Certificates are issued with respect to a particular
Aircraft.
21 To be inserted in the case of a Series C-2 Secured Certificate if both
Series C-1 and Series C-2 Secured Certificates are issued with respect to a
particular Aircraft.
22 To be inserted in the case of a Series D Secured Certificate with
appropriate adjustment for the senior Series of Secured Certificates which are
issued with respect to a particular Aircraft.
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provisions.]23 The Certificate Holder of this Secured Certificate, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Indenture Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in the Trust Indenture and (c) appoints the Indenture Trustee his
attorney-in-fact for such purpose.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Indenture Trustee by manual signature, this Secured
Certificate shall not be entitled to any benefit under the Trust Indenture or
be valid or obligatory for any purpose.
THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
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23 To be inserted in the case of a Series C-1, Series C-2 and Series D
Secured Certificate.
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IN WITNESS WHEREOF, the Owner has caused this Secured Certificate to
be executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
NORTHWEST AIRLINES, INC.,
By ______________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Secured Certificates referred to in the
within-mentioned Trust Indenture.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity
but solely as Indenture Trustee
By ______________________________
Name:
Title:
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SCHEDULE I
SECURED CERTIFICATES AMORTIZATION
Percentage of
Principal Amount
Payment Date to be Paid
------------------------------------ ------------------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Secured Certificates.
The Secured Certificates shall be dated the date of issuance
thereof, shall be issued in up to [four/five/six] separate series consisting
of [Series G-1, Series G-2, Series C-1, Series C-2]24, Series D and Series E25
and in the maturities and principal amounts and shall bear interest as
specified in Schedule I hereto (or, in the case of Series E if issued after
the Closing Date, dated such date and with such maturity, principal amount and
interest rate as specified in an amendment to this Trust Indenture). On the
Closing Date, each Secured Certificate shall be issued to the Pass Through
Trustees (or their designee) under the Pass Through Trust Agreements as set
forth on Schedule II hereto. The Owner shall have the option to issue the
Series E Secured Certificates at or after the Closing Date. The Secured
Certificates shall be issued in registered form only. The Secured Certificates
shall be issued in denominations of $1,000 and integral multiples thereof,
except that one Secured Certificate of each Series may be in an amount that is
not an integral multiple of $1,000.
Each Secured Certificate shall bear interest, in the case of [Series
G-1], [Series C-1] [and] Series D at the Debt Rate specified for each Interest
Period for such Series, and in the case of [Series G-2] [and] [Series C-2] at
the Debt Rate specified for such Series (in the case of the [Series G-1
Secured Certificates], [Series C-1 Secured Certificates] [and] Series D
Secured Certificates, calculated on the basis of a year of 360 days and actual
days elapsed during the
---------
24 There will be Secured Certificates of Series G-1 and/or Series G-2, Series
C-1 and/or Series C-2, and Series D issued with respect to an Aircraft.
25 If Series E Secured Certificates are issued and they bear interest at a
floating rate, they will be treated similarly to the Series G-1, Series C-1
and Series D Secured Certificates with respect to payment of Break Amount,
calculation of the interest rate and Past Due Rate. If Series E Secured
Certificates are issued and they bear interest at a fixed rate, they will be
treated similarly to the Series G-2 and Series C-2 Secured Certificates with
respect to the payment of Make Whole Amount, calculation of the interest rate
and Past Due Rate. Any Series E Secured Certificates would be subordinate to
all other Series of Secured Certificates.
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period for which such amount accrues, and in the case of the [Series G-2
Secured Certificates] [and] [Series C-2 Secured Certificates], calculated on
the basis of a year of 360 days comprised of twelve 30-day months) on the
unpaid Principal Amount thereof from time to time outstanding, payable in
arrears on [February/May/August/November 20, ______], and on each [February
20], [May 20], [August 20] and [November 20] thereafter until maturity.
Interest shall be payable with respect to the first but not the last day of
each Interest Period for the [Series G-1 Secured Certificates], [Series C-1
Secured Certificates] [and] Series D Secured Certificates. The Principal
Amount of each [Series G-1], [Series G-2], [Series C-1], [Series C-2], Series
D and Series E Secured Certificate shall be payable on the dates and in the
installments equal to the corresponding percentage of the Principal Amount as
set forth in Schedule I hereto applicable to such Series which shall be
attached as Schedule I to the [Series G-1], [Series G-2], [Series C-1],
[Series C-2], Series D and Series E Secured Certificates (or, in the case of
the Series E Secured Certificates if issued after the Closing Date, as set
forth in an amendment to this Trust Indenture, which payment schedule shall be
attached as Schedule I to the Series E Secured Certificates). Notwithstanding
the foregoing, the final payment made under each [Series G-1], [Series G-2],
[Series C-1], [Series C-2] [and] Series D [and Series E] Secured Certificate
shall be in an amount sufficient to discharge in full the unpaid Principal
Amount and all accrued and unpaid interest on, and any other amounts due
under, such Secured Certificate. Each Secured Certificate shall bear interest
at the Past Due Rate (in the case of the [Series G-1], [Series C-1] [and]
Series D [and Series E] Secured Certificates, calculated on the basis of a
year of 360 days and actual days elapsed during the period for which such
amount accrues, and in the case of the [Series G-2] [and] [Series C-2] [and
Series E] Secured Certificates, calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on any part of the Principal Amount, in the
case of a [Series G-2] [or] [Series C-2] [or Series E] Secured Certificate,
Make-Whole Premium, if any, Break 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 Secured Certificate 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 in the case of a
[Series G-1], [Series C-1] [or] Series D [or Series E] Secured Certificate,
such extension of time shall be included in the computation of interest
payable, and in the case of a [Series G-2] [or] [Series C-2] [or Series E]
Secured Certificate, 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 agrees to pay to the Indenture Trustee for distribution in
accordance with Section 3.04 hereof (a) the Owner's pro rata share of all
amounts owed to the Primary Liquidity Provider by the Subordination Agent
under each Primary Liquidity Facility other than amounts due as (i) repayments
of the principal of advances thereunder, (ii) interest on Interest Drawings,
Final Drawings, and Applied Downgrade Advances and Applied Non-Extension
Advances (as defined in the Primary Liquidity Facilities) under any Primary
Liquidity Facility except to the extent included in Net Interest and Related
Charges, and (iii) fees payable to the Primary Liquidity Provider payable
(whether or not in fact paid) under Section 7(a) of the Note Purchase
Agreement (as originally in effect or amended) and (b) the Owner's pro rata
share of all compensation and reimbursement of fees, expenses and
disbursements (including payment of
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indemnities) owed to the Policy Provider under the Policy Provider Agreement.
As used in this Section, "Owner's pro rata share" means as of any time:
(A) with respect to all amounts payable by the Owner specified in
clause (b) above, a fraction the numerator of which is the aggregate
principal balance then outstanding of the [Series G-1 Secured
Certificates] [and] [Series G-2 Secured Certificates] and the denominator
of which is the aggregate principal balance then outstanding of all
Series G-1 Equipment Notes and Series G-2 Equipment Notes;
(B) with respect to all amounts payable by the Owner specified in
clause (a) above under each Primary Liquidity Facility (other than all
Net Interest and Related Charges under such Primary Liquidity Facility),
a fraction (i) the numerator of which is the aggregate principal balance
then outstanding of the Secured Certificates of Series corresponding to
the class of the Pass Through Certificates to which such Primary
Liquidity Facility relates and (ii) the denominator of which is the
aggregate principal balance then outstanding of all Equipment Notes of
such Series; and
(C) with respect to all Net Interest and Related Charges under each
Primary Liquidity Facility (x) if there exists a Payment Default with
respect to the Secured Certificate of Series corresponding to the class
of the Pass Through Certificates to which such Primary Liquidity Facility
relates a fraction, the numerator of which is the aggregate principal
balance then outstanding of the Secured Certificates of such Series and
the denominator of which is the aggregate principal balance then
outstanding of all Equipment Notes of such Series with respect to which
there exists a Payment Default or (y) at all other times, zero.
As used in this Section, "Net Interest and Related Charges" means,
with respect to a Primary Liquidity Facility, the sum of (i) the amount, if
any, by which interest payable to the Primary Liquidity Provider on any
Interest Drawing, Final Drawing, Applied Downgrade Advance and/or Applied
Non-Extension Advance (as defined in such Primary Liquidity Facility) exceeds
the amount which would be payable if such drawings bore interest at the
Designated Interest Rate plus (ii) any amounts payable under Section 3.01,
Section 3.02, Section 3.03 or Section 7.07 of such Primary Liquidity Facility
(or similar provisions of any succeeding Primary Liquidity Facility) which
result from any Interest Drawing, Final Drawing, Applied Downgrade Advance or
Applied Non-Extension Advance (as defined in such Primary Liquidity Facility).
As used in this Section "Designated Interest Rate" means the Past Due Rate (as
defined in the applicable Indentures) of the Secured Certificates (or
Equipment Notes) of Series corresponding to the class of the Pass Through
Certificates to which the relevant Primary Liquidity Facility relates, except
that with respect to that portion of any Final Drawing (or Applied Downgrade
Advance or Applied Non-Extension Advance which becomes a Final Drawing) which
remains in a Primary Cash Collateral Account relating to such Primary
Liquidity Facility, Designated Interest Rate means the Investment Earnings of
funds in such Primary Cash Collateral Account. As used in this Section, a
Payment Default when used in connection with a Secured Certificate or
Equipment Note means a default in the payment of principal thereof or interest
thereon which has not been cured other than solely because of acceleration.
The following terms are used in this Section as defined in the Intercreditor
Agreement without regard to any amendment, modification or supplement thereto
after the Closing Date: Primary Cash Collateral Account,
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Equipment Notes, Final Drawings, Indentures, Interest Drawing, Investment
Earnings, Series G-1 Equipment Notes and Series G-2 Equipment Notes.
The Secured Certificates shall be executed on behalf of the Owner by
its President or one of its Vice Presidents, its Treasurer or Assistant
Secretaries or other authorized officer. Secured Certificates bearing the
signatures of individuals who were at any time the proper officers of the
Owner shall bind the Owner, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Secured Certificates or did not hold such offices at the respective
dates of such Secured Certificates. The Owner may from time to time execute
and deliver Secured Certificates with respect to the Aircraft to the Indenture
Trustee for authentication upon original issue and such Secured Certificates
shall thereupon be authenticated and delivered by the Indenture Trustee upon
the written request of the Owner signed by a Vice President, its Treasurer or
other authorized officer of the Owner; provided, however, that each such
request shall specify the aggregate Principal Amount of all Secured
Certificates to be authenticated hereunder on original issue with respect to
the Aircraft. No Secured Certificate 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 Secured Certificate a certificate of
authentication in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized officers and such
certificate upon any Secured Certificates shall be conclusive evidence, and
the only evidence, that such Secured Certificate has been duly authenticated
and delivered hereunder.
SECTION 2.03. [Intentionally Omitted].
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Premium, if
any, and other amounts due under each Secured Certificate or hereunder will be
payable in Dollars by wire transfer of immediately available funds not later
than 12:00 noon, New York City time, on the due date of payment to the
Indenture Trustee at the Corporate Trust Office for distribution among the
Certificate Holders in the manner provided herein. The Owner shall not have
any responsibility for the distribution of such payment to any Certificate
Holder. Notwithstanding the foregoing or any provision in any Secured
Certificate to the contrary, the Indenture Trustee will use reasonable efforts
to pay or cause to be paid, if so directed in writing by any Certificate
Holder (with a copy to the Owner), all amounts paid by the Owner hereunder and
under such holder's Secured Certificate or Secured Certificates to such holder
or a nominee therefor (including all amounts distributed pursuant to Article
III of this Trust Indenture) by transferring, or causing to be transferred, by
wire transfer of immediately available funds in Dollars, prior to 2:00 p.m.,
New York City time, on the due date of payment, to an account maintained by
such holder with a bank located in the continental United States the amount to
be distributed to such holder, for credit to the account of such holder
maintained at such bank. If the Indenture Trustee shall fail to make any such
payment as provided in the immediately preceding sentence after its receipt of
funds at the place and prior to the time specified above, the Indenture
Trustee, in its individual capacity and not as trustee, agrees to compensate
such holders for loss of use of funds at the Federal Funds Rate until such
payment is made and the Indenture Trustee shall be entitled to any interest
earned on such funds until such payment is made. Any payment made hereunder
shall be made without any presentment or surrender of any Secured Certificate,
except that, in
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the case of the final payment in respect of any Secured Certificate, such
Secured Certificate shall be surrendered to the Indenture Trustee for
cancellation promptly after such payment. Notwithstanding any other provision
of this Trust Indenture to the contrary, the Indenture Trustee shall not be
required to make, or cause to be made, wire transfers as aforesaid prior to
the first Business Day on which it is practicable for the Indenture Trustee to
do so in view of the time of day when the funds to be so transferred were
received by it if such funds were received after 12:00 noon, New York City
time, at the place of payment. Prior to the due presentment for registration
of transfer of any Secured Certificate, the Owner and the Indenture Trustee
shall deem and treat the Person in whose name any Secured Certificate is
registered on the Secured Certificate Register as the absolute owner and
holder of such Secured Certificate for the purpose of receiving payment of all
amounts payable with respect to such Secured Certificate and for all other
purposes, and none of the Owner or the Indenture Trustee shall be affected by
any notice to the contrary. So long as any signatory to the Participation
Agreement or nominee thereof shall be a registered Certificate Holder, all
payments to it shall be made to the account of such Certificate Holder
specified in Schedule I thereto and otherwise in the manner provided in or
pursuant to the Participation Agreement unless it shall have specified some
other account or manner of payment by notice to the Indenture Trustee
consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner, shall exclude and
withhold at the appropriate rate from each payment of Principal Amount of,
interest on, Make-Whole Premium, if any, and other amounts due hereunder or
under each Secured Certificate (and such exclusion and withholding shall
constitute payment in respect of such Secured Certificate) any and all
withholding taxes applicable thereto as required by Law. The Indenture Trustee
agrees to act as such withholding agent and, in connection therewith, whenever
any present or future United States taxes or similar charges are required to
be withheld with respect to any amounts payable hereunder or in respect of the
Secured Certificates, to withhold such amounts (and such withholding shall
constitute payment in respect of such Secured Certificate) and timely pay the
same to the appropriate authority in the name of and on behalf of the
Certificate 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 Certificate Holder (with a copy to the
Owner) appropriate receipts showing the payment thereof, together with such
additional documentary evidence as any such Certificate Holder may reasonably
request from time to time.
If a Certificate Holder which is not a U.S. Person within the
meaning of Section 7701(a)(30) of the Code has furnished to the Indenture
Trustee a properly completed (including the U.S. Taxpayer Identification
Number of the Certificate Holder) and currently effective U.S. Internal
Revenue Service Form W-8IMY (with appropriate attachments), W-8BEN or W-8ECI
(or such successor form or forms as may be required by the United States
Treasury Department or Internal Revenue Service) during the calendar year in
which the payment hereunder or under the Secured Certificate(s) held by such
holder is made (but prior to the making of such payment), or in either of the
two preceding calendar years, and has not notified the Indenture Trustee of
the withdrawal or inaccuracy of such form prior to the date of such payment
(and the Indenture Trustee has no reason to know that any information set
forth in such form is inaccurate), the Indenture Trustee shall withhold only
the amount, if any, required by Law (after taking into account any applicable
exemptions claimed by the Certificate Holder) to be withheld from payments
hereunder or under the Secured Certificates held by such holder in respect of
United
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States federal income tax (and such withholding shall constitute payment in
respect of such Secured Certificate). If a Certificate Holder which is a U.S.
Person within the meaning of Section 7701(a)(30) of the Code has furnished to
the Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form W-9 prior to a payment hereunder or under the
Secured Certificates held by such holder (or if such U.S. Person is exempt
from backup withholding), no amount shall be withheld from payments in respect
of United States federal income tax. If any Certificate Holder has notified
the Indenture Trustee that any of the foregoing forms or certificates is
withdrawn or inaccurate, or if such holder has not filed a form claiming an
exemption from United States withholding tax or if the Code or the regulations
thereunder or the administrative interpretation thereof are at any time after
the date hereof amended to require such withholding of United States federal
income taxes from payments under the Secured Certificates held by such holder,
the Indenture Trustee agrees to withhold from each payment due to the relevant
Certificate Holder withholding taxes at the appropriate rate under Law and
will, on a timely basis as more fully provided above, deposit such amounts
with an authorized depository and make such returns, statements, receipts and
other documentary evidence in connection therewith as required by applicable
Law.
The Owner shall not have any liability for the failure of the
Indenture Trustee to withhold taxes in the manner provided for herein or if
any Certificate Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Secured Certificate, each payment of Principal
Amount, Break Amount (in the case of a [Series G-1], [Series C-1] [or] Series
D Secured Certificate), if any, Make-Whole Premium, if any, and interest or
other amounts due thereon shall be applied26:
First: in the case of a [Series G-1], [Series C-1] [or] Series D
Secured Certificate, to the payment of Break Amount, if any, with respect
to such [Series G-1], [Series C-1] [or] Series D Secured Certificate, and
in the case of a [Series G-2] [or] [Series C-2] Secured Certificate, to
the payment of accrued interest on such [Series G-2] [or] [Series C-2]
Secured Certificate (as well as any interest on any overdue Principal
Amount, any overdue Make-Whole Amount, if any, and to the extent
permitted by Law, any overdue interest and any other overdue amounts
thereunder) to the date of such payment;
Second: in the case of a [Series G-1], [Series C-1] [or] Series D
Secured Certificate, to the payment of accrued interest on such [Series
G-1], [Series C-1] [or] Series D Secured Certificate (as well as any
interest on any overdue Principal Amount and to the extent permitted by
Law, any overdue interest and any other overdue amounts thereunder) to
the date of such payment, and in the case of a [Series G-2] [or] [Series
C-
---------
26 If Series E Secured Certificates are issued and bear a floating interest
rate, they will be treated like the Series G-1, Series C-1 and Series D
Secured Certificates for purposes of this Section 2.05. If Series E Secured
Certificates are issued and bear a fixed interest rate, they will be treated
like the Series G-2 and Series C-2 Secured Certificates for purposes of this
Section 2.05.
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2] Secured Certificate, to the payment of the Principal Amount of such
[Series G-2] [or] [Series C-2] Secured Certificate (or a portion thereof)
then due thereunder;
Third: in the case of a [Series G-1], [Series C-1] [or] Series D
Secured Certificate, to the payment of Principal Amount of such [Series
G-1], [Series C-1] [or] Series D Secured Certificate (or a portion
thereof) and any other amount due hereunder or under such [Series G-1],
[Series C-1] [or] Series D Secured Certificate, and in the case of a
[Series G-2] [or] [Series C-2] Secured Certificate, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under
such [Series G-2] [or] [Series C-2] Secured Certificate; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Principal Amount of such Secured Certificate remaining unpaid
(provided that such Secured Certificate shall not be subject to
redemption except as provided in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.
SECTION 2.06. Termination of Interest in Collateral.
A Certificate Holder shall not, as such, have any further interest
in, or other right with respect to, the Collateral when and if the Principal
Amount of, Make-Whole Premium, if any, and interest on and other amounts due
under all Secured Certificates held by such Certificate Holder and all other
sums then payable to such Certificate Holder hereunder and under the other
Operative Documents by the Owner (collectively, the "Secured Obligations")
shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates.
The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Secured Certificate Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Secured Certificate Registrar" for the
purpose of registering Secured Certificates and transfers of Secured
Certificates as herein provided. A holder of any Secured Certificate intending
to exchange such Secured Certificate shall surrender such Secured Certificate
to the Indenture Trustee at the Corporate Trust Office, together with a
written request from the registered holder thereof for the issuance of a new
Secured Certificate, 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 Secured Certificate, the Owner shall execute, and the
Indenture Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Secured Certificates of
a like aggregate Principal Amount and of the same series. At the option of the
Certificate Holder, Secured Certificates may be exchanged for other Secured
Certificates of any authorized denominations of a like aggregate Principal
Amount, upon
-16-
surrender of the Secured Certificates to be exchanged to the Indenture Trustee
at the Corporate Trust Office. Whenever any Secured Certificates are so
surrendered for exchange, the Owner shall execute, and the Indenture Trustee
shall authenticate and deliver, the Secured Certificates which the Certificate
Holder making the exchange is entitled to receive. All Secured Certificates
issued upon any registration of transfer or exchange of Secured Certificates
(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
evidencing the same respective obligations, and entitled to the same security
and benefits under this Trust Indenture, as the Secured Certificates
surrendered upon such registration of transfer or exchange. Every Secured
Certificate presented or surrendered for registration of transfer, shall (if
so required by the Indenture Trustee) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by the Certificate Holder or such holder's attorney duly
authorized in writing, and the Indenture Trustee shall require evidence
satisfactory to it as to the compliance of any such transfer with the
Securities Act, and the securities Laws of any applicable state. The Indenture
Trustee shall make a notation on each new Secured Certificate of the amount of
all payments of Principal Amount previously made on the old Secured
Certificate or Secured Certificates with respect to which such new Secured
Certificate is issued and the date to which interest on such old Secured
Certificate or Secured Certificates has been paid. Interest shall be deemed to
have been paid on such new Secured Certificate to the date on which interest
shall have been paid on such old Secured Certificate, and all payments of the
Principal Amount marked on such new Secured Certificate, as provided above,
shall be deemed to have been made thereon. The Owner shall not be required to
exchange any surrendered Secured Certificates as provided above during the
ten-day period preceding the due date of any payment on such Secured
Certificate. The Owner shall in all cases deem the Person in whose name any
Secured Certificate shall have been issued and registered as the absolute
owner and holder of such Secured Certificate for the purpose of receiving
payment of all amounts payable by the Owner with respect to such Secured
Certificate and for all purposes until a notice stating otherwise is received
from the Indenture Trustee and such change is reflected on the Secured
Certificate Register. The Indenture Trustee will promptly notify the Owner of
each registration of a transfer of a Secured Certificate. Any such transferee
of a Secured Certificate, by its acceptance of a Secured Certificate, agrees
to the provisions of the Participation Agreement applicable to Certificate
Holders, including Sections 6, 8(e), 8(k), 8(l), 8(q), 8(r), 8(t), 8(cc), 10,
13(b), 13(c), 15(b), 15(c) and 16, and shall be deemed to have represented and
warranted (except as provided above), and covenanted, to the parties to the
Participation Agreement as to the matters represented, warranted and
covenanted by the Purchasers in the Participation Agreement. Subject to
compliance by the Certificate Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner shall use all reasonable efforts to issue new Secured Certificates upon
transfer or exchange within 10 Business Days of the date a Secured Certificate
is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates.
If any Secured Certificate shall become mutilated, destroyed, lost
or stolen, the Owner shall, upon the written request of the holder of such
Secured Certificate, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Secured Certificate, payable in the same
Principal Amount dated the same date and captioned as issued in connection
with the Aircraft. If the Secured Certificate being replaced has become
mutilated,
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such Secured Certificate shall be surrendered to the Indenture Trustee and a
photocopy thereof shall be furnished to the Owner. If the Secured Certificate
being replaced has been destroyed, lost or stolen, the holder of such Secured
Certificate shall furnish to the Owner and the Indenture Trustee such security
or indemnity as may be required by them to save the Owner and the Indenture
Trustee harmless and evidence satisfactory to the Owner and the Indenture
Trustee of the destruction, loss or theft of such Secured Certificate and of
the ownership thereof. If a "qualified institutional buyer" of the type
referred to in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the
Securities Act (a "QIB") is the holder of any such destroyed, lost or stolen
Secured Certificate, then the written indemnity of such QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Owner and the Indenture Trustee shall be accepted as
satisfactory indemnity and security and no further indemnity or security shall
be required as a condition to the execution and delivery of such new Secured
Certificate. Subject to compliance by the Certificate Holder of the
requirements set forth in this Section 2.08, the Indenture Trustee and the
Owner shall use all reasonable efforts to issue new Secured Certificates
within 10 Business Days of the date of the written request therefor from the
Certificate Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Certificate Holder for any
registration of transfer or exchange of Secured Certificates, but the
Indenture Trustee, as Secured Certificate 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 Secured
Certificates.
