Exhibit 99(c)
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
Dated as of [_______________]
Between
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,
Indenture Trustee
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SECURED CERTIFICATES COVERING
ONE [AIRBUS A330-323][BOEING 757-351] AIRCRAFT
BEARING U.S. REGISTRATION XXXX N[______]
LEASED BY NORTHWEST AIRLINES, INC.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions..................................................6
SECTION 1.02. Reference to Other Documents................................12
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates................................12
SECTION 2.02. Issuance and Terms of Secured Certificates..................17
SECTION 2.03. Payments from Trust Indenture Estate Only...................20
SECTION 2.04. Method of Payment...........................................21
SECTION 2.05. Application of Payments.....................................23
SECTION 2.06. Termination of Interest in Trust Indenture Estate...........24
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates..............................................24
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates..............................................25
SECTION 2.09. Payment of Expenses on Transfer; Cancellation...............26
SECTION 2.10. Mandatory Redemptions of Secured Certificates...............26
SECTION 2.11. Voluntary Redemptions of Secured Certificates...............26
SECTION 2.12. Redemptions; Notice of Redemption...........................27
SECTION 2.13. Assumption of Secured Certificates by Lessee................28
SECTION 2.14. Option to Purchase Secured Certificates.....................28
SECTION 2.15. Subordination...............................................29
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.....................................30
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Refinancing...............................................31
SECTION 3.03. Payments After Event of Default.............................31
SECTION 3.04. Certain Payments............................................33
SECTION 3.05. Other Payments..............................................34
SECTION 3.06. Payments to the Owner Trustee...............................34
SECTION 3.07. Application of Payments Under Guarantee.....................34
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ARTICLE IV
COVENANTS OF THE OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of the Owner Trustee..............................35
SECTION 4.02. Event of Default............................................36
SECTION 4.03. Certain Rights..............................................37
SECTION 4.04. Remedies....................................................39
SECTION 4.05. Return of Aircraft, Etc.....................................41
SECTION 4.06. Remedies Cumulative.........................................42
SECTION 4.07. Discontinuance of Proceedings...............................42
SECTION 4.08. Waiver of Past Defaults.....................................43
SECTION 4.09. Appointment of Receiver.....................................43
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc.................................................43
SECTION 4.11. Rights of Certificate Holders to Receive Payment............43
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default..................................44
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations...............................................44
SECTION 5.03. Indemnification.............................................47
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions..............................................47
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions..............................................48
SECTION 5.06. Replacement Airframes and Replacement Engines...............48
SECTION 5.07. Indenture Supplements for Replacements......................50
SECTION 5.08. Effect of Replacement.......................................50
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.............51
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.............................51
SECTION 6.02. Absence of Duties...........................................52
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents.................................................52
SECTION 6.04. No Segregation of Monies; No Interest.......................53
SECTION 6.05. Reliance; Agreements; Advice of Counsel.....................53
SECTION 6.06. Capacity in Which Acting....................................54
SECTION 6.07. Compensation................................................54
SECTION 6.08. Instructions from Certificate Holders.......................54
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ARTICLE VII
INDEMNIFICATION OF THE INDENTURE TRUSTEE BY THE OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification....................................54
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee...........................55
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor.................................................55
SECTION 8.03. Appointment of Additional and Separate Trustees.............57
ARTICLE IX
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.......................58
SECTION 9.02. Trustees Protected..........................................60
SECTION 9.03. Documents Mailed to Certificate Holders.....................60
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement........................60
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture..............................61
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Certificate Holders.......................................61
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding............61
SECTION 10.04. Trust Indenture for Benefit of the Owner Trustee, the
Indenture Trustee, Owner Participant, Lessee and
Certificate Holders.......................................62
SECTION 10.05. Notices.....................................................62
SECTION 10.06. Severability................................................62
SECTION 10.07. No Oral Modification or Continuing Waivers..................62
SECTION 10.08. Successors and Assigns......................................63
SECTION 10.09. Headings....................................................63
SECTION 10.10. Normal Commercial Relations.................................63
SECTION 10.11. Governing Law; Counterpart Form.............................63
SECTION 10.12. Voting By Certificate Holders...............................63
SECTION 10.13. Bankruptcy..................................................64
SECTION 10.14. No Action Contrary to Lessee's Rights Under the Lease.......64
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EXHIBIT A.........Form of Trust Agreement and Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _], dated as of
[_______________] ("Trust Indenture") between XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as expressly stated herein, but solely as Owner Trustee under
the Trust Agreement referred to below (together with its successors under the
Trust Agreement, the "Owner Trustee"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, not in its individual capacity, except
as expressly stated herein, but solely as Indenture Trustee hereunder
(together with its successors hereunder, the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and Xxxxx Fargo have entered into the
Trust Agreement whereby, among other things, (i) the Owner Trustee has
established a certain trust for the use and benefit of the Owner Participant
subject, however, to the Trust Indenture Estate created pursuant hereto for
the use and benefit of, and with the priority of payment to, the holders of
Secured Certificates issued hereunder, and (ii) the Owner Trustee has been
authorized and directed to execute and deliver this Trust Indenture;
WHEREAS, the parties desire by this Trust Indenture, among other
things, (i) to provide for the issuance by the Owner Trustee to the Pass
Through Trustees (or their designee) of the Secured Certificates evidencing
the participation of the Pass Through Trustees in the payment of Lessor's Cost
for the Aircraft, as provided in the Participation Agreement and (ii) to
provide for the assignment, mortgage and pledge by the Owner Trustee to the
Indenture Trustee, as part of the Trust Indenture Estate hereunder, among
other things, of all of the Owner Trustee's right, title and interest in and
to the Aircraft and, except as hereinafter expressly provided, all of the
Owner Trustee's right, title and interest in, to and under the Lease and all
payments and other amounts received hereunder or thereunder in accordance with
the terms hereof or thereof, as security for, among other things, the Owner
Trustee's obligations to the Indenture Trustee, for the ratable benefit and
security of the Certificate Holders, subject to Section 2.15 and Article III
hereof;
WHEREAS, all things have been done to make the Secured Certificates,
when executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations of
the Owner Trustee; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the Principal Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with respect
to, all Secured Certificates from time to time outstanding hereunder and the
performance and observance by the Owner Trustee of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Secured Certificates contained, for the benefit of the Certificate Holders and
the Indenture Indemnitees and the prompt payment of all amounts from time to
time owing hereunder and under the Participation Agreement to the Certificate
Holders and the Indenture Indemnitees by the Owner Trustee or Lessee and for
the uses and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of
the acceptance of the Secured Certificates by the holders thereof, and for
other good and valuable consideration the receipt and adequacy whereof are
hereby acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby
grant, bargain, sell, assign, transfer, convey, mortgage, pledge and confirm,
unto the Indenture Trustee, its successors in trust and assigns, for the
security and benefit of the Certificate Holders, a first priority security
interest in and mortgage lien on all right, title and interest of the Owner
Trustee in, to and under the following described property, rights and
privileges, other than Excluded Payments (which collectively, excluding
Excluded Payments but including all property hereafter specifically subjected
to the Lien of this Trust Indenture by the Trust Agreement and Indenture
Supplement or any mortgage supplemental hereto, are included within the Trust
Indenture Estate), to wit:
(1) the Aircraft (including the Airframe and the Engines and all
replacements thereof and substitutions therefor to which the Owner Trustee
shall from time to time acquire title as provided herein and in the Lease),
all as more particularly described in the Trust Agreement and Indenture
Supplement executed and delivered with respect to the Aircraft or any such
replacements or substitutions therefor, as provided in this Trust Indenture
and all logs, manuals maintained on the Aircraft and modification and
maintenance records at any time required to be maintained with respect to the
Aircraft, in accordance with the rules and regulations of the FAA if the
Aircraft is registered under the laws of the United States or the rules and
regulations of the government of the country of registry of the Aircraft if
the Aircraft is registered under the laws of a jurisdiction other than the
United States;
(2) the Lease and any Lease Supplement and all Rent thereunder
(including, without limitation, all amounts of Basic Rent, Supplemental Rent
and payments of any kind thereunder (excluding any Excluded Payments)), and
the Guarantee (excluding any Excluded Payments);
(3) the Purchase Agreement [and the Guaranty - A330] ([each] to the
extent specified in the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement and the Xxxx of Sale;
(4) all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the lien of this Indenture;
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(5) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section 11
of the Lease, but excluding insurance proceeds described in clauses (ii) and
(iii) of the definition of Excluded Payments;
(6) all rights of the Owner Trustee to amounts paid or payable by
Lessee to the Owner Trustee under the Participation Agreement and all rights
of the Owner Trustee to enforce payments of any such amounts thereunder, but
excluding amounts described in clauses (i) and (v) (and clauses (vii), (viii)
and (ix) as they relate thereto) of the definition of Excluded Payments;
(7) 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 the Lease or required hereby or by the Lease to be held by
the Indenture Trustee hereunder (other than Excluded Payments); and
(8) all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Trust Indenture Estate
all Excluded Payments, and the right to enforce and collect the same, and
SUBJECT TO all of the terms and conditions of this Trust Indenture and the
rights of the Owner Trustee and the Owner Participant hereunder.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement, and the
Purchase Agreement 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 Certificate Holders, except as provided in Section 2.15
and Article III hereof without any preference, distinction or priority of any
one Secured Certificate over any other by reason of priority of time of issue,
sale, negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and in all cases and as to all
property specified in paragraphs (1) through (8) inclusive above, subject to
the terms and provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and the
Indenture Trustee and the Certificate Holders shall have no obligation or
liability under the Indenture Agreements, by reason of or arising out of the
assignment hereunder, nor shall the Indenture Trustee or the Certificate
Holders be required or obligated in any manner to perform or fulfill any
obligations of the Owner Trustee 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
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file any claim, or take any action to collect or enforce the payment of any
amounts which may have been assigned to it or to which it may be entitled at
any time or times.
