Owned Aircraft Indenture
N___U_
Exhibit C-2 to Note Purchase Agreement
FORM OF OWNED AIRCRAFT INDENTURE
INDENTURE AND SECURITY AGREEMENT
(N___U_)
Dated as of __________ __, ____
Between
US AIRWAYS, INC.
Owner
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Indenture Trustee
EQUIPMENT NOTES COVERING
ONE AIRBUS A330-___ AIRCRAFT
BEARING U.S. REGISTRATION XXXX N___U_
OWNED BY US AIRWAYS, INC.
THIS AGREEMENT HAS BEEN PREPARED BASED UPON THE ASSUMPTION THAT BOTH
SERIES G AND SERIES C EQUIPMENT NOTES WILL BE ISSUED. IF SERIES C
EQUIPMENT NOTES ARE NOT ISSUED ON A PARTICULAR CLOSING DATE, THIS
AGREEMENT SHALL BE MODIFIED TO REMOVE REFERENCES TO SERIES C EQUIPMENT
NOTES AND TO MAKE OTHER RELATED CHANGES.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . 6
SECTION 2.02. Issuance and Terms of Equipment Notes . . . 10
SECTION 2.03. [Reserved] . . . . . . . . . . . . . . . . . 13
SECTION 2.04. Method of Payment . . . . . . . . . . . . . 13
SECTION 2.05. Application of Payments . . . . . . . . . . 16
SECTION 2.06. Termination of Interest in Indenture
Estate . . . . . . . . . . . . . . . . . . . 16
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes . . . . . . . . . . . . . . 16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen
Equipment Notes . . . . . . . . . . . . . . 18
SECTION 2.09. Payment of Expenses on Transfer;
Cancellation . . . . . . . . . . . . . . . . 19
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . 19
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . 19
SECTION 2.12. Redemptions; Notice of Redemption . . . . . 19
SECTION 2.13. [Reserved] . . . . . . . . . . . . . . . . . 20
SECTION 2.14. [Reserved] . . . . . . . . . . . . . . . . . 21
SECTION 2.15. Subordination . . . . . . . . . . . . . . . 21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE INDENTURE
ESTATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.01. Basic Distributions. . . . . . . . . . . . . 21
SECTION 3.02. Event of Loss; Optional Redemption . . . . . 22
SECTION 3.03. Payments After Event of Default . . . . . . 23
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . 25
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . 26
SECTION 3.06. Payments to Owner . . . . . . . . . . . . . 26
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF DEFAULT; REMEDIES OF INDENTURE
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.01. Certain Covenants of Owner . . . . . . . . . 26
SECTION 4.02. Event of Default . . . . . . . . . . . . . . 27
SECTION 4.03. [Reserved] . . . . . . . . . . . . . . . . . 28
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . 28
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . 30
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . 32
SECTION 4.07. Discontinuance of Proceedings . . . . . . . 32
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . 32
SECTION 4.09. Appointment of Receiver . . . . . . . . . . 33
SECTION 4.10. Indenture Trustee Authorized to Execute
Bills of Sale, Etc. . . . . . . . . . . . . 33
SECTION 4.11. Rights of Note Holders to Receive Payment . 33
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . 34
SECTION 5.01. Notice of Event of Default . . . . . . . . . 34
SECTION 5.02. Action upon
Instructions; Certain
Rights and Limitations . . . . . . . . . . . 34
SECTION 5.03. Indemnification . . . . . . . . . . . . . . 35
SECTION 5.04. No Duties Except as Specified in Indenture
or Instructions . . . . . . . . . . . . . . 35
SECTION 5.05. No Action Except Under Indenture or
Instructions . . . . . . . . . . . . . . . . 36
SECTION 5.06. Replacement Airframes and Replacement
Engines . . . . . . . . . . . . . . . . . . . 36
SECTION 5.07. Indenture Supplements for Replacements . . . 38
SECTION 5.08. Effect of Replacement . . . . . . . . . . . 39
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.01. Acceptance of Trusts and Duties . . . . . . 40
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . 40
SECTION 6.03. No Representations or Warranties as to
Aircraft or Documents . . . . . . . . . . . 40
SECTION 6.04. No Segregation of Monies; No Interest . . . 41
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . 41
SECTION 6.06. [Reserved] . . . . . . . . . . . . . . . . . 42
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . 42
SECTION 6.08. Instructions from Note Holders . . . . . . . 42
ARTICLE VII
OPERATING COVENANTS OF OWNER . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.01. Liens . . . . . . . . . . . . . . . . . . . 43
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia . . . . . . 43
SECTION 7.03. Replacement and Pooling of Parts;
Alterations, Modifications and Additions . . 49
SECTION 7.04. Insurance . . . . . . . . . . . . . . . . . 52
SECTION 7.05. Inspection . . . . . . . . . . . . . . . . . 52
SECTION 7.06. Filings; Delivery of Financial Statements . 53
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER . . . . . . . . . . . . 54
SECTION 8.01. Scope of Indemnification . . . . . . . . . . 54
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . . . . . . . . . . . 55
SECTION 9.01. [Reserved.] . . . . . . . . . . . . . . . . 55
SECTION 9.02. Resignation of Indenture Trustee;
Appointment of Successor . . . . . . . . . . 55
SECTION 9.03. Appointment of Additional and Separate
Trustees. . . . . . . . . . . . . . . . . . 56
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.01. Instructions of Majority; Limitations. . . . 59
SECTION 10.02. Trustees Protected. . . . . . . . . . . . . 61
SECTION 10.03. Documents Mailed to Note Holders. . . . . . 61
SECTION 10.04. No Request Necessary for Indenture Supplement.61
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.01. Termination of Indenture. . . . . . . . . . 61
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders. . . . . . . . . . . . . . . . . . . 62
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding . . . . . . . . . . . . . . . . . . 62
SECTION 11.04. Indenture for Benefit of Owner, Indenture . 62
SECTION 11.05. Notices. . . . . . . . . . . . . . . . . . 63
SECTION 11.06. Severability. . . . . . . . . . . . . . . . 63
SECTION 11.07. No Oral Modification or Continuing Waivers. 63
SECTION 11.08. Successors and Assigns. . . . . . . . . . . 64
SECTION 11.09. Headings. . . . . . . . . . . . . . . . . . 64
SECTION 11.10. Normal Commercial Relations. . . . . . . . 64
SECTION 11.11. Governing Law; Counterpart Form. . . . . . 64
SECTION 11.12. Voting By Note Holders. . . . . . . . . . . 65
SECTION 11.13. Bankruptcy. . . . . . . . . . . . . . . . . 65
SECTION 11.14. References. . . . . . . . . . . . . . . . . 65
EXHIBIT B INDENTURE AND SECURITY AGREEMENT . . . . . . . Exhibit B-1
EXHIBIT C INDENTURE AND SECURITY AGREEMENT . . . . . . . Exhibit C-1
SCHEDULE I. . . . . . . . . . . . . . . . . . . . . . . . Schedule I-1
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST
SUPPLEMENTS . . . . . . . . . . . . . . . Schedule II-1
Owned Aircraft Indenture
N___U_
INDENTURE AND SECURITY AGREEMENT
(N___U_)
INDENTURE AND SECURITY AGREEMENT (N___U_), dated as of
_________ __, ____ (as amended, modified or supplemented from time to
time, this "Indenture") between US AIRWAYS, INC., a Delaware corporation
(together with its successors and permitted assigns, "Owner"), and STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee hereunder (together
with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H
WHEREAS, the parties desire by this Indenture, among other
things, (i) to provide for the issuance by Owner to the Pass Through
Trustees (or their designee) of the Equipment Notes evidencing the
participation of the Pass Through Trustees in the financing of Owner's
Cost for the Aircraft, as provided in the Participation Agreement and
(ii) to provide for the assignment, mortgage and pledge by Owner to the
Indenture Trustee, as part of the Indenture Estate hereunder, among other
things, of all of Owner's right, title and interest in and to the
Aircraft, as security for, among other things, Owner's obligations to the
Indenture Trustee, for the ratable benefit and security of the Note
Holders, subject to Section 2.15 and Article III;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by Owner and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable
obligations of Owner; and
WHEREAS, all things necessary to make this Indenture the
valid, binding and legal obligation of Owner for the uses and purposes
herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal
Amount of, interest on, Make-Whole Amount, if any, and all other amounts
due with respect to, all Equipment Notes from time to time outstanding
hereunder and (ii) the performance and observance by Owner of all the
agreements, covenants and provisions herein and in the Participation
Agreement and the Equipment Notes contained, for the benefit of the Note
Holders, the Loan Participants and each of the Indenture Indemnitees and
the prompt payment of all amounts from time to time owing hereunder and
under the Participation Agreement to the Note Holders, the Loan
Participants or any Indenture Indemnitee by Owner (the "Secured
Obligations") and for the uses and purposes and subject to the terms and
provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes
by the holders thereof, and for other good and valuable consideration the
receipt and adequacy whereof are hereby acknowledged, Owner has granted,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors in trust and assigns,
for the security and benefit of the Note Holders, a first priority
security interest in and mortgage lien on all right, title and interest
of Owner in, to and under the following described property, rights and
privileges, to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which Owner shall
from time to time acquire title as provided herein), all as more
particularly described in the Indenture Supplement executed and delivered
with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture;
(2) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the Xxxx of Sale;
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(4) all insurance and requisition proceeds with respect to
the Aircraft, including but not limited to the insurance required under
Section 7.04;
(5) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or required hereby to be held by the Indenture Trustee
hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, Owner is delivering to
the Indenture Trustee executed copies of the Participation Agreement, the
French Pledge Agreement and the Purchase Agreement Assignment with the
Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.15 and Article III without
any preference, distinction or priority of any one Equipment Note over
any other by reason of priority of time of issue, sale, negotiation, date
of maturity thereof or otherwise for any reason whatsoever, and for the
uses and purposes and in all cases and as to all property specified in
paragraphs (1) through (6) inclusive above, subject to the terms and
provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Indenture Indemnitees, Indenture Trustee and the Note Holders shall
have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Indenture
Indemnitees, Indenture Trustee or the Note Holders be required or
obligated in any manner to perform or fulfill any obligations of Owner
under or pursuant to any of the Indenture Agreements to which it is a
party, or, except as herein expressly provided, to make any payment, or
to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to
collect or enforce the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
Notwithstanding the above, the Indenture Trustee agrees, for
the benefit of AVSA, S.A.R.L., that in exercising or assigning its rights
under the Purchase Agreement Assignment, the terms and conditions of the
Purchase Agreement Assignment shall apply, and be binding upon, the
Indenture Trustee.
Owner does hereby constitute the Indenture Trustee the true
and lawful attorney of Owner, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any
and all monies and claims for monies (in each case including insurance
and requisition proceeds) due and to become due under or arising out of
the Indenture Agreements, and all other property which now or hereafter
constitutes part of the Indenture Estate, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Indenture
Trustee may deem to be necessary or advisable in the premises. Without
limiting the generality of the foregoing, but subject to the rights of
Owner hereunder, during the continuance of any Event of Default under
this Indenture, the Indenture Trustee shall have the right under such
power of attorney to accept any offer in connection with the exercise of
remedies as set forth herein of any purchaser to purchase the Airframe
and Engines and upon such purchase to execute and deliver in the name of
and on behalf of Owner an appropriate xxxx of sale and other instruments
of transfer relating to the Airframe and Engines, when purchased by such
purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or
take any other action or proceedings, either in its own name or in the
name of Owner or otherwise, which the Indenture Trustee may deem
necessary or appropriate to protect and preserve the right, title and
interest of the Indenture Trustee in and to such rents and other sums and
the security intended to be afforded hereby; provided, however, that no
action of the Indenture Trustee pursuant to this paragraph shall increase
the obligations or liabilities of Owner to any Person beyond those
obligations and liabilities specifically set forth in this Indenture and
in the other Operative Documents. Owner agrees that promptly upon
receipt thereof, it will transfer to the Indenture Trustee any and all
monies from time to time received by it constituting part of the
Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Indenture.
Owner agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and
all such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect
the mortgage, security interests and assignments created or intended to
be created hereby or to obtain for the Indenture Trustee the full
benefits of the assignment hereunder and of the rights and powers herein
granted.
Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that, except as
permitted by the terms hereof, it will not assign or pledge, so long as
the assignment hereunder shall remain in effect, and the Lien hereof
shall not have been released pursuant to Section 11.01, any of its right,
title or interest hereby assigned, to anyone other than the Indenture
Trustee, and that it will not, except as otherwise provided in this
Indenture, (i) enter into any agreement amending or supplementing any
Indenture Agreement, (ii) execute any waiver or modification of, or
consent under, the terms of, or exercise any rights, powers or privileges
under, any Indenture Agreement, (iii) settle or compromise any claim
arising under any Indenture Agreement or (iv) submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any Indenture Agreement to arbitration thereunder.
Owner does hereby further agree that, except as permitted by
the terms hereof, it will not without the written consent of the
Indenture Trustee sell, mortgage, transfer, assign or hypothecate (other
than to the Indenture Trustee hereunder) its interest in the Airframe and
Engines or any part thereof or in any amount to be received by it from
the use or disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III.
It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is
hereafter acquired by Owner shall ipso facto, and without any further
conveyance, assignment or act on the part of Owner or the Indenture
Trustee, become and be subject to the Lien herein granted as fully and
completely as though specifically described herein, but nothing contained
in this paragraph shall be deemed to modify or change the obligations of
Owner contained in the foregoing paragraphs.
Owner does hereby agree that it will not violate any covenant
or agreement made by it, herein or in any of the other Owner Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed
and interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS IS
AVAILABLE.
US AIRWAYS, INC. SERIES [___] EQUIPMENT NOTE DUE [___] ISSUED IN
CONNECTION WITH THE AIRBUS A330-__ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
US AIRWAYS, INC., hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the
Principal Amount remaining unpaid from time to time (calculated on the
basis of a year of 360 days comprised of twelve 30-day months) from the
date hereof until paid in full at a rate per annum equal to the Interest
Rate indicated above. The Principal Amount of this Equipment Note shall
be payable on the dates and in the installments as set forth in Schedule
I hereto. Accrued but unpaid interest shall be due and payable in semi-
annual installments commencing _______ 20, ____, and thereafter on
February 20 and August 20 of each year, to and including _______, _____.
Notwithstanding the foregoing, the final payment made on this Equipment
Note shall be in an amount sufficient to discharge in full the unpaid
Principal Amount and all accrued and unpaid interest on, and any other
amounts due under, this Equipment Note. Notwithstanding anything to the
contrary contained herein, if any date on which a payment under this
Equipment Note becomes due and payable is not a Business Day then such
payment shall not be made on such scheduled date but shall be made on the
next succeeding Business Day with the same force and effect as if made on
such scheduled date and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from
and after such scheduled date.
For purposes hereof, the term "Indenture" means the Indenture and
Security Agreement (N___U_), dated as of ___________ __, ____, between
Owner and State Street Bank and Trust Company of Connecticut, National
Association (the "Indenture Trustee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue. Amounts shall
be overdue if not paid when due (whether at stated maturity, by
acceleration or otherwise).