(b) The Indenture Trustee shall cancel all Secured Certificates
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Secured Certificates.
SECTION 2.10. Mandatory Redemptions of Secured Certificates.
On the date on which the Owner is required pursuant to Section
7.06(a)(i) hereof to make payment for an Event of Loss with respect to the
Aircraft, all of the Secured Certificates shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption, and in
the case of [Series G-1], [Series C-1] [and] Series D Secured Certificates,
Break Amount, if any, and all other amounts payable hereunder or under the
Participation Agreement to the Certificate Holders but without Make-Whole
Premium.
SECTION 2.11. Voluntary Redemptions of Secured Certificates.
All (but not less than all) of the Secured Certificates may be
redeemed by the Owner upon at least 30 days' revocable prior written notice to
the Indenture Trustee and the Certificate Holders, and the Secured
Certificates shall be redeemed in whole at a redemption price equal to 100% of
the unpaid Principal Amount thereof, together with accrued interest thereon to
the date of redemption, in the case of [Series G-1], [Series C-1] [and] Series
D
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Secured Certificates, Break Amount, if any, and all other amounts payable
hereunder or under the Participation Agreement to the Certificate Holders plus
Make-Whole Premium, if any.
In addition, so long as no Default of the type referred to in
Section 4.01(a) or 4.01(e) hereof or Event of Default shall have occurred and
be continuing, all (but not less than all) of the Series D Secured
Certificates may be redeemed by the Owner upon at least 30 days' revocable
prior written notice to the Indenture Trustee and the Certificate Holders of
Series D Secured Certificates, and the Series D Secured Certificates shall be
redeemed in whole at a redemption price equal to 100% of the unpaid Principal
Amount thereof, together with accrued interest thereon to the date of
redemption, Break Amount, if any, and all other Secured Obligations owed or
then due and payable to the Certificate Holders of Series D Secured
Certificates; provided that (a) the Owner shall have obtained written
confirmation from Xxxxx'x Investors Services, Inc., Standard & Poor's Ratings
Services, a division of the XxXxxx-Xxxx Companies, Inc. and Fitch Ratings,
that such redemption and re-issuance specified in clause (b)(ii) below will
not result in a withdrawal, suspension or downgrading of the ratings of the
Pass Through Certificates issued by the Class G-1 Pass Through Trust, the
Class G-2 Pass Through Trust, the Class C-1 Pass Through Trust or the Class
C-2 Pass Through Trust, without regard to either Policy (as defined in the
Policy Provider Agreement) and (b) concurrently with such redemption of all of
the Series D Secured Certificates, the Owner shall (i) redeem all of the other
Series D Equipment Notes (as such term is defined in the Intercreditor
Agreement) then outstanding and (ii) re-issue Series D Secured Certificates
having the terms the same in all material respects as the Series D Secured
Certificates so redeemed, except that the interest rate may be different than
the Debt Rate for Series D Secured Certificates so redeemed, the maturity date
may be later than the maturity date of the Series D Secured Certificates so
redeemed and the Principal Amount may be greater than the unpaid Principal
Amount of the Series D Secured Certificates so redeemed on the redemption
date; provided, however, that if the Owner obtains written confirmation from
Xxxxx'x Investors Services, Inc., Standard & Poor's Ratings Services, a
division of the XxXxxx-Xxxx Companies, Inc. and Fitch Ratings, that the
failure to simultaneously re-issue Series D Secured Certificates will not
result in a withdrawal, suspension or downgrading of the ratings of the Pass
Through Certificates issued by the Class G-1 Pass Through Trust, the Class G-2
Pass Through Trust, the Class C-1 Pass Through Trust and the Class C-2 Pass
Through Trust, without regard to either Policy (as defined in the Policy
Provider Agreement), the Company shall not be so obligated to simultaneously
re-issue Series D Secured Certificates upon the redemption of all of the
Series D Secured Certificates.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) No redemption of any Secured Certificate may be made except to
the extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Secured Certificate may be made by the Indenture Trustee.
(b) Notice of redemption with respect to the Secured Certificates
shall be given by the Indenture Trustee by first-class mail, postage prepaid,
mailed not less than 15 nor more than 60 days prior to the applicable
redemption date, to each Certificate Holder of such Secured Certificates to be
redeemed, at such Certificate Holder's address appearing in the Secured
Certificate Register; provided that, in the case of a redemption to be made
pursuant to Section 2.11, such notice shall be revocable and shall be deemed
revoked if the Indenture Trustee
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receives written notice of such revocation from the Owner not later than three
days prior to the redemption date. All notices of redemption shall state: (1)
the redemption date, (2) the applicable basis for determining the redemption
price, (3) that on the redemption date, the redemption price will become due
and payable upon each such Secured Certificate, and that, if any such Secured
Certificates are then outstanding, interest on such Secured Certificates shall
cease to accrue on and after such redemption date, and (4) the place or places
where such Secured Certificates are to be surrendered for payment of the
redemption price.
(c) On or before the redemption date, the Owner (or any person on
behalf of the Owner) shall, to the extent an amount equal to the redemption
price for the Secured Certificates to be redeemed on the redemption date shall
not then be held in the Collateral, deposit or cause to be deposited with the
Indenture Trustee by 12:00 noon on the redemption date in immediately
available funds the redemption price of the Secured Certificates 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 Secured
Certificates to be redeemed shall, on the redemption date, become due and
payable at the Corporate Trust Office of the Indenture Trustee or at any
office or agency maintained for such purposes pursuant to Section 2.07, and
from and after such redemption date (unless there shall be a default in the
payment of the redemption price) any such Secured Certificates then
outstanding shall cease to bear interest. Upon surrender of any such Secured
Certificate for redemption in accordance with said notice, such Secured
Certificate shall be redeemed at the redemption price. If any Secured
Certificate 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 Secured Certificate as of such redemption date.
SECTION 2.13. [Intentionally Omitted]
SECTION 2.14. [Intentionally Omitted]
SECTION 2.15. Subordination.
(a) The Owner and, by acceptance of its Secured Certificates of any
Series, each Certificate Holder of such Series, hereby agree that no payment
or distribution shall be made on or in respect of the Secured Obligations owed
to such Certificate Holder of such Series, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.01(e) or (f) hereof, except as
expressly provided in Article III hereof.
(b) By the acceptance of its Secured Certificates of any Series
(other than [Series G-1] [and] [Series G-2]), each Certificate Holder of such
Series agrees that in the event that such Certificate Holder, in its capacity
as a Certificate Holder, shall receive any payment or distribution on any
Secured Obligations in respect of such Series which it is not entitled to
receive under this Section 2.15 or Article III hereof, it will hold any amount
so received in trust for, and will forthwith turn over such payment to, the
Indenture Trustee in the form received to be applied as provided in Article
III hereof.
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(c) [The indebtedness evidenced by the Series G-1 Secured
Certificates and Series G-2 Secured Certificates shall rank in right of
payment equally with all other Series G-1 Secured Certificates and Series G-2
Secured Certificates.]27 The indebtedness evidenced by the [Series C-1 Secured
Certificates] [and] [Series C-2 Secured Certificates] is, to the extent and in
the manner provided in this Trust Indenture, subordinate and subject in right
of payment to the prior payment in full of the Secured Obligations in respect
of the [Series G-1 Secured Certificates] [and] [Series G-2 Secured
Certificates], [and shall rank in right of payment equally with all other
Series C-1 and Series C-2 Secured Certificates]28 and the [Series C-1 Secured
Certificates] [and] [the Series C-2 Secured Certificates] are issued subject
to such provisions. The indebtedness evidenced by the Series D Secured
Certificates is, to the extent and in the manner provided in this Trust
Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations in respect of the [Series G-1 Secured
Certificates], [the Series G-2 Secured Certificates] [the Series C-1 Secured
Certificates] and [the Series C-2 Secured Certificates], and the Series D
Secured Certificates are issued subject to such provisions.29 By acceptance of
its Secured Certificates of any Series, each Certificate Holder of such Series
(a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Indenture Trustee on such Certificate Holder's behalf to take any
action necessary or appropriate to effectuate the subordination as provided in
this Trust Indenture and (c) appoints the Indenture Trustee as such
Certificate Holder's attorney-in-fact for such purpose.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. Basic Distributions.
Except as otherwise provided in Section 3.02 hereof, each periodic
payment of principal or interest on the Secured Certificates received by the
Indenture Trustee shall be promptly distributed in the following order of
priority:
(i) so much of such payment as shall be required to pay in full the
aggregate amount of the payment or payments of Principal Amount
and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by
applicable Law, on any overdue interest and any other overdue
amounts) then due under all [Series G-1 Secured Certificates]
[and] [Series G-2 Secured Certificates] shall be distributed to
the Certificate Holders of [Series G-1] [and] [Series G-2]
ratably, without priority of one over the other, in the
proportion that the amount of such
---------
27 To be inserted if both Series G-1 and Series C-2 Secured Certificates are
issued with respect to a particular Aircraft.
28 To be inserted if both Series C-1 and Series C-2 Secured Certificates are
issued with respect to a particular Aircraft.
29 If Series E Secured Certificates are issued, they will be subordinated and
subject in right of payment to the prior payment in full of the Secured
Obligations in respect of any Series G-1, Series G-2, Series C-1, Series C-2
and Series D Secured Certificates issued with respect to a particular
Aircraft.
-21-
payment or payments then due under all [Series G-1 Secured
Certificates] [and] [Series G-2 Secured Certificates] held by
each Certificate Holder bears to the aggregate amount of the
payments then due under all [Series G-1 Secured Certificates]
[and] [Series G-2 Secured Certificates]30;
(ii) after giving effect to paragraph (i) above, so much of such
payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of Principal Amount
and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by
applicable Law, on any overdue interest and any other overdue
amounts) then due under all [Series C-1 Secured Certificates]
[and] [Series C-2 Secured Certificates] shall be distributed to
the Certificate Holders of [Series C-1] [and Series C-2]
ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due
under all [Series C-1 Secured Certificates] [and] [Series C-2
Secured Certificates] held by each Certificate Holder bears to
the aggregate amount of the payments then due under all [Series
C-1 Secured Certificates] [and] [Series C-2 Secured
Certificates]31; and
(iii) after giving effect to paragraph (ii) above, so much of such
payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of Principal Amount
and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by
applicable Law, on any overdue interest and any other overdue
amounts) then due under all Series D Secured Certificates shall
be distributed to the Certificate Holders of Series D ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under all
Series D Secured Certificates held by each Certificate Holder
bears to the aggregate amount of the payments then due under
all Series D Secured Certificates[.] [; and]
[(iv) after giving effect to paragraph (iii) above, so much of such
payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of Principal Amount
and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by
applicable Law, on any overdue interest and any other overdue
amounts) then due under all Series E Secured Certificates shall
be distributed to the Certificate Holders of Series E ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under all
Series E Secured Certificates held by each
---------
30 If both Series G-1 and Series G-2 Secured Certificates are issued with
respect to a particular Aircraft, they will rank equal in right of payment
with one another.
31 If both Series C-1 and Series C-2 Secured Certificates are issued with
respect to a particular Aircraft, they will rank equal in right of payment
with one another.
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Certificate Holder bears to the aggregate amount of the
payments then due under all Series E Secured Certificates.]
SECTION 3.02. Event of Loss; Replacement; Optional Redemption.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss or (ii) pursuant to the optional redemption of the
Secured Certificates pursuant to Section 2.11 hereof shall be applied to
redemption of the Secured Certificates and to all other amounts payable
hereunder or to the Indenture Trustee or any Certificate Holder under the
Participation Agreement by applying such funds in the following order of
priority:
First, (a) to reimburse the Indenture Trustee and the Certificate Holders
for any reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or indemnity
by the Owner, under the Operative Documents and then (b) to pay any
other amounts then due (except as provided in Clause Second below) to
the Indenture Trustee and the Certificate Holders under this Trust
Indenture, the Participation Agreement or the Secured Certificates
(other than amounts specified in clause Second below);
Second, (i) to pay the amounts specified in paragraph (i) of clause
"Third" of Section 3.03 hereof plus, Make-Whole Premium, if
any, then due and payable in respect of [the Series G-1
Secured Certificates] [and] [the Series G-2 Secured
Certificates];
(ii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "Third" of Section 3.03
hereof plus Make-Whole Premium, if any, then due and payable
in respect of [the Series C-1 Secured Certificates] [and] [the
Series C-2 Secured Certificates]; [and]
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of
Section 3.03 hereof plus Make-Whole Premium, if any, then due
and payable in respect of the Series D Secured Certificates;
and
[(iv) after giving effect to paragraph (iii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of
Section 3.03 hereof plus Make-Whole Premium, if any, then due
and payable in respect of the Series E Secured Certificates;
and]
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine shall
be substituted for the Airframe or Engine subject to such Event of Loss as
provided in accordance with Section 7.06 hereof, any insurance, condemnation
or similar proceeds which result from such Event of Loss and are paid over to
the Indenture Trustee shall be held by the Indenture Trustee as permitted by
Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.06 hereof) as additional security for the obligations of the
Owner under the Operative
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Documents and such proceeds (and such investment earnings), to the extent not
theretofore applied as provided herein, shall be released to the Owner at the
Owner's written request upon the release of such damaged Airframe or Engine
and the replacement thereof as provided herein.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including any
amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Article IV hereof) after both an Event of Default shall have
occurred and be continuing and the Secured Certificates shall have become due
and payable pursuant to Section 4.02(b) hereof, as well as all payments or
amounts then held by the Indenture Trustee as part of the Collateral, shall be
promptly distributed by the Indenture Trustee in the following order of
priority:
First, so much of such payments or amounts as shall be required to
reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the
expense of, or charged upon the tolls, rents, revenues, issues,
products and profits of, the property included in the Collateral
(all such property being herein called the "Mortgaged Property")
pursuant to Section 4.03(b) hereof) incurred by the Indenture
Trustee (to the extent not previously reimbursed), the expenses of
any sale, taking or other proceeding, reasonable attorneys' fees and
expenses, court costs, and any other expenditures incurred or
expenditures or advances made by the Indenture Trustee or the
Certificate Holders in the protection, exercise or enforcement of
any right, power or remedy or any damages sustained by the Indenture
Trustee or any Certificate Holder, liquidated or otherwise, upon
such Event of Default shall be applied by the Indenture Trustee as
between itself and the Certificate Holders in reimbursement of such
expenses and any other expenses for which the Indenture Trustee or
the Certificate Holders are entitled to reimbursement under any
Operative Document and in the case the aggregate amount to be so
distributed is insufficient to pay as aforesaid, then ratably,
without priority of one over the other, in proportion to the amounts
owed each hereunder;
Second, so much of such payments or amounts remaining as shall be required
to reimburse the then existing or prior Certificate 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 Certificate 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 Certificate Holder pursuant to
said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount
of all [Series G-1 Secured Certificates] [and] [Series G-2
Secured Certificates], and the accrued but unpaid interest and
other amounts due thereon, [Break Amount (with respect to the
Series G-1 Secured Certificates), if any], all other Secured
Obligations in respect of [the Series G-1 Secured
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Certificates] [and] [the Series G-2 Secured Certificates] to
the date of distribution, shall be distributed to the
Certificate Holders of [Series G-1] [and] [Series G-2], 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, to each Certificate
Holder of [Series G-1] [and] [Series G-2] in the proportion
that the aggregate unpaid Principal Amount of [all Series G-1
Secured Certificates] [and] [all Series G-2 Secured
Certificates] held by each Certificate Holder plus the accrued
but unpaid interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all [Series G-1 Secured
Certificates] [and] Series G-2 [Secured Certificates] plus the
accrued but unpaid interest and other amounts due thereon to
the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such
payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all [Series C-1
Secured Certificates] [and] [Series C-2 Secured Certificates],
and the accrued but unpaid interest and other amounts due
thereon, [Break Amount (with respect to the Series C-1 Secured
Certificates), if any], all other Secured Obligations in
respect of [the Series C-1 Secured Certificates] [and] [the
Series C-2 Secured Certificates] to the date of distribution,
shall be distributed to the Certificate Holders of [Series
C-1] [and] [Series C-2], 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, to each Certificate Holder of [Series C-1] [and]
[Series C-2] in the proportion that the aggregate unpaid
Principal Amount of [all Series C-1 Secured Certificates]
[and] [all Series C-2 Secured Certificates] held by each
Certificate Holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal Amount
of all [Series C-1 Secured Certificates] [and] Series C-2
Secured Certificates] plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution;
[and]
(iii) after giving effect to paragraph (ii) above, so much of such
payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series D
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon, Break Amount, if any, and all other
Secured Obligations in respect of the Series D Secured
Certificates to the date of distribution, shall be distributed
to the Certificate Holders of Series D, and in case the
aggregate amount so to be distributed shall be insufficient to
pay in full as aforesaid, then ratably, without priority of
one over the other, in the proportion that the aggregate
unpaid Principal Amount of all Series D Secured Certificates
held by each Certificate Holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder to the
date of distribution, bears to the
-25-
aggregate unpaid Principal Amount of all Series D Secured
Certificates plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution; and
[(iv) after giving effect to paragraph (iii) above, so much of such
payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series E
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon[, Break Amount, if any,] and all
other Secured Obligations in respect of the Series E Secured
Certificates to the date of distribution, shall be distributed
to the Certificate Holders of Series E, and in case the
aggregate amount so to be distributed shall be insufficient to
pay in full as aforesaid, then ratably, without priority of
one over the other, in the proportion that the aggregate
unpaid Principal Amount of all Series E Secured Certificates
held by each Certificate Holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder to the
date of distribution, bears to the aggregate unpaid Principal
Amount of all Series E Secured Certificates plus the accrued
but unpaid interest and other amounts due thereon to the date
of distribution; and]
Fourth, the balance, if any, of such payments or amounts remaining thereafter
shall be distributed to the Owner.
No Make-Whole Premium shall be due and payable on the Secured
Certificates as a consequence of the acceleration of the Secured Certificates.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Trust Indenture and
for which such provision is made in the Participation Agreement or any other
Operative Document shall be applied forthwith to the purpose for which such
payment was made in accordance with the terms of the Participation Agreement
or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner in respect of the Indenture
Trustee in its individual capacity, any Certificate Holder or any other
Indenture Indemnitee, in each case pursuant to Section 7 of the Participation
Agreement, directly to the Person entitled thereto. Any payment received by
the Indenture Trustee 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.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Trust Indenture or in any other Operative
Document shall be distributed by the Indenture Trustee to the extent received
or realized at any time in the order of priority specified in Section 3.01
hereof and after
-26-
payment in full of all amounts then due in accordance with Section 3.01
hereof, in the manner provided in clause "Fourth" of Section 3.03 hereof.
SECTION 3.06. Payments to the Owner.
Any amounts distributed hereunder by the Indenture Trustee to the
Owner shall be paid to the Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from the Owner to the
Indenture Trustee from time to time.
SECTION 3.07. Application of Payments Under Guarantee.
All payments received by the Indenture Trustee pursuant to the
Guarantee shall be distributed forthwith by the Indenture Trustee in the same
order of priority, and in the same manner, as it would have distributed the
payment in respect of which such payment under the Guarantee was received.
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Event of Default.
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) the failure of the Owner to pay (i) Principal Amount of,
interest on, Break Amount, if any, or, Make-Whole Premium, if any,
under any Secured Certificate when due, and such failure shall have
continued unremedied for a period of ten (10) Business Days, or (ii)
any other amount payable by it to the Certificate Holders under this
Trust Indenture (other than any such failure arising by virtue of a
tax withheld pursuant to Section 2.04(b) hereof) or under the
Participation Agreement, and such failure shall have continued
unremedied for ten (10) Business Days after receipt by the Owner of
written demand therefor from the Indenture Trustee or any
Certificate Holder; or
(b) the Owner shall fail to carry and maintain, or cause to be
carried and maintained, insurance on and in respect of the Aircraft
in accordance with the provisions of Section 7.04; or
(c) the Owner shall fail to observe or perform (or caused to be
observed or performed), in any material respect, any covenant or
agreement to be performed or observed by it under any Operative
Document, and such failure shall continue unremedied for a period of
thirty (30) days after receipt by the
-27-
Owner of written notice thereof from the Indenture Trustee provided,
however, that if the Owner shall have undertaken to cure any such
failure which arises under clause (ii) or clause (iii) of the first
sentence of Section 7.02(a), or under the second sentence of Section
7.02(a) as it relates to maintenance, service, repair or overhaul or
under Section 7.03 and, notwithstanding the diligence of the Owner
in attempting to cure such failure, such failure is not cured within
said thirty day period but is curable with future due diligence,
there shall exist no Event of Default under this Section 4.01 so
long as the Owner is proceeding with due diligence to cure such
failure and such failure is remedied not later than three hundred
sixty-five (365) days after receipt by the Owner of such written
notice; or
(d) any representation or warranty made by the Owner herein or
in the Participation Agreement or any document or certificate
furnished by the Owner in connection herewith or therewith or
pursuant hereto or thereto (except the representations and
warranties set forth in the Pass Through Trust Agreement, the
Underwriting Agreement or the Note Purchase Agreement or any
document or instrument furnished pursuant to any thereof) shall
prove to have been incorrect in any material respect at the time
made and such incorrectness shall not have been cured (to the extent
of the adverse impact of such incorrectness on the interests of the
Indenture Trustee or the Certificate Holders) within thirty (30)
days after the receipt by the Owner of a written notice from the
Indenture Trustee advising the Owner of the existence of such
incorrectness; or
(e) the commencement of an involuntary case or other proceeding
in respect of the Owner in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, 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 or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs
and the continuation of any such case or other proceeding
undismissed and unstayed for a period of ninety (90) consecutive
days or an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing,
without the consent of the Owner, a receiver, trustee or liquidator
of the Owner, or of any substantial part of its property, or
sequestering any substantial part of the property of the Owner and
any such order, judgment or decree or appointment or sequestration
shall be final or shall remain in force undismissed, unstayed or
unvacated for a period of ninety (90) days after the date of entry
thereof; or
(f) the commencement by the Owner of a voluntary case 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
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Owner or for all or substantially all of
its property, or the making by the Owner of any assignment for the
benefit of creditors, or the Owner shall take any corporate action
to authorize any of the foregoing.
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provided, however, that, notwithstanding anything to the contrary contained in
this Section 4.01, any failure of the Owner to perform or observe any
covenant, condition, agreement or any error in a representation or warranty
shall not constitute an Event of Default if such failure or error is caused
solely by reason of an event that constitutes an Event of Loss so long as the
Owner is continuing to comply with all of the terms of Section 7.06 hereof.
SECTION 4.02. Remedies.
(a) If an Event of Default shall have occurred and be continuing and
so long as the same shall continue unremedied, then in every such case, the
Indenture Trustee may do one or more of the following, to the extent permitted
by, and subject to compliance with any mandatory requirements of, applicable
Law then in effect; provided, however, that during any period the Aircraft is
subject to the Civil Reserve Air Fleet Program in accordance with the
provisions of Section 7.02(b) hereof and in possession of the United States
Government or an agency or instrumentality of the United States, the Indenture
Trustee shall not, on account of any Event of Default, be entitled to do any
of the following in such manner as to limit the Owner's control under this
Trust Indenture (or any Lessee's control under any Lease) of any Airframe or
any Engines installed thereon, unless at least sixty (60) days' (or such
lesser period as may then be applicable under the Air Mobility Command program
of the United States Government) written notice of default hereunder shall
have been given by the Indenture Trustee by registered or certified mail to
the Owner (and any Lessee) with a copy addressed to the Contracting Office
Representative for the Air Mobility Command of the United States Air Force
under any contract with the Owner (or any Lessee) relating to the Aircraft;
provided further, that the Indenture Trustee shall give the Owner twenty (20)
days' prior written notice of its intention to sell the Aircraft:
subject to the provisions of the Granting Clause hereof:
(i) cause the Owner upon the written demand of the Indenture
Trustee and at the Owner's expense, to deliver promptly, and the
Owner shall deliver promptly, the Airframe or any Engine as the
Indenture Trustee may so demand to the Indenture Trustee;
(ii) sell the Airframe and/or any Engine at public or private
sale, whether or not the Indenture Trustee shall at the time have
possession thereof, as the Indenture Trustee may determine, or lease
or otherwise dispose of, all or any part of the Airframe or any
Engine as the Indenture Trustee, in its sole discretion, may
determine, all free and clear of any rights of the Owner, except as
hereinafter set forth in this Section 4.02; or
(iii) exercise any or all of the rights and powers and pursue
any and all remedies of a secured party under the Uniform Commercial
Code of the State of New York.