The Owner Trustee does hereby constitute the Indenture Trustee the
true and lawful attorney of the Owner Trustee, irrevocably, granted for good
and valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner Trustee or
otherwise) to ask for, require, demand, receive, compound and give acquittance
for any and all monies and claims for monies (in each case including insurance
and requisition proceeds but in all cases excluding Excluded Payments) due and
to become due under or arising out of the Indenture Agreements, and all other
property which now or hereafter constitutes part of the Trust Indenture
Estate, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or to take any action or to institute any
proceedings which the Indenture Trustee may deem to be necessary or advisable
in the premises. Without limiting the generality of the foregoing, but subject
to the rights of the Owner Trustee and the Owner Participant hereunder, during
the continuance of any Event of Default under this Trust Indenture, the
Indenture Trustee shall have the right under such power of attorney to accept
any offer in connection with the exercise of remedies as set forth herein of
any purchaser to purchase the Airframe and Engines and upon such purchase to
execute and deliver in the name of and on behalf of the Owner Trustee an
appropriate xxxx of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, and in
its discretion to file any claim or take any other action or proceedings,
either in its own name or in the name of the Owner Trustee or otherwise, which
the 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 the Owner Trustee
to any Person beyond those obligations and liabilities specifically set forth
in this Trust Indenture and in the other Operative Documents. Under the Lease,
Lessee is directed, so long as this Trust Indenture shall not have been fully
discharged, to make all payments of Rent (other than Excluded Payments) and
all other amounts which are required to be paid to or deposited with the Owner
Trustee pursuant to the Lease (other than Excluded Payments) directly to, or
as directed by, the Indenture Trustee at such address or addresses as the
Indenture Trustee shall specify, for application as provided in this Trust
Indenture. The Owner Trustee 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 Trust Indenture Estate, for
distribution by the Indenture Trustee pursuant to this Trust Indenture, except
that the Owner Trustee shall accept for distribution pursuant to the Trust
Agreement any amounts distributed to it by the Indenture Trustee under this
Trust Indenture.
The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and
delivered any and all such further instruments and documents as the 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. The
parties hereto acknowledge that neither the Owner Trustee nor the Owner
Participant shall have any obligation as to any
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recording, filing, refiling or re-recording of any documents or instruments in
regard to maintaining the perfection of the security interests created
hereunder, in the Trust Indenture Estate or any security interest that may be
claimed to have been created by the Lease or the ownership interest of the
Owner Trustee in the Aircraft.
The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign
or pledge, so long as the assignment hereunder shall remain in effect, and the
Lien hereof shall not have been released pursuant to Section 10.01 hereof, any
of its right, title or interest hereby assigned, to anyone other than the
Indenture Trustee and its predecessor(s) in this transaction, and that it will
not, except as otherwise provided in this Trust Indenture and except with
respect to Excluded Payments to which it is entitled, (i) accept any payment
from Lessee under any Indenture Agreement, (ii) enter into any agreement
amending or supplementing any Indenture Agreement, (iii) execute any waiver or
modification of, or consent under, the terms of, or exercise any rights,
powers or privileges under, any Indenture Agreement, (iv) settle or compromise
any claim (other than those relating to an Excluded Payment) arising under any
Indenture Agreement or (v) submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any Indenture
Agreement to arbitration thereunder.
The Owner Trustee does hereby further agree that it will not without
the written consent of the Indenture Trustee:
(a) collect or agree to the receipt or collection of any payment of
Rent (other than Excluded Payments), including Basic Rent,
Stipulated Loss Value, Termination Value or any other payment
to be made pursuant to Section 9 or 10 of the Lease prior to
the date for the payment thereof provided for by the Lease or
assign, transfer or hypothecate (other than to the Indenture
Trustee hereunder) any payment of Rent (other than Excluded
Payments), including Basic Rent, Stipulated Loss Value,
Termination Value or any other payment to be made pursuant to
Section 9 or 10 of the Lease, then due or to accrue in the
future under the Lease in respect of the Airframe and Engines;
or
(b) except as contemplated by the Trust Agreement in connection
with the appointment of a successor owner trustee, sell,
mortgage, transfer, assign or hypothecate (other than to the
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
hereof.
It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall ipso facto, and without any further conveyance, assignment
or act on the part of the Owner Trustee 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 the Owner Trustee contained
in the foregoing paragraphs.
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The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any of the other Owner Trustee Documents.
Notwithstanding the Granting Clause or any of the foregoing
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments.
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 the
following terms shall have the following meanings (such definitions to be
equally applicable to both the singular and plural forms of the terms
defined):
"Actual Knowledge" shall mean, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the
Corporate Trust Office of the Indenture Trustee, as the case may be, and (ii)
as it applies to the Owner Participant, actual knowledge of a vice president
or other higher officer of the Owner Participant having responsibility for the
transactions contemplated by the Operative Documents.
"Amortization Amount" shall mean, with respect to any Principal
Amount Repayment Date, the amount set forth opposite such Date on the
Amortization Schedule.
"Amortization Schedule" shall mean the amortization schedule for the
Secured Certificates delivered pursuant to Section 2.02 hereof.
"Average Life Date" for each Secured Certificate to be redeemed
shall be the date which follows the redemption date by a period equal to the
Remaining Weighted Average Life at the redemption date of such Secured
Certificate. "Remaining Weighted Average Life" of such Secured Certificate, at
the redemption date of such Secured Certificate, shall be the number of days
equal to the quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such Secured
Certificate, by (ii) the number of days from and including the redemption date
to but excluding the scheduled payment date of such principal installment; by
(b) the then unpaid principal amount of such Secured Certificate.
"Cash Equivalents" shall mean the investments specified in Section
22(a) of the Lease.
"Certificate Holder" shall mean any holder from time to time of one
or more Secured Certificates.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Continuous Stay Period" shall have the meaning specified in Section
4.04(a) hereof.
"Corporate Trust Department" or "Trust Office" means the principal
corporate trust office of the Owner Trustee located at MAC: U1228-120, 000
Xxxxx Xxxx Xxxxxx, 00xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Attention:
Corporate Trust Services, or such other office at which the Owner Trustee's
corporate trust business shall be administered which the Owner Trustee shall
have specified by notice in writing to Lessee, the Indenture Trustee, the
Owner Participant and each Certificate Holder.
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee located at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Trust Department, or such other office at which the
Indenture Trustee's corporate trust business shall be administered which the
Indenture Trustee shall have specified by notice in writing to Lessee, the
Owner Trustee, the Loan Participants and each Certificate Holder.
"Debt" shall mean any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit transaction,
or other liabilities evidenced or to be evidenced by bonds, debentures, notes
or other similar instruments or for the deferred purchase price of property,
goods or services.
"Debt Rate" shall mean, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in Schedule
I to the Trust Indenture.
"Default" means any event or condition that with the giving of
notice or the lapse of time or both would become an Event of Default or Lease
Event of Default (excluding Lease Events of Default related to Excluded
Payments).
"Dollars" and "$" shall mean the lawful currency of the United
States of America.
"Enforcement Date" shall have meaning specified in Section 4.03
hereof.
"Event of Default" shall have the meaning specified in Section 4.02
hereof.
"Excess Amount" shall have the meaning specified in Section 2.03(b)
hereof.