There shall be maintained an Equipment Note Register for the
purpose of registering transfers and exchanges of Equipment Notes at the
Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, or as otherwise provided
in the Indenture. Each such payment shall be made on the date such
payment is due and without any presentment or surrender of this Equipment
Note, except that in the case of any final payment with respect to this
Equipment Note, the Equipment Note shall be surrendered promptly
thereafter to the Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Indenture, each payment of an
installment of the Principal Amount, Make-Whole Amount, if any, and
interest received by it hereunder shall be applied, first, to the payment
of accrued interest on this Equipment Note (as well as any interest on
any overdue Principal Amount, any overdue Make-Whole Amount, if any, or,
to the extent permitted by Law, any overdue interest and other amounts
hereunder) to the date of such payment, second, to the payment of the
Principal Amount of this Equipment Note (or portion hereof) then due
(other than by reason of redemption), third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Indenture, and fourth, the balance, if any, remaining thereafter, to the
payment of the Principal Amount hereof remaining unpaid and due by reason
of redemption. The amounts paid pursuant to clause fourth of the
preceding sentence shall be applied to installments of the Principal
Amount of this Equipment Note remaining unpaid in the inverse order of
their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Indenture which have been or are to be issued by Owner pursuant to
the terms of the Indenture. The Indenture Estate is held by the
Indenture Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Indenture.
Reference is hereby made to the Indenture and the Participation Agreement
for a complete statement of the rights and obligations of the holder of,
and the nature and extent of the security for, this Equipment Note and
the rights and obligations of the holders of, and the nature and extent
of the security for, any other Equipment Notes executed and delivered
under the Indenture, as well as for a statement of the terms and
conditions of the Trust created by the Indenture, to all of which terms
and conditions in the Indenture and the Participation Agreement each
holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like
aggregate Principal Amount of Equipment Notes of different authorized
denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, Owner and the Indenture Trustee shall deem and treat the
Person in whose name this Equipment Note is registered on the Equipment
Note Register as the absolute owner and holder hereof for the purpose of
receiving all amounts payable with respect to this Equipment Note and for
all purposes, and neither of Owner nor the Indenture Trustee shall be
affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10 [, 2.11](1) and 2.12 of the Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
-------------
1 To be inserted for each Series G Equipment Note.
Obligations (as defined in the Indenture) in respect of Series G
Equipment Notes, and this Equipment Note is issued subject to such
provisions. The Note Holder of this Equipment Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Indenture Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Indenture Trustee its
attorney-in-fact for such purpose.](2)
--------------------
2 To be inserted for each Series C Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized
on the date hereof.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance
thereof, shall be issued in two separate series consisting of Series G
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in
denominations of $1,000 and integral multiples thereof, except that one
Equipment Note of each Series may be in an amount that is not an integral
multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ 20 , ____, and on each
February 20 and August 20 thereafter until maturity. The Principal
Amount of each Equipment Note shall be payable on the dates and in the
installments equal to the corresponding amount as set forth on Schedule I
attached to the Equipment Notes. Notwithstanding the foregoing, the
final payment made under each Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all
accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve
30-day months) on any part of the Principal Amount, Make-Whole Amount, if
any, and to the extent permitted by applicable law, interest and any
other amounts payable thereunder not paid when due for any period during
which the same shall be overdue, in each case for the period the same is
overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything
to the contrary contained herein, if any date on which a payment under
any Equipment Note becomes due and payable is not a Business Day then
such payment shall not be made on such scheduled date but shall be made
on the next succeeding Business Day with the same force and effect as if
made on such scheduled date and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount of such
payment from and after such scheduled date.
Owner agrees to pay to the Indenture Trustee for distribution
in accordance with Section 3.04 (i) to the extent not payable (whether
or not in fact paid) under Section 7(a) of the Note Purchase Agreement,
an amount or amounts equal to the fees payable to (x) the Liquidity
Provider under Section 2.03 of each Liquidity Facility and the related
Fee Letter (as defined in the Intercreditor Agreement) multiplied by a
fraction the numerator of which shall be the then outstanding aggregate
principal amount of the Series G Equipment Notes and Series C Equipment
Notes and the denominator of which shall be the then outstanding
aggregate principal amount of all "Series G Equipment Notes" and "Series
C Equipment Notes" (in each case as defined in the relevant Operative
Indenture) issued under the Operative Indentures and (y) the Policy
Provider under the Policy Fee Letter (as defined in the Policy Provider
Agreement) multiplied by a fraction the numerator of which shall be the
sum of the then outstanding aggregate principal amount of the Series G
Equipment Notes and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all "Series G Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures; (ii) (x) the amount equal to interest on
any Downgrade Advance (other than any Applied Downgrade Advance) payable
under Section 3.07 of each Liquidity Facility minus Investment Earnings
from such Downgrade Advance multiplied by (y) the fraction specified in
the foregoing clause (i); (iii) (x) the amount equal to interest on any
Non-Extension Advance (other than any Applied Non-Extension Advance)
payable under Section 3.07 of each Liquidity Facility minus Investment
Earnings from such Non-Extension Advance multiplied by (y) the fraction
specified in the foregoing clause (i); (iv) if any payment default shall
have occurred and be continuing with respect to interest on any Series G
Equipment Note or Series C Equipment Note, (x) the excess, if any, of (1)
an amount equal to interest on any Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance payable under Section 3.07 of
each Liquidity Facility (or, in the case of the Series G Equipment Notes,
if the Policy Provider has made a payment equivalent to such an Advance,
as would have been payable under Section 3.07 of the applicable Liquidity
Facility in respect of the Class G Pass Through Certificates had such
Advance been made) over (2) the sum of Investment Earnings from any Final
Advance plus any amount of interest at the Past Due Rate actually payable
(whether or not in fact paid) by Owner in respect of the overdue
scheduled interest on the Equipment Notes in respect of which such Unpaid
Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made by the applicable Liquidity Provider (or, in the case of the Series
G Equipment Notes, an equivalent payment was made by the Policy Provider)
multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series G Equipment Notes and
Series C Equipment Notes (other than interest becoming due and payable
solely as a result of acceleration of any such Equipment Notes) and the
denominator of which shall be the then aggregate overdue amounts of
interest on all "Series G Equipment Notes" and "Series C Equipment Notes"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures (other than interest becoming due and
payable solely as a result of acceleration of any such "Equipment Notes,"
(in each case as defined in the relevant Operative Indenture) issued
under the Operative Indentures); (v) any other amounts owed to the
Liquidity Provider by the Subordination Agent as borrower under each
Liquidity Facility (other than amounts due as repayment of advances
thereunder or as interest on such advances), except to the extent payable
pursuant to clause (i), (ii), (iii) or (iv) above multiplied by the
fraction specified in the foregoing clause (i); (vi) all compensation and
reimbursement of expenses, disbursements and advances payable by Owner
under the Pass Through Trust Agreements multiplied by the fraction
specified in the foregoing clause (i); (vii) Owner's pro rata share of
(I) all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement
except with respect to any income or franchise taxes incurred by the
Subordination Agent in connection with the transactions contemplated by
the Intercreditor Agreement and (II) all amounts for which the Policy
Provider is entitled to reimbursement under Section 3.7(i) of the
Intercreditor Agreement and (viii) without duplication of any amounts
paid or payable pursuant to clauses (i) through (vii) above, Owner's pro
rata share of any amount payable under Section 6(b) of the Participation
Agreement to any Pass Through Indemnitee to the extent such amount
relates to, results from or arises out of or in connection with (i) the
Pass Through Trust Agreement or the enforcement of any of the terms of
any Pass Through Document, (ii) the offer, sale, or delivery of the Pass
Through Certificates or any interest therein or represented thereby or
(iii) any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Owner under any Pass Through Document or the falsity of any
representation or warranty of Owner in any Pass Through Document. As
used herein, "Owner's pro rata share" means as of any time a fraction,
the numerator of which is the principal balance then outstanding of
Equipment Notes and the denominator of which is the aggregate principal
balance then outstanding of all "Equipment Notes" (in each case as
defined in the relevant Operative Indenture) issued under the Operative
Indentures. For purposes of this paragraph, the terms "Applied Downgrade
Advance", "Applied Non-Extension Advance", "Cash Collateral Account",
"Downgrade Advance", "Final Advance", "Investment Earnings", "Non-
Extension Advance" and "Unpaid Advance" shall have the meanings specified
in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of Owner by its
President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes
bearing the signatures of individuals who were at any time the proper
officers of Owner shall bind Owner, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to the
authentication and delivery of such Equipment Notes or did not hold such
offices at the respective dates of such Equipment Notes. Owner may from
time to time execute and deliver Equipment Notes with respect to the
Aircraft to the Indenture Trustee for authentication upon original issue
and such Equipment Notes shall thereupon be authenticated and delivered
by the Indenture Trustee upon the written request of Owner signed by a
Vice President or Assistant Vice President or other authorized officer of
Owner; provided, however, that each such request shall specify the
aggregate Principal Amount of all Equipment Notes to be authenticated
hereunder on original issue with respect to the Aircraft. No Equipment
Note shall be secured by or entitled to any benefit under this Indenture
or be valid or obligatory for any purposes, unless there appears on such
Equipment Note a certificate of authentication in the form provided for
herein executed by the Indenture Trustee by the manual signature of one
of its authorized officers and such certificate upon any Equipment Notes
shall be conclusive evidence, and the only evidence, that such Equipment
Note has been duly authenticated and delivered hereunder.
SECTION 2.03. [Reserved].
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount,
if any, and other amounts due under each Equipment Note or hereunder will
be payable in Dollars by wire transfer of immediately available funds not
later than 11:00 a.m., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution
among the Note Holders in the manner provided herein. Owner shall not
have any responsibility for the distribution of such payment to any Note
Holder. Notwithstanding the foregoing or any provision in any Equipment
Note to the contrary, the Indenture Trustee will use reasonable efforts
to pay or cause to be paid, if so directed in writing by any Note Holder
(with a copy to Owner), all amounts paid by Owner hereunder and under
such holder's Equipment Note or Equipment Notes to such holder or a
nominee therefor (including all amounts distributed pursuant to Article
III of this Indenture) by transferring, or causing to be transferred, by
wire transfer of immediately available funds in Dollars, prior to 2:00
p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United
States the amount to be distributed to such holder, for credit to the
account of such holder maintained at such bank. If the Indenture Trustee
shall fail to make any such payment as provided in the immediately
preceding sentence after its receipt of funds at the place and prior to
the time specified above, the Indenture Trustee, in its individual
capacity and not as trustee, agrees to compensate such holders for loss
of use of funds at the Federal Funds Rate until such payment is made and
the Indenture Trustee shall be entitled to any interest earned on such
funds until such payment is made. Any payment made hereunder shall be
made without any presentment or surrender of any Equipment Note, except
that, in the case of the final payment in respect of any Equipment Note,
such Equipment Note shall be surrendered to the Indenture Trustee for
cancellation promptly after such payment. Notwithstanding any other
provision of this Indenture to the contrary, the Indenture Trustee shall
not be required to make, or cause to be made, wire transfers as aforesaid
prior to the first Business Day on which it is practicable for the
Indenture Trustee to do so in view of the time of day when the funds to
be so transferred were received by it if such funds were received after
11:00 a.m., New York City time, at the place of payment. Prior to the
due presentment for registration of transfer of any Equipment Note, Owner
and the Indenture Trustee shall deem and treat the Person in whose name
any Equipment Note is registered on the Equipment Note Register as the
absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither Owner nor the Indenture
Trustee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account
of such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for Owner, shall exclude
and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Equipment Note (and such exclusion and
withholding shall constitute payment in respect of such Equipment Note)
any and all United States withholding taxes applicable thereto as
required by Law. The Indenture Trustee agrees to act as such withholding
agent and, in connection therewith, whenever any present or future United
States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts (and such withholding shall constitute payment in
respect of such Equipment Note) and timely pay the same to the
appropriate authority in the name of and on behalf of the Note Holders,
that it will file any necessary United States withholding tax returns or
statements when due, and that as promptly as possible after the payment
thereof it will deliver to each Note Holder (with a copy to Owner)
appropriate receipts showing the payment thereof, together with such
additional documentary evidence as any such Note Holder may reasonably
request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001, W-8 or W-8BEN (or such successor form
or forms as may be required by the United States Treasury Department)
during the calendar year in which the payment hereunder or under the
Equipment Note(s) held by such holder is made (but prior to the making of
such payment), or in either of the two preceding calendar years, and has
not notified the Indenture Trustee of the withdrawal or inaccuracy of
such form prior to the date of such payment (and the Indenture Trustee
has no reason to know that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if
any, required by Law (after taking into account any applicable exemptions
claimed by the Note Holder) to be withheld from payments hereunder or
under the Equipment Notes held by such holder in respect of United States
federal income tax (and such withholding shall constitute payment in
respect of such Equipment Note). If a Note Holder (x) which is a Non-
U.S. Person has furnished to the Indenture Trustee a properly completed
and currently effective U.S. Internal Revenue Service Form 4224 or W-8ECI
in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order
to avoid withholding of United States federal income tax), during the
calendar year in which the payment is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the
withdrawal or inaccuracy of such certificate or form prior to the date of
such payment (and the Indenture Trustee has no reason to know that any
information set forth in such form is inaccurate) or (y) which is a U.S.
Person has furnished to the Indenture Trustee a properly completed and
currently effective U.S. Internal Revenue Service Form W-9 (or such
successor form or forms as may be required by the United States Treasury
Department), if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from
payments in respect of United States federal income tax. If any Note
Holder has notified the Indenture Trustee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not
filed a form claiming an exemption from United States withholding tax or
if the Code or the regulations thereunder or the administrative
interpretation thereof are at any time after the date hereof amended to
require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Indenture
Trustee agrees to withhold from each payment due to the relevant Note
Holder withholding taxes at the appropriate rate under Law and will, on a
timely basis as more fully provided above, deposit such amounts with an
authorized depository and make such returns, statements, receipts and
other documentary evidence in connection therewith as required by
applicable law. Owner shall not be liable if the Indenture Trustee fails
to withhold withholding taxes in accordance with this Section 2.04 or if
any Note Holder provides false or inaccurate information on any form
required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue Principal Amount, any
overdue Make-Whole Amount, if any, and to the extent permitted by Law,
any overdue interest and any other overdue amounts thereunder) to the
date of such payment;
Second: to the payment of the Principal Amount of such
Equipment Note (or a portion thereof) then due thereunder (other than by
reason of redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid
and due by reason of redemption (provided that such Equipment Note shall
not be subject to redemption except as provided in Sections 2.10, 2.11
and 2.12).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity. Notwithstanding the
foregoing, each indemnity payment or payment of transaction costs or
expenses received hereunder or under another Operative Document shall be
applied for the purpose (directly or by reimbursement) for which such
amount was paid.
SECTION 2.06. Termination of Interest in Indenture Estate.
A Note Holder and Indenture Indemnitees shall not, as such,
have any further interest in, or other right with respect to, the
Indenture Estate when and if the Secured Obligations due to such Note
Holder or Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of
Equipment Notes.
The Indenture Trustee shall keep a register (the "Equipment
Note Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee.