(b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Indenture Trustee may (and shall, upon receipt
of a written demand therefor from a Majority in Interest of Certificate
Holders) at any time, by delivery of written notice or
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notices to the Owner, declare all the Secured Certificates to be due and
payable, whereupon the unpaid Principal Amount of all Secured Certificates
then outstanding, together with accrued but unpaid interest thereon, Break
Amount (in the case of [Series G-1], [Series C-1] [and] Series D Secured
Certificates), if any (without Make-Whole Premium) and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
This Section 4.02(b), however, is subject to the condition that, if
at any time after the Principal Amount of the Secured Certificates 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 Secured Certificates and all other amounts payable under the
Secured Certificates (except the Principal Amount of the Secured Certificates
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 Certificate Holders may (but
shall not be obligated to), by written instrument filed with the Indenture
Trustee, rescind and annul the Indenture Trustee's declaration and its
consequences; but no such rescission or annulment shall extend to or affect
any subsequent Default or Event of Default or impair any right consequent
thereon.
(c) Any Certificate Holder shall be entitled, at any sale pursuant
to this Section 4.02, to credit against any purchase price bid at such sale by
such holder all or any part of the unpaid obligations owing to such
Certificate Holder and secured by the Lien of this Trust Indenture (but only
to the extent that such purchase price would have been paid to such
Certificate 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 Collateral, or any part thereof,
pursuant to any judgment or decree of any court or otherwise in connection
with the enforcement of any of the terms of this Trust Indenture, the unpaid
Principal Amount of all Secured Certificates then outstanding, together with
accrued interest thereon, and other amounts due thereunder, shall immediately
become due and payable without presentment, demand, protest or notice, all of
which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Certificate Holder, the Indenture Trustee will not be
authorized or empowered to acquire title to any Mortgaged Property or take any
action with respect to any Mortgaged Property so acquired by it if such
acquisition or action would cause any Pass Through Trust to fail to qualify as
a "grantor trust" for federal income tax purposes.
SECTION 4.03. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be continuing and
the Secured Certificates have been accelerated, subject to Section 4.02
hereof, at the request of the Indenture Trustee, the Owner shall promptly
execute and deliver to the Indenture Trustee such instruments of title and
other documents as the Indenture Trustee may deem necessary or advisable to
enable
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the Indenture Trustee or an agent or representative designated by the
Indenture Trustee, at such time or times and place or places as the Indenture
Trustee may specify, to obtain possession of all or any part of the Mortgaged
Property included in the Collateral to which the Indenture Trustee shall at
the time be entitled hereunder. If the Owner shall for any reason fail to
execute and deliver such instruments and documents after such request by the
Indenture Trustee, the Indenture Trustee may (i) obtain a judgment conferring
on the Indenture Trustee the right to immediate possession and requiring the
Owner to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner hereby specifically consents
to the fullest extent permitted by applicable Law, and (ii) pursue all or part
of such Mortgaged Property wherever it may be found and may enter any of the
premises of the Owner wherever such Mortgaged Property may be or be supposed
to be and search for such Mortgaged Property and take possession of and remove
such Mortgaged Property. All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to maintain, use, operate, store, insure, lease,
control, manage, dispose of, modify or alter the Mortgaged Property and to
carry on the business and to exercise all rights and powers of the Owner
relating to the Mortgaged Property, as the Indenture Trustee shall deem best,
including the right to enter into any and all such agreements with respect to
the maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modification or alteration of the Mortgaged Property
or any part thereof as the Indenture Trustee may determine, and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents,
revenues, issues, income, products and profits of the Mortgaged Property and
every part thereof, without prejudice, however, to the right of the Indenture
Trustee under any provision of this Trust Indenture to collect and receive all
cash held by, or required to be deposited with, the Indenture Trustee
hereunder. Such tolls, rents, revenues, issues, income, products and profits
shall be applied to pay the expenses of the maintenance, use, operation,
storage, insurance, leasing, control, management, disposition, improvement,
modification or alteration of the Mortgaged Property and of conducting the
business thereof, and to make all payments which the Indenture Trustee may be
required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Mortgaged Property or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the properties and books and records of the Owner), and all
other payments which the Indenture Trustee may be required or authorized to
make under any provision of this Trust Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee, and of all
persons properly engaged and employed by the Indenture Trustee with respect
hereto.
SECTION 4.04. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein
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given or otherwise existing may be exercised from time to time and as often
and in such order as may be deemed expedient by the Indenture Trustee, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner or to be an
acquiescence therein.
SECTION 4.05. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any proceeding
to enforce any right, power or remedy under this Trust Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner and
the Indenture Trustee shall, subject to any determination in such proceedings,
be restored to their former positions and rights hereunder with respect to the
Mortgaged Property, and all rights, remedies and powers of the Owner or the
Indenture Trustee shall continue as if no such proceedings had been
instituted.
SECTION 4.06. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Certificate
Holders, the Indenture Trustee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; provided,
that in the absence of written instructions from all the Certificate Holders,
the Indenture Trustee shall not waive any Default (i) in the payment of the
Principal Amount, Make-Whole Premium, if any, and interest and other amounts
due under any Secured Certificate then outstanding, or (ii) in respect of a
covenant or provision hereof which, under Article X hereof, cannot be modified
or amended without the consent of each Certificate Holder.
SECTION 4.07. Appointment of Receiver.
The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged Property,
whether such receivership be incidental to a proposed sale of the Mortgaged
Property or the taking of possession thereof or otherwise, and the Owner
hereby consents to the appointment of such a receiver and will not oppose any
such appointment. Any receiver appointed for all or any part of the Mortgaged
Property shall be entitled to exercise all the rights and powers of the
Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.08. Indenture Trustee Authorized to Execute Bills of Sale,
Etc.
The Owner irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of the Owner in its name and stead and on its behalf,
for the purpose, if an Event of Default shall have occurred and be continuing,
of effectuating any sale, assignment, transfer or delivery for the enforcement
of the Lien of this Trust Indenture, whether pursuant to
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foreclosure or power of sale, assignments and other instruments as may be
necessary or appropriate, with full power of substitution, the Owner hereby
ratifying and confirming all that such attorney or any substitute shall do by
virtue hereof in accordance with applicable Law. Nevertheless, if so requested
by the Indenture Trustee or any purchaser, the Owner shall ratify and confirm
any such sale, assignment, transfer or delivery, by executing and delivering
to the Indenture Trustee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
SECTION 4.09. Rights of Certificate Holders to Receive Payment.
Notwithstanding any other provision of this Trust Indenture, the
right of any Certificate Holder to receive payment of principal of, Make-Whole
Premium, if any, Break Amount (in the case of [Series G-1], [Series C-1] [and]
Series D Secured Certificates), if any, and interest on a Secured Certificate
on or after the respective due dates expressed in such Secured Certificate, 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 Certificate Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay any payment of Principal
Amount of, interest on, Break Amount (in the case of [Series G-1], [Series
C-1] [and] Series D Secured Certificates), if any, Make-Whole Premium, if any,
due and payable under any Secured Certificates, the Indenture Trustee shall
give prompt written notice thereof to the Owner, each Certificate Holder and
the Owner's independent insurance broker who last provided the report required
by Section 7.04(c) hereof. Subject to the terms of Sections 4.02, 4.06, 5.02
and 5.03 hereof, the Indenture Trustee shall take such action, or refrain from
taking such action, with respect to such Event of Default or Default
(including with respect to the exercise of any rights or remedies hereunder)
as the Indenture Trustee shall be instructed in writing by a Majority in
Interest of Certificate Holders. Subject to the provisions of Section 5.03, if
the Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to the
Certificate Holders the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section 5.01,
take such action, or refrain from taking such action, but shall be under no
duty to take or refrain from taking any action, with respect to such Event of
Default or Default as it shall determine advisable in the best interests of
the Certificate Holders; provided, however, that the Indenture Trustee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest
of Certificate Holders. For all purposes of this Trust Indenture, in the
absence of Actual Knowledge on the part of the Indenture Trustee, the
Indenture Trustee shall not be deemed to have knowledge of a Default or an
Event of Default (except the failure of the Owner to pay any payment of
Principal Amount or interest within one
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(1) Business Day after the same shall become due, which failure shall
constitute knowledge of a Default) unless notified in writing by the Owner or
one or more Certificate Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.02(a), 4.06, 5.01 and 5.03
hereof, upon the written instructions at any time and from time to time of a
Majority in Interest of Certificate Holders, the Indenture Trustee shall,
subject to the terms of this Section 5.02, take such of the following actions
as may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions; and (ii) give such notice or direction or exercise such right,
remedy or power hereunder with respect to any part of the Collateral as shall
be specified in such instructions.
The Indenture Trustee will execute and the Owner will file or cause
to be filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Collateral as
specified from time to time in written instructions of a Majority in Interest
of Certificate Holders (which instructions may, by their terms, be operative
only at a future date and which shall be accompanied by the form of such
continuation statement so to be filed). The Indenture Trustee will furnish to
each Certificate Holder promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, certificates and other instruments
furnished to the Indenture Trustee hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be under any obligation to take any
action under this Trust Indenture and nothing herein or therein shall require
the Indenture Trustee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it (the written indemnity of any Certificate Holder who
is a QIB, signed by an authorized officer thereof, in favor of, delivered to
and in form reasonably satisfactory to Indenture Trustee shall be accepted as
reasonable assurance of adequate indemnity). The Indenture Trustee shall not
be required to take any action under Section 5.01 (other than the first
sentence thereof) or 5.02 or Article IV hereof, nor shall any other provision
of this Trust Indenture or any other Operative Document be deemed to impose a
duty on the Indenture Trustee to take any action, if the Indenture Trustee
shall have been advised by counsel that such action is contrary to the terms
hereof or is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Collateral, or to otherwise take or
refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Collateral, except as expressly provided by the
terms of this Trust Indenture or as expressly provided in written instructions
from Certificate Holders as provided in this Trust Indenture; and no implied
duties or obligations shall be read into this Trust
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Indenture against the Indenture Trustee. The Indenture Trustee agrees that it
will in its individual capacity and at its own cost and expense (but without
any right of indemnity in respect of any such cost or expense under Section
8.01 hereof), promptly take such action as may be necessary duly to discharge
all liens and encumbrances on any part of the Collateral which result from
claims against it in its individual capacity not related to the ownership of
the Aircraft or the administration of the Collateral or any other transaction
pursuant to this Trust Indenture or any document included in the Collateral.
SECTION 5.05. No Action Except Under Trust Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate, store,
lease, control, manage, sell, dispose of or otherwise deal with the Aircraft
or any other part of the Collateral except in accordance with the powers
granted to, or the authority conferred upon, the Indenture Trustee pursuant to
this Trust Indenture and in accordance with the express terms hereof.
SECTION 5.06. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee pursuant to Section 3.02,
or pursuant to any provision of any other Operative Document providing for
amounts to be held by the Indenture Trustee which are not distributed pursuant
to the other provisions of Article III hereof shall be invested by the
Indenture Trustee from time to time in Cash Equivalents as directed by the
Owner so long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Trust Indenture, any
income realized as a result of any such investment, net of the Indenture
Trustee's reasonable fees and expenses in making such investment, shall be
held and applied by the Indenture Trustee in the same manner as the principal
amount of such investment is to be applied and any losses, net of earnings and
such reasonable fees and expenses, shall be charged against the principal
amount invested. The Indenture Trustee shall not be liable for any loss
resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence,
and any such investment may be sold (without regard to its maturity) by the
Indenture Trustee without instructions whenever such sale is necessary to make
a distribution required by this Trust Indenture. Any of the investments
permitted hereunder may be made with or through, as applicable, the entity
acting as Indenture Trustee or its Affiliates.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Trust Indenture and agrees to receive and disburse all monies
constituting part of the Collateral in accordance with the terms hereof. The
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for its own willful misconduct
or gross negligence (other than for the handling of funds, for which the
standard of accountability shall be willful misconduct or
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negligence), and (ii) as provided in the fourth sentence of Section 2.04(a)
hereof and the last sentence of Section 5.04 hereof.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections 5.03
and 5.04 hereof, the Indenture Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing 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 the Owner
shall be in default with respect thereto, (iii) to see to the payment or
discharge of any lien or encumbrance of any kind against any part of the
Collateral, (iv) to confirm, verify or inquire into the failure to receive any
financial statements from the Owner, or (v) to inspect the Aircraft at any
time or ascertain or inquire as to the performance or observance of any of the
Owner's covenants herein with respect to the Aircraft.
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT
MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER. The Indenture Trustee, in its individual or trust
capacities, does not make, nor shall it be deemed to have made, any
representation or warranty as to the validity, legality or enforceability of
this Trust Indenture, the Participation Agreement, the Secured Certificates,
the Purchase Agreement, the Consent and Agreement or the Guarantee, or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Indenture Trustee, in each case
expressly made in this Trust Indenture or in the Participation Agreement. The
Loan Participants and the Certificate Holders make no representation or
warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant to
any provision hereof and not then required to be distributed to the
Certificate Holders, or the Owner as provided in Article III hereof need not
be segregated in any manner except to the extent required by Law or Section
5.06, 7.04(g), 7.06(f) or 7.07(c) hereof, and may be deposited under such
general conditions as may be prescribed by Law, and the Indenture Trustee
shall not be liable for any interest thereon (except that the Indenture
Trustee shall invest all monies held as directed by
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the Owner so long as no Default or Event of Default has occurred and is
continuing (or in the absence of such direction, by the Majority In Interest
of Certificate Holders) in Cash Equivalents; provided, however, that any
payments received, or applied hereunder, by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Indenture Trustee may accept a copy of a resolution of the Board
of Directors (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 Principal Amount of Secured
Certificates outstanding as of any date, the Owner may for all purposes hereof
rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or matter
relating to the Owner the manner of ascertainment of which is not specifically
described herein, the Indenture Trustee may for all purposes hereof rely on a
certificate, signed by a duly authorized officer of the Owner, as to such fact
or matter, and such certificate shall constitute full protection to the
Indenture Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon. In the administration of the trusts hereunder, the
Indenture Trustee may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and
may at the expense of the Collateral, consult with counsel, accountants and
other skilled persons to be selected and retained by it, and the Indenture
Trustee shall not be liable for anything done, suffered or omitted in good
faith by them in accordance with the written advice or written opinion of any
such counsel, accountants or other skilled persons.
SECTION 6.06. Compensation.
The Indenture Trustee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and
expenses of counsel), for all services rendered hereunder and shall, on and
subsequent to an Event of Default hereunder, have a priority claim on the
Collateral for the payment of such compensation, to the extent that such
compensation shall not be paid by the Owner, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held
by it hereunder in the Collateral toward such payments. The Indenture Trustee
agrees that it shall have no right against the Loan Participants or the
Certificate Holders for any fee as compensation for its services as trustee
under this Trust Indenture.
SECTION 6.07. Instructions from Certificate Holders.
In the administration of the trusts created hereunder, the Indenture
Trustee shall have the right to seek instructions from a Majority in Interest
of Certificate Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should the
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Indenture Trustee's duties or obligations hereunder be unclear, and the
Indenture Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected for
acting in accordance with any instructions received under this Section 6.07.
ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. Liens.
The Owner will not directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to the Aircraft, title thereto or
any interest therein, except (i) the Lien of this Trust Indenture, and any
other rights existing pursuant to the Operative Documents, (ii) the rights of
others under agreements or arrangements to the extent permitted by the terms
of Sections 7.02(b) and 7.03(b) hereof, (iii) Loan Participant Liens and
Indenture Trustee's Liens, (iv) Liens for taxes of the Owner (or any Lessee)
either not yet due or being contested in good faith by appropriate proceedings
so long as such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein, or,
so long as any Secured Certificates shall be outstanding, adversely affect the
Lien of this Trust Indenture, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course of
the Owner's (or, if a Lease is then in effect, Lessee's business (including
those arising under maintenance agreements entered into in the ordinary course
of business) securing obligations that are not overdue for a period of more
than sixty (60) days or are being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of the Airframe or any Engine or any interest
therein or, so long as any Secured Certificates shall be outstanding,
adversely affect the Lien of this Trust Indenture, (vi) Liens arising out of
any judgment or award against the Owner (or any Lessee), unless the judgment
secured shall not, within sixty (60) days after the entry thereof, have been
discharged, vacated, reversed or execution thereof stayed pending appeal or
shall not have been discharged, vacated or reversed within sixty (60) days
after the expiration of such stay, (vii) any other Lien with respect to which
the Owner (or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. The Owner will
promptly, at its own expense, take (or cause to be taken) such actions as may
be necessary duly to discharge any such Lien not excepted above if the same
shall arise at any time.
SECTION 7.02. Registration, Maintenance and Operation; Possession
and Leases; Insignia.
(a) (I) Registration and Maintenance. The Owner, at its own cost and
expense, shall (or shall cause any Lessee to): (i) cause the Aircraft to be
duly registered in its name, and, subject to the second paragraph of this
Section 7.02(a) and Section 8(f) of the Participation Agreement, to remain
duly registered in the name of the Owner under the Federal Aviation Act,
provided that the Owner shall not register the Aircraft or permit the Aircraft
to be registered under any laws other than the Federal Aviation Act at any
time except as provided in Section 8(f) of the Participation Agreement and
shall cause this Trust Indenture to be duly recorded and
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maintained of record as a first mortgage on the Aircraft; (ii) maintain,
service, repair and overhaul (or cause to be maintained, serviced, repaired
and overhauled) the Aircraft so as to keep the Aircraft in as good an
operating condition as when initially subjected to the Lien hereof, ordinary
wear and tear excepted, and as may be necessary to enable the applicable
airworthiness certification for the Aircraft to be maintained in good standing
at all times (other than during temporary periods of storage in accordance
with applicable regulations or during maintenance or modification permitted
hereunder) under the Federal Aviation Act, except when all [Airbus Model
A319-100] [Boeing Model 757-300] [Airbus Model A330-300] aircraft powered by
engines of the same type as those with which the Airframe shall be equipped at
the time of such grounding and registered in the United States have been
grounded by the FAA (although such certification need actually be maintained
only during such periods as the Aircraft is registered in the United States),
or the applicable laws of any other jurisdiction in which the Aircraft may
then be registered from time to time in accordance with Section 8(f) of the
Participation Agreement, and utilizing, except during any period that a Lease
is in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Owner with respect to similar aircraft operated by the
Owner in similar circumstances and utilizing, during any period that a Lease
is in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Lessee with respect to similar aircraft operated by the
Lessee in similar circumstances; provided, however, that in all circumstances
the Aircraft shall be maintained by the Owner (or any Lessee) in accordance
with maintenance standards required by, or substantially equivalent to those
required by, the FAA or the central civil aviation authority of Canada,
France, Germany, Japan, the Netherlands or the United Kingdom; and (iii)
maintain or cause to be maintained all records, logs and other materials
required to be maintained in respect of the Aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered. (II) Operation. The Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or permit any Lessee
to maintain, use, service, repair, overhaul or operate the Aircraft) in
violation of any law or any rule, regulation, order or certificate of any
government or governmental authority (domestic or foreign) having
jurisdiction, or in violation of any airworthiness certificate, license or
registration relating to the Aircraft issued by any such authority, except to
the extent the Owner (or, if a Lease is then in effect, any Lessee) is
contesting in good faith the validity or application of any such law, rule,
regulation or order in any reasonable manner which does not materially
adversely affect the first priority Lien of this Trust Indenture and does not
involve any material risk of sale, forfeiture or loss of the Aircraft. The
Owner will not operate the Aircraft, or permit any Lessee to operate the
Aircraft, in any area excluded from coverage by any insurance required by the
terms of Section 7.04; provided, however, that the failure of the Owner to
comply with the provisions of this sentence shall not give rise to an Event of
Default hereunder where such failure is attributable to causes beyond the
reasonable control of the Owner (or any Lessee) or to extraordinary
circumstances involving an isolated occurrence or series of incidents not in
the ordinary course of the regular operations of the Owner (or any Lessee) and
in each such case the Owner (or such Lessee, as the case may be) is taking all
reasonable steps to remedy such failure as soon as is reasonably practicable.
The Indenture Trustee, upon compliance with all of the terms of
Section 8(f) of the Participation Agreement, shall, at the request and sole
expense of the Owner, cooperate with the Owner to take all actions required to
change the registration of the Aircraft to another country.