"Excluded Payments" shall mean (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner
Trustee in its individual capacity, their respective Affiliates, successors
and permitted assigns and their directors, officers, employees, servants and
agents (collectively, the "Owner Indemnitees") pursuant to Sections 7(b),
7(c), 16 and 17 of the Participation Agreement, (ii) proceeds of public
liability insurance in respect of the Aircraft payable as a result of
insurance claims made, or losses suffered, by the Owner Trustee or the
Indenture Trustee in their respective individual capacities or by any of the
Owner Indemnitees, (iii) proceeds of insurance maintained with respect to the
Aircraft by the Owner Participant (whether directly or through the Owner
Trustee) or any other Owner
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Indemnitee and permitted under Section 11(e) of the Lease, (iv) all payments
required to be made under the Tax Indemnity Agreement by Lessee and all
payments of Supplemental Rent by Lessee in respect of any amounts payable
under the Tax Indemnity Agreement, (v) fees payable to the Owner Trustee or
the Indenture Trustee pursuant to the last sentence of Section 7(c) of the
Participation Agreement, (vi) provided that the Secured Certificates shall
have been duly assumed by Lessee pursuant to Section 2.13 hereof, the amounts
payable to the Owner Trustee pursuant to the third sentence of Section 19(d)
of the Lease plus all reasonable expenses incurred by the Owner Trustee and
the Owner Participant in connection with such assumption, as applicable, (vii)
any payment of the foregoing under the Guarantee, (viii) interest accrued on
any of the above, and (ix) any right to enforce the payment of any amount
described in clauses (i) through (viii) above and the right to declare an
Event of Default in respect of any of the foregoing amounts.
"Federal Funds Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by State Street from
three Federal funds brokers of recognized standing selected by it.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements
or relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"Guarantor" shall have the meaning specified in the Lease.
"Indenture Agreements" means the Participation Agreement, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, [the Guaranty -
A330 only], the Consent and Agreement, the Guarantee, the Bills of Sale and
any other contract, agreement or instrument from time to time assigned or
pledged under the Trust Indenture.
"Indenture Indemnitee" means (i) the Indenture Trustee, (ii) the
Loan Participants and each Certificate Holder, (iii) the Subordination Agent,
(iv) the Primary Liquidity Provider and the Policy Provider (v) the Pass
Through Trustee and (vi) the respective directors, officers, employees, agents
and servants of each of the Persons described in clauses (i) through (v),
inclusive.
"Indenture Trustee Event" means either (i) the Secured Certificates
shall have become due and payable pursuant to Section 4.04(b) of the Trust
Indenture or (ii) the Indenture Trustee has taken action or notified the Owner
Trustee that it intends to take action to foreclose
-8-
the Lien of the Trust Indenture or otherwise commence the exercise of any
significant remedy under the Trust Indenture or the Lease.
"Law" shall mean (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" shall mean that certain Lease Agreement [NW ____ _], dated
as of [_______________], entered into by the Owner Trustee and Lessee
concurrently with the execution and delivery hereof, as said Lease Agreement
has been, or may from time to time be, supplemented or amended, or the terms
thereof waived or modified, to the extent permitted by, and in accordance
with, the terms of this Indenture. The term "Lease" shall also include each
Lease Supplement from time to time entered into pursuant to the terms of the
Lease.
"Lease Default" shall mean a "Default" as defined in the Lease.
"Lease Event of Default" shall mean an "Event of Default" as defined
in the Lease.
"Lessee" shall mean Northwest Airlines, Inc., a Minnesota
corporation.
"Lessee Operative Documents" means the Participation Agreement, the
Lease, Lease Supplement No. 1, the Tax Indemnity Agreement, the Purchase
Agreement Assignment, the FAA Xxxx of Sale and the Xxxx of Sale.
"Majority in Interest of Certificate Holders" as of a particular
date of determination shall mean the holders of more than a majority in
aggregate unpaid Principal Amount of all Secured Certificates outstanding as
of such date (excluding any Secured Certificates held by the Owner Trustee or
the Owner Participant or any interests of the Owner Participant therein by
reason of subrogation pursuant to Section 4.03 hereof (unless all Secured
Certificates then outstanding shall be held by the Owner Trustee or the Owner
Participant) or Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Secured Certificate,
the amount (as determined by an independent investment banker selected by
Lessee and reasonably acceptable to the Indenture Trustee and the Owner
Participant) by which (a) the present value of the remaining scheduled
payments of principal and interest from the redemption date to maturity of
such Secured Certificate computed by discounting each such payment on a
semiannual basis from its respective Payment Date (assuming a 360-day year of
twelve 30-day months) using a discount rate equal to the Treasury Yield
exceeds (b) the outstanding principal amount of such Secured Certificate plus
accrued interest. For purposes of determining the Make-Whole Amount, "Treasury
Yield" at the time of determination with respect to any Secured Certificate
means the interest rate (expressed as a semiannual equivalent and as a decimal
and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semiannual
yield to maturity for United States Treasury securities maturing on the
Average Life Date of such Secured Certificate and trading in the public
securities market either as determined by interpolation between the most
recent weekly average yield to maturity for two series of United States
Treasury securities, trading in the public
-9-
securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date of such Secured Certificate and (B) the other
maturing as close as possible to, but later than, the Average Life Date of
such Secured Certificate, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Secured Certificate is
reported on the most recent H.15(519), such weekly average yield to maturity
as published in such H.15(519). "H.15(519)" means the weekly statistical
release designated as such, or any successor publication, published by the
Board of Governors of the Federal Reserve System. The date of determination of
a Make-Whole Amount shall be the third Business Day prior to the applicable
redemption date and the "most recent H.15(519)" means the H.15(519) published
prior to the close of business on the third Business Day prior to the
applicable redemption date.
"Mortgaged Property" shall have the meaning specified in Section
3.03 hereof.
"Owner Indemnitee" shall have the meaning specified in the
definition of Excluded Payments herein.
"Owner Participant" shall mean [______________________________], a
[____________________], so long as such party shall have any interest in the
Trust Estate, and transferees thereof as permitted by Section 8 of the
Participation Agreement.
"Participants" shall mean and include the Loan Participants and the
Owner Participant.
"Participation Agreement" shall mean that certain Participation
Agreement [NW ____ _], dated as of [_______________], among the Owner Trustee,
the Subordination Agent, the Indenture Trustee, Lessee, the Guarantor, the
Owner Participant and the Purchasers as the same may from time to time be
supplemented or further amended, or the terms thereof waived or modified, to
the extent permitted by, and in accordance with, the terms thereof.
"Past Due Rate" shall mean, with respect to the Secured
Certificates, the rate per annum equal to 2% over the Debt Rate as in effect
from time to time.
"Payment Date" shall mean each [February 20], [May 20], [August 20]
and [November 20], commencing on [February/May/August/November 20, ____] until
the Secured Certificates have been paid in full.
"Principal Amount" with respect to a Secured Certificate means the
stated original principal amount of such Secured Certificate and, with respect
to all Secured Certificates, means the aggregate stated original principal
amounts of all Secured Certificates.
"Principal Amount Repayment Date" shall mean each Payment Date on
which any portion of the Principal Amount is due and payable in accordance
with the Amortization Schedule.
"QIB" shall have the meaning specified in Section 2.08 hereof.
-10-
"Replacement Airframe" shall mean any airframe substituted for the
Airframe pursuant to Section 5.06 hereof.
"Replacement Engine" shall mean any engine substituted for an Engine
pursuant to Section 5.06 hereof.
"Responsible Officer" means with respect to the Owner Trustee, a
responsible officer in the Trust Office of the Owner Trustee (including,
without limitation, any authorized officer in the Trust Office of the Owner
Trustee), and with respect to the Indenture Trustee, a responsible officer in
the Corporate Trust Office of the Indenture Trustee.
"Section 1110 Period" shall have the meaning specified in Section
4.04(a) hereof.
"Secured Certificates" shall mean and include any Secured
Certificates issued hereunder, and issued in exchange therefor or replacement
thereof.
"Secured Obligations" shall have the meaning specified in Section
2.06 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series C-2" or "Series C-2 Secured Certificates" means Secured
Certificates issued and designated as "Series C-2" hereunder, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series C-2."
"Series G-2" or "Series G-2 Secured Certificates" means Secured
Certificates issued and designated as "Series G-2" hereunder, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series G-2."
"State Street" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture Trustee under
the Trust Indenture, but in its individual capacity.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Trust Agreement and Indenture Supplement" shall mean a supplement
to the Trust Agreement and to this Indenture, in substantially the form of
Exhibit A hereto, which shall particularly describe the Aircraft, and any
Replacement Airframe and Replacement Engine included in the property of the
Owner Trustee covered by the Trust Agreement.
"Trust Indenture", "this Trust Indenture", "the Trust Indenture",
"Indenture", "this Indenture", and "the Indenture" shall mean this Trust
Indenture and Security Agreement [NW ____ _] as it may from time to time be
supplemented or amended as herein provided, including supplementing by the
Trust Agreement and Indenture Supplement pursuant hereto.
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"Xxxxx Xxxxxxxxx Xxxxxx" shall mean all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in the
Granting Clause of this Trust Indenture, excluding Excluded Payments.
"Xxxxx Fargo" shall mean Xxxxx Fargo Bank Northwest, National
Association, a national banking association.
SECTION 1.02. Reference to Other Documents. For all purposes of
this Trust Indenture the terms used but not defined herein are used as defined
in the Lease.
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates.
The Secured Certificates shall be substantially in the form set
forth below:
THIS SECURED CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS SECURED CERTIFICATE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER TRUST
AGREEMENT [NW ____ _] DATED AS OF [______________].