The Indenture Trustee is hereby appointed "Equipment Note Registrar" for
the purpose of registering Equipment Notes and transfers of Equipment
Notes as herein provided. A holder of any Equipment Note intending to
exchange such Equipment Note shall surrender such Equipment Note to the
Indenture Trustee at the Corporate Trust Office, together with a written
request from the registered holder thereof for the issuance of a new
Equipment Note, specifying, in the case of a surrender for transfer, the
name and address of the new holder or holders. Upon surrender for
registration of transfer of any Equipment Note, Owner shall execute, and
the Indenture Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Equipment Notes of
a like aggregate Principal Amount and of the same series. At the option
of the Note Holder, Equipment Notes may be exchanged for other Equipment
Notes of any authorized denominations of a like aggregate Principal
Amount, upon surrender of the Equipment Notes to be exchanged to the
Indenture Trustee at the Corporate Trust Office. Whenever any Equipment
Notes are so surrendered for exchange, Owner shall execute, and the
Indenture Trustee shall authenticate and deliver, the Equipment Notes
which the Note Holder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.07 or under Section 2.08 or
otherwise under this Indenture) shall be the valid obligations of Owner
evidencing the same respective obligations, and entitled to the same
security and benefits under this Indenture, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every
Equipment Note presented or surrendered for registration of transfer,
shall (if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any
applicable state. The Indenture Trustee shall make a notation on each
new Equipment Note of the amount of all payments of Principal Amount
previously made on the old Equipment Note or Equipment Notes with respect
to which such new Equipment Note is issued and the date to which interest
on such old Equipment Note or Equipment Notes has been paid. Interest
shall be deemed to have been paid on such new Equipment Note to the date
on which interest shall have been paid on such old Equipment Note, and
all payments of the Principal Amount marked on such new Equipment Note,
as provided above, shall be deemed to have been made thereon. Owner
shall not be required to exchange any surrendered Equipment Notes as
provided above during the ten-day period preceding the due date of any
payment on such Equipment Note. Owner shall in all cases deem the Person
in whose name any Equipment Note shall have been issued and registered as
the absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable by Owner with respect to such
Equipment Note and for all purposes until a notice stating otherwise is
received from the Indenture Trustee and such change is reflected on the
Equipment Note Register. The Indenture Trustee will promptly notify
Owner of each registration of a transfer of an Equipment Note. Any such
transferee of an Equipment Note, by its acceptance of an Equipment Note,
agrees to the provisions of the Participation Agreement applicable to
Note Holders, and shall be deemed to have represented and warranted
(except as provided above), and covenanted, to the parties to the
Participation Agreement as to the matters represented, warranted and
covenanted by the Loan Participants in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of
the requirements set forth in this Section 2.07, the Indenture Trustee
and Owner shall use all reasonable efforts to issue new Equipment Notes
upon transfer or exchange within ten (10) Business Days of the date an
Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes.
If any Equipment Note shall become mutilated, destroyed, lost
or stolen, Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Principal Amount dated the same date and captioned as issued in
connection with the Aircraft. If the Equipment Note being replaced has
become mutilated, such Equipment Note shall be surrendered to the
Indenture Trustee and a photocopy thereof shall be furnished to Owner.
If the Equipment Note being replaced has been destroyed, lost or stolen,
the holder of such Equipment Note shall furnish to Owner and the
Indenture Trustee such security or indemnity as may be required by them
to save Owner and the Indenture Trustee harmless and evidence
satisfactory to Owner and the Indenture Trustee of the destruction, loss
or theft of such Equipment Note and of the ownership thereof. If a
"qualified institutional buyer" of the type referred to in paragraph
(a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a
"QIB") is the holder of any such destroyed, lost or stolen Equipment
Note, then the written indemnity of such QIB, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Owner and the Indenture Trustee shall be accepted as
satisfactory indemnity and security and no further indemnity or security
shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder of the
requirements set forth in this Section 2.08, the Indenture Trustee and
Owner shall use all reasonable efforts to issue new Equipment Notes
within ten (10) Business Days of the date of the written request therefor
from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the
Indenture Trustee, as Equipment Note Registrar, may require payment from
the party requesting such new Equipment Notes of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Equipment
Notes.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
On the date on which Owner is required pursuant to Section 5.06
to make payment for an Event of Loss with respect to the Aircraft, all of
the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with all
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement to the Note
Holders but without the Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than all, of the Equipment Notes may be
redeemed by Owner upon at least twenty (20) days' revocable prior written
notice to the Indenture Trustee at a redemption price equal to 100% of
the unpaid Principal Amount thereof, together with accrued interest
thereon to the date of redemption and all other amounts payable hereunder
or under the Participation Agreement to the Note Holders plus the Make-
Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by Owner of any Equipment Note may be made except to the extent
and in the manner expressly permitted by this Indenture. No purchase of
any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than fifteen (15) nor more than
sixty (60) days prior to the applicable redemption date, to each Note
Holder of such Equipment Notes to be redeemed or purchased, at such Note
Holder's address appearing in the Equipment Note Register. All notices
of redemption shall state: (1) the redemption date, (2) the applicable
basis for determining the redemption price, (3) that on the redemption
date, the redemption price will become due and payable upon each such
Equipment Note, and that, if any such Equipment Notes are then
outstanding, interest on such Equipment Notes shall cease to accrue on
and after such redemption date and (4) the place or places where such
Equipment Notes are to be surrendered for payment of the redemption
price.
(c) On or before the redemption date, Owner (or any Person on
behalf of Owner) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed or purchased on the
redemption date shall not then be held in the Indenture Estate, deposit
or cause to be deposited with the Indenture Trustee by 11:00 a.m. New
York City time on the redemption date in immediately available funds the
redemption price of the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid (and not revoked at least three (3) days prior to the
redemption date), the Equipment Notes to be redeemed or purchased shall,
on the redemption date, become due and payable at the Corporate Trust
Office of the Indenture Trustee or at any office or agency maintained for
such purposes pursuant to Section 2.07, and from and after such
redemption date (unless there shall be a default in the payment of the
redemption price) any such Equipment Notes then outstanding shall cease
to bear interest. Upon surrender of any such Equipment Note for
redemption or purchase in accordance with said notice, such Equipment
Note shall be redeemed at the redemption price. If any Equipment Note
called for redemption or purchase shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid,
continue to bear interest from the applicable redemption date at the
interest rate in effect for such Equipment Note as of such redemption
date.
SECTION 2.13. [Reserved].
SECTION 2.14. [Reserved].
SECTION 2.15. Subordination.
(a) Owner and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations
owed to such Note Holder of such Series, including any payment or
distribution of cash, property or securities after the commencement of a
proceeding of the type referred to in Section 4.02(e), except as
expressly provided in Article III.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series G), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section
2.15 or Article III, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c)) and will forthwith turn
over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III.
(c) As used in this Section 2.15, the term "Senior Holder"
shall mean, (i) the Note Holders of Series G until the Secured
Obligations in respect of Series G Equipment Notes have been paid in full
and (ii) after the Secured Obligations in respect of Series G Equipment
Notes have been paid in full, the Note Holders of Series C until the
Secured Obligations in respect of Series C Equipment Notes have been paid
in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE
SECTION 3.01. Basic Distributions.
Except as otherwise provided in Sections 3.02 and 3.03, each
periodic payment of principal or interest on the Equipment Notes received
by the Indenture Trustee shall be promptly distributed in the following
order of priority: (i) so much of such installment or payment as shall be
required to pay in full the aggregate amount of the payment or payments
of Principal Amount and interest and other amounts (as well as any
interest on any overdue Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other overdue amounts)
then due under all Series G Equipment Notes shall be distributed to the
Note Holders of Series G ratably, without priority of one over the other,
in the proportion that the amount of such payment or payments then due
under each Series G Equipment Note bears to the aggregate amount of the
payments then due under all Series G Equipment Notes; and (ii) after
giving effect to paragraph (i) above, so much of such installment or
payment remaining as shall be required to pay in full the aggregate
amount of the payment or payments of Principal Amount and interest and
other amounts (as well as any interest on any overdue Principal Amount
and, to the extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series C Equipment
Notes shall be distributed to the Note Holders of Series C ratably,
without priority of one over the other, in the proportion that the amount
of such payment or payments then due under each Series C Equipment Note
bears to the aggregate amount of the payments then due under all Series C
Equipment Notes.
SECTION 3.02. Event of Loss; Optional Redemption.
Except as otherwise provided in Section 3.03, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss or (ii) in connection with any optional
redemption of the Equipment Notes effected in accordance with the
Operative Documents, shall be applied to redemption of the Equipment
Notes, to payment of the Secured Obligations or to the Indenture Trustee
or any Note Holder under the Participation Agreement by applying such
funds in the following order of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or
indemnity by Owner, under the Operative Documents and then (ii) to pay
any other amounts then due to the Indenture Trustee and the Note Holders
under this Indenture, the Participation Agreement or the Equipment Notes
(other than the amounts specified in clause Second below);
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 plus Make-Whole Amount, if any, then due
and payable in respect of the Series G Equipment Notes; and (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 plus Make-Whole Amount,
if any, then due and payable in respect of the Series C Equipment Notes;
and
Third, as provided in clause "Fourth" of Section 3.03 hereof.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Article IV) after both an Event of Default shall
have occurred and be continuing and the Equipment Notes shall have become
due and payable pursuant to Section 4.04(b), as well as all payments or
amounts then held by the Indenture Trustee as part of the Indenture
Estate, shall be promptly distributed by the Indenture Trustee in the
following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to
Section 4.05(b)) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any
other expenses for which the Indenture Trustee or the Note Holders are
entitled to reimbursement under any Operative Document and all amounts
payable to the other Indenture Indemnitees hereunder and under the
Participation Agreement excluding those amounts described in clauses
"Second" and "Third" below, and in the case the aggregate amount to be so
distributed is insufficient to pay as aforesaid, then ratably, without
priority of one over the other, in proportion to the amounts owed each
hereunder;
Second, so much of such payments or amounts remaining as shall
be required to reimburse the then existing or prior Note Holders for
payments made pursuant to Section 5.03 (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in accordance
with the amount of the payment or payments made by each such then
existing or prior Note Holder pursuant to said Section 5.03;
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series G Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in respect of
the Series G Equipment Notes to the date of distribution, shall be
distributed to the Note Holders of Series G, 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 G
Equipment Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal Amount of all
Series G Equipment Notes held by all such holders plus the accrued but
unpaid interest and other amounts due thereon to the date of
distribution; and (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 Equipment
Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Series C Equipment
Notes to the date of distribution, shall be distributed to the Note
Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that
the aggregate unpaid Principal Amount of all Series C Equipment Notes
held by each holder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series C Equipment Notes
held by all such holders plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to Owner or as Owner may direct
free and clear of the Lien of this Indenture.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Indenture and
for which such provision is made in the Participation Agreement or any
other Operative Document shall be applied forthwith to the purpose for
which such payment was made in accordance with the terms of the
Participation Agreement or such other Operative Document, as the case may
be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from Owner in respect of (i)
the Indenture Trustee in its individual capacity or any other Indenture
Indemnitees, (ii) any Note Holder, (iii) the Subordination Agent, (iv)
the Liquidity Provider, (v) the Policy Provider and (vi) the Pass Through
Trustees, in each case pursuant to Section 6 of the Participation
Agreement, directly to the Person entitled thereto. Any payment received
by the Indenture Trustee the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee in the manner provided in
Section 3.03. Further, and except as otherwise provided in Sections
3.02, 3.03 and 3.04, all payments received and amounts realized by the
Indenture Trustee with respect to the Aircraft, to the extent received or
realized at any time after payment in full of all Secured Obligations due
the Note Holders, shall be distributed by the Indenture Trustee to Owner.
SECTION 3.06. Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee to
Owner shall be paid to Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner to the
Indenture Trustee from time to time. Owner hereby notifies the Indenture
Trustee that unless and until the Indenture Trustee receives notice to
the contrary from Owner, all amounts to be distributed to Owner pursuant
to this Indenture shall be distributed by wire transfer of funds of the
type received by the Indenture Trustee to Owner's account specified in
Schedule I to the Participation Agreement.
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Certain Covenants of Owner.
Owner hereby covenants and agrees that it will duly and
punctually pay the Principal Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under the Equipment Notes and hereunder
in accordance with the terms of the Equipment Notes and this Indenture
and all amounts, if any, payable by it to the Note Holders under the
Participation Agreement.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever
the reason for such Event of Default and whether such event shall be
voluntary or involuntary or come about or be effected by operation of Law
or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
governmental body):
(a) the failure of Owner to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder and such
failure shall have continued unremedied for ten (10) Business Days in the
case of any payment of Principal Amount or interest or Make-Whole Amount,
if any, thereon and, in the case of any other amount, for ten (10)
Business Days after Owner receives written demand from the Indenture
Trustee or any Note Holder; or
(b) any representation or warranty made by Owner herein, in
the Participation Agreement or in any certificate furnished by Owner to
the Indenture Trustee or any Note Holder in connection with the
transactions contemplated by the Operative Documents shall prove to have
been false or incorrect when made in any material respect and continues
to be material and adverse to the interests of the Indenture Trustee or
the Note Holders; and if such misrepresentation is capable of being
corrected and if such correction is being sought diligently, such
misrepresentation shall not have been corrected within sixty (60) days
following notice thereof from the Indenture Trustee or any Note Holder to
Owner; or
(c) other than as provided in (d) below, any failure by Owner
to observe or perform any other covenant or obligation of Owner for the
benefit of the Indenture Trustee or the Note Holders contained in the
Participation Agreement, the Equipment Notes or this Indenture which is
not remedied within a period of sixty (60) days after notice thereof has
been given to Owner; provided, however, that if Owner shall have
undertaken to cure any such failure and, notwithstanding the diligence of
Owner in attempting to cure such failure, such failure is not cured
within said sixty (60) day period but is curable with future due
diligence, there shall exist no Event of Default under this Section
4.02(c) so long as Owner is proceeding with due diligence to cure such
failure and such failure is remedied not later than three hundred sixty
(360) days after receipt by Owner of such written notice; or
(d) if at any time when the Aircraft is registered under the
laws of the United States, Owner shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under
the Transportation Code, and regulations then applicable thereunder,
shall cease to be effective; provided that no Event of Default shall be
deemed to have occurred under this paragraph (d) unless such
circumstances continue unremedied for more than sixty (60) days after
Owner has actual knowledge of the state of facts that resulted in such
ineffectiveness and of such loss of citizenship; or
(e) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of Owner under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the
United States or seeking the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of Owner
or for all or substantially all of its property, or seeking the winding-
up or liquidation of its affairs and the continuation of any such case or
other proceeding undismissed and unstayed for a period of ninety (90)
consecutive days; or (ii) the commencement by Owner of a voluntary case
or proceeding under the federal bankruptcy Laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States, or the consent by
Owner to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Owner or for all or substantially all of its property, or
the making by Owner of any assignment for the benefit of creditors or
Owner shall take any action to authorize any of the foregoing; or
(f) Owner shall fail to carry and maintain or with respect to
the Aircraft (or cause to be carried or maintained) insurance required to
be maintained in accordance with Section 7.04.
SECTION 4.03. [Reserved].
SECTION 4.04. Remedies.