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(b) Possession and Leases. The Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease; provided that, so long as no Default of
the type referred to in Section 4.01(a) or 4.01(e) or Event of Default shall
have occurred and be continuing at the time of such lease, delivery, transfer
or relinquishment of possession or installation or such Wet Lease, and so long
as the action to be taken shall not deprive the Indenture Trustee of the
perfected first priority Lien of this Trust Indenture on the Airframe or
(subject to the further proviso (B) to clause (i) of this Section 7.02(b)) any
Engine, and so long as the Owner (or any Lessee) shall comply with the
provisions of Sections 7.02(a) and 7.04 hereof, the Owner (or, except with
respect to clause (x) below, any Lessee) may, without the prior written
consent of the Indenture Trustee:
(i) subject the Airframe and the Engines or engines then
installed thereon to normal interchange agreements or any Engine to
normal pooling or similar arrangements, in each case customary in
the airline industry and entered into by the Owner (or, if a Lease
is then in effect, by Lessee) in the ordinary course of its
business; provided that (A) no such agreement or arrangement
contemplates or requires the transfer of title to the Airframe, (B)
if the Owner's title to any Engine shall be divested under any such
agreement or arrangement, such divestiture shall be deemed to be an
Event of Loss with respect to such Engine and the Owner shall (or
shall cause Lessee to) comply with Section 7.06(b) hereof in respect
thereof, and (C) any interchange agreement to which the Airframe may
be subject shall be with a U.S. Air Carrier or a Foreign Air
Carrier;
(ii) deliver possession of the Airframe or any Engine to the
manufacturer thereof (or for delivery thereto) or to any
organization (or for delivery thereto) for testing, service, repair,
maintenance or overhaul work on the Airframe or Engine or any part
of any thereof or for alterations or modifications in or additions
to such Airframe or Engine to the extent required or permitted by
the terms of Section 7.03(c) hereof;
(iii) install an Engine on an airframe which is owned by the
Owner (or any Lessee) free and clear of all Liens, except: (A)
Permitted Liens and those which apply only to the engines (other
than Engines), appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment (other than Parts)
installed on such airframe (but not to the airframe as an entirety),
(B) the rights of third parties under interchange agreements which
would be permitted under clause (i) above, provided that the Owner's
title to such Engine and the first priority Lien of this Trust
Indenture shall not be divested or impaired as a result thereof and
(C) mortgage liens or other security interests, provided that (as
regards this clause (C)) such mortgage liens or other security
interests effectively provide that such Engine shall not become
subject to the lien of such mortgage or security interest,
notwithstanding the installation thereof on such airframe;
(iv) install an Engine on an airframe leased to the Owner (or
any Lessee) or purchased by the Owner (or any Lessee) subject to a
conditional sale or
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other security agreement, provided that (x) such airframe is free
and clear of all Liens, except: (A) the rights of the parties to the
lease or conditional sale or other security agreement covering such
airframe, or their assignees, and (B) Liens of the type permitted by
subparagraph (iii) of this paragraph (b) and (y) such lease,
conditional sale or other security agreement effectively provides
that such Engine shall not become subject to the lien of such lease,
conditional sale or other security agreement, notwithstanding the
installation thereof on such airframe;
(v) install an Engine on an airframe owned by the Owner (or any
Lessee), leased to the Owner (or any Lessee) or purchased by the
Owner (or any Lessee) subject to a conditional sale or other
security agreement under circumstances where neither subparagraph
(iii) nor subparagraph (iv) of this paragraph (b) is applicable,
provided that such installation shall be deemed an Event of Loss
with respect to such Engine and the Owner shall (or shall cause any
Lessee to) comply with Section 7.06(b) hereof in respect thereof,
the Indenture Trustee not intending hereby to waive any right or
interest it may have to or in such Engine under applicable law until
compliance by the Owner with such Section 7.06(b);
(vi) to the extent permitted by Section 7.03(b) hereof, subject
any appliances, Parts or other equipment owned by the Owner and
removed from the Airframe or any Engine to any pooling arrangement
referred to in Section 7.03(b) hereof;
(vii) subject (or permit any Lessee to subject) the Airframe or
any Engine to the Civil Reserve Air Fleet Program and transfer (or
permit any Lessee to transfer) possession of the Airframe or any
Engine to the United States of America or any instrumentality or
agency thereof pursuant to the Civil Reserve Air Fleet Program, so
long as the Owner (or any Lessee) shall (A) promptly notify the
Indenture Trustee upon subjecting the Airframe or any Engine to the
Civil Reserve Air Fleet Program in any contract year and provide the
Indenture Trustee with the name and address of the Contracting
Office Representative for the Air Mobility Command of the United
States Air Force to whom notice must be given pursuant to Section
4.02 hereof, and (B) promptly notify the Indenture Trustee upon
transferring possession of the Airframe or any Engine to the United
States of America or any agency or instrumentality thereof pursuant
to such program;
(viii) enter into a Wet Lease for the Airframe and Engines or
engines then installed thereon with any third party provided that if
the Owner (or any Lessee) shall enter into any Wet Lease for a
period of more than one year (including renewal options) the Owner
shall provide the Indenture Trustee written notice of such Wet Lease
(such notice to be given prior to entering into such Wet Lease, if
practicable, but in any event promptly after entering into such Wet
Lease);
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(ix) transfer possession of the Airframe or any Engine to the
United States of America or any instrumentality or agency thereof
pursuant to a contract, a copy of which shall be provided to the
Indenture Trustee; or
(x) the Owner may, at any time, enter into any lease with (1) a
U.S. Air Carrier, (2) any Person approved in writing by the
Indenture Trustee, which approval shall not be unreasonably withheld
or (3) any Permitted Lessee if (A) in any such case, the Lessee
under such lease is not subject to a proceeding or final order under
applicable bankruptcy, insolvency or reorganization laws on the date
such lease is entered into, (B) in the event that the Lessee under
such lease is a foreign air carrier (other than a foreign air
carrier principally based in Taiwan), the United States maintains
diplomatic relations with the country in which such proposed Lessee
is principally based at the time such lease is entered into (or, in
the case of a lease to a proposed Lessee principally based in
Taiwan, maintains diplomatic relations at least as good as those in
effect on the Closing Date) and (C) in the event that the Lessee
under such lease is a foreign air carrier, the Indenture Trustee
shall have received an opinion of counsel to the Owner to the effect
that (I) the terms of the proposed lease will be legal, valid,
binding and (subject to customary exceptions in foreign opinions
generally) enforceable against the proposed Lessee in the country in
which the proposed Lessee is principally based, (II) there exist no
possessory rights in favor of the Lessee under such lease under the
laws of such Lessee's country of domicile that would, upon
bankruptcy or insolvency of or other default by the Owner and
assuming at such time such Lessee is not insolvent or bankrupt,
prevent the return or repossession of the Aircraft in accordance
with the terms of this Trust Indenture, (III) the laws of such
Lessee's country of domicile require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of the Aircraft in the
event of the requisition by such government of such use, and (IV)
the laws of such Lessee's country of domicile would give recognition
to the Owner's title to the Aircraft, to the registry of the
Aircraft in the name of the Owner (or the proposed Lessee, as
"lessee", as appropriate) and to the Lien of this Trust Indenture.
The rights of any Lessee or other transferee who receives possession
by reason of a transfer permitted by this paragraph (b) (other than the
transfer of an Engine which is deemed an Event of Loss) shall be effectively
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to, all the terms of this Trust
Indenture and to the Lien of this Trust Indenture, including, without
limitation, the covenants contained in Section 7.02(a) hereof and the
Indenture Trustee's rights to foreclosure and repossession pursuant to Section
4.02 hereof and to avoid such Lease upon such repossession, and the Owner
shall remain primarily liable hereunder for the performance of all of the
terms of this Trust Indenture to the same extent as if such Lease or transfer
had not occurred, and, except as otherwise provided herein, the terms of any
such Lease shall not permit any Lessee to take any action not permitted to be
taken by the Owner in this Trust Indenture with respect to the Aircraft. No
pooling agreement, lease or other relinquishment of possession of the Airframe
or any Engine or Wet Lease shall in any way discharge or diminish any of the
Owner's obligations to the Indenture Trustee hereunder or constitute a waiver
of the Indenture Trustee's rights or
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remedies hereunder. Any lease permitted under this Section 7.02(b) shall
expressly prohibit any further sublease by the Lessee. The Indenture Trustee
agrees, for the benefit of the Owner (and any Lessee) and for the benefit of
any mortgagee or other holder of a security interest in any engine (other than
an Engine) owned by the Owner (or any Lessee), any lessor of any engine (other
than an Engine) leased to the Owner (or any Lessee) and any conditional vendor
of any engine (other than an Engine) purchased by the Owner (or any Lessee)
subject to a conditional sale agreement or any other security agreement, that
no interest shall be created hereunder in any engine so owned, leased or
purchased and that neither the Indenture Trustee nor its successors or assigns
will acquire or claim, as against the Owner (or any Lessee) or any such
mortgagee, lessor or conditional vendor or other holder of a security interest
or any successor or assignee of any thereof, any right, title or interest in
such engine as the result of such engine being installed on the Airframe;
provided, however, that such agreement of the Indenture Trustee shall not be
for the benefit of any lessor or secured party of any airframe (other than the
Airframe) leased to the Owner (or any Lessee) or purchased by the Owner (or
any Lessee) subject to a conditional sale or other security agreement or for
the benefit of any mortgagee of or any other holder of a security interest in
an airframe owned by the Owner (or any Lessee), unless such lessor,
conditional vendor, other secured party or mortgagee has expressly agreed
(which agreement may be contained in such lease, conditional sale or other
security agreement or mortgage) that neither it nor its successors or assigns
will acquire, as against the Indenture Trustee, any right, title or interest
in an Engine as a result of such Engine being installed on such airframe. The
Owner shall provide to the Indenture Trustee (i) written notice of any Lease
hereunder (such notice to be given not later than five days prior to entering
into such Lease, if practicable, but in any event promptly after entering into
any such Lease) and (ii) a copy of each Lease which has a term of more than
three months.
(c) Insignia. On or prior to the Closing Date, or as soon as
practicable thereafter, the Owner agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine, a
nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Indenture Trustee as permitted herein). Except as above
provided, the Owner will not allow the name of any Person (other than the
Owner) to be placed on the Airframe or on any Engine as a designation that
might be interpreted as a claim of ownership; provided that nothing herein
contained shall prohibit the Owner (or any Lessee) from placing its customary
colors and insignia on the Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. The Owner, at its own cost and expense,
will so long as the Airframe or an Engine is subject to the Lien of this Trust
Indenture promptly replace or
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cause to be replaced all Parts which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine and which may from time
to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use for any reason whatsoever,
except as otherwise provided in paragraph (c) of this Section 7.03 or if the
Airframe or an Engine to which a Part relates has suffered an Event of Loss.
In addition, the Owner (or any Lessee) may, at its own cost and expense,
remove in the ordinary course of maintenance, service, repair, overhaul or
testing, any Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that the Owner (or any Lessee), except as otherwise provided in
paragraph (c) of this Section 7.03, will, at its own cost and expense, replace
such Parts as promptly as practicable. All replacement Parts shall be free and
clear of all Liens (except for Permitted Liens and pooling arrangements to the
extent permitted by paragraph (b) of this Section 7.03 and except in the case
of replacement property temporarily installed on an emergency basis) and shall
be in as good operating condition as, and shall have a value and utility at
least equal to, the Parts replaced assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof. Except as
otherwise provided in paragraph (c) of this Section 7.03, all Parts at any
time removed from the Airframe or any Engine shall remain subject to the Lien
of this Trust Indenture, no matter where located, until such time as such
Parts shall be replaced by Parts which have been incorporated or installed in
or attached to the Airframe or such Engine and which meet the requirements for
replacement Parts specified above. Immediately upon any replacement part
becoming incorporated or installed in or attached to the Airframe or any
Engine as above provided, without further act (subject only to Permitted Liens
and any pooling arrangement to the extent permitted by paragraph (b) of this
Section 7.03 and except in the case of replacement property temporarily
installed on an emergency basis), (i) title to such replacement Part shall be
owned by the Owner, (ii) such replacement Part shall become subject to the
Lien of this Trust Indenture and be deemed part of the Airframe or such Engine
for all purposes hereof to the same extent as the Parts originally
incorporated or installed in or attached to the Airframe or such Engine, and
(iii) the replaced Part shall thereupon be free and clear of all rights of the
Indenture Trustee, and shall no longer be subject to the Lien of this Trust
Indenture or be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or any
Engine as provided in paragraph (a) of this Section 7.03 may be subjected by
the Owner (or any Lessee) to a normal pooling arrangement customary in the
airline industry of which the Owner (or, if a Lease is then in effect, any
Lessee) is a party entered into in the ordinary course of the Owner's (or any
Lessee's) business; provided that the Part replacing such removed Part shall
be incorporated or installed in or attached to such Airframe or Engine in
accordance with such paragraph (a) as promptly as practicable after the
removal of such removed Part. In addition, any replacement Part when
incorporated or installed in or attached to the Airframe or any Engine in
accordance with such paragraph (a) may be owned by any third party subject to
such a normal pooling arrangement, provided that the Owner (or any Lessee), at
its expense, as promptly thereafter as practicable, either (i) causes such
replacement Part to become subject to the Lien of this Trust Indenture free
and clear of all Liens except Permitted Liens (other than pooling
arrangements), at which time such temporary replacement Part shall become a
Part or (ii) replaces such replacement Part by incorporating or installing in
or attaching to the Airframe or Engine a further replacement Part which is
subject to the Lien of this Trust Indenture, free and clear of all Liens
except Permitted Liens (other than pooling arrangements).
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(c) Alterations, Modifications and Additions. The Owner, at its own
expense, will make (or cause to be made) such alterations and modifications in
and additions to the Airframe and Engines as may be required from time to time
to meet the applicable standards of the FAA or any other governmental
authority having jurisdiction; provided, however, that the Owner (or, if a
Lease is then in effect, any Lessee) may, in good faith, contest the validity
or application of any such law, rule, regulation or order in any reasonable
manner which does not adversely affect the Indenture Trustee. In addition, the
Owner (or any Lessee), at its own expense, may from time to time add further
parts or accessories and make such alterations and modifications in and
additions to the Airframe or any Engine as the Owner (or any Lessee) may deem
desirable in the proper conduct of its business, including, without
limitation, removal of Parts which the Owner (or any Lessee) has determined in
its reasonable judgment to be obsolete or no longer suitable or appropriate
for use on the Airframe or such Engine (such parts, "Obsolete Parts");
provided that no such alteration, modification or addition shall materially
diminish the value, utility or remaining useful life of the Airframe or such
Engine below the value, utility or remaining useful life thereof immediately
prior to such alteration, modification or addition, assuming the Airframe or
such Engine was then in the condition required to be maintained by the terms
of this Trust Indenture, except that the value (but not the utility or
remaining useful life) of the Airframe or any Engine may be reduced by the
value of Obsolete Parts which shall have been removed so long as the aggregate
value of all Obsolete Parts which shall have been removed and not replaced
shall not exceed [$400,000 for A319's] [$500,000 for 757's] [$800,000 for
A330's]. All Parts incorporated or installed in or attached or added to the
Airframe or an Engine as the result of such alteration, modification or
addition (the "Additional Parts") shall, without further act, become subject
to the Lien of this Trust Indenture. Notwithstanding the foregoing sentence,
the Owner (or any Lessee) may remove or suffer to be removed any Additional
Part, provided that such Additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine on the Closing Date or
any Part in replacement of, or substitution for, any such Part, (ii) is not
required to be incorporated or installed in or attached or added to the
Airframe or any Engine pursuant to the terms of Section 7.02 hereof or the
first sentence of this paragraph (c) and (iii) can be removed from the
Airframe or such Engine without diminishing or impairing the value, utility or
remaining useful life which the Airframe or such Engine would have had at the
time of removal had such alteration, modification or addition not occurred,
assuming that such Airframe or Engine was in the condition and repair required
to be maintained by the terms hereof. Upon the removal by the Owner (or any
Lessee) of any Part as provided above, such Part shall, without further act,
be free and clear of all rights of the Indenture Trustee, such Part shall not
be subject to the Lien of this Trust Indenture and such Part shall no longer
be deemed part of the Airframe or Engine from which it was removed.
SECTION 7.04. Insurance.
(a) Public Liability and Property Damage Insurance. (I) Except as
provided in clause (II) of this Section 7.04(a), the Owner will carry or cause
to be carried at its or any Lessee's expense (i) aircraft public liability
(including, without limitation, passenger legal liability) (and including
aircraft war risk and hijacking insurance, if and to the extent the same is
maintained by the Owner (or, if a Lease is then in effect, if and to the
extent maintained by Lessee) with respect to other aircraft owned or leased,
and operated by the Owner (or such Lessee) on the same routes) insurance and
property damage insurance (exclusive of
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manufacturer's product liability insurance) with respect to the Aircraft, in
an amount not less than the greater of (x) the amount of public liability and
property damage insurance from time to time applicable to aircraft owned or
operated by the Owner (or, if a Lease is then in effect, by Lessee) of the
same type as the Aircraft and (y) $[250,000,000 for A319's, $300,000,000 for
757's and $350,000,000 for A330's] per occurrence and (ii) cargo liability
insurance, in the case of both clause (i) and clause (ii), (A) of the type and
covering the same risks as from time to time applicable to aircraft operated
by the Owner (or, if a Lease is then in effect, by Lessee) of the same type as
the Aircraft and (B) which is maintained in effect with insurers of recognized
responsibility. Any policies of insurance carried in accordance with this
paragraph (a) and any policies taken out in substitution or replacement for
any of such policies (A) shall be amended to name the Indenture Trustee and
the Policy Provider (but without imposing on any such parties liability to pay
the premiums for such insurance) (and, if any Lease shall be in effect, the
Owner in its capacity as lessor under the Lease) as additional insureds as
their respective interests may appear, (B) shall provide that in respect of
the interest of the Indenture Trustee and the Policy Provider (and, if any
Lease shall be in effect, the Owner in its capacity as lessor under the Lease)
in such policies the insurance shall not be invalidated by any action or
inaction of the Owner (or, if any Lease is then in effect, any Lessee) or any
other Person and shall insure the Indenture Trustee and the Policy Provider
(and, if any Lease shall be in effect, the Owner in its capacity as lessor
under the Lease) regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by the Owner (or, if any
Lease is then in effect, any Lessee), (C) may provide for self-insurance to
the extent permitted by Section 7.04(d) and (D) shall provide that if the
insurers cancel such insurance for any reason whatever or if any material
change is made in such insurance which adversely affects the interest of the
Indenture Trustee or the Policy Provider (or, if any Lease shall be in effect,
the Owner in its capacity as lessor under the Lease), or such insurance shall
lapse for non-payment of premium, such cancellation, lapse or change shall not
be effective as to the Indenture Trustee or the Policy Provider (or, if any
Lease shall be in effect, the Owner in its capacity as lessor under the Lease)
for thirty (30) days (seven (7) days in the case of war risk and allied perils
coverage) after issuance to the Indenture Trustee or the Policy Provider (or,
if any Lease shall be in effect, the Owner in its capacity as lessor under the
Lease), respectively, of written notice by such insurers of such cancellation,
lapse or change; provided, however, that if any notice period specified above
is not reasonably obtainable, such policies shall provide for as long a period
of prior notice as shall then be reasonably obtainable. Each liability policy
(1) shall be primary without right of contribution from any other insurance
which is carried by the Indenture Trustee or the Policy Provider (or, if any
Lease shall be in effect, the Owner in its capacity as lessor under the
Lease), (2) shall expressly provide that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured, and (3) shall waive any right of the
insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of the Indenture Trustee
or the Policy Provider (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease) to the extent of any moneys due to the
Indenture Trustee or the Policy Provider (or, if any Lease shall be in effect,
the Owner in its capacity as lessor under the Lease).
(II) During any period that the Aircraft is on the ground and not in
operation, the Owner may carry or cause to be carried, in lieu of the
insurance required by clause (I) above, insurance otherwise conforming with
the provisions of said clause (I) except that (A) the amounts of coverage
shall not be required to exceed the amounts of public liability and property
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damage insurance from time to time applicable to aircraft owned or operated by
the Owner (or, if a Lease is then in effect, by Lessee) of the same type as
the Aircraft which are on the ground and not in operation; and (B) the scope
of the risks covered and the type of insurance shall be the same as from time
to time shall be applicable to aircraft owned or operated by the Owner (or, if
a Lease is then in effect, by Lessee) of the same type which are on the ground
and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft. (I) Except as
provided in clause (II) of this Section 7.04(b), the Owner shall maintain or
cause to be maintained in effect, at its or any Lessee's expense, with
insurers of recognized responsibility, all-risk ground and flight aircraft
hull insurance covering the Aircraft and all-risk ground and flight coverage
of Engines and Parts while temporarily removed from the Aircraft and not
replaced by similar components (including, without limitation, war risk and
governmental confiscation and expropriation (other than by the government of
registry of the Aircraft) and hijacking insurance, if and to the extent the
same is maintained by the Owner (or, if a Lease is then in effect, by Lessee)
with respect to other aircraft owned or operated by the Owner (or such Lessee)
on the same routes, except that the Owner (or such Lessee) shall maintain war
risk and governmental confiscation and expropriation (other than by the
government of registry of the Aircraft) and hijacking insurance if the
Aircraft is operated on routes where the custom is for major international air
carriers flying comparable routes to carry such insurance) which is of the
type as from time to time applicable to aircraft owned or operated by the
Owner (or, if a Lease is then in effect, by Lessee) of the same type as the
Aircraft; provided that such insurance shall at all times while the Aircraft
is subject to this Trust Indenture be for an amount (subject to self-insurance
to the extent permitted by Section 7.04(d)) not less than the 105% of the then
aggregate unpaid Principal Amount of the Secured Certificates (the "Loan Loss
Value"). Any policies carried in accordance with this paragraph (b) covering
the Aircraft and any policies taken out in substitution or replacement for any
such policies (i) shall name the Indenture Trustee (and, if any Lease shall be
in effect, the Owner in its capacity as lessor under the Lease) as an
additional insured, as its interest may appear (but without imposing on such
party liability to pay premiums with respect to such insurance), (ii) may
provide for self-insurance to the extent permitted in Section 7.04(d), (iii)
shall provide that (A) in the event of a loss involving proceeds in excess of
[$5,000,000 for A319's and 757's] [$7,000,000 for A330's] (or, if the Aircraft
is then under a Lease, in excess of [$3,000,000 for A319's and 757's]
[$4,000,000 for A330's]), the proceeds in respect of such loss up to an amount
equal to the aggregate unpaid Principal Amount of the Secured Certificates
plus all accrued and unpaid interest thereon (the "Balance Due") shall be
payable to the Indenture Trustee (except in the case of a loss with respect to
an Engine installed on an airframe other than the Airframe, in which case the
Owner (or any Lessee) shall arrange for any payment of insurance proceeds in
respect of such loss to be held for the account of the Indenture Trustee
whether such payment is made to the Owner (or any Lessee) or any third party),
it being understood and agreed that in the case of any payment to the
Indenture Trustee otherwise than in respect of an Event of Loss, the Indenture
Trustee shall, upon receipt of evidence satisfactory to it that the damage
giving rise to such payment shall have been repaired or that such payment
shall then be required to pay for repairs then being made, pay the amount of
such payment to the Owner or its order, and (B) the entire amount of any loss
involving proceeds of [$5,000,000 for A319's and 757's] [$7,000,000 for
A330's] (or, if the Aircraft is then under a Lease, of [$3,000,000 for A319's
and 757's] [$4,000,000 for A330's]) or less or the amount of any proceeds of
any loss in excess of the Balance Due shall be paid to the Owner or its order
unless an Event of Default shall have occurred and be continuing and the
insurers have been
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notified thereof by the Indenture Trustee, (iv) shall provide that if the
insurers cancel such insurance for any reason whatever, or such insurance
lapses for non-payment of premium or if any material change is made in the
insurance which adversely affects the interest of the Indenture Trustee, such
cancellation, lapse or change shall not be effective as to the Indenture
Trustee (or, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease) for thirty (30) days (seven (7) days in the case of
hull war risk and allied perils coverage) after issuance to the Indenture
Trustee (or, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease), respectively, of written notice by such insurers of
such cancellation, lapse or change, provided, however, that if any notice
period specified above is not reasonably obtainable, such policies shall
provide for as long a period of prior notice as shall then be reasonably
obtainable, (v) shall provide that in respect of the interest of the Indenture
Trustee (and, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease) in such policies the insurance shall not be
invalidated by any action or inaction of the Owner (or, if a Lease is then in
effect, any Lessee) or any other Person and shall insure the Indenture Trustee
(and, if any Lease shall be in effect, the Owner in its capacity as lessor
under the Lease) regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by the Owner (or, if a
Lease is then in effect, any Lessee), (vi) shall be primary without any right
of contribution from any other insurance which is carried by the Indenture
Trustee (or, if any Lease shall be in effect, the Owner in its capacity as
lessor under the Lease), (vii) shall waive any right of subrogation of the
insurers against the Indenture Trustee (and, if any Lease shall be in effect,
the Owner in its capacity as lessor under the Lease), and (viii) shall waive
any right of the insurers to set-off or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of the
Indenture Trustee or the Owner (or any Lessee) to the extent of any moneys due
to the Indenture Trustee. In the case of a loss with respect to an engine
(other than an Engine) installed on the Airframe, the Indenture Trustee shall
hold any payment to it of any insurance proceeds in respect of such loss for
the account of any third party that is entitled to receive such proceeds.
As between the Indenture Trustee and the Owner, it is agreed that
all insurance payments received as the result of the occurrence of an Event of
Loss will be applied as follows:
(x) if such payments are received as a result of an Event of
Loss with respect to the Airframe (or the Airframe and the Engines
installed thereon) that has been or is being replaced by the Owner
as contemplated by Section 7.06(a) hereof, such payments shall be
paid over to, or retained by, the Indenture Trustee as security and
upon completion of such replacement shall be paid over to the Owner;
(y) if such payments are received with respect to the Airframe
(or the Airframe and the Engines installed thereon) that has not
been or is not being replaced by the Owner as contemplated by
Section 7.06(a) hereof, so much of such payments remaining, after
reimbursement of the Indenture Trustee for reasonable costs and
expenses, as shall not exceed the Balance Due shall be applied in
reduction of the Owner's obligation to pay such Balance Due, if not
already paid by the Owner, or, if already paid by the Owner, shall
be applied to reimburse the Owner for its payment of such Balance
Due, and the balance, if
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any, of such payments remaining thereafter will be paid over to, or
retained by, the Owner (or if directed by the Owner, any Lessee); and
(z) if such payments are received with respect to an Engine or
Part under the circumstances contemplated by Section 7.06(b) hereof,
so much of such payments remaining, after reimbursement of the
Indenture Trustee for reasonable costs and expenses, shall be paid
over to, or retained by, the Owner (or if directed by the Owner, any
Lessee), provided that the Owner shall have fully performed, or
concurrently therewith will fully perform, the terms of Section
7.06(b) hereof with respect to the Event of Loss for which such
payments are made.