SERIES [___] NON-RECOURSE SECURED CERTIFICATE DUE [_____] ISSUED IN CONNECTION
WITH THE [AIRBUS A330-323][BOEING 757-351] AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N[_____].
No.____ Date:[________]
$__________________
INTEREST RATE MATURITY DATE
[________] [______,_____]
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity
called the "Owner Trustee") under that certain Trust Agreement [NW ____ _],
dated as of [_______________], between the Owner Participant named therein and
XXXXX FARGO (herein as such Trust Agreement may be supplemented or amended
from time to time called the "Trust Agreement"), hereby promises to pay to
___________, or the registered assignee thereof, the principal sum of
$_________ (the "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
-12-
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 Secured Certificate shall be payable in installments on the
dates set forth in Schedule I hereto equal to the corresponding percentage of
the Principal Amount of this Secured Certificate set forth in Schedule I
hereto. Accrued but unpaid interest shall be due and payable in quarterly
installments commencing [February/May/August/November 20, ___], and thereafter
on [February 20], [May 20], [August 20] and [November 20] of each year, to and
including [____________]. Notwithstanding the foregoing, the final payment
made on this Secured Certificate shall be in an amount sufficient to discharge
in full the unpaid Principal Amount and all accrued and unpaid interest on,
and any other amounts due under, this Secured Certificate. Notwithstanding
anything to the contrary contained herein, if any date on which a payment
under this Secured Certificate becomes due and payable is not a Business Day
then such payment shall not be made on such scheduled date but shall be made
on the next succeeding Business Day and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount of such
payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement [NW ____ _], dated as of [_______________],
between the Owner Trustee and State Street Bank and Trust Company (the
"Indenture Trustee"), as the same may be amended or supplemented from time to
time. All other capitalized terms used in this Secured Certificate and not
defined herein shall have the respective meanings assigned in the Trust
Indenture.
This Secured Certificate shall bear interest, payable on demand, at
the Past Due Rate (calculated on the basis of a year of 360 days 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).
All payments of Principal Amount, interest, Make-Whole Amount, if
any, and other amounts, if any, to be made by the Owner Trustee hereunder and
under the Trust Indenture shall be payable only from the income and proceeds
from the Trust Estate to the extent included in the Trust Indenture Estate and
only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Trust Estate to the extent included in the Trust Indenture
Estate to enable the Indenture Trustee to make such payments in accordance
with the terms of Section 2.03 and Article III of the Trust Indenture and each
holder hereof, by its acceptance of this Secured Certificate, agrees that it
will look solely to the income and proceeds from the Trust Indenture Estate to
the extent available for distribution to the holder hereof as above provided
and that none of the Owner Participant, the Owner Trustee or the Indenture
Trustee is personally liable or liable in any manner extending to any assets
other than the Trust Indenture Estate to the holder hereof for any amounts
payable or any liability under this Secured Certificate or, except as provided
in the Trust Indenture or in the Participation Agreement, for any liability
under the Trust Indenture or the Participation Agreement; provided, however,
that nothing herein contained shall limit, restrict or impair the right of the
Indenture Trustee, subject always to the terms and provisions of the Trust
Indenture, to accelerate the maturity of this Secured Certificate upon
occurrence of an Event of Default under the Trust Indenture in accordance with
Section 4.04(b)
-13-
of the Trust Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Secured Certificate for purposes of realizing upon the Trust
Indenture Estate and to exercise all rights and remedies provided under the
Trust Indenture or otherwise realize upon the Trust Indenture Estate.
There shall be maintained a Secured Certificate Register for the
purpose of registering transfers and exchanges of Secured Certificates at the
Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the Trust
Indenture. Each such payment shall be made on the date such payment is due and
without any presentment or surrender of this Secured Certificate, except that
in the case of any final payment with respect to this Secured Certificate, the
Secured Certificate shall be surrendered promptly thereafter to the Indenture
Trustee for cancellation.
The holder hereof, by its acceptance of this Secured Certificate,
agrees that, except as provided in the Trust Indenture, each payment received
by it hereunder shall be applied, first, to the payment of accrued interest on
this Secured Certificate (as well as any interest on any overdue Principal
Amount, any overdue Make-Whole Amount, if any, or, to the extent permitted by
Law, any overdue interest and other amounts hereunder) to the date of such
payment, second, to the payment of the Principal Amount of this Secured
Certificate then due, third, to the payment of Make-Whole Amount, if any, and
any other amount due hereunder or under the Trust Indenture, and fourth, the
balance, if any, remaining thereafter, to the payment of Principal Amount of
this Secured Certificate remaining unpaid in the inverse order of their normal
maturity.
This Secured Certificate is one of the Secured Certificates referred
to in the Trust Indenture which have been or are to be issued by the Owner
Trustee pursuant to the terms of the Trust Indenture. The Trust Indenture
Estate is held by the Indenture Trustee as security, in part, for the Secured
Certificates. The provisions of this Secured Certificate are subject to the
Trust Indenture. Reference is hereby made to the Trust Indenture and the
Participation Agreement for a complete statement of the rights and obligations
of the holder of, and the nature and extent of the security for, this Secured
Certificate and the rights and obligations of the holders of, and the nature
and extent of the security for, any other Secured Certificates executed and
delivered under the Trust Indenture, as well as for a statement of the terms
and conditions of the trust created by the Trust Indenture, to all of which
terms and conditions in the Trust Indenture and the Participation Agreement
each holder hereof agrees by its acceptance of this Secured Certificate.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Secured Certificate is exchangeable for a
like aggregate Principal Amount of Secured Certificates of different
authorized denominations, as requested by the holder surrendering the same.
-14-
Prior to due presentment for registration of transfer of this
Secured Certificate, the Owner Trustee and the Indenture Trustee shall treat
the person in whose name this Secured Certificate is registered as the owner
hereof for all purposes whether or not this Secured Certificate be overdue,
and neither of the Owner Trustee nor the Indenture Trustee shall be affected
by notice to the contrary.
This Secured Certificate is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This
Secured Certificate is also subject to assumption by Lessee as provided in
Section 2.13 of the Trust Indenture, to exchange and to purchase by the Owner
Participant or the Owner Trustee as provided in Section 2.14 of the Trust
Indenture but not otherwise.
[The indebtedness evidenced by this Secured Certificate is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of Series G-2
Secured Certificates and this Secured Certificate is issued subject to such
provisions. The Certificate Holder of this Secured Certificate, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Indenture Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Trust Indenture and (c) appoints the Indenture Trustee his attorney-in-fact
for such purpose.]1
Unless the certificate of authentication hereon has been executed by
or on behalf of the Indenture Trustee by manual signature, this Secured
Certificate shall not be entitled to any benefit under the Trust Indenture or
be valid or obligatory for any purpose.
THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
----------
1 To be inserted in the case of a Series C-2 Secured Certificate.
-15-
IN WITNESS WHEREOF, the Owner Trustee has caused this Secured
Certificate to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee
By _________________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Secured Certificates referred to in the
within-mentioned Trust Indenture.
STATE STREET BANK AND TRUST
COMPANY,
not in its individual capacity but solely
as Indenture Trustee
By _________________________________________
Name:
Title:
-16-
SCHEDULE I
SECURED CERTIFICATES AMORTIZATION
Percentage of
Principal Amount
Payment Date to be Paid
------------------------- -------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Secured Certificates.
The Secured Certificates shall be dated the date of issuance
thereof, shall be issued in two separate series consisting of Series G-2 and
Series C-2 and in the maturities and principal amounts and shall bear interest
as specified in Schedule I hereto. On the Delivery Date, each Secured
Certificate shall be issued to the Pass Through Trustees (or their designee)
under the Pass Through Agreements as set forth in Schedule II hereto. The
Secured Certificates shall be issued in registered form only. The Secured
Certificates shall be issued in denominations of $1,000 and integral multiples
thereof, except that one Secured Certificate of each Series may be in an
amount that is not an integral multiple of $1,000.