(a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then and in
every such case the Indenture Trustee may exercise any or all of the
rights and powers and pursue any and all of the remedies pursuant to this
Article IV and shall have and may exercise all of the rights and remedies
of a secured party under the Uniform Commercial Code in effect in the
State of New York and may take possession of all or any part of the
properties covered or intended to be covered by the Lien created hereby
or pursuant hereto and may exclude Owner and all Persons claiming under
Owner wholly or partly therefrom; provided, however, that during any
period the Aircraft is subject to the Civil Reserve Air Fleet Program and
in possession of the United States Government or an agency or
instrumentality of the United States, the Indenture Trustee shall not, on
account of any Event of Default, be entitled to exercise or pursue any of
the powers, rights or remedies described in this Section 4.04 in such
manner as to limit Owner's control (or any Lessee's control under any
Lease) of any Airframe or any Engines installed thereon, unless at least
sixty (60) days (or such lesser period as may then be applicable under
the Air Mobility Command program of the United States Government) written
notice of default hereunder shall have been given by the Indenture
Trustee by registered or certified mail to Owner (and any Lessee) with a
copy addressed to the Contracting Office Representative of the Air
Mobility Command of the United States Air Force under any contract with
Owner (or any Lessee) relating to the Aircraft; provided further, that
the Indenture Trustee shall give Owner twenty (20) days' prior written
notice of its intention to sell the Aircraft. Without limiting any of
the foregoing, it is understood and agreed that the Indenture Trustee may
exercise any right of sale of the Aircraft available to it, even though
it shall not have taken possession of the Aircraft and shall not have
possession thereof at the time of such sale.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), at any time, by delivery of written notice or
notices to Owner, declare all the Equipment Notes to be due and payable,
whereupon the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately
become due and payable without presentment, demand, protest or notice,
all of which are hereby waived; provided that if an Event of Default
referred to in clause (e) of Section 4.02 shall have occurred and be
continuing, then and in every such case the unpaid Principal Amount then
outstanding, together with accrued but unpaid interest and all other
amounts due thereunder and hereunder shall immediately and without
further act become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree
for the payment of the money so due, or any thereof, shall be entered,
all overdue payments of interest upon the Equipment Notes and all other
amounts payable under the Equipment Notes (except the Principal Amount of
the Equipment Notes which by such declaration shall have become payable)
shall have been duly paid, and every other Default and Event of Default
with respect to any covenant or provision of this Indenture shall have
been cured, then and in every such case a Majority in Interest of Note
Holders may (but shall not be obligated to), by written instrument filed
with the Indenture Trustee, rescind and annul the Indenture Trustee's
declaration and its consequences; but no such rescission or annulment
shall extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereon.
(c) Any Note Holder shall be entitled, at any sale pursuant to
this Section 4.04, to credit against any purchase price bid at such sale
by such holder all or any part of the unpaid obligations owing to such
Note Holder and secured by the Lien of this Indenture (but only to the
extent that such purchase price would have been paid to such Note Holder
pursuant to Article III if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or
otherwise in connection with the enforcement of any of the terms of this
Indenture, the unpaid Principal Amount of all Equipment Notes then
outstanding, together with accrued interest thereon, and other amounts
due thereunder, shall immediately become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property so
acquired by it if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax
purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, at the request of the Indenture Trustee, Owner shall promptly
execute and deliver to the Indenture Trustee such instruments and other
documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by
the Indenture Trustee, at such time or times and place or places as the
Indenture Trustee may specify, to obtain possession of all or any part of
the Mortgaged Property included in the Indenture Estate to which the
Indenture Trustee shall at the time be entitled hereunder. If Owner
shall for any reason fail to execute and deliver such instruments and
documents after such request by the Indenture Trustee, the Indenture
Trustee may (i) obtain a judgment conferring on the Indenture Trustee the
right to immediate possession and requiring Owner to execute and deliver
such instruments and documents to the Indenture Trustee, to the entry of
which judgment Owner hereby specifically consents to the fullest extent
permitted by applicable law, and (ii) pursue all or part of such
Mortgaged Property wherever it may be found and may enter any of the
premises of Owner wherever such Mortgaged Property may be or be supposed
to be and search for such Mortgaged Property and take possession of and
remove such Mortgaged Property. All expenses of obtaining such judgment
or of pursuing, searching for and taking such property shall, until paid,
be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property,
make all such expenditures for maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modifications or
alterations to and of the Mortgaged Property, as it may deem proper. In
each such case, the Indenture Trustee shall have the right to maintain,
use, operate, store, insure, lease, control, manage, dispose of, modify
or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of Owner relating to the Mortgaged
Property, as the Indenture Trustee shall deem best, including the right
to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modification or alteration of the Mortgaged
Property or any part thereof as the Indenture Trustee may determine, and
the Indenture Trustee shall be entitled to collect and receive directly
all tolls, rents, revenues, issues, income, products and profits of the
Mortgaged Property and every part thereof. Such tolls, rents, revenues,
issues, income, products and profits shall be applied to pay the expenses
of the maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make
all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges
upon the Mortgaged Property or any part thereof, and all other payments
which the Indenture Trustee may be required or authorized to make under
any provision of this Indenture, as well as just and reasonable
compensation for the services of the Indenture Trustee, and of all
Persons properly engaged and employed by the Indenture Trustee with
respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Indenture
Trustee, and the exercise or the beginning of the exercise of any power
or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No
delay or omission by the Indenture Trustee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such
right, power or remedy or be construed to be a waiver of any default on
the part of Owner or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, and all rights, remedies and
powers of the Indenture Trustee or Owner shall continue as if no such
proceedings had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, the Indenture Trustee shall waive any past Default hereunder and
its consequences and upon any such waiver such Default shall cease to
exist and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture, but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon; provided, that in the absence of written instructions from all
the Note Holders, the Indenture Trustee shall not waive any Default (i)
in the payment of the Principal Amount, Make-Whole Amount, if any, and
interest and other amounts due under any Equipment Note then outstanding,
or (ii) in respect of a covenant or provision hereof which, under Article
X, cannot be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of
the Mortgaged Property or the taking of possession thereof or otherwise,
and Owner hereby consents to the appointment of such a receiver and will
not oppose any such appointment. Any receiver appointed for all or any
part of the Mortgaged Property shall be entitled to exercise all the
rights and powers of the Indenture Trustee with respect to the Mortgaged
Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills
of Sale, Etc.
Owner irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of Owner in its name and stead and on its behalf,
for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating in accordance with applicable law any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate, with full power
of substitution, Owner hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law. Nevertheless, if so requested by the Indenture Trustee
or any purchaser, Owner shall ratify and confirm any such sale,
assignment, transfer or delivery, by executing and delivering to the
Indenture Trustee or such purchaser all bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Note Holder to receive payment of principal of, and Make-
Whole Amount, if any, and interest on an Equipment Note on or after the
respective due dates expressed in such Equipment Note, or to bring suit
for the enforcement of any such payment on or after such respective dates
in accordance with the terms hereof, shall not be impaired or affected
without the consent of such Note Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure by Owner to pay
when due any payment of Principal Amount of, interest on, or Make-Whole
Amount, if any, due and payable under any Equipment Note, the Indenture
Trustee shall give prompt written notice thereof to Owner and each Note
Holder. Subject to the terms of Sections 4.04, 4.08, 5.02 and 5.03, the
Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in
Interest of Note Holders. Subject to the provisions of Section 5.03, if
the Indenture Trustee shall not have received instructions as above
provided within twenty (20) days after mailing notice of such Event of
Default to the Note Holders, the Indenture Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of
this Section 5.01, take such action, or refrain from taking such action,
but shall be under no duty to take or refrain from taking any action,
with respect to such Event of Default or Default as it shall determine
advisable in the best interests of the Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.04, 4.08, 5.01 and 5.03,
upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Indenture Trustee shall,
subject to the terms of this Section 5.02, take such of the following
actions as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder as shall be
specified in such instructions; and (ii) give such notice or direction or
exercise such right, remedy or power under the Participation Agreement,
the Purchase Agreement, or any other part of the Indenture Estate as
shall be specified in such instructions.
The Indenture Trustee will execute and Owner will file or cause
to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Indenture Estate as specified by Owner pursuant to Section 7(j) of the
Participation Agreement or as may be specified from time to time in
written instructions of a Majority in Interest of Note Holders (which
instructions may, by their terms, be operative only at a future date and
which shall be accompanied by the form of such continuation statement so
to be filed). The Indenture Trustee will furnish to each Note Holder,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished
to the Indenture Trustee hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action
or refrain from taking any action under Sections 5.01 (other than the
first sentence thereof) or 5.02 or Article IV unless the Indenture
Trustee shall have been indemnified to its reasonable satisfaction
against any liability, cost or expense (including counsel fees) which may
be incurred in connection therewith pursuant to a written agreement with
one or more Note Holders. The Indenture Trustee shall not be under any
obligation to take any action under this Indenture and nothing herein or
therein shall require the Indenture Trustee to expend or risk its own
funds or otherwise incur the risk of any financial liability in the
performance of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it (the
written indemnity of any Note Holder who is a QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form
reasonably satisfactory to Indenture Trustee shall be accepted as
reasonable assurance of adequate indemnity). The Indenture Trustee shall
not be required to take any action under Section 5.01 (other than the
first sentence thereof) or 5.02 or Article IV, nor shall any other
provision of this Indenture or any other Operative Document be deemed to
impose a duty on the Indenture Trustee to take any action, if the
Indenture Trustee shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Indenture
Estate, or to otherwise take or refrain from taking any action under, or
in connection with, this Indenture or any part of the Indenture Estate,
except as expressly provided by the terms of this Indenture or as
expressly provided in written instructions from Note Holders as provided
in this Indenture; and no implied duties or obligations shall be read
into this Indenture against the Indenture Trustee. The Indenture Trustee
agrees that it will in its individual capacity and at its own cost and
expense (but without any right of indemnity in respect of any such cost
or expense under Section 8.01), promptly take such action as may be
necessary duly to discharge all liens and encumbrances on any part of the
Indenture Estate which result from claims against it in its individual
capacity not related to its interest in the Aircraft or the
administration of the Indenture Estate or any other transaction pursuant
to this Indenture or any document included in the Indenture Estate.
SECTION 5.05. No Action Except Under Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Indenture Estate except in
accordance with the powers granted to, or the authority conferred upon,
the Indenture Trustee pursuant to this Indenture and in accordance with
the express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the
Airframe and the Engines and/or engines then installed thereon, Owner
shall forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of
Loss, and, within sixty (60) days after such Event of Loss, Owner shall
give the Indenture Trustee written notice of its election to perform one
of the following options (it being agreed that if Owner shall not have
given such notice of election within such period, Owner shall be deemed
to have elected the option set forth in clause (i) below). Owner may
elect either to:
(i) redeem the Equipment Notes in the
manner set forth in Section 2.10 on the earlier of (x) the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss or (y) an earlier Business Day
irrevocably specified fifteen (15) days in advance by notice
from Owner to the Indenture Trustee; or
(ii) substitute an aircraft or an airframe
or an airframe and one or more engines, as the case may be;
provided that, if Owner does not perform its obligation to
effect such substitution in accordance with this Section
5.06(a), during the period of time provided herein, then Owner
shall redeem the Equipment Notes in the manner set forth in
Section 2.10 on the Business Day next succeeding the 120th day
following the occurrence of such Event of Loss.
In the event Owner shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be)
Owner shall, at its sole expense, not later than the Business Day next
succeeding the 120th day following the occurrence of such Event of Loss,
(1) furnish the Indenture Trustee with such evidence as the Indenture
Trustee may reasonably request that Owner holds title to such aircraft
(or such airframe or such airframe and one or more engines which,
together with the Engines constituting a part of the Aircraft but not
installed thereon at the time of such Event of Loss, constitute the
Aircraft) free and clear of all Liens (other than Permitted Liens) and
having a value, utility and remaining useful life at least equal to the
Aircraft subject to such Event of Loss assuming that the Aircraft had
been maintained in accordance with the requirements of this Indenture,
and Owner shall cause an Indenture Supplement to be duly executed by
Owner and filed for recording pursuant to the Transportation Code, or the
applicable laws, rules and regulations of any other jurisdiction in which
the Airframe may then be registered as permitted by Section 7(b) of the
Participation Agreement with respect to such substituted property, (2)
cause a financing statement or statements with respect to such
substituted property to be filed in such place or places, if any, as may
be deemed necessary or desirable by the Indenture Trustee to perfect the
Indenture Trustee's interest therein, (3) furnish the Indenture Trustee
with such evidence of compliance with the insurance provisions hereof
with respect to such substituted property as the Indenture Trustee may
reasonably request and (4) furnish the Indenture Trustee with an opinion
of counsel (which shall be Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) and, if not, other
counsel chosen by Owner and reasonably acceptable to the Indenture
Trustee) reasonably satisfactory to the Indenture Trustee to the effect
that the Indenture Trustee will be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to the substitute aircraft,
provided that such opinion need not be delivered to the extent that
immediately prior to such substitution the benefits of Section 1110 of
the Bankruptcy Code were not, solely by reason of a change in law or
governmental interpretation thereof after the date hereof, available to
the Indenture Trustee with respect to the Aircraft. For all purposes
hereof, the property so substituted shall be deemed part of the property
subject to the Lien of this Indenture and shall be deemed an "Aircraft",
"Airframe" and "Engine", as the case may be, as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with
respect to the Airframe, Owner shall forthwith (and in any event, within
fifteen (15) days after such occurrence) give the Indenture Trustee
written notice thereof and shall, within one hundred twenty (120) days
after the occurrence of such Event of Loss, (i) cause an Indenture
Supplement to be duly executed by Owner and to be filed for recording
pursuant to the Transportation Code, or the applicable laws, rules and
regulations of any other jurisdiction in which the Airframe may then be
registered as permitted by Section 7(b) of the Participation Agreement
with respect to an Acceptable Alternate Engine and, (ii) furnish the
Indenture Trustee with such evidence of compliance with the insurance
provisions hereof with respect to such replacement engine as the
Indenture Trustee may reasonably request. For all purposes hereof, each
such replacement engine shall, after such designation, be deemed part of
the property subject to the Lien of this Indenture hereunder, and shall
be deemed an "Engine".
(c) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event
of the requisition for use of an Engine by the United States Government
or any other government of registry of the Aircraft or any agency or
instrumentality of any thereof, Owner shall replace such Engine hereunder
by complying (or causing any Lessee to comply) with the terms of Section
5.06(b) to the same extent as if an Event of Loss had occurred with
respect thereto, and, upon compliance with Section 5.06(b), any payments
received by Owner from such government with respect to such requisition
shall be paid over to, or retained by, Owner.