As between the Indenture Trustee and the Owner, the insurance
payments for any property damage loss to the Airframe or any Engine not
constituting an Event of Loss with respect thereto will be applied in payment
for repairs or for replacement property in accordance with the terms of
Sections 7.02 and 7.03, if not already paid for by the Owner (or any Lessee),
and any balance (or if already paid for by the Owner (or any Lessee), all such
insurance proceeds) remaining after compliance with such Sections with respect
to such loss shall be paid to the Owner (or any Lessee if directed by the
Owner).
(II) During any period that the Aircraft is on the ground and not in
operation, the Owner may carry or cause to be carried, in lieu of the
insurance required by clause (I) above, insurance otherwise conforming with
the provisions of said clause (I) except that the scope of the risks and the
type of insurance shall be the same as from time to time applicable to
aircraft owned or operated by the Owner (or, if a Lease is then in effect, by
Lessee) of the same type similarly on the ground and not in operation,
provided that the Owner shall maintain insurance against risk of loss or
damage to the Aircraft in an amount equal to the Loan Loss Value of the
Aircraft during such period that the Aircraft is on the ground and not in
operation.
(c) Reports, etc. The Owner will furnish, or cause to be furnished,
to the Indenture Trustee, on or before the Closing Date and on or before July
1 in each year thereafter commencing July, _____, a report, signed by Aon Risk
Services, Inc., Aon Risk Services of Minnesota, Inc. or any other independent
firm of insurance brokers reasonably acceptable to the Indenture Trustee (the
"Insurance Brokers"), describing in reasonable detail the insurance and
reinsurance then carried and maintained with respect to the Aircraft and
stating the opinion of such firm that the insurance then carried and
maintained with respect to the Aircraft complies with the terms hereof;
provided, however, that all information contained in the foregoing report
shall not be made available by the Indenture Trustee or the Loan Participants
to anyone except (A) to permitted transferees of the Loan Participants' or the
Indenture Trustee who agree to hold such information confidential, (B) to the
Loan Participants' or the Indenture Trustee's counsel or independent certified
public accountants or independent insurance advisors who agree to hold such
information confidential or (C) as may be required by any statute, court or
administrative order or decree or governmental ruling or regulation. The Owner
will cause such Insurance Brokers to agree to advise the Indenture Trustee in
writing of any default in the payment of any premium and of any other act or
omission on the part of the Owner of which it has knowledge and which might
invalidate or render unenforceable, in whole or in part, any insurance on the
Aircraft. To the extent such agreement is reasonably obtainable, the Owner
will also cause such Insurance Brokers to agree to advise the Indenture
Trustee in writing at least thirty (30) days
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(seven (7) days in the case of war risk and allied perils coverage), prior to
the expiration or termination date of any insurance carried and maintained on
the Aircraft pursuant to this Section 7.04. In addition, the Owner will also
cause such Insurance Brokers to deliver to the Indenture Trustee, on or prior
to the date of expiration of any insurance policy referenced in a previously
delivered certificate of insurance, a new certificate of insurance,
substantially in the same form as delivered by the Owner to such party on the
Closing Date. In the event that the Owner or any Lessee shall fail to maintain
or cause to be maintained insurance as herein provided, the Indenture Trustee
may at its sole option provide such insurance and, in such event, the Owner
shall, upon demand, reimburse the Indenture Trustee for the cost thereof to
Indenture Trustee, without waiver of any other rights Indenture Trustee may
have.
(d) Self-Insurance. The Owner may self-insure by way of deductible,
premium adjustment or franchise provisions or otherwise (including, with
respect to insurance maintained pursuant to Section 7.04(b), insuring for a
maximum amount which is less than the Loan Loss Value of the Aircraft) in the
insurance covering the risks required to be insured against pursuant to this
Section 7.04 under a program applicable to all aircraft in the Owner's fleet,
but in no case shall the aggregate amount of self-insurance in regard to
Section 7.04(a) and Section 7.04(b) exceed during any policy year, with
respect to all of the aircraft in the Owner's fleet (including, without
limitation, the Aircraft), the lesser of (a) 50% of the largest replacement
value of any single aircraft in the Owner's fleet or (b) 1-1/2% of the average
aggregate insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which the Owner carries
insurance. In addition, the Owner (and any Lessee) may self-insure to the
extent of any applicable mandatory minimum per aircraft (or, if applicable,
per annum or other period) hull or liability insurance deductible imposed by
the aircraft hull or liability insurers.
(e) Additional Insurance by the Owner. The Owner (and any Lessee)
may at its own expense carry insurance with respect to its interest in the
Aircraft in amounts in excess of that required to be maintained by this
Section 7.04.
(f) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance, the
Indenture Trustee agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft, indemnification from, or insurance provided by, the
United States Government or any agency or instrumentality thereof or, upon the
written consent of the Indenture Trustee, other government of registry of the
Aircraft or any agency or instrumentality thereof, against such risk in an
amount which, when added to the amount of insurance against such risk
maintained by the Owner (or any Lessee) with respect to the Aircraft
(including permitted self-insurance) shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 7.04.
(g) Application of Payments During Existence of an Event of Default.
Any amount referred to in paragraph (b) of this Section 7.04 which is payable
to or retainable by the Owner (or any Lessee) shall not be paid to or retained
by the Owner (or any Lessee) if at the time of such payment or retention an
Event of Default shall have occurred and be continuing, but shall be held by
or paid over to the Indenture Trustee as security for the obligations of the
Owner (or any Lessee) under this Trust Indenture and applied against the
Owner's obligations hereunder as and when due. Upon the earlier of (a) such
time as there shall not be continuing any such Event
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of Default or (b) the termination of this Trust Indenture in accordance with
Section 11.01 hereof, such amount shall be paid to the Owner (or such Lessee)
to the extent not previously applied in accordance with the preceding
sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior written
notice to the Owner, the Indenture Trustee or its authorized representative
may (not more than once every calendar year (unless an Event of Default has
occurred and is continuing when such inspection right shall not be so
limited)) inspect the Aircraft and inspect and make copies (at the Indenture
Trustee's expense) of the books and records of the Owner relating to the
maintenance of the Aircraft, and upon any such inspection by the Indenture
Trustee or its authorized representatives of the books and records of the
Owner relating to the maintenance of the Aircraft, the Policy Provider or its
authorized representatives may also inspect and make copies (at the Policy
Provider's expense) of the books and records of the Owner relating to the
maintenance of the Aircraft; any such inspection of the Aircraft shall be
limited to a visual, walk-around inspection and shall not include opening any
panels, bays or the like without the express consent of the Owner; provided
that no exercise of such inspection right shall interfere with the operation
or maintenance of the Aircraft by, or the business of, the Owner (or any
Lessee). Neither the Indenture Trustee nor the Policy Provider shall have any
duty to make any such inspection nor shall it incur any liability or
obligation by reason of not making such inspection.
SECTION 7.06. Loss, Destruction, Requisition, etc.
(a) Event of Loss with Respect to the Aircraft. Upon the occurrence
of an Event of Loss with respect to the Airframe or the Airframe and the
Engines and/or engines then installed thereon, the Owner shall forthwith (and
in any event, within fifteen (15) days after such occurrence) give the
Indenture Trustee written notice of such Event of Loss, and within forty-five
(45) days after such Event of Loss the Owner shall give the Indenture Trustee
written notice of its election to perform one of the following options (it
being agreed that if the Owner shall not have given such notice of election
within such period, the Owner shall be deemed to have elected the option set
forth in clause (i) below). The Owner may elect either to:
(i) redeem the Secured Certificates in accordance with Section
2.10 hereof not later than the earlier of (x) the Business Day next
succeeding the 120th day following the occurrence of such Event of
Loss or (y) an earlier Business Day irrevocably specified fifteen
(15) days in advance by notice from the Owner to the Indenture
Trustee; or
(ii) substitute an aircraft or an airframe or an airframe and
one or more engines, as the case may be;
provided that, if the Owner does not perform its obligation to effect such
substitution in accordance with this Section 7.06(a) during the period of time
provided herein, then the Owner shall pay or cause to be paid to the Indenture
Trustee on the Business Day next succeeding the 120th day following the
occurrence of such Event of Loss the amount specified in clause (i) above.
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In the event the Owner shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be), the
Owner shall at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss, (x)
cause to be subjected to the Lien of this Trust Indenture, in replacement of
the Airframe with respect to which the Event of Loss occurred, a Replacement
Airframe and, if any Engine shall have been installed on the Airframe when it
suffered an Event of Loss, a Replacement Engine therefor, such Replacement
Airframe and Replacement Engines, if any, to be free and clear of all Liens
(other than Permitted Liens) and having a value, utility and remaining useful
life (without regard to hours or cycles) at least equal to the Airframe or
Engine, as the case may be, subject to such Event of Loss assuming no Event of
Loss had occurred and that the Aircraft had been maintained in accordance with
this Trust Indenture; provided that the Replacement Airframe and the
Replacement Engines, if any, shall be of the same or improved model as the
Airframe or Engine, as the case may be, that are replaced and (y) prior to or
at the time of any such substitution, the Owner (or any Lessee), at its own
expense, will (1) furnish the Indenture Trustee a copy of the original xxxx of
sale respecting such Replacement Airframe and the Replacement Engines, if any,
and appropriate instruments assigning to the Indenture Trustee the benefits,
if any, of all manufacturer's and vendor's warranties generally available and
permitted to be assigned by the Owner with respect to such Replacement
Airframe and Replacement Engines, if any, (2) cause a Trust Indenture
Supplement to be duly executed by the Owner and filed for recording pursuant
to the Federal Aviation Act, or the applicable laws, rules and regulations of
any other jurisdiction in which the Replacement Airframe and Replacement
Engines, if any, may then be registered as permitted by Section 8(f) of the
Participation Agreement, (3) cause a financing statement or statements with
respect to such Replacement Airframe and Replacement Engines, if any, to be
filed in such place or places as are deemed necessary or desirable by counsel
for the Indenture Trustee to perfect the Indenture Trustee's interest therein,
(4) furnish the Indenture Trustee with such evidence of compliance with the
insurance provisions of Section 7.04 with respect to such Replacement Airframe
and Replacement Engines, if any, as the Indenture Trustee's counsel may
reasonably request, (5) furnish the Indenture Trustee with (A) an opinion of
in-house counsel to the Owner, or other counsel satisfactory to the Indenture
Trustee, stating that the Replacement Airframe and Replacement Engines, if
any, has or have been validly subjected to the Lien of this Trust Indenture,
the instruments subjecting such Replacement Airframe and Replacement Engines,
if any, to the Lien of this Trust Indenture, have been duly filed for
recordation pursuant to the Federal Aviation Act or any other law then
applicable to the registration of the Replacement Airframe and Replacement
Engines, if any, and no further action, filing or recording of any document is
necessary or advisable in order to establish and perfect the Lien of this
Trust Indenture on such Replacement Airframe and Replacement Engines, if any
(B) a certificate signed by a duly authorized officer of the Owner stating the
following: (i) a description of the replaced Airframe and Engines, if any,
which shall be identified by manufacturer, model, FAA registration number (or
other applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe and Replacement Engines, if
any, to be received (including the manufacturer, model, FAA registration
number (or other applicable registration information) and manufacturer's
serial number) as consideration for the replaced Airframe and Engines, if any;
(iii) that the Replacement Airframe and Replacement Engines, if any, is or are
of the same or an improved model as the Airframe and Engines, if any,
requested to be released from this Trust Indenture; (iv) the value, utility
and remaining useful life (without
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regard to hours or cycles) of the Replacement Airframe and Replacement
Engines, if any, as of the date of such certificate (which in the judgment of
the Owner shall be not less than the value, utility and remaining useful life
(without regard to hours or cycles) of the Airframe and Engines, if any,
requested to be released (assuming no Event of Loss and that such Airframe and
Engines, if any, was or were in the condition and repair required to be
maintained under this Trust Indenture)); and (v) that no Event of Default or
Default has occurred which has not been remedied or waived, and that the Owner
will not be in default, by the making and granting of the request for release
and the addition of a Replacement Airframe and Replacement Engines, if any, in
the performance of any of the terms and covenants of the Owner, and (C) a
certificate from either an aircraft engineer (who may be an employee of the
Owner) or a firm of independent aircraft appraisers selected by the Owner
confirming the accuracy of the information set forth in sub-clause (iv) of the
immediately preceding clause (5)(B) of this Section 7.06(a), and (6) furnish
the Indenture Trustee with an opinion of counsel (which shall be Cadwalader,
Xxxxxxxxxx & Xxxx and, if not, other counsel chosen by the Owner and
reasonably acceptable to the Indenture Trustee) reasonably satisfactory to the
Indenture Trustee to the effect that the Indenture Trustee will be entitled to
the benefits of Section 1110 of the U.S. Bankruptcy Code with respect to the
Replacement Airframe, provided that such opinion need not be delivered to the
extent that immediately prior to such substitution the benefits of Section
1110 of the U.S. Bankruptcy Code were not, solely by reason of a change in law
or governmental interpretation thereof, available to the Indenture Trustee.
For all purposes hereof, the property so substituted shall after such transfer
be deemed part of the property subject to the Lien of this Trust Indenture and
shall be deemed an "Aircraft", "Airframe" and "Engine", as the case may be, as
defined herein.
Upon the Owner having provided a Replacement Airframe and
Replacement Engines, if any, as provided for in this Section 7.06(a), (x) the
Lien of this Trust Indenture shall continue with respect to such Replacement
Airframe and Replacement Engines, if any, as though no Event of Loss had
occurred; the Indenture Trustee shall, at the cost and expense of the Owner,
release from the Lien of this Trust Indenture the replaced Airframe and
Engines, if any, with respect to which such Event of Loss occurred, by
executing and delivering to the Owner such documents and instruments, prepared
at the Owner's expense, as the Owner may reasonably request to evidence such
release; and (y) the Indenture Trustee shall assign to the Owner all claims it
may have against any other Person arising from the Event of Loss and the Owner
shall receive all insurance proceeds and proceeds from any award in respect of
condemnation, confiscation, seizure or requisition, including any investment
interest thereon, to the extent not previously applied to the purchase price
of the Replacement Airframe and Replacement Engines, if any, as provided in
Sections 7.04(b) and 7.06(c)(i) hereof.
(b) Substitution with Respect to an Engine. The Owner shall (i) so
long as no Default or Event of Default has occurred which has not been
remedied or waived, have the right to substitute a Replacement Engine for any
Engine at its option at any time, on at least thirty (30) days' prior written
notice to the Indenture Trustee and (ii) substitute a Replacement Engine for
an Engine if an Event of Loss shall have occurred with respect to such Engine
(under circumstances in which there has not occurred an Event of Loss with
respect to the Airframe) within sixty (60) days after the occurrence of such
Event of Loss (such Replacement Engine to be of the same or another
manufacturer of the same, an equivalent or an improved model and suitable for
installation and use on the Airframe without impairing the value, utility or
remaining useful life of the Aircraft; provided that both Engines shall be of
the same make and model) free
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and clear of all Liens (other than Permitted Liens) and having a value,
utility and remaining useful life (without regard to hours or cycles) at least
equal to the replaced Engine assuming no Event of Loss had occurred and that
such replaced Engine had been maintained in accordance with the provisions of
this Trust Indenture. Prior to or at the time of any such substitution, the
Owner, at its own expense, will (1) furnish the Indenture Trustee with (A) a
copy of the original xxxx of sale with respect to such Replacement Engine and
(B) appropriate instruments assigning to the Indenture Trustee the benefits,
if any, of all manufacturer's and vendor's warranties generally available and
permitted to be assigned by the Owner with respect to such Replacement Engine,
(2) cause a Trust Indenture Supplement to be duly executed by the Owner and to
be filed for recording pursuant to the Federal Aviation Act, or the applicable
laws, rules and regulations of any other jurisdiction in which the Aircraft
may then be registered as permitted by Section 8(f) of the Participation
Agreement, (3) cause a financing statement or statements covering the Lien
created by this Trust Indenture with respect to the Replacement Engine to be
filed in such place or places as are deemed necessary or desirable by counsel
for the Indenture Trustee to perfect the Indenture Trustee's interest therein,
(4) furnish the Indenture Trustee with such evidence of compliance with the
insurance provisions of Section 7.04 hereof with respect to such Replacement
Engine as the Indenture Trustee may reasonably request, and (5) furnish the
Indenture Trustee with (A) an opinion of in-house counsel to the Owner, or
other counsel satisfactory to the Indenture Trustee, stating that the
Replacement Engine has been validly subjected to the Lien of this Trust
Indenture, the instruments subjecting such Replacement Engine to the Lien of
this Trust Indenture have been duly filed for recordation pursuant to the
Federal Aviation Act or any other law then applicable to the registration of
the Aircraft, and no further action, filing or recording of any document is
necessary or advisable in order to establish and perfect the Lien of this
Trust Indenture on such Replacement Engine and (B) a certificate signed by a
duly authorized officer of the Owner stating the following: (i) a description
of the replaced Engine which shall be identified by manufacturer's serial
number; (ii) a description of the Replacement Engine (including the
manufacturer's name and serial number) as consideration for the replaced
Engine; (iii) that such Replacement Engine is substantially the same as the
replaced Engine (or an improved model); and (iv) the value, utility and
remaining useful life (without regard to hours or cycles) of the Replacement
Engine as of the date of such certificate (which in the judgment of the Owner
shall not be less than the value, utility and remaining useful life (without
regard to hours or cycles) of the Engine requested to be released (assuming no
Event of Loss and that such Engine was in the condition and repair required to
be maintained under this Trust Indenture).
Upon the Owner having provided a Replacement Engine, as provided for
in this Section 7.06(b), (x) the Lien of this Trust Indenture shall continue
with respect to such Replacement Engine; the Indenture Trustee shall, at the
cost and expense of the Owner, release from the Lien of this Trust Indenture
the replaced Engine by executing and delivering to the Owner such documents
and instruments, prepared at the Owner's expense, as the Owner may reasonably
request to evidence such release; and (y) the Indenture Trustee shall assign
to the Owner all claims it may have against any other Person arising from an
Event of Loss of such replaced Engine giving rise to such substitution and the
Owner shall receive all insurance proceeds and proceeds from any award in
respect of condemnation, confiscation, seizure or requisition, including any
investment interest thereon, to the extent not previously applied to the
purchase price of the Replacement Engine, as provided in Sections 7.04(b) and
7.06(c)(ii) hereof.
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For all purposes hereof, each such Replacement Engine shall, after such
conveyance, be deemed part of the property subject to the Lien of this Trust
Indenture, and shall be deemed an "Engine".
(c) Application of Payments from Governmental Authorities for
Requisition of Title, etc. Any payments (other than insurance proceeds the
application of which is provided for in Section 7.04) received at any time by
the Indenture Trustee or by the Owner from any governmental authority or other
Person with respect to an Event of Loss will be applied as follows:
(i) if payments are received with respect to the Airframe (or
the Airframe and any Engine then installed thereon), that has been
or is being replaced by the Owner as contemplated by Section 7.06(a)
hereof, such payments shall be paid over to, or retained by the
Indenture Trustee as security and upon completion of such
replacement and compliance by the Owner with the provisions of
Section 7.06(a) with respect to the Event of Loss for which such
payments are made, be paid over to the Owner;
(ii) if such payments are received with respect to the Airframe
(or the Airframe and any Engines installed thereon) or an Engine or
Part (not involving an Event of Loss as to the Airframe) that has
been or is being replaced by the Owner pursuant to Section 7.06(b)
hereof, such payments shall be paid over to, or retained by, the
Owner; and
(iii) if such payments are received with respect to the
Airframe (or the Airframe and any Engines installed thereon) that
has not been replaced by the Owner as contemplated by Section
7.06(a) hereof, so much of such payments remaining, after
reimbursement of the Indenture Trustee for reasonable costs and
expenses as shall not exceed the Balance Due, shall be applied in
reduction of the Owner's obligation to pay such Balance Due, if not
already paid by the Owner, or, if already paid by the Owner, shall
be applied to reimburse the Owner for its payment of such Balance
Due, and the balance, if any, of such payments remaining thereafter
will be paid over to, or retained by, the Owner (or if directed by
the Owner, any Lessee).
(d) Requisition for Use of the Aircraft. In the event of the
requisition for use by any government or any instrumentality or agency
thereof, so long as it does not constitute an Event of Loss, of the Airframe
and the Engines or engines installed on the Airframe, so long as the Airframe
or an Engine is subject to the Lien of this Trust Indenture, the Owner shall
promptly notify the Indenture Trustee of such requisition, and all of the
Owner's obligations under this Trust Indenture with respect to the Aircraft
shall continue to the same extent as if such requisition had not occurred. All
payments received by the Indenture Trustee or the Owner from such government
or instrumentality or agency thereof for the use of such Airframe and Engines
or engines shall be paid over to, or retained by, the Owner (or, if directed
by the Owner, any Lessee).
(e) Requisition for Use of an Engine. In the event of an Event of
Loss of an Engine resulting from the requisition for use of such Engine (but
not the Airframe) by any
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government or agency or instrumentality the Owner will replace such Engine
hereunder by complying (or causing any Lessee to comply) with the terms of
Section 7.06(b) hereof and any payments received by the Indenture Trustee or
the Owner from such government with respect to such requisition shall be paid
over to, or retained by, the Owner.
(f) Application of Payments During Existence of Event of Default.
Any amount referred to in this Section 7.06 which is payable to or retainable
by the Owner (or any Lessee) shall not be paid to or retained by the Owner (or
such Lessee) if at the time of such payment or retention an Event of Default
shall have occurred and be continuing, but shall be held by or paid over to
the Indenture Trustee as security for the obligations of the Owner (or such
Lessee) under this Trust Indenture and applied against the Owner's obligations
hereunder as and when due. Upon the earlier of (a) such time as there shall
not be continuing any such Event of Default or (b) the termination of this
Trust Indenture in accordance with Section 11.01 hereof, such amount shall be
paid to the Owner (or such Lessee) to the extent not previously applied in
accordance with the preceding sentence.
SECTION 7.07. Interests in the Purchase Agreement.
[A319's and A330's -- The grant by the Owner to the Indenture
Trustee of the Owner's interests in and to the Contract Rights as set forth in
clause (b) of the Granting Clause hereof is subject to the following:
(a) With respect to the assignment contained in clause (b) of the
Granting Clause, if and so long as (A) the Aircraft shall be subject to this
Trust Indenture and (B) no Event of Default under this Trust Indenture has
occurred and is continuing, (1) the Indenture Trustee authorizes the Owner, on
behalf of but to the exclusion of the Indenture Trustee, to exercise in the
Owner's own name (i) all rights and powers related to the Assigned Warranties
and the Guaranty as it relates to the Assigned Warranties and (ii) subject to
paragraph 7.07(c) hereof, to retain any recovery or benefit resulting from the
enforcement of any Assigned Warranties in respect of the Aircraft or resulting
from the enforcement of the Guaranty in respect of the same, and (2) the
Indenture Trustee shall, at the Owner's expense, cooperate with the Owner and
take such actions as the Owner reasonably deems necessary to enable the Owner
to enforce such rights and claims.
(b) In the event that an Event of Default under this Trust Indenture
has occurred and is continuing and thereafter until such Event of Default has
been cured or waived: (i) at the Indenture Trustee's option, the authorization
given to the Owner under paragraph 7.07(a) hereof to enforce such rights and
claims shall henceforth cease to be effective and the Indenture Trustee and
its successors and permitted assigns shall, to the exclusion of the Owner, be
entitled to assert and enforce such rights and claims as substitute party
plaintiff or otherwise, and the Owner shall, at the request of the Indenture
Trustee or its successors or permitted assigns and at the Owner's expense,
cooperate with and take such action as reasonably necessary to enable the
Indenture Trustee and its successors and permitted assigns to enforce such
rights and claims, and the Indenture Trustee, if it shall elect to enforce
such rights or claims, shall use its best efforts to assert and enforce such
rights and claims, and (ii) the Owner will be deemed to have irrevocably
constituted the Indenture Trustee and its successors and permitted assigns the
Owner's true and lawful attorney (it being acknowledged that such appointment
is coupled with an interest, namely
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the Indenture Trustee's rights acquired and to be acquired hereunder) with
full power (in the name of the Owner or otherwise) to ask, require, demand,
receive, settle, compromise, compound and give acquittance for any and all
monies and claims for monies due and to become due under, or arising out of,
the Purchase Agreement in respect of the Aircraft, to the extent that the same
have been assigned pursuant to clause (b) of the Granting Clause hereof, and
for such period as the Indenture Trustee may exercise rights with respect
thereto under this clause (ii), to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute (or, if previously commenced, assume control of) any proceedings and
to obtain any recovery in connection therewith which the Indenture Trustee may
deem to be necessary or advisable in the premises.