Each Secured Certificate shall bear interest 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 [February/May/August/November 20, ____], and on each
[February 20], [May 20], [August 20], and [November 20] thereafter until
maturity. The Principal Amount of each Series G-2 and Series C-2 Secured
Certificate shall be payable on the dates and in the installments equal to the
corresponding percentage of the Principal Amount as set forth in Schedule I
hereto applicable to such Series which shall be attached as Schedule I to the
Series G-2 and Series C-2 Secured Certificates. Notwithstanding the foregoing,
the final payment made under each Series G-2 and Series C-2 Secured
Certificate shall be in an amount sufficient to discharge in full the unpaid
Principal Amount and all accrued and unpaid interest on, and any other amounts
due under, such Secured Certificate. Each Secured Certificate shall bear
interest at the Past Due Rate (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
Secured Certificate becomes due and payable is not a Business Day then such
payment shall not be made
-17-
on such scheduled date but shall be made on the next succeeding Business Day
and if such payment is made on such next succeeding Business Day, no interest
shall accrue on the amount of such payment during such extension.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by Lessee to (i) the
Indenture Trustee in its individual capacity, (ii) the Certificate Holders,
(iii) the Subordination Agent, (iv) the Primary Liquidity Provider, or (v) the
Pass Through Trustees, in each case pursuant to Section 7 of the Participation
Agreement, (b) Owner Trustee's pro rata share of all amounts owed to the
Primary Liquidity Provider by the Subordination Agent under each Primary
Liquidity Facility other than amounts due as (i) repayments of the principal
of advances thereunder, (ii) interest on Interest Drawings, Final Drawings,
and Applied Downgrade Advances and Applied Non-Extension Advances (as defined
in the Primary Liquidity Facilities) under any Primary Liquidity Facility
except to the extent included in Net Interest and Related Charges, and (iii)
fees payable to the Primary Liquidity Provider payable (whether or not in fact
paid) under Section 7(a) of the Note Purchase Agreement (as originally in
effect or amended, with the consent of the Owner Participant), (c) the Owner
Trustee's pro rata share of all compensation and reimbursement of fees,
expenses and disbursements (including payment of indemnities) owed to the
Policy Provider under the Policy Provider Agreement, and (d) any and all
amounts received by the Owner Trustee which are payable by Lessee under clause
(c) or (d) of the definition of Supplemental Rent. As used in this Section,
"Owner Trustee's pro rata share" means as of any time:
(A) with respect to all amounts payable by the Owner Trustee
specified in clause (c) above, a fraction the numerator of which is the
aggregate principal balance then outstanding of the Series G-2 Secured
Certificates and the denominator of which is the aggregate principal
balance then outstanding of all Series G-1 Equipment Notes and Series G-2
Equipment Notes;
(B) with respect to all amounts payable by the Owner Trustee
specified in clause (a) above under each Primary Liquidity Facility
(other than all Net Interest and Related Charges under such Primary
Liquidity Facility), a fraction (i) the numerator of which is the
aggregate principal balance then outstanding of the Secured Certificates
of Series corresponding to the class of the Pass Through Certificates to
which such Primary Liquidity Facility relates and (ii) the denominator of
which is the aggregate principal balance then outstanding of all Equipment
Notes of such Series; and
(C) with respect to all Net Interest and Related Charges under each
Primary Liquidity Facility (x) if there exists a Payment Default with
respect to the Secured Certificate of Series corresponding to the class of
Pass Through Certificates to which such Primary Liquidity Facility relates
a fraction, the numerator of which is the aggregate principal balance then
outstanding of the Secured Certificates of such Series and the denominator
of which is the aggregate principal balance then outstanding of all
Equipment Notes of such Series with respect to which there exists a
Payment Default or (y) at all other times, zero.
-18-
As used in this Section, "Net Interest and Related Charges" means, with
respect to a Primary Liquidity Facility, the sum of (i) the amount, if any, by
which interest payable to the Primary Liquidity Provider on any Interest
Drawing, Final Drawing, Applied Downgrade Advance and/or Applied Non-Extension
Advance (as defined in such Primary Liquidity Facility) exceeds the amount
which would be payable if such drawings bore interest at the Designated
Interest Rate plus (ii) any amounts payable under Section 3.01, Section 3.02,
Section 3.03 or Section 7.07 of such Primary Liquidity Facility (or similar
provisions of any succeeding Primary Liquidity Facility) which result from any
Interest Drawing, Final Drawing, Applied Downgrade Advance or Applied
Non-Extension Advance (as defined in such Primary Liquidity Facility). As used
in this Section "Designated Interest Rate" means the Past Due Rate (as defined
in the applicable Indentures) of the Secured Certificates (or Equipment Notes)
of Series corresponding to the class of the Pass Through Certificates to which
the relevant Primary Liquidity Facility relates except that with respect to
that portion of any Final Drawing (or Applied Downgrade Advance or Applied
Non-Extension Advance which becomes a Final Drawing) which remains in a
Primary Cash Collateral Account relating to such Primary Liquidity Facility,
Designated Interest Rate means the Investment Earnings of funds in such
Primary Cash Collateral Account. As used in this Section, a Payment Default
when used in connection with a Secured Certificate or Equipment Note means a
default in the payment of principal thereof or interest thereon which has not
been cured other than solely because of acceleration. The following terms are
used in this Section as defined in the Intercreditor Agreement without regard
to any amendment, modification or supplement thereto after the Closing Date:
Primary Cash Collateral Account, Equipment Notes, Final Drawing, Indentures,
Interest Drawing, Investment Earnings, Series G-1 Equipment Notes and Series
G-2 Equipment Notes.
The Secured Certificates shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer. Secured
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Owner Trustee shall bind the Owner Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Secured Certificates
or did not hold such offices at the respective dates of such Secured
Certificates. The Owner Trustee may from time to time execute and deliver
Secured Certificates with respect to the Aircraft to the Indenture Trustee for
authentication upon original issue and such Secured Certificates shall
thereupon be authenticated and delivered by the Indenture Trustee upon the
written request of the Owner Trustee signed by a Vice President or Assistant
Vice President or other authorized officer of the Owner Trustee; provided,
however, that each such request shall specify the aggregate Principal Amount
of all Secured Certificates to be authenticated hereunder on original issue
with respect to the Aircraft. No Secured Certificate shall be secured by or
entitled to any benefit under this Trust Indenture or be valid or obligatory
for any purposes, unless there appears on such Secured Certificate a
certificate of authentication in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized officers
and such certificate upon any Secured Certificates shall be conclusive
evidence, and the only evidence, that such Secured Certificate has been duly
authenticated and delivered hereunder.
-19-
SECTION 2.03. Payments from Trust Indenture Estate Only.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Certificate Holders under this
Trust Indenture, each Certificate Holder, by its acceptance of a Secured
Certificate, agrees that as between it and the Owner Trustee, except as
expressly provided in this Trust Indenture, the Participation Agreement or any
other Operative Document, (i) the obligation to make all payments of the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Secured Certificates, and the performance by
the Owner Trustee of every obligation or covenant contained in this Trust
Indenture and in the Participation Agreement or any of the other Operative
Documents, shall be payable only from the income and proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate and only to the
extent that the Owner Trustee shall have sufficient income or proceeds from
the Trust Estate to the extent included in the Trust Indenture Estate to
enable the Indenture Trustee to make such payments in accordance with the
terms of Article III hereof, and all of the statements, representations,
covenants and agreements made by the Owner Trustee (when made in such
capacity) contained in this Trust Indenture and any agreement referred to
herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this Trust
Indenture or such other agreements to the contrary notwithstanding (except for
any express provisions or representations that the Owner Trustee is
responsible for, or is making, in its individual capacity, for which there
would be personal liability of the Owner Trustee), no recourse shall be had
with respect to this Trust Indenture or such other agreements against the
Owner Trustee in its individual capacity or against any institution or person
which becomes a successor trustee or co-trustee or any officer, director,
trustee, servant or direct or indirect parent or controlling Person or Persons
of any of them, and (ii) none of the Owner Trustee, in its individual
capacity, the Owner Participant, the Indenture Trustee and any officer,
director, trustee, servant, employee, agent or direct or indirect parent or
controlling Person or Persons of any of them shall have any personal liability
for any amounts payable, or other obligation owed, hereunder, under the
Participation Agreement or any of the other Operative Documents or under the
Secured Certificates except as expressly provided herein or in the
Participation Agreement; provided, however, that nothing contained in this
Section 2.03(a) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Trust Indenture or such other agreements of
rights and remedies against the Trust Estate. These provisions are not
intended as any release or discharge of the indebtedness represented by the
Secured Certificates and the Trust Indenture, but are intended only as a
covenant not to xxx the Owner Participant, the Owner Trustee or the Indenture
Trustee in their individual capacities, except as expressly provided herein or
in the Participation Agreement, for a deficiency with respect to such
indebtedness, the indebtedness represented by this Trust Indenture and the
Secured Certificates to remain in full force and effect as fully as though
these provisions were not contained in this Trust Indenture. The Owner Trustee
hereby acknowledges that the Certificate Holders have expressly reserved all
their rights and remedies against the Trust Indenture Estate, including the
right, in the event of a default in the payment of all or part of the
Principal Amount of, interest on, Make-Whole Amount, if any, or any other
amount due with respect to any Secured Certificate within the periods provided
for in Section 4.02(b) hereof, or upon the occurrence and continuation of any
other Event of Default under this Trust Indenture, to foreclose upon this
Trust Indenture, and/or to receive the proceeds from the Trust Indenture
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Estate and otherwise to enforce any other right under this Trust Indenture in
accordance with the provisions hereof. Nothing in this Section 2.03(a) shall
(x) release the Owner Trustee or constitute a covenant not to xxx the Owner
Trustee for any breach by it of any representations, warranties or covenants
of the Owner Trustee contained in the Operative Documents or (y) release the
Owner Trustee in its individual capacity from personal liability, or
constitute a covenant not to xxx the Owner Trustee in its individual capacity
for any breach by it of any representations, warranties or covenants of the
Owner Trustee made in its individual capacity in the Operative Documents.