(d) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 5.06 which is payable to
or retainable by Owner shall not be paid to or retained by Owner if at
the time of such payment or retention an Event of Default has occurred
and is continuing, but shall be held by or paid over to the Indenture
Trustee as security for the obligations of Owner hereunder and, if an
Event of Default has occurred and is continuing hereunder, applied
against Owner's obligations hereunder as and when due. At such time as
there shall not be continuing any such Event of Default, such amount
shall be paid to Owner to the extent not previously applied in accordance
with the preceding sentence.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 5.06, Owner and the Indenture
Trustee agree for the benefit of the Note Holders and Owner, subject to
fulfillment of the conditions precedent and compliance by Owner with the
requirements of Section 5.06 with respect to such Replacement Airframe or
Replacement Engine, to execute and deliver an Indenture Supplement.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of an Engine
or Engines pursuant to Section 5.06, (a) all provisions of this Indenture
relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines
with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or
engines, as the case may be, as the Airframe or Engine or Engines being
replaced but for the Event of Loss with respect to the Airframe or Engine
or Engines being replaced, and (b) the provisions of this Indenture shall
no longer be applicable to the Airframe or Engine or Engines being
replaced, which shall be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture
Trustee.
Any amounts held by the Indenture Trustee pursuant to any
provision of any other Operative Document providing for amounts to be
held by the Indenture Trustee which are not distributed pursuant to the
other provisions of Article III shall be invested by the Indenture
Trustee from time to time in Cash Equivalents as directed by Owner so
long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Indenture, any
income realized as a result of any such investment, net of the Indenture
Trustee's reasonable fees and expenses in making such investment, shall
be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net
of earnings and such reasonable fees and expenses, shall be charged
against the principal amount invested. The Indenture Trustee shall not
be liable for any loss resulting from any investment required to be made
by it under this Indenture other than by reason of its willful misconduct
or gross negligence, and any such investment may be sold (without regard
to its maturity) by the Indenture Trustee without instructions whenever
such sale is necessary to make a distribution required by this Indenture.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms
of this Indenture and agrees to receive and disburse all monies
constituting part of the Indenture Estate in accordance with the terms
hereof. The Indenture Trustee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for willful
misconduct or gross negligence (other than for the handling of funds, for
which the standard of accountability shall be willful misconduct or
negligence), (ii) as provided in the fourth sentence of Section 2.04(a)
and the last sentence of Section 5.04, and (iii) for liabilities that may
result from the inaccuracy of any representation or warranty of the
Indenture Trustee (in its individual capacity) in the Participation
Agreement or expressly made hereunder.
SECTION 6.02. Absence of Duties.
Except in accordance with written instructions furnished
pursuant to Section 5.01 or 5.02 , and except as provided in, and without
limiting the generality of, Sections 5.03 and 5.04, the Indenture Trustee
shall have no duty (i) to see to any registration of the Aircraft or any
recording or filing of this Indenture or any other document, or to see to
the maintenance of any such registration, recording or filing, (ii) to
see to any insurance on the Aircraft or to effect or maintain any such
insurance, whether or not Owner shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of
any kind against any part of the Indenture Estate, or (iv) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants hereunder with respect to the
Aircraft.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES
NOT 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 capacity, does not make and shall not be deemed
to have made any representation or warranty as to the validity, legality
or enforceability of this Indenture, the Participation Agreement, the
Equipment Notes, the Purchase Agreement, the Purchase Agreement
Assignment or the Consent and Agreement, or as to the correctness of any
statement contained in any thereof.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed
to the Note Holders or Owner as provided in Article III need not be
segregated in any manner except to the extent required by Law and Section
5.09, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee shall invest all
monies held as directed by Owner so long as no Event of Default has
occurred and is continuing (or in the absence of such direction, by the
Majority In Interest of Note Holders) in Cash Equivalents; provided,
however, that any payments received, or applied hereunder, by the
Indenture Trustee shall be accounted for by the Indenture Trustee so that
any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to anyone
in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Indenture Trustee may accept a copy of a
resolution of the Board of Directors of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary thereof
as duly adopted and in full force and effect, as conclusive evidence that
such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid Principal Amount of Equipment
Notes outstanding as of any date, Owner may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized
corporate trust officer of the Indenture Trustee. As to any fact or
matter relating to Owner the manner of ascertainment of which is not
specifically described herein, the Indenture Trustee may for all purposes
hereof rely on a certificate, signed by a duly authorized officer of
Owner, as to such fact or matter, and such certificate shall constitute
full protection to the Indenture Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Indenture Trustee may execute
any of the trusts or powers hereof and perform its powers and duties
hereunder directly or through agents or attorneys and may at the expense
of the Indenture Estate, consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Indenture
Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons.
SECTION 6.06. [Reserved].
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Owner, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the
Indenture Estate toward such payments. The Indenture Trustee agrees that
it shall have no right against the Loan Participants or the Note Holders
for any fee as compensation for its services as trustee under this
Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a
Majority in Interest of Note Holders should any provision of this
Indenture appear to conflict with any other provision herein or should
the Indenture Trustee's duties or obligations hereunder be unclear, and
the Indenture Trustee shall incur no liability in refraining from acting
until it receives such instructions. The Indenture Trustee shall be
fully protected for acting in accordance with any instructions received
under this Section 6.08.
ARTICLE VII
OPERATING COVENANTS OF OWNER
SECTION 7.01. Liens. Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to
the Aircraft, title thereto or any interest therein, except (i) the Lien
of the Indenture, the rights of any Lessee under a Lease permitted
hereunder and any other rights of any Person existing pursuant to the
Operative Documents, (ii) the rights of others under agreements or
arrangements to the extent permitted by the terms of Sections 7.02 and
7.03, (iii) Loan Participant Liens and Indenture Trustee's Liens, (iv)
Liens for Taxes of Owner (or any Lessee) either not yet due or being
contested in good faith by appropriate proceedings so long as such
proceedings do not involve any material risk of the sale, forfeiture or
loss of the Airframe or any Engine or any interest therein, (v)
materialmen's, mechanics', workmen's, repairmen's, employees' or other
like Liens arising in the ordinary course of Owner's (or, if a Lease is
then in effect, Lessee's) business (including those arising under
maintenance agreements entered into in the ordinary course of business)
securing obligations that are not overdue for a period of more than sixty
(60) days or are being contested in good faith by appropriate proceedings
so long as such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein,
(vi) Liens arising out of any judgment or award against Owner (or any
Lessee), unless the judgment secured shall not, within sixty (60) days
after the entry thereof, have been discharged, vacated, reversed or
execution thereof stayed pending appeal or shall not have been
discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Owner
(or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. Owner will
promptly, at its own expense, take (or cause to be taken) such actions as
may be necessary duly to discharge any such Lien not excepted above if
the same shall arise at any time.
SECTION 7.02. Registration, Maintenance and Operation;
Possession and Leases; Insignia.
(a) Registration, Maintenance and Operation.
(i) Registration and Maintenance. Owner,
at its own cost and expense, shall (or shall cause any Lessee
to): (A) cause the Aircraft to be duly registered in the name
of Owner (or any Lessee), and, subject to clause (ii) of this
Section 7.02(a) and Section 7(b) of the Participation
Agreement, to remain duly registered in the name of Owner (or
any Lessee) under the Transportation Code, and shall not
register the Aircraft or permit the Aircraft to be registered
under any laws other than the Transportation Code at any time
except as provided in Section 7(b) of the Participation
Agreement and, shall cause the Indenture to be duly recorded
and maintained of record as a first mortgage on the Aircraft;
(B) maintain, service, repair and/or overhaul (or cause to be
maintained, serviced, repaired and/or overhauled) the Aircraft
so as to keep the Aircraft in as good an operating condition as
when delivered by the Seller to Owner, ordinary wear and tear
excepted, and as may be necessary to enable the applicable
airworthiness certification for the Aircraft to be maintained
in good standing at all times (other than during temporary
periods of storage or during maintenance or modification
permitted hereunder) under the Transportation Code, except when
all of Owner's Airbus Model A330 aircraft powered by engines of
the same type as those with which the Airframe shall be
equipped at the time of such grounding and registered in the
United States have been grounded by the FAA (although such
certification need actually be maintained only during such
periods as the Aircraft is registered in the United States), or
the applicable laws of any other jurisdiction in which the
Aircraft may then be registered from time to time in accordance
with Section 7(b) of the Participation Agreement, utilizing,
except during any period that a Lease is in effect, the same
manner and standard of maintenance, service, repair or overhaul
used by Owner with respect to similar aircraft operated by
Owner in similar circumstances and utilizing, during any period
that a Lease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by the Lessee
with respect to similar aircraft operated by the Lessee in
similar circumstances; and (C) maintain or cause to be
maintained in English all records, logs and other materials
required to be maintained in respect of the Aircraft by the FAA
or the applicable regulatory agency or body of any other
jurisdiction in which the Aircraft may then be registered.
(ii) Operation. Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or
permit any Lessee to maintain, use, service, repair, overhaul
or operate the Aircraft) in violation of any law or any rule,
regulation, order or certificate of any government or
governmental authority (domestic or foreign) having
jurisdiction over the Aircraft, or in violation of any
airworthiness certificate, license or registration relating to
the Aircraft issued by any such authority, except to the extent
Owner (or, if a Lease is then in effect, any Lessee) is
contesting in good faith the validity or application of any
such law, rule, regulation or order in any reasonable manner
which does not involve any material risk of sale, forfeiture or
loss of the Aircraft. Owner will not operate the Aircraft, or
permit any Lessee to operate the Aircraft, in any area excluded
from coverage by any insurance required by the terms of Section
7.04; provided, however, that the failure of Owner to comply
with the provisions of this sentence shall not give rise to an
Event of Default hereunder if indemnification complying with
Section 7.04 has been provided or where such failure is
attributable to extraordinary circumstances involving an
isolated occurrence or series of incidents not in the ordinary
course of the regular operations of Owner (or any Lessee) such
as a hijacking, medical emergency, equipment malfunction,
weather condition, navigational error or other causes beyond
the reasonable control of Owner (or any Lessee).
(b) Possession and Leases. Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any
manner deliver, transfer or relinquish possession of the Airframe or any
Engine or install or permit any Engine to be installed on any airframe
other than the Airframe or enter into any Wet Lease, and so long as Owner
(or any Lessee) shall comply with the provisions of Section 7.02(a) and
Section 7.04, Owner may (or may permit any Lessee to), without the prior
written consent of the Indenture Trustee:
(i) subject the Airframe and the Engines
or engines then installed thereon to interchange agreements or
any Engine to pooling or similar arrangements, in each case
customary in the airline industry and entered into by Owner
(or, if a Lease is then in effect, by Lessee) in the ordinary
course of its business; provided that (A) no such agreement or
arrangement contemplates or requires the transfer of title to
the Airframe, (B) if Owner's title to any Engine shall be
divested under any such agreement or arrangement, such
divestiture shall be deemed to be an Event of Loss with respect
to such Engine and Owner shall (or shall cause Lessee to)
comply with Section 5.06(b) in respect thereof, and (C) any
interchange agreement to which the Airframe may be subject
shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery
thereto) or to any organization (or for delivery thereto) for
testing, service, repair, maintenance or overhaul work on the
Airframe or Engine or any part of any thereof or for
alterations or modifications in or additions to such Airframe
or Engine to the extent required or permitted by the terms of
Section 7.03;
(iii) install an Engine on an airframe owned
by Owner (or any Lessee) free and clear of all Liens, except:
(A) Permitted Liens and those which apply only to the engines
(other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties under
interchange agreements or pooling or similar arrangements which
would be permitted under clause (i) above, provided that
Owner's title to such Engine and the first priority Lien of the
Indenture shall not be divested or impaired as a result thereof
and (C) mortgage liens or other security interests, provided
that (as regards this clause (C)) the documents creating such
mortgage liens or other security interests (or, if applicable,
another written agreement governing such mortgage liens or
other security interests) effectively provide that such Engine
shall not become subject to the lien of such mortgage or
security interest, notwithstanding the installation thereof on
such airframe;
(iv) install an Engine on an airframe
leased to Owner (or any Lessee) or purchased by Owner (or any
Lessee) subject to a conditional sale or other security
agreement, provided that (x) such airframe is free and clear of
all Liens, except: (A) the rights of the parties to the lease
or conditional sale or other security agreement covering such
airframe, or their assignees, and (B) Liens of the type
permitted by clause (iii) of this paragraph (b) and (y) such
lease, conditional sale or other security agreement effectively
provides that such Engine shall not become subject to the lien
of such lease, conditional sale or other security agreement,
notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned
by Owner (or any Lessee), leased to Owner (or any Lessee) or
purchased by Owner (or any Lessee) subject to a conditional
sale or other security agreement under circumstances where
neither clause (iii) nor clause (iv) of this paragraph (b) is
applicable, provided that such installation shall be deemed an
Event of Loss with respect to such Engine and Owner shall (or
shall cause any Lessee to) comply with Section 5.06(b) in
respect thereof;
(vi) to the extent permitted by this
Section 7.02(b), subject any appliances, Parts or other
equipment removed from the Airframe or any Engine to any
pooling arrangement referred to in this Section 7.02(b);
(vii) subject (or permit any Lessee to
subject) the Airframe or any Engine to the Civil Reserve Air
Fleet Program and transfer (or permit any Lessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to
the Civil Reserve Air Fleet Program, so long as Owner (or any
Lessee) shall (A) promptly notify the Indenture Trustee upon
subjecting the Airframe or any Engine to the Civil Reserve Air
Fleet Program in any contract year and provide the Indenture
Trustee with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United
States Air Force to whom notice must be given pursuant to
Section 4.04(a), and (B) promptly notify the Indenture Trustee
upon transferring possession of the Airframe or any Engine to
the United States of America or any agency or instrumentality
thereof pursuant to such program;
(viii) enter into a Wet Lease for the
Airframe and Engines or engines then installed thereon with any
third party;
(ix) transfer possession of the Airframe or
any Engine to the United States Government or any
instrumentality or agency thereof pursuant to a contract, a
copy of which shall be provided to the Indenture Trustee; or
(x) at any time, in Owner's sole
discretion, enter into any lease with respect to the Aircraft,
Airframe or any Engine to any Permitted Lessee that is not then
subject to any bankruptcy, insolvency, liquidation,
reorganization, dissolution or similar proceeding and shall not
have substantially all of its property in the possession of any
liquidator, trustee, receiver or similar person; provided,
however, with respect to a lease to a Permitted Lessee not
domiciled in the United States, Owner shall deliver to the
Indenture Trustee an opinion of counsel to the effect that (I)
the terms of the lease constitute valid and binding obligations
of the Lessee and (subject to customary bankruptcy and
equitable remedies exceptions and to other similar exceptions
customary in such opinions) enforceable against Lessee (it
being understood that such opinion may be an opinion as to the
form of the lease only and may assume due authorization,
execution, delivery, requisite approvals and absence of
conflicts with laws, contracts or organizational documents)
under the laws of the jurisdiction governing the lease and (II)
unless Owner shall have agreed to provide insurance covering
the risk of requisition of use of the Aircraft by the
government of the jurisdiction of the proposed Lessee, that the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of the Aircraft in
the event of the requisition by such government of such use;
and provided, further, that, with respect to any lease to any
Affiliate of Owner, (I) such Lessee shall be a Certificated Air
Carrier and (II) Owner shall deliver to the Indenture Trustee
an opinion of counsel to the effect that Owner would be
entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the Aircraft if such Affiliate were to be a
debtor in a case under Chapter 11 of the Bankruptcy Code, such
opinion to be subject to customary assumptions and
qualifications. Owner shall provide the Indenture Trustee with
a copy of any sublease which has a term of more than one (1)
year.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to the Indenture Trustee's
rights to repossess and to void such Lease upon such repossession, and
Owner shall remain primarily liable hereunder for the performance of all
of the terms of this Indenture and the terms of any such Lease shall not
permit any Lessee to take any action not permitted to be taken by Owner
hereunder with respect to the Aircraft. No pooling agreement, lease,
sublease or other relinquishment of possession of the Airframe or any
Engine or Wet Lease shall in any way discharge or diminish any of Owner's
obligations hereunder or constitute a waiver of the Indenture Trustee's
rights or remedies hereunder. The Indenture Trustee agrees, for the
benefit of Owner (and any Lessee) and for the benefit of any mortgagee or
other holder of a security interest in any engine (other than an Engine)
owned by Owner (or any Lessee), any lessor of any engine (other than an
Engine) leased to Owner (or any Lessee) and any conditional vendor of any
engine (other than an Engine) purchased by Owner (or any Lessee) subject
to a conditional sale agreement or any other security agreement, that no
interest shall be created hereunder in any engine so owned, leased or
purchased and that none of the Indenture Trustee, its successors or
assigns will acquire or claim, as against Owner (or any Lessee) or any
such mortgagee, lessor or conditional vendor or other holder of a
security interest or any successor or assignee of any thereof, any right,
title or interest in such engine as the result of such engine being
installed on the Airframe.