(c) Notwithstanding clause (b) of the Granting Clause hereof, this
Section 7.07 and anything in this Trust Indenture to the contrary (but subject
to all the terms of the Purchase Agreement), all amounts that the Supplier or
the Manufacturer is obligated to pay to the Owner under Clauses 12, 13 and, to
the extent relating to acts to be performed following the date of enforcement
of this Indenture, 17 of the Purchase Agreement with respect to the Aircraft
or the Guaranty as it relates to such Clauses (a "Supplier Payment"), will be
payable and applicable as follows: so long as the Aircraft is subject to this
Trust Indenture, all Supplier Payments shall be paid to the Owner unless and
until an Event of Default under this Trust Indenture has occurred and is
continuing, whereupon the Indenture Trustee shall direct the Supplier to make
all Supplier Payments directly to the Indenture Trustee until all Events of
Default under this Trust Indenture have been cured or waived. Any amounts
received by the Indenture Trustee pursuant to the immediately preceding
sentence shall, to the extent not theretofore applied in satisfaction of the
Secured Obligations, be returned to the Owner promptly after all Events of
Default under this Trust Indenture have been cured or waived.
(d) Anything herein contained to the contrary notwithstanding: (i)
the Owner shall at all times remain liable to the Manufacturer under the
Purchase Agreement in respect of the Aircraft to perform all of the duties and
obligations of "Northwest" thereunder to the same extent as if this Trust
Indenture had not been executed; (ii) the exercise by the Indenture Trustee of
any of the rights assigned hereunder shall not release the Owner from any of
its duties or obligations to the Supplier under the Purchase Agreement in
respect of the Aircraft except to the extent that such exercise by the
Indenture Trustee shall constitute performance of such duties and obligations;
and (iii) except as provided in paragraph (e) of this Section 7.07, the
Indenture Trustee shall not have any obligation or liability under the
Purchase Agreement by reason of, or arising out of, this Trust Indenture or be
obligated to perform any of the obligations or duties of the Owner under the
Purchase Agreement or to make any payment or make any inquiry as to the
sufficiency of any payment received by it or to present or to file any claim
or to take any other action to collect or enforce any claim for any payment
assigned hereunder.
(e) Without in any way releasing the Owner from any of its duties or
obligations under the Purchase Agreement, the Indenture Trustee confirms for
the benefit of the Supplier and the Manufacturer that, insofar as the
provisions of the Purchase Agreement relate to the Aircraft, in exercising any
rights under the Purchase Agreement or the Guaranty, or in making any claim
with respect to the Aircraft or other things delivered or to be delivered
pursuant to the Purchase Agreement or the Guaranty, the terms and conditions
of the Purchase Agreement and the Guaranty shall apply to, and be binding
upon, the Indenture Trustee to the same extent as the
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Owner. The Indenture Trustee hereby confirms that it shall be deemed for all
purposes to have read and be familiar with the Purchase Agreement and the
Guaranty and to understand thoroughly the terms and conditions thereof.
(f) Nothing contained in this Trust Indenture shall (i) subject the
Supplier or the Manufacturer to any liability to which it would not otherwise
be subject under the Purchase Agreement or the Guaranty or (ii) modify in any
respect the Supplier's or the Manufacturer's contract rights thereunder,
except as provided in the Consent and Agreement.
(g) For all purposes of the assignment contained in clause (b) of
the Granting Clause, the Supplier and the Manufacturer shall not be deemed to
have knowledge of and need not recognize any Event of Default, unless and
until the Supplier shall have received written notice thereof from the
Indenture Trustee at the address for the Supplier set forth in Section 11.05
hereof and, in acting in accordance with the terms of the Purchase Agreement,
the Guaranty and the assignment contained in clause (b) of the Granting
Clause, the Supplier and the Manufacturer may act with acquittance and
conclusively rely upon such notice. -- A319's and A330's]
[757's -- The grant by the Owner to the Indenture Trustee of the
Owner's interests in and to the Contract Rights as set forth in clause (b) of
the Granting Clause hereof is subject to the following:
(h) If and so long as (A) the Aircraft shall be subject to this
Trust Indenture and (B) the Manufacturer shall not have received written
notice from the Indenture Trustee (including by mail, courier, telex, or
telecopy thereof from the Indenture Trustee addressed to the Manufacturer's
Vice President - Contracts at X.X. Xxx 0000, Mail Code 21-34, Xxxxxxx, XX
00000 if by mail; 0000 Xxxxxxxxx Xxx. X.X., X/X 00-00, Xxxxxx, XX 00000, if by
courier; 000-000-0000 if by telecopy and 32-9430 (answerback BOEINGREN), if by
telex) that an Event of Default under this Trust Indenture has occurred and is
continuing, (1) the Indenture Trustee authorizes the Owner, on behalf of but
to the exclusion of the Indenture Trustee, to exercise in the Owner's own name
(i) such rights and powers of the "Buyer" under the Purchase Agreement and
(ii) such rights as the Indenture Trustee may have with respect to the
Aircraft under any warranty, covenant, representation, service life policy,
aircraft performance guarantee, indemnity or product support agreement of the
Manufacturer or any subcontractor or vendor with respect thereto and, subject
to paragraph 7.07(c) hereof, to retain any recovery or benefit resulting from
the enforcement of any warranty, covenant, representation, service life
policy, aircraft performance guarantee, indemnity, or product support
agreement of the Manufacturer or any subcontractor or vendor under the
Purchase Agreement in respect of the Aircraft, and (2) the Indenture Trustee
shall, at the Owner's expense, cooperate with the Owner and take such actions
as the Owner reasonably deems necessary to enable the Owner to enforce such
rights and claims.
(i) Effective upon the receipt by the Manufacturer of written notice
from the Indenture Trustee that an Event of Default under this Trust Indenture
has occurred and is continuing and thereafter until the Manufacturer shall
have received written notice from the Indenture Trustee that such Event of
Default has been cured or waived: (i) at the Indenture Trustee's option, the
authorization given to the Owner under paragraph 7.07(a) hereof to enforce
such rights and claims shall henceforth cease to be effective and the
Indenture Trustee and its
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successors and permitted assigns shall, to the exclusion of the Owner, be
entitled to assert and enforce such rights and claims as substitute party
plaintiff or otherwise, and the Owner shall, at the request of the Indenture
Trustee or its successors or permitted assigns and at the Owner's expense,
cooperate with and take such action as reasonably necessary to enable the
Indenture Trustee and its successors and permitted assigns to enforce such
rights and claims, and the Indenture Trustee, if it shall elect to enforce
such rights or claims, shall use its best efforts to assert and enforce such
rights and claims, and (ii) the Owner will be deemed to have irrevocably
constituted the Indenture Trustee and its successors and permitted assigns the
Owner's true and lawful attorney (it being acknowledged that such appointment
is coupled with an interest, namely the Indenture Trustee's rights acquired
and to be acquired hereunder) with full power (in the name of the Owner or
otherwise) to ask, require, demand, receive, settle, compromise, compound and
give acquittance for any and all monies and claims for monies due and to
become due under, or arising out of, the Purchase Agreement in respect of the
Aircraft, to the extent that the same have been assigned pursuant to clause
(b) of the Granting Clause hereof, and for such period as the Indenture
Trustee may exercise rights with respect thereto under this clause (ii), to
endorse any checks or other instruments or orders in connection therewith and
to file any claims or take any action or institute (or, if previously
commenced, assume control of) any proceedings and to obtain any recovery in
connection therewith which the Indenture Trustee may deem to be necessary or
advisable in the premises.
(j) Notwithstanding clause (b) of the Granting Clause hereof, this
Section 7.07 and anything in this Trust Indenture to the contrary, all amounts
that the Manufacturer is obligated to pay to the Owner under the Purchase
Agreement with respect to the Aircraft, including, without limitation, in
respect of refunds thereunder or resulting from the enforcement of any
warranty, service life policy, aircraft performance guarantee or indemnity or
product support agreement thereunder or the enforcement or exercise of any
right or power under the Purchase Agreement or hereunder (a "Manufacturer
Payment") (excluding, however, from the Manufacturer Payments any amounts the
Manufacturer is obligated to pay to the Owner with respect to the rights
reserved to the Owner in clauses (i) through (v) of the definition of Contract
Rights, which shall at all times be paid to the Owner), will be payable and
applicable as follows: all the Manufacturer Payments shall be paid to the
Owner unless and until the Manufacturer shall have received written notice
from the Indenture Trustee that an Event of Default under this Trust Indenture
has occurred and is continuing, whereupon the Manufacturer will, until the
Manufacturer shall have received written notice from the Indenture Trustee
that all Events of Default under this Trust Indenture have been cured or
waived, make any and all such payments directly to the Indenture Trustee. Any
amounts received by the Indenture Trustee pursuant to the immediately
preceding sentence shall, to the extent not theretofore applied in
satisfaction of the Secured Obligations, be returned to the Owner promptly
after all Events of Default under this Trust Indenture have been cured or
waived.
(k) For all purposes of this Trust Indenture, the Manufacturer shall
not be deemed to have knowledge of an Event of Default under this Trust
Indenture or of the discontinuance or waiver of an Event of Default unless and
until the Manufacturer shall have received written notice thereof from the
Indenture Trustee (including by mail, courier, telex, or telecopy thereof from
the Indenture Trustee addressed to the Manufacturer's Vice President -
Contracts at X.X. Xxx 0000, Mail Code 21-34, Xxxxxxx, XX 00000 if by mail;
0000 Xxxxxxxxx Xxx. X.X., X/X 00-00, Xxxxxx, XX 00000, if by courier;
000-000-0000 if by telecopy and 32-9430 (answerback
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BOEINGREN), if by telex) and, in acting in accordance with the terms and
conditions of the Purchase Agreement and this Trust Indenture, the
Manufacturer may rely conclusively upon any such notice.
(l) Anything herein contained to the contrary notwithstanding: (i)
the Owner shall at all times remain liable to the Manufacturer under the
Purchase Agreement in respect of the Aircraft to perform all of the duties and
obligations of "Buyer" thereunder to the same extent as if this Trust
Indenture had not been executed; (ii) the exercise by the Indenture Trustee of
any of the rights assigned hereunder shall not release the Owner from any of
its duties or obligations to the Manufacturer under the Purchase Agreement in
respect of the Aircraft except to the extent that such exercise by the
Indenture Trustee shall constitute performance of such duties and obligations;
and (iii) except as provided in paragraph (f) of this Section 7.07, the
Indenture Trustee shall not have any obligation or liability under the
Purchase Agreement by reason of, or arising out of, this Trust Indenture or be
obligated to perform any of the obligations or duties of the Owner under the
Purchase Agreement or to make any payment or make any inquiry as to the
sufficiency of any payment received by it or to present or to file any claim
or to take any other action to collect or enforce any claim for any payment
assigned hereunder.
(m) Without in any way releasing the Owner from any of its duties or
obligations under the Purchase Agreement, the Indenture Trustee confirms for
the benefit of the Manufacturer that, insofar as the provisions of the
Purchase Agreement relate to the Aircraft, in exercising any rights under the
Purchase Agreement, or in making any claim with respect to the Aircraft or
other things delivered or to be delivered pursuant to the Purchase Agreement,
the terms and conditions of the Purchase Agreement (including, without
limitation, the warranty disclaimer and indemnity provisions in the product
assurance and customer support documents, Exhibits B and C, respectively, to
the Purchase Agreement) shall apply to, and be binding upon, the Indenture
Trustee to the same extent as the Owner. The Indenture Trustee hereby confirms
that it shall be deemed for all purposes to have read and be familiar with the
Purchase Agreement (insofar as it relates to the Aircraft) and to understand
thoroughly the terms and conditions thereof.
(n) Nothing contained in this Trust Indenture shall (i) subject the
Manufacturer to any liability to which it would not otherwise be subject under
the Purchase Agreement or (ii) modify in any respect the Manufacturer's
contract rights thereunder, except as provided in the Consent and Agreement.
-- 757's]
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Scope of Indemnification.
The Owner hereby agrees, except as otherwise provided in Section
2.03 hereof, to assume liability for, and does hereby indemnify, protect, save
and keep harmless the Indenture Trustee (in its individual and trust
capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture Trustee on or measured by
any compensation received by the
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Indenture Trustee for its services under this Trust Indenture), claims,
actions, suits, costs, expenses or disbursements (including reasonable legal
fees and expenses) of any kind and nature whatsoever, which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
indemnified against by any other Person under any other document) in any way
relating to or arising out of this Trust Indenture or any other Operative
Document to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of
the Aircraft or any Engine (including, without limitation, latent or other
defects, whether or not discoverable, and any claim for patent, trademark or
copyright infringement), or in any way relating to or arising out of the
administration of the Collateral or the action or inaction of the Indenture
Trustee hereunder. Without limiting the foregoing, the Indenture Trustee
agrees that, prior to seeking indemnification from the Collateral, it will
demand, and take such action as it may in its discretion determine to be
reasonable to pursue, indemnification available to the Indenture Trustee under
the Participation Agreement. Notwithstanding the foregoing, the Indenture
Trustee shall not be entitled to any indemnification for any Taxes or Expenses
to the extent relating to or arising from the willful misconduct or gross
negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture Trustee (in its
individual capacity) referred to in Section 6.03 hereof, or as provided in
Section 6.01 hereof or in the last sentence of Section 5.04 hereof, or as
otherwise excluded by the terms of Sections 7(b) and 7(c) of the Participation
Agreement from the Owner's indemnities under such Sections. In addition, if
necessary, the Indenture Trustee shall be entitled to indemnification from the
Collateral for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to
this Section 8.01 to the extent not reimbursed by others, but without
releasing any of them from their respective agreements of reimbursement; and
to secure the same the Indenture Trustee shall have a prior Lien on the
Collateral.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at any
time without cause by giving at least 30 days' prior written notice to the
Owner and each Certificate Holder, such resignation to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In addition, a
Majority in Interest of Certificate Holders may at any time (but only with the
consent of the Owner, which consent shall not be unreasonably withheld, except
that such consent shall not be necessary if an Event of Default is continuing)
remove the Indenture Trustee without cause by an instrument in writing
delivered to the Owner and the Indenture Trustee, and the Indenture Trustee
shall promptly notify each Certificate Holder thereof in writing, such removal
to be effective upon the acceptance of the trusteeship by a successor
Indenture Trustee. In the case of the resignation or removal of the Indenture
Trustee, a Majority in Interest of Certificate Holders may appoint a successor
Indenture Trustee by an instrument signed by such
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holders, which successor, so long as no Event of Default shall have occurred
and be continuing, shall be subject to the Owner's reasonable approval. If a
successor Indenture Trustee shall not have been appointed within 30 days after
such notice of resignation or removal, the Indenture Trustee, the Owner or any
Certificate Holder may apply to any court of competent jurisdiction to appoint
a successor Indenture Trustee to act until such time, if any, as a successor
shall have been appointed as above provided. The successor Indenture Trustee
so appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner and the predecessor Indenture Trustee an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after the
time of such appointment, and thereupon such successor Indenture Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Indenture Trustee hereunder in
the trust hereunder applicable to it with like effect as if originally named
the Indenture Trustee herein; but nevertheless upon the written request of
such successor Indenture Trustee, such predecessor Indenture Trustee shall
execute and deliver an instrument transferring to such successor Indenture
Trustee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Indenture Trustee, and such
predecessor Indenture Trustee shall duly assign, transfer, deliver and pay
over to such successor Indenture Trustee all monies or other property then
held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be a
bank or trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston,
Massachusetts and having (or whose obligations under the Operative Documents
are guaranteed by an affiliated entity having) a combined capital and surplus
of at least $100,000,000, if there be such an institution willing, able and
legally qualified to perform the duties of the Indenture Trustee hereunder
upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of paragraph (c) of this Section 9.01, be a successor
Indenture Trustee and the Indenture Trustee under this Trust Indenture without
further act.
SECTION 9.02. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary or
desirable in order to conform to any law of any jurisdiction in which all or
any part of the Collateral shall be situated or to make any claim or bring any
suit with respect to or in connection with the Collateral, this Trust
Indenture, any other Indenture Agreement, the Secured Certificates or any of
the transactions contemplated by the Participation Agreement, (ii) the
Indenture Trustee shall be advised by counsel satisfactory to it that it is so
necessary or prudent in the interests of the Certificate Holders (and the
Indenture Trustee shall so advise the Owner), or (iii) the Indenture
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Trustee shall have been requested to do so by a Majority in Interest of
Certificate Holders, then in any such case, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner, shall execute and
deliver an indenture supplemental hereto and such other instruments as may
from time to time be necessary or advisable either (1) to constitute one or
more bank or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Collateral, or to act as
separate trustee or trustees of all or any part of the Collateral, in each
case with such rights, powers, duties and obligations consistent with this
Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Indenture Trustee or a Majority in Interest of Certificate
Holders may deem necessary or advisable, or (2) to clarify, add to or subtract
from the rights, powers, duties and obligations theretofore granted any such
additional and separate trustee, subject in each case to the remaining
provisions of this Section 9.02. If the Owner shall not have taken any action
requested of it under this Section 9.02(a) that is permitted or required by
its terms within 15 days after the receipt of a written request from the
Indenture Trustee so to do, or if an Event of Default shall have occurred and
be continuing, the Indenture Trustee may act under the foregoing provisions of
this Section 9.02(a) without the concurrence of the Owner; and the Owner
hereby irrevocably appoints (which appointment is coupled with an interest)
the Indenture Trustee, its agent and attorney-in-fact to act for it under the
foregoing provisions of this Section 9.02(a) in either of such contingencies.
The Indenture Trustee may, in such capacity, execute, deliver and perform any
such supplemental indenture, or any such instrument, as may be required for
the appointment of any such additional or separate trustee or for the
clarification of, addition to or subtraction from the rights, powers, duties
or obligations theretofore granted to any such additional or separate trustee.
In case any additional or separate trustee appointed under this Section
9.02(a) shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Indenture Trustee until a
successor additional or separate trustee is appointed as provided in this
Section 9.02(a).
(b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Indenture
Trustee in respect of the custody, investment and payment of monies and all
monies received by any such additional or separate trustee from or
constituting part of the Collateral or otherwise payable under any Operative
Document to the Indenture Trustee shall be promptly paid over by it to the
Indenture Trustee. All other rights, powers, duties and obligations conferred
or imposed upon any additional or separate trustee shall be exercised or
performed by the Indenture Trustee and such additional or separate trustee
jointly except to the extent that applicable Law of any jurisdiction in which
any particular act is to be performed renders the Indenture Trustee
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations (including the holding of title to all or part
of the Collateral in any such jurisdiction) shall be exercised and performed
by such additional or separate trustee. No additional or separate trustee
shall take any discretionary action except on the instructions of the
Indenture Trustee or a Majority in Interest of Certificate Holders. No trustee
hereunder shall be personally liable by reason of any act or omission of any
other trustee hereunder, except that the Indenture Trustee shall be liable for
the consequences of its lack of reasonable care in selecting, and Indenture
Trustee's own actions in acting with, any additional or separate trustee. Each
additional or separate trustee appointed pursuant to this Section 9.02 shall
be subject to, and shall have the benefit of Articles IV, V, VI, VIII, IX and
XI hereof insofar as they apply to the Indenture Trustee. The powers of any
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additional or separate trustee appointed pursuant to this Section 9.02 shall
not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so necessary
or desirable in the interest of the Certificate Holders, or in the event that
the Indenture Trustee shall have been requested to do so in writing by a
Majority in Interest of Certificate Holders, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner, shall execute and
deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee.
The Indenture Trustee may act on behalf of the Owner under this Section
9.02(c) when and to the extent it could so act under Section 9.02(a) hereof.
ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) The Indenture Trustee agrees with the Certificate Holders that
it shall not enter into any amendment, waiver or modification of, supplement
or consent to the Purchase Agreement, the Consent and Agreement, this Trust
Indenture, the Guarantee or the Participation Agreement, or any other
agreement included in the Collateral, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by a Majority in
Interest of Certificate Holders, or does not adversely affect the Certificate
Holders, but upon the written request of a Majority in Interest of Certificate
Holders, the Indenture Trustee shall from time to time enter into any such
supplement or amendment, or execute and deliver any such waiver, modification
or consent, as may be specified in such request and as may be (in the case of
any such amendment, supplement or modification), to the extent such agreement
is required, agreed to by the Owner or, as may be appropriate, the
Manufacturer; provided, however, that, without the consent of each holder of
an affected Secured Certificate then outstanding, no such amendment of or
supplement to this Trust Indenture, the Purchase Agreement, the Consent and
Agreement, the Guarantee or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 10.01, or of Sections 2.02, 2.10, 2.11,
2.15, 4.02, 4.02(c), 4.02(d), 5.02, 7.06(a) or 7.06(b) hereof, the definitions
of "Break Amount", "Event of Default", "Default", "Majority in Interest of
Certificate Holders", "Make-Whole Amount", "Make-Whole Premium", "Prepayment
Premium" or "Certificate Holder", or the percentage of Certificate Holders
required to take or approve any action hereunder, (ii) reduce the amount, or
change the time of payment or method of calculation of any amount, of
Principal Amount, Break Amount (in the case of [Series G-1], [Series C-1]
[and] Series D Secured Certificates), if any, Make-Whole Premium, if any, or
interest with respect to any Secured Certificate, 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 Certificate Holders
and the Owner, (iii) reduce, modify or amend any indemnities in favor of the
Certificate Holders or (iv) permit the creation of any Lien on the Collateral
or any part thereof other than Permitted Liens or deprive any Certificate
Holder of the benefit of the Lien of this
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Trust Indenture on the Collateral, except as provided in connection with the
exercise of remedies under Article IV hereof.
(b) The Owner and the Indenture Trustee may enter into one or more
agreements supplemental hereto without the consent of any Certificate Holder
for any of the following purposes: (i) (a) to cure any defect or inconsistency
herein or in the Secured Certificates, or to make any change not inconsistent
with the provisions hereof (provided that such change does not adversely
affect the interests of any Certificate Holder in its capacity solely as
Certificate Holder) or (b) to cure any ambiguity or correct any mistake; (ii)
to evidence the succession of another party as the Owner in accordance with
the terms of the hereof or to evidence the succession of a new trustee
hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other provisions with
respect to matters or questions arising hereunder so long as such action shall
not adversely affect the interests of the Certificate Holders in its capacity
solely as Certificate Holder; (iv) to correct or amplify the description of
any property at any time subject to the Lien of this Trust Indenture or better
to assure, convey and confirm unto the Indenture Trustee any property subject
or required to be subject to the Lien of this Trust Indenture, the Airframe or
Engines or any Replacement Airframe or Replacement Engine; (v) to add to the
covenants of the Owner for the benefit of the Certificate Holders, or to
surrender any rights or power herein conferred upon the Owner; (vi) to add to
the rights of the Certificate Holders; (vii) to provide for the issuance of
Series E Secured Certificates and to make changes relating thereto, provided
that the Series E Secured Certificates are issued in accordance with the terms
hereof, Section 5(a)(v) of the Note Purchase Agreement and Section 9.1(f) of
the Intercreditor Agreement; (viii) to provide for the re-issuance of new
Series D Secured Certificates following a redemption of Series D Secured
Certificates pursuant to the second paragraph of Section 2.11 hereof; provided
that any re-issued Series D Secured Certificates are issued in accordance with
Section 9.1(e) of the Intercreditor Agreement; and (ix) to include on the
Secured Certificates any legend as may be required by law.
SECTION 10.02. Indenture Trustee Protected.
If, in the opinion of the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the terms of
Section 10.01 hereof adversely affects any right, duty, immunity or indemnity
with respect to such institution under this Trust Indenture, such institution
may in its discretion decline to execute such document.