(b) If (i) all or any part of the Trust Estate becomes the property
of, or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code,
the Owner Trustee (in its individual capacity) or the Owner Participant is
required, by reason of the Owner Trustee (in its individual capacity) or the
Owner Participant being held to have recourse liability to any Certificate
Holder or the Indenture Trustee, directly or indirectly (other than the
recourse liability of the Owner Trustee (in its individual capacity), to make
payment on account of any amount payable as principal, Make-Whole Amount, if
any, interest or other amounts on the Secured Certificates or under this
Indenture and (iii) any Certificate Holder or the Indenture Trustee actually
receives any Excess Amount (as hereinafter defined) which reflects any payment
by the Owner Trustee (in its individual capacity) or the Owner Participant on
account of clause (ii) above, then such Certificate Holder or the Indenture
Trustee, as the case may be, shall promptly refund to the Owner Trustee (in
its individual capacity) or the Owner Participant (whichever shall have made
such payment) such Excess Amount.
For purposes of this Section 2.03(b), "Excess Amount" means the
amount by which such payment exceeds the amount that would have been received
by a Certificate Holder or the Indenture Trustee if the Owner Trustee (in its
individual capacity) or the Owner Participant had not become subject to the
recourse liability referred to in clause (ii) above. Nothing contained in this
Section 2.03(b) shall prevent a Certificate Holder or the Indenture Trustee
from enforcing any personal recourse obligation (and retaining the proceeds
thereof) of the Owner Trustee (in its individual capacity) or the Owner
Participant under the Participation Agreement or this Trust Indenture (and any
exhibits or annexes hereto or thereto) or by separate agreement or from
retaining any amount paid by Owner Participant under Section 2.14 or 4.03
hereof.
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Secured Certificate or hereunder will be
payable in Dollars by wire transfer of immediately available funds not later
than 12:00 noon, New York City time, on the due date of payment to the
Indenture Trustee at the Corporate Trust Office for distribution among the
Certificate Holders in the manner provided herein. The Owner Trustee shall not
have any responsibility for the distribution of such payment to any
Certificate Holder. Notwithstanding the foregoing or any provision in any
Secured Certificate to the contrary, the Indenture Trustee will use reasonable
efforts to pay or cause to be paid, if so directed in writing by any
Certificate Holder (with a copy to the Owner Trustee), all amounts paid by the
Owner
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Trustee hereunder and under such holder's Secured Certificate or Secured
Certificates to such holder or a nominee therefor (including all amounts
distributed pursuant to Article III of this Trust Indenture) by transferring,
or causing to be transferred, by wire transfer of immediately available funds
in Dollars, prior to 2:00 p.m., New York City time, on the due date of
payment, to an account maintained by such holder with a bank located in the
continental United States the amount to be distributed to such holder, for
credit to the account of such holder maintained at such bank. If the Indenture
Trustee shall fail to make any such payment as provided in the immediately
preceding sentence after its receipt of funds at the place and prior to the
time specified above, the Indenture Trustee, in its individual capacity and
not as trustee, agrees to compensate such holders for loss of use of funds at
the Federal Funds Rate until such payment is made and the Indenture Trustee
shall be entitled to any interest earned on such funds until such payment is
made. Any payment made hereunder shall be made without any presentment or
surrender of any Secured Certificate, except that, in the case of the final
payment in respect of any Secured Certificate, such Secured Certificate shall
be surrendered to the Indenture Trustee for cancellation promptly after such
payment. Notwithstanding any other provision of this Trust Indenture to the
contrary, the Indenture Trustee shall not be required to make, or cause to be
made, wire transfers as aforesaid prior to the first Business Day on which it
is practicable for the Indenture Trustee to do so in view of the time of day
when the funds to be so transferred were received by it if such funds were
received after 12:00 noon, New York City time, at the place of payment. Prior
to the due presentment for registration of transfer of any Secured
Certificate, the Owner Trustee and the Indenture Trustee shall deem and treat
the Person in whose name any Secured Certificate is registered on the Secured
Certificate Register as the absolute owner and holder of such Secured
Certificate for the purpose of receiving payment of all amounts payable with
respect to such Secured Certificate and for all other purposes, and none of
the Owner Trustee or the Indenture Trustee shall be affected by any notice to
the contrary. So long as any signatory to the Participation Agreement or
nominee thereof shall be a registered Certificate Holder, all payments to it
shall be made to the account of such Certificate Holder specified in Schedule
I thereto and otherwise in the manner provided in or pursuant to the
Participation Agreement unless it shall have specified some other account or
manner of payment by notice to the Indenture Trustee consistent with this
Section 2.04.
(b) The Indenture Trustee, as agent for the Owner Trustee, 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 Secured Certificate (and such exclusion and
withholding shall constitute payment in respect of such Secured Certificate)
any and all withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future United States taxes or similar
charges are required to be withheld with respect to any amounts payable
hereunder or in respect of the Secured Certificates, to withhold such amounts
(and such withholding shall constitute payment in respect of such Secured
Certificate) and timely pay the same to the appropriate authority in the name
of and on behalf of the Certificate Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each
Certificate Holder (with a copy to the Owner Trustee and Lessee) appropriate
receipts showing the payment thereof, together with such additional
documentary evidence as any such Certificate Holder may reasonably request
from time to time.
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If a Certificate Holder which is not a U.S. Person within the
meaning of Section 7701(a)(30) of the Code has furnished to the Indenture
Trustee a properly completed (including the U.S. Taxpayer Identification
Number of the Certificate Holder) and currently effective U.S. Internal
Revenue Service Form W-8IMY (with appropriate attachments), W-8BEN or W-8ECI
(or such successor form or forms as may be required by the United States
Treasury Department or Internal Revenue Service) during the calendar year in
which the payment hereunder or under the Secured Certificate(s) held by such
holder is made (but prior to the making of such payment), or in either of the
two preceding calendar years, and has not notified the Indenture Trustee of
the withdrawal or inaccuracy of such form prior to the date of such payment
(and the Indenture Trustee has no reason to know that any information set
forth in such form is inaccurate), the Indenture Trustee shall withhold only
the amount, if any, required by Law (after taking into account any applicable
exemptions claimed by the Certificate Holder) to be withheld from payments
hereunder or under the Secured Certificates held by such holder in respect of
United States federal income tax (and such withholding shall constitute
payment in respect of such Secured Certificate). If a Certificate Holder which
is a U.S. Person within the meaning of Section 7701(a)(30) of the Code has
furnished to the Indenture Trustee a properly completed and currently
effective U.S. Internal Revenue Service Form W-9 prior to a payment hereunder
or under the Secured Certificates held by such holder (or if such U.S. Person
is exempt from backup withholding), no amount shall be withheld from payments
in respect of United States federal income tax. If any Certificate Holder has
notified the Indenture Trustee that any of the foregoing forms or certificates
is withdrawn or inaccurate, or if such holder has not filed a form claiming an
exemption from United States withholding tax or if the Code or the regulations
thereunder or the administrative interpretation thereof are at any time after
the date hereof amended to require such withholding of United States federal
income taxes from payments under the Secured Certificates held by such holder,
the Indenture Trustee agrees to withhold from each payment due to the relevant
Certificate Holder withholding taxes at the appropriate rate under Law and
will, on a timely basis as more fully provided above, deposit such amounts
with an authorized depository and make such returns, statements, receipts and
other documentary evidence in connection therewith as required by applicable
Law.
Neither the Owner Participant nor the Owner Trustee shall be liable
for the failure of the Indenture Trustee to withhold taxes in the manner
provided for herein or if any Certificate Holder provides false or inaccurate
information on any form required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Secured Certificate, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due thereon
shall be applied:
First: to the payment of accrued interest on such Secured
Certificate (as well as any interest on any overdue Principal Amount, any
overdue Make-Whole Amount, if any, and to the extent permitted by Law, any
overdue interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Secured
Certificate (or a portion thereof) then due thereunder;
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Third: to the payment of Make-Whole Amount, if any, and any other
amount due hereunder or under such Secured Certificate; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Principal Amount of such Secured Certificate remaining unpaid
(provided that such Secured Certificate shall not be subject to
redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.
SECTION 2.06. Termination of Interest in Trust Indenture Estate.
A Certificate Holder, shall not, as such, have any further interest
in, or other right with respect to, the Trust Indenture Estate when and if the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Secured Certificates held by such Certificate Holder and
all other sums then payable to such Certificate Holder hereunder and under the
other Operative Documents by the Owner Trustee (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates.