Any Wet Lease or similar arrangement under which Owner
maintains operational control of the Aircraft shall not constitute a
delivery, transfer or relinquishment of possession of the Aircraft for
purposes of this Section.
The Indenture Trustee acknowledges that any consolidation or
merger of Owner or conveyance, transfer or lease of all or substantially
all of Owner's assets otherwise permitted by the Operative Documents
shall not be prohibited by this Section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Owner agrees to affix and maintain (or cause to
be affixed and maintained), at its expense, in the cockpit of the
Airframe adjacent to the airworthiness certificate therein and on each
Engine a nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company of Connecticut,
National Association,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Indenture Trustee, as permitted under the
Operative Documents). Except as above provided, Owner will not allow the
name of any Person (other than 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 Owner
(or any Lessee) from placing its customary colors and insignia on the
Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from
time to time be incorporated or installed in or attached to the Airframe
or any Engine and which may from time to time become worn out, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever, except as
otherwise provided in paragraph (c) of this Section 7.03 or if the
Airframe or an Engine to which a Part relates has suffered an Event of
Loss. In addition, Owner (or any Lessee) may, at its own cost and
expense, remove in the ordinary course of maintenance, service, repair,
overhaul or testing, any Parts, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use, provided that Owner (or any Lessee), except as
otherwise provided in paragraph (c) of this Section 7.03, will, at its
own cost and expense, replace such Parts as promptly as practicable. All
replacement Parts shall be free and clear of all Liens (except for
Permitted Liens and pooling arrangements to the extent permitted by
paragraph (b) of this Section 7.03 and except in the case of replacement
property temporarily installed on an emergency basis) and shall be in as
good operating condition as, and shall have a value and utility at least
equal to, the Parts replaced assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof.
Except as otherwise provided in paragraph (c) of this Section 7.03, all
Parts at any time removed from the Airframe or any Engine shall remain
the property of Owner, no matter where located. Immediately upon any
replacement part becoming incorporated or installed in or attached to the
Airframe or any Engine as above provided, without further act (subject
only to Permitted Liens and any pooling arrangement to the extent
permitted by paragraph (b) of this Section 7.03 and except in the case of
replacement property temporarily installed on an emergency basis), such
replacement Part shall become subject to the Lien of this Indenture and
be deemed part of the Airframe or such Engine for all purposes hereof to
the same extent as the Parts originally incorporated or installed in or
attached to the Airframe or such Engine, and the replaced Part shall be
free and clear of the Lien of this Indenture and shall no longer be
deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as provided in paragraph (a) of this Section 7.03 may be
subjected by Owner (or any Lessee) to a normal pooling arrangement
customary in the airline industry of which Owner (or, if a Lease is then
in effect, any Lessee) is a party entered into in the ordinary course of
Owner's (or any Lessee's) business; provided that the Part replacing such
removed Part shall be incorporated or installed in or attached to such
Airframe or Engine in accordance with such paragraph (a) as promptly as
practicable after the removal of such removed Part. In addition, any
replacement Part when incorporated or installed in or attached to the
Airframe or any Engine in accordance with such paragraph (a) may be owned
by any third party subject to such a normal pooling arrangement, provided
that Owner (or any Lessee), at its expense, as promptly thereafter as
practicable, either (i) causes title to such replacement Part to vest in
Owner in accordance with such paragraph (a) free and clear of all Liens
except Permitted Liens (other than pooling arrangements) or (ii) replaces
such replacement Part by incorporating or installing in or attaching to
the Airframe or Engine a further replacement Part owned by Owner (or any
Lessee) free and clear of all Liens except Permitted Liens (other than
pooling arrangements) and by causing title to such further replacement
Part to vest in Owner in accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Owner, at its
own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be
required from time to time to meet the applicable standards of the FAA or
any applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered as permitted by Section 7(b) of
the Participation Agreement; provided, however, that Owner (or, if a
Lease is then in effect, any Lessee) may, in good faith, contest the
validity or application of any such law, rule, regulation or order in any
reasonable manner which does not adversely affect the Indenture Trustee.
In addition, Owner (or any Lessee), at its own expense, may from time to
time add further parts or accessories and make such alterations and
modifications in and additions to the Airframe or any Engine as Owner (or
any Lessee) may deem desirable in the proper conduct of its business,
including, without limitation, removal of Parts which Owner (or any
Lessee) has determined in its reasonable judgment to be obsolete or no
longer suitable or appropriate for use on the Airframe or such Engine
(such parts, "Obsolete Parts"); provided that no such alteration,
modification or addition shall materially diminish the value, utility or
remaining useful life of the Airframe or such Engine below the value,
utility or remaining useful life thereof immediately prior to such
alteration, modification or addition, assuming the Airframe or such
Engine was then in the condition required to be maintained by the terms
of this Indenture, except that the value (but not the utility or
remaining useful life) of the Airframe or any Engine may be reduced by
the value of Obsolete Parts which shall have been removed so long as the
aggregate value of all Obsolete Parts which shall have been removed and
not replaced shall not exceed $750,000 in aggregate value at the time of
removal. Owner (or any Lessee) may remove or suffer to be removed any
Part incorporated or installed in or attached or added to the Airframe or
an Engine as the result of any such alteration, modification or addition,
provided that such additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine at the time of
delivery thereof hereunder or any Part in replacement of, or substitution
for, any such Part, (ii) is not required to be incorporated or installed
in or attached or added to the Airframe or any Engine pursuant to the
terms of Section 7.02 or the first sentence of this paragraph (c) and
(iii) can be removed from the Airframe or such Engine without diminishing
or impairing the value, utility or remaining useful life which the
Airframe or such Engine would have had at the time of removal had such
alteration, modification or addition not occurred.
Upon the removal by Owner (or Lessee) of any Part as provided
above, such Part shall no longer be deemed part of the Airframe or Engine
from which it was removed.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Owner may install on the Airframe, subject to the requirements of Section
7.03(c) above, Passenger Convenience Equipment that is (i) owned by
another Person and leased to Owner, (ii) sold to Owner by another Person
subject to a conditional sale contract or other retained security
interest, (iii) leased to Owner pursuant to a lease which is subject to a
security interest in favor of another Person or (iv) installed on the
Aircraft subject to a license granted to Owner by another Person, and in
any such case the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on
the Airframe. Owner agrees that if any such Person repossesses such
Passenger Convenience Equipment, Owner will (or cause such Person to)
restore the Aircraft to the condition it would have been in had the
installation of such Passenger Convenience Equipment not occurred.
SECTION 7.04. Insurance.
(a) Owner's Obligation to Insure. Owner shall comply with, or
cause to be complied with, each of the provisions of Exhibit B, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) [Reserved.]
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance,
the Indenture Trustee agrees to accept, in lieu of insurance against any
risk with respect to the Aircraft, indemnification from, or insurance
provided by, the United States Government or any agency or
instrumentality thereof, or, upon the written consent of the Indenture
Trustee, other government of registry of the Aircraft or agency or
instrumentality thereof, against such risk in an amount which, when added
to the amount of insurance against such risk maintained by Owner (or any
Lessee) shall be at least equal to the amount of insurance against such
risk otherwise required by this Section 7.04 (taking into account self-
insurance permitted by Exhibit B hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit B which is
payable to or retainable by Owner (or any Lessee) shall not be paid to or
retained by Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but
shall be held by or paid over to the Indenture Trustee as security for
the obligations of Owner hereunder if the Indenture Trustee declares this
Indenture to be in default pursuant to Section 4.02, applied against
Owner's obligations hereunder as and when due. At such time as there
shall not be continuing any such Event of Default, such amount shall be
paid to Owner to the extent not previously applied in accordance with the
preceding sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior
written notice to Owner, the Indenture Trustee, or its authorized
representatives, may inspect the Aircraft and inspect and make copies of
the books and records of Owner and any Lessee required to be maintained
by the FAA or the regulatory agency or body of another jurisdiction in
which the Aircraft is then registered relating to the maintenance of the
Aircraft (at the Indenture Trustee's risk and expense) and shall keep any
information or copies obtained thereby confidential and shall not
disclose the same to any Person, except (A) to the Note Holders and to
prospective and permitted transferees of the Note Holders' or the
Indenture Trustee's interest (and such prospective and permitted
transferee's counsel, independent insurance advisors or other agents) who
agree to hold such information confidential, (B) to the Note Holders' or
the Indenture Trustee's counsel, independent insurance advisors or other
agents who agree to hold such information confidential, or (C) as may be
required by any statute, court or administrative order or decree or
governmental ruling or regulation, provided, however, that any and all
disclosures permitted by clause (C) above shall be made only to the
extent necessary to meet the specific requirements or needs of the
Persons for whom such disclosures are hereby permitted. Any such
inspection of the Aircraft shall be subject to Owner's safety and
security rules applicable to the location of the Aircraft, shall be a
visual, walk-around inspection of the interior and exterior of the
Aircraft and shall not include opening any panels, bays or the like
without the express consent of Owner (except in connection with a heavy
maintenance visit when a panel, bay or the like is scheduled or required
to be opened), which consent Owner may in its sole discretion withhold;
provided that no exercise of such inspection right shall interfere with
the normal operation or maintenance of the Aircraft by, or the business
of, Owner (or any Lessee). The Indenture Trustee shall not have any duty
to make any such inspection nor shall it incur any liability or
obligation by reason of not making such inspection. Except during the
continuance of an Event of Default, all inspections by the Indenture
Trustee and its authorized representatives provided for under this
Section 7.05 shall be limited to one (1) inspection of any kind
contemplated by this Section 7.05 during any calendar year.
SECTION 7.06. Filings; Delivery of Financial Statements.
Forthwith upon the execution and delivery of each Indenture
Supplement from time to time required by the terms hereof and upon
execution and delivery of any amendment to this Indenture, Owner will
cause such Indenture Supplement (and, in the case of the initial
Indenture Supplement and the Indenture as well) or amendment to be duly
filed and recorded, and maintained of record, in accordance with the
applicable laws of the government of registry of the Aircraft. Owner
agrees to furnish to the Indenture Trustee promptly after execution and
delivery of any supplement and amendment hereto (except for any such
supplement or amendment which does not require or receive the approval of
Owner pursuant to the Operative Documents and is not required pursuant to
the terms of the Operative Documents), an opinion of counsel (which may
be Owner's General Counsel, Deputy General Counsel, Associate General
Counsel or Assistant General Counsel) reasonably satisfactory to the
Indenture Trustee as to the due recording or filing of such supplement or
amendment. Owner will deliver to the Indenture Trustee (a) within sixty
(60) days after the end of each of the first three quarterly periods of
each fiscal year of Owner, the publicly filed Form 10-Q report of Owner;
and (b) within one hundred twenty (120) days after the close of such
fiscal year, the publicly filed annual report and Form 10-K report of
Owner.
SECTION 7.07. Termination as to Engines; Replacement. Owner
shall have the right at its option at any time, on at least thirty (30)
days prior written notice, to terminate the Lien of the Indenture with
respect to any Engine. In such event, and prior to the date of such
termination, Owner shall replace such Engine hereunder by complying with
the terms of Section 5.06 to the same extent as if an Event of Loss had
occurred with respect to such Engine.
SECTION 7.08. No Set-Off, Counterclaim, etc. Except as
expressly provided herein, Owner's obligation to pay all amounts payable
hereunder shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which Owner may have
against the Indenture Trustee (in its individual capacity or as Indenture
Trustee), any Loan Participant, or anyone else for any reason whatsoever
(whether in connection with the transactions contemplated hereby or any
other transactions), including, without limitation, any breach by Owner
of its warranties, agreements or covenants contained in any of the
Operative Documents, (ii) any defect in the title, registration,
airworthiness, condition, design, operation, or fitness for use of, or
any damage to or loss or destruction of, the Aircraft, or any
interruption or cessation in or prohibition of the use or possession
thereof by Owner (or any Lessee) for any reason whatsoever, including,
without limitation, any such interruption, cessation or prohibition
resulting from the act of any government authority, (iii) any insolvency,
bankruptcy, reorganization or similar case or proceedings by or against
Owner (or any Lessee) or any other Person or (iv) any other circumstance,
happening, or event whatsoever, whether or not unforeseen or similar to
any of the foregoing.
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER
SECTION 8.01. Scope of Indemnification.
Owner hereby agrees, except as otherwise provided in Section
2.04(b), to assume liability for, and does hereby indemnify, protect,
save and keep harmless the Indenture Trustee (in its individual and trust
capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties,
taxes (excluding any taxes payable by the Indenture Trustee on or
measured by any compensation received by the Indenture Trustee for its
services under this Indenture), claims, actions, suits, costs, expenses
or disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever, which may be imposed on, incurred by or
asserted against the Indenture Trustee (whether or not also indemnified
against by any other Person under any other document) in any way relating
to or arising out of this Indenture or any other Operative Document to
which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to
or arising out of the administration of the Indenture Estate or the
action or inaction of the Indenture Trustee hereunder. Notwithstanding
the foregoing, the Indenture Trustee shall not be entitled to any
indemnification for any Expenses to the extent relating to or arising
from the willful misconduct or gross negligence (or negligence in the
case of handling funds) of the Indenture Trustee in the performance of
its duties hereunder or resulting from the inaccuracy of any
representation or warranty of the Indenture Trustee (in its individual
capacity) referred to in Section 6.03, or as provided in Section 6.01 or
in the last sentence of Section 5.04, or as otherwise excluded by the
terms of Section 6(b) of the Participation Agreement from Owner's
indemnities under such Section. In addition, if necessary, the Indenture
Trustee shall be entitled to indemnification from the Indenture Estate
for any liability, obligation, loss, damage, penalty, claim, action,
suit, cost, expense or disbursement indemnified against pursuant to this
Section 8.01 to the extent not reimbursed by Owner or others, but without
releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on
the Indenture Estate. Owner shall be subrogated to the Indenture
Trustee's rights, if any, to payment from Owner for amounts payable by
Owner under this Section 8.01.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. [Reserved.]