SECTION 10.03. Documents Mailed to Certificate Holders.
Promptly after the execution by the Owner or the Indenture Trustee
of any document entered into pursuant to Section 10.01 hereof, the Indenture
Trustee shall mail, by first class mail, postage prepaid, a copy thereof to
the Owner and to each Certificate Holder at its address last set forth in the
Secured Certificate Register, but the failure of the Indenture Trustee to mail
such copies shall not impair or affect the validity of such document.
-65-
SECTION 10.04. No Request Necessary for Trust Indenture Supplement.
No written request or consent of the Indenture Trustee or the
Certificate Holders pursuant to Section 10.01 hereof shall be required to
enable the Owner to execute and deliver a Trust Indenture Supplement
specifically required by the terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal Amount
of, Make-Whole Premium, if any, and interest on and all other amounts due
under all Secured Certificates and provided that there shall be no other
Secured Obligations due to the Certificate Holders and the Indenture Trustee
hereunder or under the Participation Agreement, the Owner shall direct the
Indenture Trustee to execute and deliver to or as directed in writing by the
Owner an appropriate instrument releasing the Aircraft and the Engines from
the Lien of this Trust Indenture and releasing the Guarantee and the Purchase
Agreement from the assignment and pledge thereof hereunder and the Indenture
Trustee shall execute and deliver such instrument as aforesaid and give
written notice thereof to the Owner; provided, however, that this Trust
Indenture and the trusts created hereby shall earlier terminate and this Trust
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Indenture Trustee of all property constituting part of the
Collateral and the final distribution by the Indenture Trustee of all monies
or other property or proceeds constituting part of the Collateral 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 11.02. No Legal Title to Collateral in Certificate Holders.
No holder of a Secured Certificate shall have legal title to any
part of the Collateral. No transfer, by operation of law or otherwise, of any
Secured Certificate or other right, title and interest of any Certificate
Holder in and to the Collateral 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 Collateral.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is Binding.
Any sale or other conveyance of the Collateral, or any part thereof
(including any part thereof or interest therein), by the Indenture Trustee
made pursuant to the terms of this Trust Indenture shall bind the Certificate
Holders and shall be effective to transfer or convey all right, title and
interest of the Indenture Trustee, the Owner and such holders in and to such
Collateral or part thereof. No purchaser or other grantee shall be required to
inquire as to the authorization, necessity, expediency or regularity of such
sale or conveyance or as to the application of any sale or other proceeds with
respect thereto by the Indenture Trustee.
-66-
SECTION 11.04. Trust Indenture for Benefit of the Owner, Indenture
Trustee, and Certificate Holders.
Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner, the Indenture Trustee
and the Certificate Holders, any legal or equitable right, remedy or claim
under or in respect of this Trust Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this 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, addressed to it at its office at 0000 Xxxx Xxx Xxxxxxx
(X0000), Xxxxx, XX 00000-0000, Attention: Treasurer (Telecopy No. (612)
726-0665), (ii) if to the Indenture Trustee, addressed to it at its office at,
for U.S. mail at Corporate Trust Department, X.X. Xxx 000, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000, and for overnight courier at Corporate Trust
Department, 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (Telecopy
No. (000) 000-0000), (iii) if to any Certificate Holder, addressed to such
party at such address as such party shall have furnished by notice to the
Owner and the Indenture Trustee or, until an address is so furnished,
addressed to the address of such party (if any) set forth on the signature
pages to the Participation Agreement or in the Secured Certificate Register.
[Any notice to the Supplier shall be addressed to its Chief Executive Officer,
0 Xxxx Xxxxx Xxxxxxx Xxxxxxxx, 00000 Xxxxxxx, Xxxxxx (telex 521155F) (fax:
000-00-0-00-00-000). -- A319's and A330's] Whenever any notice in writing is
required to be given by the Owner or the Indenture Trustee or any Certificate
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 11.06. 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 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Secured
Certificates may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the Owner and the Indenture Trustee, in
compliance with Section 10.01 hereof. Any waiver of the terms hereof or of any
Secured Certificate shall be effective only in the specific instance and for
the specific purpose given.
-67-
SECTION 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Certificate
Holder shall bind the successors and assigns of such holder. Each Certificate
Holder by its acceptance of a Secured Certificate agrees to be bound by this
Trust Indenture and all provisions of the Participation Agreement applicable
to a Loan Participant or a Certificate Holder.
SECTION 11.09. Headings.
The headings of the various Articles and sections herein and in the
table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner, the Indenture Trustee, any Certificate Holder or
any bank or other Affiliate of such Certificate Holder may conduct any banking
or other financial transactions, and have banking or other commercial
relationships, with the Owner 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 the Owner for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. 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 11.12. Voting By Certificate Holders.
All votes of the Certificate Holders shall be governed by a vote of
a Majority in Interest of Certificate Holders, except as otherwise provided
herein.
SECTION 11.13. Bankruptcy.
It is the intention of the parties that the Indenture Trustee, shall
be entitled to the benefits of Section 1110 with respect to the right to take
possession of the Aircraft, Airframe, Engines and Parts as provided herein in
the event of a case under Chapter 11 of the Bankruptcy Code in which the Owner
is a debtor, and in any instance where more than one construction is
-68-
possible of the terms and conditions hereof or any other pertinent Operative
Document, each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve such
benefits.
-69-
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
NORTHWEST AIRLINES, INC.,
By: _____________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity, except as expressly
provided herein, but solely as
Indenture Trustee,
Indenture Trustee
By: _____________________________
Name:
Title:
-70-
ANNEX A
DEFINITIONS
Unless the context otherwise requires, the following terms shall
have the following meanings for all purposes of the Trust Indenture and
Security Agreement [NW ____ _] and shall be equally applicable to both the
singular and the plural forms of the terms herein defined:
["Above Cap Liquidity Agreement[s]" means [collectively] [(x)
[the ISDA Master Agreement, the Schedule to such ISDA Master
Agreement and the Class G-1 Above-Cap Liquidity Confirmation that
supplements such ISDA Master Agreement, each dated as of the
Issuance Date and between the Above-Cap Liquidity Provider and the
Subordination Agent, on behalf of the Class G-1 Pass Through
Trustee] [and] [or] [(y) the ISDA Master Agreement, the Schedule to
such ISDA Master Agreement and the Class C-1 Above-Cap Liquidity
Confirmation that supplements such ISDA Master Agreement, each dated
as of the Issuance Date and between the Above-Cap Liquidity Provider
and the Subordination Agent, on behalf of the Class C-1 Pass Through
Trustee [, as the case may be]].
[Above Cap Liquidity Provider" means, for any Above Cap
Liquidity Agreement, Credit Suisse First Boston, International, or
any successor thereto, as Above Cap Liquidity Provider under the
related Above Cap Liquidity Agreement.]
"Actual Knowledge" shall mean, as it applies to the Indenture
Trustee, actual knowledge of a Responsible Officer in the Corporate
Trust Office of the Indenture Trustee.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common
control with such person. For the purposes of this definition,
"control" (including "controlled by" and "under common control
with") shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of such person
whether through the ownership of voting securities or by contract or
otherwise.
"Aircraft" means the Airframe (or any airframe from time to
time substituted for such Airframe pursuant to Section 7.06 of the
Trust Indenture) together with the initial Engines (or any engine
substituted for either of such Engines pursuant to the terms of the
Trust Indenture), whether or not any such initial or substituted
Engines may from time to time be installed on such initial or
substituted Airframe or may be installed on any other airframe or on
any other aircraft.
"Airframe" means: (i) the [Airbus A319-114] [Boeing 757-351]
[Airbus A330-323] aircraft (except Engines or engines from time to
time installed
Annex A-1
thereon) identified by U.S. registration xxxx and manufacturer's
serial number in the initial Trust Indenture Supplement and any
aircraft (except Engines or engines from time to time installed
thereon) which may from time to time be substituted for such
aircraft (except Engines or engines from time to time installed
thereon) pursuant to clause (ii) of the first paragraph of Section
7.06(a) of the Trust Indenture; and (ii) any and all Parts so long
as the same shall be incorporated or installed in or attached to
such aircraft (except Engines or engines from time to time installed
thereon).
"Amortization Amount" shall mean, with respect to any Principal
Amount Repayment Date, the amount set forth opposite such Date on
the Amortization Schedule.
"Amortization Schedule" shall mean the amortization schedule
for the Secured Certificates delivered pursuant to Section 2.02 of
the Trust Indenture.
["Assigned Warranties" has the meaning set forth in the
definition of "Contract Rights".-- A319's and A330's]
"Average Life Date" for each [Series G-2] [and] [Series C-2]
Secured Certificate to be redeemed shall be the date which follows
the redemption date by a period equal to the Remaining Weighted
Average Life at the redemption date of such Secured Certificate.
"Remaining Weighted Average Life" of such Secured Certificate, at
the redemption date of such Secured Certificate, shall be the number
of days equal to the quotient obtained by dividing (a) the sum of
the products obtained by multiplying (i) the amount of each then
remaining installment of principal, including the payment due on the
maturity date of such Secured Certificate, by (ii) the number of
days from and including the redemption date to but excluding the
scheduled payment date of such principal installment; by (b) the
then unpaid principal amount of such Secured Certificate.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
Citibank, N.A. in New York, New York from time to time as its base
rate.
"Break Amount" means, as of any date of payment, redemption or
acceleration of any [Series G-1], [Series C-1] [or] Series D Secured
Certificate (the "Applicable Date"), an amount determined by the
Reference Agent on the date that is two Business Days prior to the
Applicable Date pursuant to the formula set forth below; provided,
however, that no Break Amount will be payable (x) if the Break
Amount, as calculated pursuant to the formula set forth below, is
equal to or less than zero or (y) on or in respect of any Applicable
Date that is a Payment Date.
Annex A-2
Break Amount = Z-Y
Where:
X = with respect to any applicable Interest Period, the sum
of (i) the amount of the outstanding principal amount of
such Secured Certificate as of the first day of the then
applicable Interest Period plus (ii) interest payable
thereon during such entire Interest Period at then
effective LIBOR.
Y = X, discounted to present value from the last day of the
then applicable Interest Period to the Applicable Date,
using then effective LIBOR as the discount rate.
Z = X, discounted to present value from the last day of the
then applicable Interest Period to the Applicable Date, using a rate
equal to the applicable London interbank offered rate for a period
commencing on the Applicable Date and ending on the last day of the
then applicable Interest Period, determined by the Reference Agent
as of two Business Days prior to the Applicable Date as the discount
rate.
"Business Day" means any day other than a Saturday or Sunday or
a day on which commercial banks are required or authorized to close
in the City of New York, New York; Boston, Massachusetts;
Minneapolis, Minnesota, or, solely as it relates to the
determination of LIBOR, London, England.
"Cash Equivalents" shall mean (i) direct obligations of the
United States of America and agencies guaranteed by the United
States government having a final maturity of ninety (90) days or
less from date of purchase thereof; (ii) certificates of deposit
issued by, bankers' acceptances of, or time deposits with, any bank,
trust company or national banking association incorporated under the
laws of the United States of America or one of the states thereof
having combined capital and surplus and retained earnings as of its
last report of condition of at least $500,000,000 and having a
rating of Aa or better by Xxxxx'x Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Ratings Services, a
division of XxXxxx-Xxxx Companies, Inc. ("S&P") and having a final
maturity of ninety (90) days or less from date of purchase thereof;
and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and
commercial paper of any corporation or finance company incorporated
or doing business under the laws of the United States of America or
any state thereof having a rating assigned to such commercial paper
of A1 by S&P or P1 by Moody's and having a final maturity of ninety
(90) days or less from the date of purchase thereof; provided,
however, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not be in
excess of 5% of such bank's capital and surplus.
Annex A-3
"Certificate Holder" shall mean any holder from time to time of
one or more Secured Certificates.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States
Code, for aircraft capable of carrying ten or more individuals or
6,000 pounds or more of cargo or that otherwise is certified or
registered to the extent required to fall within the purview of 11
U.S.C. Section 1110 or any analogous successor provision of the
Bankruptcy Code.
"Citizen of the United States" has the meaning specified in
Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in
substitution or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force
Air Mobility Command pursuant to Executive Order No. 11490, as
amended, or any substantially similar program.
"Class C-1 Pass Through Trust" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2002-1C-1, dated as of the Issuance Date
among Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
["Class C-1 Trustee" means the Pass Through Trustee for the
Class C-1 Pass Through Trust.]
"Class C-2 Pass Through Trust" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2002-1C-2, dated as of the Issuance Date
among Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
["Class C-2 Trustee" means the Pass Through Trustee for the
Class C-2 Pass Through Trust.]
"Class D Pass Through Trust" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2002-1D, dated as of [__________], 200[_]
among Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
Annex A-4
"Class D Trustee" means the Pass Through Trustee for the Class
D Pass Through Trust.
"Class G-1 Pass Through Trust" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2002-1G-1, dated as of the Issuance Date
among Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
["Class G-1 Trustee" means the Pass Through Trustee for the
Class G-1 Pass Through Trust.]
"Class G-2 Pass Through Trust" means the Pass Through Trust
Agreement, dated as of June 3, 1999, among Northwest Airlines
Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2002-1G-2, dated as of the Issuance Date
among Northwest Airlines, Inc., Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.
["Class G-2 Trustee" means the Pass Through Trustee for the
Class G-2 Pass Through Trust.]
"Closing" means the closing of the transactions contemplated by
the Participation Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all estate, right, title and interest
of the Indenture Trustee in and to the properties referred to in the
Granting Clause of the Trust Indenture.
"Commitment" means the amount the payment of each Pass Through
Trustee to be made as provided in Section 1 of the Participation
Agreement.
"Consent and Agreement" means[, collectively, the Manufacturer
Consent and Agreement to Assignment of Warranties and the Supplier
Consent and Agreement to Assignment of Warranties. -- A319's and
A330's] [that certain Consent and Agreement [NW ____ _], dated as of
the date hereof, executed by the Manufacturer, as the same may be
amended, modified or supplemented in accordance with the applicable
provisions thereof -- 757's]
"Contract Rights" means all of the Owner's rights and interests
in and to [(i) Clauses 12, 13 and, to the extent relating to acts to
be performed following the
Annex A-5
date of enforcement of the Trust Indenture, 17 of the Purchase
Agreement (but not any other provision of the Purchase Agreement or
any letter agreement referred to therein) as such Clauses relate to
the Aircraft (the "Assigned Warranties"), and (ii) the Guaranty as
it relates to the Assigned Warranties, reserving to the Owner,
however, all of the Owner's rights and interests in and to Clauses
12, 13 and, to the extent relating to acts to be performed following
the date of enforcement of the Trust Indenture, 17 of the Purchase
Agreement and the Guaranty as and to the extent that such Clauses of
the Purchase Agreement and the Guaranty relate to aircraft other
than the Aircraft and to the extent that the Purchase Agreement and
the Guaranty relate to any other matters not directly pertaining to
the Aircraft. -- A319's and A330's] [the Purchase Agreement, as and
to the extent that the same relate to the Aircraft and the operation
thereof, including, without limitation, (a) all claims for damages
in respect of the Aircraft arising as a result of any default by the
Manufacturer under the Purchase Agreement, including, without
limitation, all warranty, service life policy, aircraft performance
guarantee and indemnity provisions in the Purchase Agreement in
respect of the Aircraft and all claims thereunder and (b) any and
all rights of the Owner to compel performance of the terms of the
Purchase Agreement in respect of the Aircraft; reserving to the
Owner, however, (i) all of the Owner's rights and interests in and
to the Purchase Agreement as and to the extent that it relates to
any matters not in respect of the Aircraft, (ii) all of the Owner's
rights and interests under the Purchase Agreement (other than under
Exhibit B (Product Assurance Document) thereof), (iii) all of the
Owner's rights and interests in or arising out of any payments or
deposits made or to be made by the Owner or amounts credited or to
be credited or paid or to be paid by the Manufacturer to the Owner
in respect of the Aircraft under the Purchase Agreement, (iv) all of
the Owner's rights and interests in and to any Spare Parts General
Terms Agreement and (v) with respect to the Aircraft, all rights to
demand, accept and retain all rights in and to property (other than
the Aircraft), data, documents, training and services of any kind
which the Manufacturer is obligated to provide or does provide
pursuant to the Purchase Agreement with respect to the Aircraft. --
757's]
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee located at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Corporate Trust Department, or such
other office at which the Indenture Trustee's corporate trust
business shall be administered which the Indenture Trustee shall
have specified by notice in writing to the Owner, the Loan
Participants and each Certificate Holder.
"Debt" shall mean any liability for borrowed money, or any
liability for the payment of money in connection with any letter of
credit transaction, or other liabilities evidenced or to be
evidenced by bonds, debentures, notes or other similar instruments
or for the deferred purchase price of property, goods or services.
"Debt Rate" shall mean, with respect to [(i) Series G-1, the
amount specified for the Debt Rate for Series G-1 Secured
Certificates in Schedule I to
Annex A-6
the Trust Indenture], [[(i)][(ii)] Series G-2, the rate per annum
specified for the Debt Rate for Series G-2 Secured Certificates in
Schedule I to the Trust Indenture,] [[(ii)][(iii)] Series C-1, the
amount specified for the Debt Rate for Series C-1 Secured
Certificates in Schedule I to the Trust Indenture,]
[[[(ii)][(iii)][(iv)] Series C-2, the amount specified for the Debt
Rate for Series C-2 Secured Certificates in Schedule I to the Trust
Indenture,] [(iii)][(iv)][(v)] Series D, the amount specified for
the Debt Rate for Series D Secured Certificates in Schedule I to the
Trust Indenture, [[(iv)][(v)][(vi)] Series E, the amount specified
for such Series in an amendment to the Trust Indenture,] and
[(iv)][(v)][(vi)][(vii)] for any other purpose with respect to any
period, the weighted average interest rate per annum during such
period borne by the outstanding Secured Certificates, excluding any
interest payable at the Past Due Rate.
"Default" means any event which with the giving of notice or
the lapse of time or both would become an Event of Default.
"Dollars" and "$" means the lawful currency of the United
States of America.
"Engine" means (i) each of the two [CFM International, Inc.
Model CFM56-5A5] [Xxxxx & Xxxxxxx Model PW2040] [Xxxxx & Whitney
Model PW4168A] engines listed by manufacturer's serial number in the
initial Trust Indenture Supplement, whether or not from time to time
thereafter installed on the Airframe or installed on any other
airframe or on any other aircraft; and (ii) any engine which may
from time to time be substituted, pursuant to the terms of the Trust
Indenture, for either of such two engines, together in each case
with any and all Parts incorporated or installed in or attached
thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder. Section references to ERISA are to
ERISA, as in effect at the date of the Participation Agreement and
any subsequent provisions of ERISA, amendatory thereof, supplemental
thereto or substituted therefor.
"Event of Default" shall have the meaning specified in Section
4.01 of the Trust Indenture.
"Event of Loss" with respect to the Aircraft, Airframe or any
Engine means any of the following events with respect to such
property: (i) the loss of such property or of the use thereof due to
the destruction of or damage to such property which renders repair
uneconomic or which renders such property permanently unfit for
normal use by the Owner (or any Lessee) for any reason whatsoever;
(ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total
loss, or a constructive or compromised total loss; (iii) the theft
or disappearance of such property, or the confiscation,
condemnation, or seizure of, or requisition of title to, or use of,
such property (other than a requisition for use by the United States
Annex A-7
Government or any other government of registry of the Aircraft, or
any agency or instrumentality of any thereof) which in the case of
any event referred to in this clause (iii) (other than a requisition
of title) shall have resulted in the loss of possession of such
property by the Owner (or any Lessee) for a period in excess of 180
consecutive days or, in the case of a requisition of title, the
requisition of title shall not have been reversed within 90 days
from the date of such requisition of title; (iv) as a result of any
law, rule, regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government of
registry of the Aircraft having jurisdiction, the use of such
property in the normal course of the business of air transportation
shall have been prohibited for a period of 180 consecutive days,
unless the Owner (or any Lessee), prior to the expiration of such
180 day period, shall have undertaken and shall be diligently
carrying forward all steps which are necessary or desirable to
permit the normal use of such property by the Owner (or such
Lessee), but in any event if such use shall have been prohibited for
a period of two consecutive years, provided that no Event of Loss
shall be deemed to have occurred if such prohibition has been
applicable to the entire U.S. registered fleet of [Airbus Model
A319-100] [Boeing Model 757-300] [Airbus Model A330-300] aircraft of
the Owner (or any Lessee) and the Owner (or a Lessee), prior to the
expiration of such two-year period, shall have conformed at least
one such aircraft in its fleet to the requirements of any such law,
rule, regulation, order or other action and commenced regular
commercial use of the same in such jurisdiction and shall be
diligently carrying forward, in a manner which does not discriminate
against the Aircraft in so conforming the Aircraft, all steps which
are necessary or desirable to permit the normal use of the Aircraft
by the Owner (or such Lessee), provided, further that,
notwithstanding any of the foregoing, such prohibition shall
constitute an Event of Loss if such use shall have been prohibited
for a period of three consecutive years; and (v) any divestiture of
title to or interest in an Engine treated as an Event of Loss
pursuant to Section 7.06(b) of the Trust Indenture. An Event of Loss
with respect to the Aircraft shall be deemed to have occurred if an
Event of Loss occurs with respect to the Airframe.
"Expenses" shall have the meaning attributed thereto in Section
7(c) of the Participation Agreement.
"Federal Aviation Act" means that portion of the United States
Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that
amends, supplements or supersedes such provisions.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or
instrumentality of the United States government succeeding to their
functions.
"Federal Funds Rate" means a fluctuating interest rate per
annum in effect from time to time, which rate per annum shall at all
times be equal to the weighted average of the rates on overnight
Federal funds transactions with
Annex A-8
members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or if such rate is not published for any
day that is a Business Day, the average of the quotations for such
day for such transactions received by State Street from three
Federal funds brokers of recognized standing selected by it.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs maintenance, preventative maintenance
and inspections for the Aircraft, Airframe and/or any Engine or
engine to standards which are approved by, or which are
substantially equivalent to those required by, the Federal Aviation
Administration, the Civil Aviation Authority of the United Kingdom,
the Direction Generale de l'Aviation Civile of the French Republic,
the Luftfahrt Bundesamt of the Federal Republic of Germany, the
Nederlandse Luchtvaart Authoriteit of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality
of the applicable government succeeding to the functions of any of
the foregoing entities).
["French Pledge Agreement" means the French Pledge Agreement,
dated as of [_____________], between the Owner and the Indenture
Trustee.-- A319's and A330's]
"Government Entity" mean (a) any federal, state, provincial or
similar government, and any body, board, department, commission,
court, tribunal, authority, agency or other instrumentality of any
such government or otherwise exercising any executive, legislative,
judicial, administrative or regulatory functions of such government
or (b) any other government entity having jurisdiction over any
matter contemplated by the Operative Agreements or relating to the
observance or performance of the obligations of any of the parties
to the Operative Agreements.
"Guarantee" means that certain Guarantee [NW ____ _], dated as
of [________], made by the Guarantor, as such Guarantee may be
amended or supplemented from time to time pursuant to the applicable
provisions thereof.
"Guarantor" means Northwest Airlines Corporation, a Delaware
corporation.
["Guaranty" means that certain Guaranty of the Manufacturer
attached to the Purchase Agreement.-- A319's and A330's]
"Indemnitee" means (i) the Indenture Trustee, (ii) the Loan
Participants and each other Certificate Holder, (iii) the
Subordination Agent, (iv) the Liquidity Providers and the Policy
Provider, (v) the Pass Through Trustees, (vi) each Affiliate of the
Person described in clause (i), (vii) each Affiliate of the Persons
described in clauses (iii), (iv) and (v) inclusive, (viii) the
respective directors,
Annex A-9
officers, employees, agents and servants of each of the Persons
described in clauses (i) through (v), inclusive, (ix) the successors
and permitted assigns of the Person described in clause (i), and (x)
the successors and permitted assigns of the Persons described in
clauses (ii), (iii), (iv) and (v) inclusive.