The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Secured Certificate Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Secured Certificate Registrar" for the
purpose of registering Secured Certificates and transfers of Secured
Certificates as herein provided. A holder of any Secured Certificate intending
to exchange such Secured Certificate shall surrender such Secured Certificate
to the Indenture Trustee at the Corporate Trust Office, together with a
written request from the registered holder thereof for the issuance of a new
Secured Certificate, specifying, in the case of a surrender for transfer, the
name and address of the new holder or holders. Upon surrender for registration
of transfer of any Secured Certificate, the Owner Trustee shall execute, and
the Indenture Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Secured Certificates of
a like aggregate Principal Amount and of the same series. At the option of the
Certificate Holder, Secured Certificates may be exchanged for other Secured
Certificates of any authorized denominations of a like aggregate Principal
Amount, upon surrender of the Secured Certificates to be exchanged to the
Indenture Trustee at the Corporate Trust Office. Whenever any Secured
Certificates are so surrendered for exchange, the Owner Trustee shall execute,
and the Indenture Trustee shall authenticate and deliver, the Secured
Certificates which the Certificate Holder making the exchange is entitled to
receive. All Secured Certificates issued upon any registration of transfer or
exchange of Secured Certificates (whether under this Section 2.07 or under
Section 2.08 hereof or otherwise under this Trust Indenture) shall be the
valid obligations of the Owner Trustee evidencing the same respective
obligations, and entitled to the same security and benefits under this Trust
Indenture, as the
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Secured Certificates surrendered upon such registration of transfer or
exchange. Every Secured Certificate presented or surrendered for registration
of transfer, shall (if so required by the Indenture Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Indenture Trustee duly executed by the Certificate Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall require
evidence satisfactory to it as to the compliance of any such transfer with the
Securities Act, and the securities Laws of any applicable state. The Indenture
Trustee shall make a notation on each new Secured Certificate of the amount of
all payments of Principal Amount previously made on the old Secured
Certificate or Secured Certificates with respect to which such new Secured
Certificate is issued and the date to which interest on such old Secured
Certificate or Secured Certificates has been paid. Interest shall be deemed to
have been paid on such new Secured Certificate to the date on which interest
shall have been paid on such old Secured Certificate, and all payments of the
Principal Amount marked on such new Secured Certificate, as provided above,
shall be deemed to have been made thereon. The Owner Trustee shall not be
required to exchange any surrendered Secured Certificates as provided above
during the ten-day period preceding the due date of any payment on such
Secured Certificate. The Owner Trustee shall in all cases deem the Person in
whose name any Secured Certificate shall have been issued and registered as
the absolute owner and holder of such Secured Certificate for the purpose of
receiving payment of all amounts payable by the Owner Trustee with respect to
such Secured Certificate and for all purposes until a notice stating otherwise
is received from the Indenture Trustee and such change is reflected on the
Secured Certificate Register. The Indenture Trustee will promptly notify the
Owner Trustee, the Owner Participant and Lessee of each registration of a
transfer of a Secured Certificate. Any such transferee of a Secured
Certificate, by its acceptance of a Secured Certificate, agrees to the
provisions of the Participation Agreement applicable to Certificate Holders,
including Sections 6, 8(c), 8(e), 8(k), 8(l), 8(q), 8(r), 8(t), 8(cc), 10,
13(b), 13(c), 15(b) and 15(c), and shall be deemed to have represented and
warranted (except as provided above), and covenanted, to the parties to the
Participation Agreement as to the matters represented, warranted and
covenanted by the Purchasers in the Participation Agreement. Subject to
compliance by the Certificate Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner Trustee shall use all reasonable efforts to issue new Secured
Certificates upon transfer or exchange within 10 Business Days of the date a
Secured Certificate is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates.
If any Secured Certificate shall become mutilated, destroyed, lost
or stolen, the Owner Trustee shall, upon the written request of the holder of
such Secured Certificate, execute and the Indenture Trustee shall authenticate
and deliver in replacement thereof a new Secured Certificate, payable in the
same Principal Amount dated the same date and captioned as issued in
connection with the Aircraft. If the Secured Certificate being replaced has
become mutilated, such Secured Certificate shall be surrendered to the
Indenture Trustee and a photocopy thereof shall be furnished to the Owner
Trustee. If the Secured Certificate being replaced has been destroyed, lost or
stolen, the holder of such Secured Certificate shall furnish to the Owner
Trustee, the Owner Participant and the Indenture Trustee such security or
indemnity as may be required by them to save the Owner Trustee, the Owner
Participant and the Indenture Trustee harmless and evidence satisfactory to
the Owner Trustee, the Owner Participant and the Indenture Trustee of the
destruction, loss or theft of such Secured Certificate and of the
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ownership thereof. If a "qualified institutional buyer" of the type referred
to in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the
Securities Act (a "QIB") is the holder of any such destroyed, lost or stolen
Secured Certificate, then the written indemnity of such QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Lessee, the Owner Participant, the Owner Trustee and the
Indenture Trustee shall be accepted as satisfactory indemnity and security and
no further indemnity or security shall be required as a condition to the
execution and delivery of such new Secured Certificate. Subject to compliance
by the Certificate Holder of the requirements set forth in this Section 2.08,
the Indenture Trustee and the Owner Trustee shall use all reasonable efforts
to issue new Secured Certificates within 10 Business Days of the date of the
written request therefor from the Certificate Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Certificate Holder for any
registration of transfer or exchange of Secured Certificates, but the
Indenture Trustee, as Secured Certificate Registrar, may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Secured
Certificates.
(b) The Indenture Trustee shall cancel all Secured Certificates
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Secured Certificates.
SECTION 2.10. Mandatory Redemptions of Secured Certificates.
(a) On the date on which Lessee is required pursuant to Section
10(a)(i) of the Lease to make payment for an Event of Loss with respect to the
Aircraft, all of the Secured Certificates shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption and all
other amounts payable hereunder or under the Participation Agreement to the
Certificate Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9 or Section 19(d) thereof and Lessee shall not
have assumed all of the obligations of the Owner Trustee hereunder pursuant to
Section 2.13 and to Section 8(x) of the Participation Agreement, on the date
the Lease is so terminated all the Secured Certificates shall be redeemed in
whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with accrued interest thereon to the date of redemption and
all other amounts payable hereunder or under the Participation Agreement to
the Certificate Holders plus Make-Whole Amount, if any.
SECTION 2.11. Voluntary Redemptions of Secured Certificates.
All (but not less than all) of the Secured Certificates may be
redeemed by the Owner Trustee in connection with a transaction described in,
and subject to the terms and conditions of, Section 17 of the Participation
Agreement upon at least 30 days' revocable prior written notice to the
Indenture Trustee and the Certificate Holders, and the Secured Certificates
shall, as provided in Section 17 of the Participation Agreement, be redeemed
in whole at a
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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
Certificate Holders plus Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Secured Certificate nor any
purchase by the Owner Trustee of any Secured Certificate may be made except to
the extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Secured Certificate may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed or purchased, at such Certificate Holder's address
appearing in the Secured Certificate Register; provided that, in the case of a
redemption to be made pursuant to Section 2.10(b) or Section 2.11, such notice
shall be revocable and shall be deemed revoked in the event that the Lease
does not in fact terminate on the specified termination date or if notice of
such redemption shall have been given in connection with a refinancing of
Secured Certificates and the Indenture Trustee receives written notice of such
revocation from Lessee or the Owner Trustee not later than three days prior to
the redemption date. All notices of redemption shall state: (1) the redemption
date, (2) the applicable basis for determining the redemption price, (3) that
on the redemption date, the redemption price will become due and payable upon
each such Secured Certificate, and that, if any such Secured Certificates are
then outstanding, interest on such Secured Certificates shall cease to accrue
on and after such redemption date, and (4) the place or places where such
Secured Certificates are to be surrendered for payment of the redemption
price.
(c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal to
the redemption price for the Secured Certificates to be redeemed or purchased
on the redemption date shall not then be held in the Trust Indenture Estate,
deposit or cause to be deposited with the Indenture Trustee by 12:00 noon on
the redemption date in immediately available funds the redemption price of the
Secured Certificates to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 2.12(b)),
the Secured Certificates 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 Secured Certificates
then outstanding shall cease to bear interest. Upon surrender of any such
Secured Certificate for redemption or purchase in accordance with said notice,
such Secured Certificate shall be redeemed at the redemption price. If any
Secured Certificate 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 Secured Certificate as of such redemption
date.
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SECTION 2.13. Assumption of Secured Certificates by Lessee.
If, in accordance with Section 8(x) of the Participation Agreement,
and subject to the provisions of Section 8(o) thereof, Lessee shall assume (on
a full recourse basis) all of the obligations of the Owner Trustee hereunder,
under the Secured Certificates and all other Operative Documents by
supplemental indenture satisfactory to the Indenture Trustee (which shall
contain (i) the provisions substantially similar to Sections 6, 7, 8, 10, 11
and 12 of the Lease and (ii) other provisions necessary or advisable to
effectuate such assumption), then upon delivery of such supplemental
indenture, payment by Lessee of all expenses (including reasonable fees and
expenses of counsel) for the Owner Trustee and the Owner Participant, delivery
by the Guarantor of a guarantee of the Secured Certificates and other amounts
owing to the Certificate Holders substantially in the form of the Guarantee,
and delivery of an opinion of counsel for Lessee that such assumption has been
duly and validly effected, the Owner Trustee shall be released and discharged
from any further obligations hereunder and under the Secured Certificates and
all other Operative Documents and the Owner Participant shall be released and
discharged from any further obligations under the Participation Agreement and
any other Operative Document to which it is a party, except with respect to
any such obligations that accrued prior thereto.