SECTION 9.02. Resignation of Indenture Trustee; Appointment
of Successor.
(a) The Indenture Trustee or any successor thereto may resign
at any time without cause by giving at least 30 days' prior written
notice to Owner and each Note Holder, such resignation to be effective
upon the acceptance of the trusteeship by a successor Indenture Trustee.
In addition, a Majority in Interest of Note Holders may at any time (but
only with the consent of Owner, which consent shall not be unreasonably
withheld, except that such consent shall not be necessary if an Event of
Default shall have occurred and be continuing) remove the Indenture
Trustee without cause by an instrument in writing delivered to Owner and
the Indenture Trustee, and the Indenture Trustee shall promptly notify
each Note Holder thereof in writing, such removal to be effective upon
the acceptance of the trusteeship by a successor Indenture Trustee. In
the case of the resignation or removal of the Indenture Trustee, a
Majority in Interest of Note Holders may appoint a successor Indenture
Trustee by an instrument signed by such holders, which successor, so long
as no Event of Default shall have occurred and be continuing, shall be
subject to Owner's reasonable approval. If a successor Indenture Trustee
shall not have been appointed within 30 days after such notice of
resignation or removal, the Indenture Trustee, Owner or any Note Holder
may apply to any court of competent jurisdiction to appoint a successor
Indenture Trustee to act until such time, if any, as a successor shall
have been appointed as above provided. The successor Indenture Trustee
so appointed by such court shall immediately and without further act be
superseded by any successor Indenture Trustee appointed as above
provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the predecessor Indenture Trustee and Owner an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee hereunder and under the Participation Agreement arising
from and after the time of such appointment, and thereupon such successor
Indenture Trustee, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor
Indenture Trustee hereunder in the trust hereunder applicable to it with
like effect as if originally named the Indenture Trustee herein; but
nevertheless upon the written request of such successor Indenture
Trustee, such predecessor Indenture Trustee shall execute and deliver an
instrument transferring to such successor Indenture Trustee, upon the
trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee, and such
predecessor Indenture Trustee shall duly assign, transfer, deliver and
pay over to such successor Indenture Trustee all monies or other property
then held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall
be a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined
capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of
the Indenture Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee
may be transferred, shall, subject to the terms of paragraph (c) of this
Section 9.02, be a successor Indenture Trustee and the Indenture Trustee
under this Indenture without further act.
SECTION 9.03. Appointment of Additional and Separate
Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the
Indenture Estate, this Indenture, any other Indenture Agreement, the
Equipment Notes or any of the transactions contemplated by the
Participation Agreement, (ii) the Indenture Trustee shall be advised by
counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Indenture Trustee shall so advise
Owner), or (iii) the Indenture Trustee shall have been requested to do so
by a Majority in Interest of Note Holders, then in any such case, the
Indenture Trustee and, upon the written request of the Indenture Trustee,
Owner, shall execute and deliver an indenture supplemental hereto and
such other instruments as may from time to time be necessary or advisable
either (1) to constitute one or more bank or trust companies or one or
more Persons approved by the Indenture Trustee, either to act jointly
with the Indenture Trustee as additional trustee or trustees of all or
any part of the Indenture Estate, or to act as separate trustee or
trustees of all or any part of the Indenture Estate, in each case with
such rights, powers, duties and obligations consistent with this
Indenture as may be provided in such supplemental indenture or other
instruments as the Indenture Trustee or a Majority in Interest of Note
Holders may deem necessary or advisable, or (2) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore
granted any such additional and separate trustee, subject in each case to
the remaining provisions of this Section 9.03. If Owner shall not have
taken any action requested of it under this Section 9.03(a) that is
permitted or required by its terms within 15 days after the receipt of a
written request from the Indenture Trustee so to do, or if an Event of
Default shall have occurred and be continuing, the Indenture Trustee may
act under the foregoing provisions of this Section 9.03(a) without the
concurrence of Owner; and Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Indenture Trustee, its agent
and attorney-in-fact to act for it under the foregoing provisions of this
Section 9.03(a) in either of such contingencies. The Indenture Trustee
may, in such capacity, execute, deliver and perform any such supplemental
indenture, or any such instrument, as may be required for the appointment
of any such additional or separate trustee or for the clarification of,
addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case
any additional or separate trustee appointed under this Section 9.03(a)
shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Indenture Trustee
until a successor additional or separate trustee is appointed as provided
in this Section 9.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment
of monies and all monies received by any such additional or separate
trustee from or constituting part of the Indenture Estate or otherwise
payable under any Operative Document to the Indenture Trustee shall be
promptly paid over by it to the Indenture Trustee. All other rights,
powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Indenture
Trustee and such additional or separate trustee jointly except to the
extent that applicable law of any jurisdiction in which any particular
act is to be performed renders the Indenture Trustee incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations (including the holding of title to all or part of
the Indenture Estate in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee. No additional or
separate trustee shall take any discretionary action except on the
instructions of the Indenture Trustee or a Majority in Interest of Note
Holders. No trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, except that the
Indenture Trustee shall be liable for the consequences of its lack of
reasonable care in selecting, and Indenture Trustee's own actions in
acting with, any additional or separate trustee. Each additional or
separate trustee appointed pursuant to this Section 9.03 shall be subject
to, and shall have the benefit of Articles IV through IX and Article XI
insofar as they apply to the Indenture Trustee. The powers of any
additional or separate trustee appointed pursuant to this Section 9.03
shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or desirable in order to conform to any such law or take
any such action or shall be advised by such counsel that it is no longer
so necessary or desirable in the interest of the Note Holders, or in the
event that the Indenture Trustee shall have been requested to do so in
writing by a Majority in Interest of Note Holders, the Indenture Trustee
and, upon the written request of the Indenture Trustee, Owner, shall
execute and deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to remove any additional
or separate trustee. The Indenture Trustee may act on behalf of Owner
under this Section 9.03(c) when and to the extent it could so act under
Section 9.03(a).
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) Owner agrees it shall not enter into any amendment of or
supplement to Article 12 of the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement, or execute and deliver any written
waiver or modification of, or consent under, the Purchase Agreement (to
the extent assigned by the Purchase Agreement Assignment), the Purchase
Agreement Assignment, the Consent and Agreement, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
the Indenture Trustee and a Majority in Interest of Note Holders.
(b) Without limiting the provisions of Section 10.01(a) the
Indenture Trustee agrees with the Note Holders that it shall not enter
into any amendment, waiver or modification of, supplement or consent to
this Indenture, the Purchase Agreement (to the extent assigned by the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement, or any other
agreement included in the Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by
a Majority in Interest of Note Holders, or does not adversely affect the
Note Holders, but upon the written request of a Majority in Interest of
Note Holders, the Indenture Trustee shall from time to time enter into
any such supplement or amendment, or execute and deliver any such waiver,
modification or consent, as may be specified in such request and as may
be (in the case of any such amendment, supplement or modification), to
the extent such agreement is required, agreed to by Owner or, as may be
appropriate, the Manufacturer; provided, however, that, without the
consent of the Liquidity Provider, the Policy Provider and each holder of
an affected Equipment Note then outstanding, no such amendment of or
supplement to this Indenture, the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement or the Participation Agreement or
waiver or modification of the terms of, or consent under, any thereof,
shall (i) modify any of the provisions of this Section 10.01, or of
Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06,
the definitions of "Event of Default", "Default", "Majority in Interest
of Note Holders", "Make-Whole Amount" or "Note Holder", or the percentage
of Note Holders required to take or approve any action hereunder, (ii)
reduce the amount, or change the time of payment or method of calculation
of any amount, of Principal Amount, Make-Whole Amount, if any, or
interest with respect to any Equipment Note, or alter or modify the
provisions of Article III with respect to the order of priorities in
which distribution thereunder shall be made as among the Note Holders and
Owner, (iii) reduce, modify or amend any indemnities in favor of the Note
Holders, (iv) consent to any change in the Indenture which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10
or 2.11 or the purchase of the Equipment Notes or (v) permit the creation
of any Lien on the Indenture Estate or any part thereof other than
Permitted Liens or deprive any Note Holder of the benefit of the Lien of
this Indenture on the Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV. Without the consent of
Owner, no amendment or supplement to this Indenture or waiver or
modification of the terms hereof shall adversely affect Owner.
(c) At any time after the date hereof, Owner and the Indenture
Trustee may enter into one or more agreements supplemental hereto without
the consent of any Note Holder for any of the following purposes: (i) (a)
to cure any defect or inconsistency herein or in the Equipment Notes, or
to make any change not inconsistent with the provisions hereof (provided
that such change does not adversely affect the interests of any Note
Holder in its capacity solely as Note Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of a
new trustee hereunder pursuant hereto, the removal of the trustee
hereunder or the appointment of any co-trustee or co-trustees or any
separate or additional trustee or trustees; (iii) to convey, transfer,
assign, mortgage or pledge any property to or with the Indenture Trustee
or to make any other provisions with respect to matters or questions
arising hereunder so long as such action shall not adversely affect the
interests of the Note Holders in its capacity solely as Note Holder; (iv)
to correct or amplify the description of any property at any time subject
to the Lien of this Indenture or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subject
to the Lien of this Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of Owner for
the benefit of the Note Holders, or to surrender any rights or power
herein conferred upon Owner; (vi) to add to the rights of the Note
Holders; and (vii) to include on the Equipment Notes any legend as may be
required by law.
SECTION 10.02. Trustees Protected.
If, in the opinion of the institution acting as Indenture
Trustee hereunder, any document required to be executed by it pursuant to
the terms of Section 10.01 adversely affects any right, duty, immunity
or indemnity with respect to such institution under this Indenture, such
institution may in its discretion decline to execute such document.
SECTION 10.03. Documents Mailed to Note Holders.
Promptly after the execution by Owner or the Indenture Trustee
of any document entered into pursuant to Section 10.01, the Indenture
Trustee shall mail, by first class mail, postage prepaid, a copy thereof
to Owner and to each Note Holder at its address last set forth in the
Equipment Note Register, but the failure of the Indenture Trustee to mail
such copies shall not impair or affect the validity of such document.
SECTION 10.04. No Request Necessary for Indenture Supplement.
No written request or consent of the Indenture Trustee or the
Note Holders pursuant to Section 10.01 shall be required to enable Owner
to enter into any Indenture Supplement specifically required by the terms
hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other
amounts due under all Equipment Notes and provided that there shall then
be no other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the
Participation Agreement, Owner shall direct the Indenture Trustee to
execute and deliver to or as directed in writing by Owner an appropriate
instrument releasing the Aircraft, the Engines, the Purchase Agreement
and the Purchase Agreement Assignment with the Consent and Agreement
attached thereto from the Lien of this Indenture and the Indenture
Trustee shall execute and deliver such instrument as aforesaid and give
written notice thereof to Owner; provided, however, that this Indenture
and the trusts created hereby shall earlier terminate and this Indenture
shall be of no further force or effect upon any sale or other final
disposition by the Indenture Trustee of all property constituting part of
the Indenture Estate and the final distribution by the Indenture Trustee
of all monies or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Except as
aforesaid otherwise provided, this Indenture and the trusts created
hereby shall continue in full force and effect in accordance with the
terms hereof.
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders.
No holder of an Equipment Note shall have legal title to any
part of the Indenture Estate. No transfer, by operation of law or
otherwise, of any Equipment Note or other right, title and interest of
any Note Holder in and to the Indenture Estate or hereunder shall operate
to terminate this Indenture or entitle such holder or any successor or
transferee of such holder to an accounting or to the transfer to it of
any legal title to any part of the Indenture Estate.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Indenture shall bind
the Note Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, Owner and such holders in
and to such Indenture Estate or part thereof. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the
Indenture Trustee.
SECTION 11.04. Indenture for Benefit of Owner, Indenture
Trustee, Note Holders and the Other Indenture Indemnitees.
Nothing in this Indenture, whether express or implied, shall be
construed to give any Person other than Owner, the Indenture Trustee, the
Indenture Indemnitees and the Note Holders, any legal or equitable right,
remedy or claim under or in respect of this Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Indenture to
be made, given, furnished or filed shall be in writing, personally
delivered or mailed by certified mail, postage prepaid, or by facsimile
or confirmed telex, and (i) if to Owner, addressed to it at its office at
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Vice
President and Treasurer, Telecopy No.: (000) 000-0000, (ii) if to the
Indenture Trustee, addressed to it at its office at 000 Xxxxxx Xxxxxx,
Xxxxxxx Square, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate Trust
Administration, Telecopy No.: (000) 000-0000, (iii) if to any Participant
or any Note Holder, addressed to such party at such address as such party
shall have furnished by notice to Owner and the Indenture Trustee, or,
until an address is so furnished, addressed to the address of such party
(if any) set forth on Schedule I to the Participation Agreement or in the
Equipment Note Register. Whenever any notice in writing is required to
be given by Owner, any Participant, the Indenture Trustee or any Note
Holder to any of the other of them, such notice shall be deemed given and
such requirement satisfied when such notice is received, or if such
notice is mailed by certified mail, postage prepaid, three Business Days
after being mailed, addressed as provided above. Any party hereto may
change the address to which notices to such party will be sent by giving
notice of such change to the other parties to this Indenture.
SECTION 11.06. Severability.
Any provision of this Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by Owner and the Indenture Trustee, in
compliance with Section 10.01. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for
the specific purpose given.
SECTION 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 11.09. Headings.
The headings of the various Articles and Sections herein and in
the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Indenture to the contrary
notwithstanding, the Indenture Trustee, any Participant or any bank or
other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking or other commercial
relationships, with Owner, fully to the same extent as if this Indenture
were not in effect, including without limitation the making of loans or
other extensions of credit to Owner for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. Governing Law; Counterpart Form.
THIS INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS INDENTURE IS BEING
DELIVERED IN THE STATE OF NEW YORK. This Indenture may be executed by
the parties hereto in separate counterparts (or upon separate signature
pages bound together into one or more counterparts), each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.12. Voting By Note Holders.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided
herein.
SECTION 11.13. Bankruptcy.
It is the intention of the parties that the Indenture Trustee
shall be entitled to the benefits of Section 1110 of the Bankruptcy Code
with respect to the right to take possession of the Aircraft, Airframe,
Engines and Parts in the event of a case under Chapter 11 of the
Bankruptcy Code in which Owner is a debtor, and in any instance where
more than one construction is possible of the terms and conditions hereof
or any other pertinent Operative Document, each such party agrees that a
construction which would preserve such benefits shall control over any
construction which would not preserve such benefits.
SECTION 11.14. References.
Unless otherwise specified, references in this Indenture to
Sections, Exhibits, Schedules and Annexes are references to Sections,
Exhibits, Schedules and Annexes herein or hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
US AIRWAYS, INC.
By: __________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture
Trustee
By:_____________________________
Name:
Title:
EXHIBIT A
TO
INDENTURE AND SECURITY AGREEMENT
INDENTURE SUPPLEMENT
(No. N___U_)
This Indenture Supplement N___U_) dated _______ __, _____
(herein called this "Indenture Supplement") of US Airways, Inc.