"Indenture Agreements" means the Participation Agreement, the
Purchase Agreement, [the Guaranty, -- A319's and A330's only] the
Guarantee, and any other contract, agreement or instrument from time
to time assigned or pledged under the Trust Indenture.
"Indenture Indemnitee" means (i) the Indenture Trustee, (ii)
the Loan Participants and each Certificate Holder, (iii) the
Subordination Agent, (iv) the Liquidity Providers and the Policy
Provider, (v) the Pass Through Trustee and (vi) the respective
directors, officers, employees, agents and servants of each of the
Persons described in clauses (i) through (v), inclusive.
"Indenture Trustee" means the Indenture Trustee under the Trust
Indenture, and any entity which may from time to time be acting as
Indenture Trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation Agreement
and the Trust Indenture.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to
its interest in the Aircraft, (B) acts of the Indenture Trustee not
permitted by, or failure of the Indenture Trustee to take any action
required by, the Operative Documents to the extent such acts arise
or such failure arises from or constitutes gross negligence or
willful misconduct, (C) claims against the Indenture Trustee
relating to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 of the Participation Agreement
pursuant to said Section 7, or (D) claims against the Indenture
Trustee arising out of the transfer by the Indenture Trustee of all
or any portion of its interest in the Aircraft, the Collateral or
the Operative Documents other than a transfer of the Aircraft
pursuant to Article IV of the Trust Indenture while an event of
default is continuing and prior to the time that the Indenture
Trustee has received all amounts due pursuant to the Trust
Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement among the Pass Through Trustees (originally executed
without the trustee for the Class D Pass Through Trust), the
Liquidity Providers, the Policy Provider, [and] the Subordination
Agent [and other parties thereto]1, as such Intercreditor Agreement
may be amended or supplemented from time to time pursuant to the
applicable provisions thereof.
---------
1 To be inserted if less than all of Series G-1, Series G-2, Series C-1,
Series C-2 Secured Certificates are issued with respect to a particular
Aircraft.
Annex A-10
"Interest Period" means (i) in the case of the first Interest
Period, the period commencing on (and including) the Closing Date
and ending on (but excluding) the first Payment Date following the
Closing Date and (ii) in the case of each subsequent Interest
Period, the period commencing on (and including) the last day of the
immediately preceding Interest Period, and ending on (but excluding)
the next Payment Date.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of
such Interest Period.
"Issuance Date" means August 5, 2002.
"Law" shall mean (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and
(b) any judicial or administrative interpretation or application of,
or decision under, any of the foregoing.
"Lease" means any lease permitted by the terms of Section 7.02
of the Trust Indenture.
"Lessee" means any Person for so long, but only so long, as
such Person is in possession of the Airframe and/or any Engine
pursuant to the terms of a Lease which is then in effect pursuant to
Section 7.02(b)(x) of the Trust Indenture.
"LIBOR" means, with respect to any period, LIBOR for such
period as determined pursuant to the Reference Agency Agreement.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease or security interest.
"Liquidity Facilities" means[, collectively, the Above Cap
Liquidity Agreement and] the Primary Liquidity Facilities.
"Liquidity Providers" means[, together, the Above Cap Liquidity
Provider and] the Primary Liquidity Provider.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Certificate Holder.
"Loan Participant Liens" means any Lien which arises from acts
or claims against any Loan Participant not related to the
transactions contemplated by the Operative Documents.
"Majority in Interest of Certificate Holders" as of a
particular date of determination shall mean the holders of more than
a majority in aggregate unpaid Principal Amount of all Secured
Certificates outstanding as of such date (excluding any Secured
Certificates held by the Owner or its affiliates, it being
Annex A-11
understood that the Class D Trustee shall be an affiliate of the
Owner as long as more than 50% in the aggregate face amount of the
Pass Through Certificates issued by the Class D Pass Through Trust
are held by an affiliate of the Owner or the Class D Trustee is
otherwise under the control of such affiliate of the Owner (unless
all Secured Certificates then outstanding shall be held by the Owner
or its affiliates)).
"Make-Whole Amount" means, with respect to any [Series G-2
Secured Certificate] [or] [Series C-2 Secured Certificate], the
amount (as determined by an independent investment banker selected
by the Owner and reasonably acceptable to the Indenture Trustee) by
which (a) the present value of the remaining scheduled payments of
principal and interest from the redemption date to maturity of such
Secured Certificate computed by discounting each such payment on a
semiannual basis from its respective Payment Date (assuming a
360-day year of twelve 30-day months) using a discount rate equal to
the Treasury Yield exceeds (b) the outstanding principal amount of
such Secured Certificate plus accrued interest. For purposes of
determining the Make-Whole Amount, "Treasury Yield" at the time of
determination with respect to any [Series G-2 Secured Certificate]
[or] [Series C-2 Secured Certificate] means the interest rate
(expressed as a semiannual equivalent and as a decimal and, in the
case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the per annum rate equal to the semiannual
yield to maturity for United States Treasury securities maturing on
the Average Life Date of such Secured Certificate and trading in the
public securities market either as determined by interpolation
between the most recent weekly average yield to maturity for two
series of United States Treasury securities, trading in the public
securities markets, (A) one maturing as close as possible to, but
earlier than, the Average Life Date of such Secured Certificate and
(B) the other maturing as close as possible to, but later than, the
Average Life Date of such Secured Certificate, in each case as
published in the most recent H.15(519) or, if a weekly average yield
to maturity for United States Treasury securities maturing on the
Average Life Date of such Secured Certificate is reported on the
most recent H.15(519), such weekly average yield to maturity as
published in such H.15(519). "H.15(519)" means the weekly
statistical release designated as such, or any successor
publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of a Make-Whole Amount
shall be the third Business Day prior to the applicable redemption
date and the "most recent H.15(519)" means the H.15(519) published
prior to the close of business on the third Business Day prior to
the applicable redemption date.
"Make-Whole Premium" means, in the case of [Series G-1] [and]
[Series C-1] Secured Certificates, the Prepayment Premium, and in
the case of [Series G-2] [and] [Series C-2] Secured Certificates,
the Make-Whole Amount.
"Manufacturer" means [Airbus G.I.E., f/k/a Airbus Industrie
G.I.E., a Groupement d'Interet Economique established under
Ordonnance 67-821, dated
Annex X-00
Xxxxxxxxx 00, 0000, xx xxx Xxxxxxxx of France] [The Boeing Company,
a Delaware corporation].
["Manufacturer Consent and Agreement to Assignment of
Warranties" means the Manufacturer Consent and Agreement to
Assignment of Warranties [NW ____ __], dated as of the date hereof,
executed by the Manufacturer, as the same may be amended, modified
or supplemented from time to time in accordance with the applicable
provisions thereof. -- A319's and A330's]
"Manufacturer Documents" means [the Manufacturer Consent and
Agreement to Assignment of Warranties and the Guaranty. -- A319's
and A330's] [the Purchase Agreement and the Consent and Agreement.--
757's]
["Mortgage" means that certain Mortgage and Security Agreement,
dated as of [________________].]
"Mortgaged Property" shall have the meaning specified in
Section 3.03 of the Trust Indenture.
"Note Purchase Agreement" means that certain Note Purchase
Agreement, dated as of the Issuance Date, among Northwest Airlines,
Inc., the Subordination Agent, Xxxxx Fargo Bank Northwest, National
Association, as Escrow Agent, State Street Bank and Trust Company of
Connecticut, National Association, as Paying Agent, [and] the Pass
Through Trustee under each Pass Through Trust Agreement (other than
the Class D Pass Through Trust) [and other parties thereto]2,
providing for, among other things, the issuance and sale of certain
secured certificates.
"Operative Documents" and "Operative Document" means each of
the Participation Agreement, the Trust Indenture, the Trust
Indenture Supplement covering the Aircraft, the Secured
Certificates, the Purchase Agreement (insofar as it relates to the
Aircraft), the Consent and Agreement and the Guarantee.
"Overall Transaction" means all the transactions contemplated
by the Operative Documents.
"Owner Documents" means the Participation Agreement, the Trust
Indenture and the Purchase Agreement (insofar as it relates to the
Aircraft).
"Participants" means and includes the Loan Participants.
"Participation Agreement" means that certain Participation
Agreement [NW ____ _], dated as of [_______________], among the
Owner, the Subordination Agent, the Indenture Trustee, the
Guarantor, and the Purchasers as
---------
2 To be inserted if less than all of Series G-1, Series G-2, Series C-1,
Series C-2 Secured Certificates are issued with respect to a particular
Aircraft.
Annex A-13
the same may from time to time be supplemented or further amended,
or the terms thereof waived or modified, to the extent permitted by,
and in accordance with, the terms thereof.
"Parties" means the Indenture Trustee and the Participants.
"Parts" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of
whatever nature (other than (a) complete Engines or engines, (b) any
items leased by the Owner from a third party (other than Lessor) and
(c) cargo containers) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Overall Transaction.
"Pass Through Trust" means each of the [three/four/five]
separate pass through trusts created under the Pass Through Trust
Agreements.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the [three/four/five] separate pass through
trust supplements referred to on Schedule III to the Participation
Agreement.
"Pass Through Trustee" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, in its capacity as trustee under each Pass Through
Trust Agreement, and each other person that may from time to time be
acting as successor trustee under any such Pass Through Trust
Agreement.
"Past Due Rate" shall mean with respect to any Series of
Secured Certificates, the Debt Rate then applicable to such Series
plus 2% per annum.
"Payment Date" shall mean each February 20, May 20, August 20
and November 20 commencing on [February/May/August/November 20,
____] (or, in the case of a [Series G-1,] [Series C-1] [or] Series D
Secured Certificate, if any such day is not a Business Day, the
immediately succeeding Business Day) until the Secured Certificates
have been paid in full.
"Permitted Lessee" means any entity domiciled in a country
listed in Schedule III to the Trust Indenture.
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 7.01 of the Trust Indenture.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Annex A-14
"Policy Provider" means MBIA Insurance Corporation, a New
York-domiciled stock insurance company.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement dated as of the Issuance Date among the Subordination
Agent, [the Class G-1 Trustee] [the Class G-2 Trustee] [the other
party thereto]3 and the Policy Provider, including the related
Policy Provider Fee Letter referred to therein, as amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Prepayment Premium" is defined in Schedule I to the Trust
Indenture.
"Primary Liquidity Facilities" means the [two/three/four]
Revolving Credit Agreements (consisting of a separate Revolving
Credit Agreement with the Primary Liquidity Provider with respect to
each Pass Through Trust (other than the Class D Pass Through Trust),
between the Subordination Agent, as borrower, and the Primary
Liquidity Provider, each dated as of the Issuance Date, including,
in each case, the related Liquidity Fee Letter referred to therein,
and any replacement thereof, in each case as the same may be
amended, modified or supplemented.
"Primary Liquidity Provider" means Westdeutsche Landesbank
Girozentrale, a German banking institution organized under the laws
of the State of North Rhine-Westphalia, acting through its New York
branch, or any successor thereto, as ["Class G-1 Primary Liquidity
Provider"], ["Class G-2 Primary Liquidity Provider"], ["Class C-1
Primary Liquidity Provider"] and ["Class C-2 Primary Liquidity
Provider"] (as such terms are defined in the Intercreditor
Agreement).
"Principal Amount" with respect to a Secured Certificate means
the stated original principal amount of such Secured Certificate
and, with respect to all Secured Certificates, means the aggregate
stated original principal amounts of all Secured Certificates.
"Principal Amount Repayment Date" shall mean each Payment Date
on which any portion of the Principal Amount is due and payable in
accordance with the Amortization Schedule.
"Purchase Agreement" means that certain [Airbus A319 Purchase
Agreement, dated as of September 19, 1997] [Purchase Agreement No.
2159, dated January 16, 2001] [Airbus A330 Purchase Agreement, dated
as of December 21, 2000], between the [Supplier] [Manufacturer] and
the Owner relating to the purchase by the Owner of the Aircraft, as
originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the foregoing
relates to the Aircraft.
---------
3 To be inserted if Series G-1 and Series G-2 are not both issued with respect
to a particular Aircraft.
Annex A-15
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" shall have the meaning specified in Section 2.08 of the
Trust Indenture.
"Reference Agency Agreement" means the Reference Agency
Agreement, dated as of the Issuance Date, among State Street, as
reference agent thereunder, the Subordination Agent, Xxxxx Fargo
Bank Northwest, National Association, as Escrow Agent and the Owner.
"Reference Agent" means State Street as reference agent under
the Reference Agency Agreement, and any entity which may from time
to time be acting as reference agent under the Reference Agency
Agreement.
"Related Indemnitee Group" means, with respect to any
Indemnitee, any officer, director, servant, employee, agent or
Affiliate thereof.
"Replacement Airframe" shall mean any airframe substituted for
the Airframe pursuant to Section 7.06 of the Trust Indenture.
"Replacement Engine" shall mean any engine substituted for an
Engine pursuant to Section 7.06 of the Trust Indenture.
"Responsible Officer" means a responsible officer in the
Corporate Trust Office of the Indenture Trustee.
"Secured Certificates" shall mean and include any Secured
Certificates issued hereunder, and issued in exchange therefor or
replacement thereof.
"Secured Obligations" shall have the meaning specified in
Section 2.06 of the Trust Indenture.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series" means any of [Series G-1], [Series G-2], [Series C-1],
[Series C-2], Series D or Series E.
["Series C-1" or "Series C-1 Secured Certificates" means
Secured Certificates issued and designated as "Series C-1"
hereunder, in the Principal Amount and maturities as specified in
Schedule I to the Trust Indenture under the heading "Series C-1" and
bearing interest at the Debt Rate for Series C-1 Secured
Certificates specified in Schedule I to the Trust Indenture.]
["Series C-2" or "Series C-2 Secured Certificates" means
Secured Certificates issued and designated as "Series C-2"
hereunder, in the Principal Amount and maturities as specified in
Schedule I to the Trust Indenture under the
Annex A-16
heading "Series C-2" and bearing interest at the Debt Rate for
Series C-2 Secured Certificates specified in Schedule I to the Trust
Indenture.]
"Series D" or "Series D Secured Certificates" means Secured
Certificates issued and designated as "Series D" hereunder, in the
Principal Amount and maturities as specified in Schedule I to the
Trust Indenture under the heading "Series D" and bearing interest at
the Debt Rate for Series D Secured Certificates specified in
Schedule I to the Trust Indenture.
"Series E" or "Series E Secured Certificates" means Secured
Certificates issued and designated as "Series E" hereunder, in the
Principal Amount and maturities as specified in Schedule I to the
Trust Indenture under the heading "Series E" and bearing interest at
the Debt Rate for Series E Secured Certificates specified in
Schedule I to the Trust Indenture (or, if the Series E Secured
Certificates are issued after the Closing Date, as specified in an
amendment to the Trust Indenture at the time of issuance of the
Series E Secured Certificates).
["Series G-1" or "Series G-1 Secured Certificates" means
Secured Certificates issued and designated as "Series G-1"
hereunder, in the Principal Amount and maturities as specified in
Schedule I to the Trust Indenture under the heading "Series G-1" and
bearing interest at the Debt Rate for Series G-1 Secured
Certificates specified in Schedule I to the Trust Indenture.]
["Series G-2" or "Series G-2 Secured Certificates" means
Secured Certificates issued and designated as "Series G-2"
hereunder, in the Principal Amount and maturities as specified in
Schedule I to the Trust Indenture under the heading "Series G-2" and
bearing interest at the Debt Rate for Series G-2 Secured
Certificates specified in Schedule I to the Trust Indenture.]
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture
Trustee under the Trust Indenture, but in its individual capacity.
"Subordination Agent" means State Street Bank and Trust
Company, a Massachusetts trust company, as subordination agent under
the Intercreditor Agreement, or any successor thereto.
["Supplier" means AVSA, S.A.R.L., a French societe a
responsabilite limitee, organized and existing under the laws of the
French Republic, and its successors.-- A319's and A330's]
["Supplier Consent and Agreement to Assignment of Warranties"
means the Supplier Consent and Agreement to Assignment of Warranties
[NW ____ _], dated as of the date hereof, executed by the Supplier,
as the same may be amended, modified or supplemented from time to
time in accordance with the applicable terms thereof. -- A319's and
A330's]
Annex A-17
["Supplier Documents" means the Purchase Agreement and the
Supplier Consent and Agreement to Assignment of Warranties.-- A319's
and A330's]
"Tax Indemnitee" means (i) the Indenture Trustee, its
successors and permitted assigns, (ii) the Policy Provider and (iii)
the Trust Indenture Estate.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes
(including, without limitation, income, gross receipts, sales,
rental, use, turnover, value added, property (tangible and
intangible), excise and stamp taxes), license, levies, imposts,
duties, charges, assessments or withholdings of any nature
whatsoever, together with any and all penalties, fines, additions to
tax and interest thereon (each, individually a "Tax").
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Trust Indenture", "this Indenture"," the Trust Indenture",
"Indenture", and "the Indenture" shall mean the Trust Indenture and
Security Agreement [NW ____ _], dated as of [______] between the
Owner and the Indenture Trustee, as it may from time to time be
supplemented or amended as herein provided, including supplementing
by a Trust Indenture Supplement pursuant thereto.
"Trust Indenture Estate" shall mean all estate, right, title
and interest of the Indenture Trustee in and to the properties
referred to in the Granting Clause of the Trust Indenture.
"Trust Indenture Supplement" shall mean a supplement to the
Trust Indenture, in substantially the form of Exhibit A thereto,
which shall particularly describe the Aircraft, and any Replacement
Airframe and Replacement Engine.
"Underwriting Agreement" means that certain Underwriting
Agreement, dated as of July 29, 2002, among the Owner, the
Guarantor, and the underwriters named therein.
"U.S. Air Carrier" means any Certificated Air Carrier as to
which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the regulations under the Federal Aviation
Act, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provisions therefor or
in the absence thereof.
"Wet Lease" means any arrangement whereby the Owner (or any
Lessee) agrees to furnish the Airframe and Engines or engines
installed thereon to a third party pursuant to which such Airframe
and Engines or engines (i) shall be operated solely by regular
employees of the Owner (or any Lessee) possessing all current
certificates and licenses that would be required under the Federal
Aviation Act or, if the Aircraft is not registered in the United
States, all certificates and licenses required by the laws of the
jurisdiction of registry, for the performance by
Annex A-18
such employees of similar functions within the United States of
America or such other jurisdiction of registry (it is understood
that cabin attendants need not be regular employees of the Owner (or
any Lessee)) and (ii) shall be maintained by the Owner (or any
Lessee) in accordance with its normal maintenance practices.
Annex A-19
----------------------------------
EXHIBIT A
TO
TRUST INDENTURE
AND SECURITY AGREEMENT
----------------------------------
TRUST INDENTURE SUPPLEMENT
[NW ____ _]
This TRUST INDENTURE SUPPLEMENT [NW ____ _], dated [_____________]
(herein called this "Trust Indenture Supplement") of NORTHWEST AIRLINES, INC.
(the "Owner").
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _],
dated as of [_______________] (as amended and supplemented to the date hereof,
the "Trust Indenture") between the Owner and STATE STREET BANK AND TRUST
COMPANY, as Indenture Trustee (the "Indenture Trustee"), provides for the
execution and delivery of a supplement thereto substantially in the form
hereof, which shall particularly describe the Aircraft, and shall specifically
mortgage such Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and Engines
described below, and a counterpart of the Trust Indenture is attached hereto
and made a part hereof and this Trust Indenture Supplement, together with such
counterpart of the Trust Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner hereby confirms that the Lien of the Trust Indenture on the Collateral
covers all of the Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
--------------- --------- ---------------- ------------------
together with all of the Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are
from time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
EXHIBIT A-1
Manufacturer Manufacturer's Model Serial Number
---------------- ------------------------ -----------------
together with all of the Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereafter acquired and which are from
time to time incorporated or installed in or attached to any of such engines.
Together with all of the Owner's right, title and interest in and to
all Parts of whatever nature, which from time to time are included within the
definition of "Airframe" or "Engine", whether now owned or hereafter acquired,
including all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to the Airframe and Engines (other
than additions, improvements, accessions and accumulations which constitute
appliances, parts, instruments, appurtenances, accessories, furnishings or
other equipment excluded from the definition of Parts).
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Certificate Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Secured Certificate over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as supplemental
to the Trust Indenture and shall form a part thereof. The Trust Indenture is
each hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.
This Trust Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, the Owner hereby acknowledges that the Aircraft
referred to in this Trust Indenture Supplement has been delivered to the Owner
and is included in the property of the Owner subject to the pledge and
mortgage thereof under the Trust Indenture.
EXHIBIT A-2
IN WITNESS WHEREOF, the Owner 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.
NORTHWEST AIRLINES, INC.
By: _____________________________
Name:
Title:
EXHIBIT A-3
SCHEDULE I
Principal Amount Maturity Date
---------------- -------------
[Series G-1............. $[_________]]
[Series G-2............. $[_________]]
[Series C-1............. $[_________]]
[Series C-2............. $[_________]]
Series D................ $[_________]
[Series E............... $[_________]]
CERTAIN DEFINED TERMS
Defined Term Definition
------------ ----------
[Debt Rate for Series G-1
Secured Certificates: With respect to (i) the first Interest Period
[___]% per annum, and (ii) any subsequent Interest
Period, LIBOR for such Interest Period as
determined pursuant to the Reference Agency
Agreement plus a margin of 0.75% per annum.
Debt Rate for Series G-2
Secured Certificates: 6.264% per annum
Debt Rate for Series C-1
Secured Certificates: With respect to (i) the first Interest Period
[___]%per annum, and (ii) any subsequent Interest
Period, LIBOR for such Interest Period as
determined pursuant to the Reference Agency
Agreement plus a margin of 4.50% per annum.
SCHEDULE I-4 -- A319's and 757's]
Debt Rate for Series C-2
Secured Certificates: 9.055% per annum
Debt Rate for Series D
Secured Certificates: With respect to (i) the first Interest Period
[___]% per annum, and (ii) any subsequent Interest
Period, LIBOR for such Interest Period as
determined pursuant to the Reference Agency
Agreement plus a margin of [__]% per annum.
Debt Rate for Series E
Secured Certificates: ]
Prepayment Premium: [In the case of the prepayment of the unpaid
Principal Amount of Series G-1 Secured
Certificates, an amount equal to the following
percentage of the Principal Amount prepaid:
If redeemed during
the year prior to
the anniversary of
the Issuance Date Prepayment
indicated below Premium
------------------- -------------
1st 1.50%
2nd 1.25%
3rd 1.00%
4th 0.75%
5th 0.50%
6th 0.25%
Thereafter 0.00%]
Prepayment Premium: [In the case of the prepayment of the unpaid
Principal Amount of Series C-1 Secured
Certificates, an amount equal to the following
percentage of the Principal Amount prepaid:
If redeemed during
the year prior to
the anniversary of
the Issuance Date Prepayment
indicated below Premium
------------------- -------------
1st 3.00%
2nd 2.00%
3rd 1.00%
Thereafter 0.00%]
EXHIBIT A-5
Secured Certificates Amortization
[SERIES G-1
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid]
------------------------ -------------------------
EXHIBIT A-6
[SERIES G-2
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid]
------------------------ -------------------------
EXHIBIT A-7
[SERIES C-1
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid]
------------------------ -------------------------
EXHIBIT A-8
[SERIES C-2
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid]
------------------------ -------------------------
EXHIBIT A-9
SERIES D
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------------------ -------------------------
EXHIBIT A-10
[SERIES E
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid]
------------------------ -------------------------
EXHIBIT A-11
SCHEDULE II
PASS THROUGH TRUST AGREEMENTS
1. [Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1G-1, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.]
2. [Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1G-2, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.]
3. [Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1C-1, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.]
4. [Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1C-2, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.]
5. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1D, dated as of [________], 2002 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.
SCHEDULE II-1
SCHEDULE III
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Xxxxxxxx
Xxxxxxx Xxxxxxxx xx Xxxxx (Xxxxxx)0
Xxxxxx Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
---------
1 So long as on the date of entering into the proposed lease such country
and the United States have diplomatic relations at least as good as those
in effect on the Closing Date.
SCHEDULE III-1