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement N___U_) dated as
of _________ __, ____ (as amended and supplemented to the date hereof,
the "Indenture") between Owner and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as Indenture Trustee (the "Indenture
Trustee"), provides for the execution and delivery of a supplement
thereto substantially in the form hereof, which shall particularly
describe the Aircraft, and shall specifically mortgage such Aircraft to
the Indenture Trustee; and
WHEREAS, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto
and made a part hereof and this Indenture Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Indenture Supplement witnesseth that Owner
hereby confirms that the Lien of the Indenture on the Indenture Estate
covers all of Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
Airbus A330
together with all of Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and
which are from time to time incorporated or installed in or attached to
said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's
Model Number Serial Number
together with all of Owner's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to
any of such engines.
Together with all of Owner's right, title and interest in and
to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or
hereafter acquired, including all substitutions, renewals and
replacements of and additions, improvements, accessions and accumulations
to the Airframe and Engines (other than additions, improvements,
accessions and accumulations which constitute appliances, parts,
instruments, appurtenances, accessories, furnishings or other equipment
excluded from the definition of Parts).
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
equal and proportionate benefit and security of the Note Holders, except
as provided in Section 2.15 and Article III of the Indenture without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and subject to the terms and provisions set forth in the
Indenture.
This Indenture Supplement shall be construed as supplemental to
the Indenture and shall form a part thereof. The Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved
and confirmed. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Indenture.
This Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, Owner hereby acknowledges that the Aircraft
referred to in this Indenture Supplement has been delivered to Owner and
is included in the property of Owner, subject to the pledge and mortgage
thereof under the Indenture.
IN WITNESS WHEREOF, Owner has caused this Indenture Supplement
to be duly executed by one of its officers, thereunto duly authorized, on
the day and year first above written.
US AIRWAYS, INC.
By: _________________________
Name:
Title:
EXHIBIT B
TO
INDENTURE AND SECURITY AGREEMENT
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties
hereto deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1)
Except as provided in clause (2) of this subsection (a), and subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit
B, Owner will carry or cause to be carried with respect to the Aircraft
at its or any Lessee's expense (i) comprehensive airline liability
(including, without limitation, passenger, contractual, bodily injury and
property damage liability) insurance (exclusive of manufacturer's product
liability insurance) and (ii) cargo liability insurance, (A) in an amount
not less than the greater of (x) the amounts of comprehensive airline
liability insurance from time to time applicable to aircraft owned or
leased, and operated by Owner (or, if a Lease is then in effect, by
Lessee) of the same type as the Aircraft and (y) $300 million per
occurrence, (B) of the type and covering the same risks as from time to
time applicable to aircraft owned or leased and operated by Owner of the
same type as the Aircraft, and (C) which is maintained in effect with
insurers of nationally or internationally recognized reputation and
responsibility; provided, however, that Owner need not maintain such
cargo liability insurance, or may maintain such cargo liability insurance
in an amount less than $300 million per occurrence, so long as the amount
of cargo liability insurance, if any, maintained with respect to the
Aircraft is not less than the cargo liability insurance, if any,
maintained for other Airbus Model A330 aircraft owned or leased and
operated by Owner.
(2) During any period that the Airframe or an Engine, as the
case may be, is on the ground and not in operation, Owner may carry or
cause to be carried as to such non-operating property, in lieu of the
insurance required by clause (1) above, and subject to the self-insurance
to the extent permitted by subsection (d), insurance by insurers of
nationally or internationally recognized reputation and responsibility
otherwise conforming with the provisions of said clause (1) except that
(A) the amounts of coverage shall not be required to exceed the amounts
of comprehensive airline liability from time to time applicable to
property owned or leased by Owner of the same type as such non-operating
property and which is on the ground and not in operation; and (B) the
scope of the risks covered and the type of insurance shall be the same as
from time to time shall be applicable to aircraft owned or leased by
Owner of the same type as such non-operating property and which is on the
ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject
to the provisions of subsection (d) of this Exhibit B permitting the
self-insurance, Owner shall maintain or cause to be maintained in effect,
at its or any Lessee's expense, with insurers of nationally or
internationally recognized responsibility, all-risk aircraft hull
insurance covering the Aircraft and fire and extended coverage and all-
risk aircraft hull insurance covering Engines and Parts while temporarily
removed from the Aircraft and not replaced by similar components;
provided that such insurance shall at all times while the Aircraft is
subject to the Lien of the Indenture be for an amount (taking into
account the self-insurance to the extent permitted by subsection (d) of
this Exhibit B) not less than the amount payable under Section 5.06(a)
upon the occurrence of an Event of Loss; provided further, that, subject
to compliance with subsection (d) of this Exhibit B, such all-risk
property damage insurance covering Engines and Parts temporarily removed
from an Airframe or an airframe or (in the case of Parts) an Engine need
be obtained only to the extent available at reasonable cost (as
reasonably determined by Owner). In the case of a loss with respect to
an engine (other than an Engine) installed on the airframe in
circumstances which do not constitute an Event of Loss with respect to
the Airframe, the Indenture Trustee shall promptly remit any payment made
to it of any insurance proceeds in respect of such loss to Owner or any
other third party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Owner with the insurers. As between the
Indenture Trustee and Owner, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be
applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon),
(i) unless such property is replaced pursuant to the last
paragraph of Section 5.06(a), so much of such payments
remaining, after reimbursement of the Indenture Trustee for
reasonable costs and expenses, as shall not exceed the amounts
payable pursuant to Section 5.06(a), shall be paid over to, or
retained by, the Indenture Trustee for the benefit of the Note
Holders (but not in excess of the amounts then due and payable
under the Equipment Notes); or (ii) if such property is
replaced pursuant to the last paragraph of Section 5.06(a),
such payments shall be paid over to, or retained by, Owner (or
if directed by Owner, any Lessee), provided that Owner shall
have fully performed or, concurrently therewith, will fully
perform the terms of the last paragraph of Section 5.06(a) with
respect to the Event of Loss for which such payments are made;
and
(y) if such payments are received with respect to an
Engine under the circumstances contemplated by Section 5.06(b),
so much of such payments remaining after reimbursement of the
Indenture Trustee for reasonable costs and expenses, shall be
paid over to, or retained by, Owner (or if directed by Owner,
any Lessee), provided that Owner shall have fully performed or
concurrently therewith will fully perform the terms of Section
5.06(b) with respect to the Event of Loss for which such
payments are made.
As between the Indenture Trustee and Owner, the insurance
payments for any property damage loss to the Airframe or any engine not
constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the
terms of Sections 7.02 and 7.03, if not already paid for by Owner (or any
Lessee), and any balance (or if already paid for by Owner (or any
Lessee), all such insurance proceeds) remaining after compliance with
such Sections with respect to such loss shall be paid to Owner (or any
Lessee if directed by Owner).
(2) During any period that the Aircraft is on the ground and
not in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit B, insurance
otherwise conforming with the provisions of said clause (1) except that
the scope of the risks and the type of insurance shall be the same as
from time to time applicable to aircraft owned or leased by Owner (or, if
a Lease is then in effect, by Lessee) of the same type as the Aircraft
similarly on the ground and not in operation, provided that, subject to
self-insurance to the extent permitted by subsection (d) of this Exhibit
B, Owner shall maintain insurance against risk of loss or damage to the
Aircraft in an amount at least equal to the amount payable upon the
occurrence of an Event of Loss pursuant to Section 5.06(a) during such
period that the Aircraft is on the ground and not in operation.
(3) If Owner (or any Lessee) shall at any time operate or
propose to operate the Aircraft, Airframe or any Engine (i) in any area
of recognized hostilities or (ii) on international routes, and war-risk,
hijacking or allied perils insurance is maintained by Owner (or any
Lessee) with respect to other aircraft owned and operated by Owner (or
any Lessee) on such routes or in such areas, Owner shall maintain or
cause to be maintained war-risk, hijacking and related perils insurance
of substantially the same type carried by major United States commercial
air carriers operating the same or comparable models of aircraft on
similar routes or in such areas and in no event in an amount less than
the amount payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a).
(c) Reports, etc. Owner will furnish, or cause to be
furnished, to the Indenture Trustee and the Pass Through Trustee, on or
before the Delivery Date and on each annual anniversary date of Owner's
applicable insurance, a report, signed by Owner's regular insurance
broker or any other independent firm of insurance brokers reasonably
acceptable to the Indenture Trustee which brokers may be in the regular
employ of Owner (the "Insurance Brokers"), describing in reasonable
detail the hull and liability insurance (and property insurance for
detached engines and parts) then carried and maintained with respect to
the Aircraft and stating the opinion of such firm that the insurance
complies with the terms hereof; provided, that all information contained
in the foregoing report shall not be made available by the Indenture
Trustee or the Pass Through Trustee to anyone except (i) to prospective
and permitted transferees of the Indenture Trustee's or the Pass Through
Trustee's interest or their respective counsel, independent certified
public accountants and independent insurance brokers or other agents, who
agree to hold such information confidential, (ii) the Indenture Trustee's
or the Pass Through Trustee's counsel or independent certified public
accountants, independent insurance brokers or agents who agree to hold
such information confidential or (iii) as may be required by any statute,
court or administrative order or decree or governmental ruling or
regulation; provided, however that any disclosure permitted by clause
(iii) above shall be made only to the extent necessary to meet the
specific requirements or needs of the Persons to whom such disclosures
are hereby permitted. Owner will cause such Insurance Brokers to agree
to advise the Indenture and the Pass Through Trustee in writing of any
act or omission on the part of Owner of which it has knowledge and which
might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise in writing at least thirty (30)
days (ten (10) days in the case of war risk, allied perils coverage and
with respect to the Electronic Date Recognition Exclusion Limited
Coverage Endorsement), prior to the cancellation or material adverse
change of any insurance maintained pursuant to Section 7.04, provided
that if the notice period specified above is not reasonably obtainable,
the Insurance Broker shall provide for as long a period of prior notice
as shall then be reasonably obtainable. In addition, Owner will also
cause such Insurance Brokers to deliver to the Indenture Trustee and the
Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Owner to such parties on the Delivery Date except for
such changes in the report or the coverage consistent with the terms
hereof. In the event that Owner or any Lessee shall fail to maintain or
cause to be maintained insurance as herein provided, the Indenture
Trustee may at its sole option, but shall be under no duty to, provide
such insurance and, in such event, Owner shall, upon demand, reimburse
the Indenture Trustee for the cost thereof to the Indenture Trustee.
(d) Self-Insurance. Owner may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise
(including, with respect to insurance maintained pursuant to subsection
(b) of this Exhibit B, insuring for an amount that is less than the
amounts payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a)) the risks required to be insured against pursuant to
Section 7.04 under a program applicable to all aircraft (whether owned or
leased) in Owner's fleet, but in no case shall the aggregate amount of
self-insurance in regard to subsection (a) and (b) of this Exhibit B
exceed for any policy year, with respect to all of the aircraft (whether
owned or leased) in Owner's fleet (including, without limitation, the
Aircraft), the lesser of (i) 50% of the highest replacement value of any
single aircraft in Owner's fleet or (ii) 1-1/2% of the average aggregate
insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which Owner carries
insurance, unless an insurance broker of national standing shall certify
that the standard among all other major United States airlines is a
higher level of self-insurance, in which case Owner may insure the
Aircraft to such higher level. In addition to the foregoing right to
self-insure, Owner (and any Lessee) may self-insure to the extent of any
applicable mandatory minimum per aircraft (or, if applicable, per annum
or other period) hull or liability insurance deductible customary in the
airline industry imposed by the aircraft hull or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit B and any policies
taken out in substitution or replacement for any of such policies (A)
shall be amended to name the Additional Insureds as their respective
interests may appear, (B) may provide for the self-insurance to the
extent permitted in subsection (d) of this Exhibit B, (C) shall provide
that if the insurers cancel such insurance for any reason whatever or if
any material change is made in such insurance which adversely affects the
interest of the Additional Insureds, or such insurance shall lapse for
non-payment of premium, such cancellation, lapse or change shall not be
effective as to the Additional Insureds for thirty (30) days (ten (10)
days in the case of war risk, allied perils coverage and with respect to
the Electronic Date Recognition Limited Coverage Endorsement) after
issuance to the Additional Insureds, respectively, of written notice by
such insurers of such cancellation, lapse or change; provided, however,
that if any notice period specified above is not reasonably obtainable,
such policies shall provide for as long a period of prior notice as shall
then be reasonably obtainable, (D) shall provide that in respect of the
respective interests of the Additional Insureds in such policies the
insurance shall not be invalidated by any action or inaction of Owner
(or, if any Lease is then in effect, any Lessee) or any other Person and
shall insure the Additional Insureds regardless of any breach or
violation of any warranty, declaration or condition contained in such
policies by Owner (or, if any Lease is then in effect, any Lessee), (E)
shall be primary without right of contribution from any other insurance
which is carried by any Additional Insured, (F) shall expressly provide
that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering
each insured, (G) shall waive any right of the insurers to any set-off or
counterclaim or any other deduction, whether by attachment or otherwise,
in respect of any liability of any Additional Insured to the extent of
any moneys due to any Additional Insured, and (H) shall provide that (i)
in the event of a loss involving proceeds in excess of $5,000,000, the
proceeds in respect of such loss up to an amount equal to the amount
payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a) shall be payable to the Indenture Trustee (so long as the
Indenture shall not have been discharged) in the manner set forth in
Sections 2.10 and 2.12 (except in the case of a loss with respect to an
Engine installed on an airframe other than the Airframe, in which case
Owner (or any Lessee) shall arrange for any payment of insurance proceeds
in respect of such loss to be held for the account of the Indenture
Trustee (so long as the Indenture shall not have been discharged) whether
such payment is made to Owner (or any Lessee) or any third party), it
being understood and agreed that in the case of any payment to the
Indenture Trustee otherwise than in respect of an Event of Loss, the
Indenture Trustee shall, upon receipt of evidence satisfactory to it that
the damage giving rise to such payment shall have been repaired or that
such payment shall then be required to pay for repairs then being made,
pay the amount of such payment (and all earnings thereon) to Owner or its
order, and (ii) the entire amount of any loss involving proceeds of
$5,000,000 or less or the amount of any proceeds of any loss in excess of
the amount payable upon the occurrence of an Event of Loss pursuant to
Section 5.06(a) shall be paid to Owner or its order unless an Event of
Default shall have occurred and be continuing and the insurers have been
notified thereof by the Indenture Trustee.
EXHIBIT C
TO
INDENTURE AND SECURITY AGREEMENT
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg United States
Malaysia Venezuela
*So long as on the date of the Lease such country and the
United States have diplomatic relations at least as good as those in
effect on the Delivery Date.
SCHEDULE I
Principal Amount Interest Rate
Series G _____%
Series C _____%
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of July 30, 1999, between US
Airways, Inc., US Airways Group, Inc. and State Street Bank and Trust
Company of Connecticut, National Association, as supplemented by Trust
Supplement No. 2000-1G, dated as of March __, 2000, and as supplemented
by Trust Supplement No. 2000-1C, dated as of March __, 2000.