SECTION 2.14. Option to Purchase Secured Certificates.
Either the Owner Trustee or the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set forth in
this Section 2.14, purchase all but not less than all of the Secured
Certificates outstanding hereunder, and each Certificate Holder agrees that it
will, upon such events and subject to such terms and conditions and upon
receipt of such price, sell, assign, transfer and convey to such purchaser or
its nominee (without recourse or warranty of any kind except as to its title
to the Secured Certificates and except against Liens on such Secured
Certificates arising by, through or under such holder), all of the right,
title and interest of such Certificate Holder in and to the Trust Indenture
Estate, this Trust Indenture and the Secured Certificates held by it, and such
purchaser or its nominee shall assume all of such holder's obligations under
the Participation Agreement and hereunder.
Such option to purchase the Secured Certificates may be exercised by
the Owner Trustee or the Owner Participant upon any of the following events,
and, in any such event, the purchase price thereof shall equal for each
Secured Certificate the aggregate unpaid Principal Amount thereof, plus
accrued and unpaid interest thereon to the date of purchase and all other
amounts (other than the Make-Whole Amount, except as provided in the next
sentence) then payable hereunder or under the Participation Agreement to the
holder thereof. Such option to purchase the Secured Certificates may be
exercised: (i) upon an Indenture Trustee Event or (ii) in the event there
shall have occurred and be continuing a Lease Event of Default, provided that
if such option is exercised pursuant to this clause (ii) at a time when there
shall have occurred and be continuing for less than 180 days a Lease Event of
Default, the purchase price thereof shall equal the price provided in the
preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Secured Certificates may be exercised by
the Owner Trustee or the Owner Participant giving written notice of its
election of such option to the Indenture Trustee, which notice shall specify a
date for such purchase not more than thirty (30)
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days or less than fifteen (15) days after the date of such notice. The
Indenture Trustee shall not exercise any of the remedies hereunder or, without
the consent of the Owner Trustee or the Owner Participant, under the Lease,
during the period from the time that a notice of exercise by the Owner
Participant of such option to purchase becomes irrevocable until the date on
which such purchase is required to occur pursuant to the terms of the
preceding sentence. Such election to purchase the Secured Certificates shall
become irrevocable upon the sixteenth day preceding the date specified in the
written notice described in the first sentence of this paragraph.
If the Owner Trustee or the Owner Participant on or before the date
of such purchase shall so request, the Certificate Holders will comply with
all the provisions of Section 2.07 to enable new Secured Certificates to be
issued to the Owner Trustee or the Owner Participant or its nominee in such
denominations as the Owner Trustee or the Owner Participant shall request. All
taxes, charges and expenses required pursuant to Section 2.09 in connection
with the issuance of such new Secured Certificate shall be borne by the Owner
Participant.
SECTION 2.15. Subordination.
(a) The Owner Trustee and, by acceptance of its Secured Certificates
of any Series, each Certificate Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Certificate Holder of such Series, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.
(b) By the acceptance of its Secured Certificates of any Series,
each Certificate Holder of such Series agrees that in the event that such
Certificate Holder, in its capacity as a Certificate Holder, shall receive any
payment or distribution on any Secured Obligations in respect of such Series
which it is not entitled to receive under this Section 2.15 or Article III
hereof, it will hold any amount so received in trust for, and will forthwith
turn over such payment to, the Indenture Trustee in the form received to be
applied as provided in Article III hereof.
(c) The indebtedness evidenced by the Series G-2 Secured
Certificates shall rank in right of payment equally with all other Series G-2
Secured Certificates. The indebtedness evidenced by the Series C-2 Secured
Certificates is, to the extent and in the manner provided in this Trust
Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations in respect of the Series G-2 Secured
Certificates, and the Series C-2 Secured Certificates are issued subject to
such provisions. By acceptance of its Secured Certificates of any Series, each
Certificate Holder of such Series (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Indenture Trustee on such
Certificate Holder's behalf to take any action necessary or appropriate to
effectuate the subordination as provided in this Trust Indenture and (c)
appoints the Indenture Trustee as such Certificate Holder's attorney in fact
for such purpose.
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ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.
Except as otherwise provided in Section 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Indenture Trustee pursuant to
Section 4.03 hereof shall be promptly distributed in the following order of
priority:
First, (i) so much of such installment or payment as shall be required to
pay in full the aggregate amount of the payment or payments of
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-2 Secured
Certificates shall be distributed to the Certificate Holders of
Series G-2 ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under all Series G-2 Secured Certificates held by each
Certificate Holder bears to the aggregate amount of the
payments then due under all Series G-2 Secured Certificates;
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-2 Secured
Certificates shall be distributed to the Certificate Holders of
Series C-2 ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then
due under all Series C-2 Secured Certificates held by each
Certificate Holder bears to the aggregate amount of the
payments then due under all Series C-2 Secured Certificates;
and
Second, the balance, if any, of such installment remaining thereafter shall
be distributed to the Owner Trustee; provided, however, that if an
Event of Default shall have occurred and be continuing, then such
balance shall not be distributed as provided in this clause "Second"
but shall be held by the Indenture Trustee as part of the Trust
Indenture Estate and invested in accordance with Section 5.09 hereof
until whichever of the following shall first occur: (i) all Events
of Default shall have been cured or waived, in which event such
balance shall be distributed as provided in this clause "Second"
without reference to this proviso, (ii) Section 3.03 hereof shall be
applicable, in which event such balance shall be distributed in
accordance with the provisions of such Section 3.03, or (iii) the
120th day after the
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receipt of such payment in which case such payment shall be
distributed as provided in this clause "Second" without reference to
this proviso.
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Refinancing.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the
result of an Event of Loss, (ii) pursuant to a voluntary termination of the
Lease pursuant to Section 9 or 19(d) thereof, or (iii) in connection with a
refinancing of the Secured Certificates pursuant to Section 17 of the
Participation Agreement shall be applied to redemption of the Secured
Certificates and to all other amounts payable hereunder or to the Indenture
Trustee or any Certificate Holder under the Participation Agreement by
applying such funds in the following order of priority:
First, (a) to reimburse the Indenture Trustee and the Certificate Holders
for any reasonable costs or expenses incurred in connection
with such redemption for which they are entitled to
reimbursement, or indemnity by Lessee, under the Operative
Documents and then (b) to pay any other amounts then due to
the Indenture Trustee and the Certificate Holders under this
Trust Indenture, the Participation Agreement or the Secured
Certificates (other than amounts specified in clause Second
below);
Second, (i) to pay the amounts specified in paragraph (i) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any, then due
and payable in respect of the Series G-2 Secured Certificates;
(ii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series C-2 Secured Certificates; and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine shall
be substituted for the Airframe or Engine subject to such Event of Loss as
provided in Section 10 of the Lease and in accordance with Section 5.06
hereof, any insurance, condemnation or similar proceeds which result from such
Event of Loss and are paid over to the Indenture Trustee shall be held by the
Indenture Trustee as permitted by Section 6.04 hereof (provided that such
moneys shall be invested as provided in Section 5.09 hereof) as additional
security for the obligations of Lessee under the Lessee Operative Documents
and, unless otherwise applied pursuant to the Lease, such proceeds (and such
investment earnings) shall be released to Lessee at Lessee's written request
upon the release of such damaged Airframe or Engine and the replacement
thereof as provided in the Lease.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including any
amounts realized by the
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Indenture Trustee from the exercise of any remedies pursuant to Section 15 of
the Lease or Article IV hereof) after both an Event of Default shall have
occurred and be continuing and the Secured Certificates shall have become due
and payable pursuant to Section 4.04(b) hereof, as well as all payments or
amounts then held by the Indenture Trustee as part of the Trust 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 Trust
Indenture Estate (all such property being herein called the
"Mortgaged Property") pursuant to Section 4.05(b) hereof) incurred
by the Indenture Trustee (to the extent not previously reimbursed),
the expenses of any sale, taking or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Certificate Holders in the protection,
exercise or enforcement of any right, power or remedy or any damages
sustained by the Indenture Trustee or any Certificate Holder,
liquidated or otherwise, upon such Event of Default shall be applied
by the Indenture Trustee as between itself and the Certificate
Holders in reimbursement of such expenses and any other expenses for
which the Indenture Trustee or the Certificate Holders are entitled
to reimbursement under any Operative Document and in the case the
aggregate amount to be so distributed is insufficient to pay as
aforesaid, then ratably, without priority of one over the other, in
proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be required
to reimburse the then existing or prior Certificate Holders for
payments made pursuant to Section 5.03 hereof (to the extent not
previously reimbursed) shall be distributed to such then existing or
prior Certificate Holders ratably, without priority of one over the
other, in accordance with the amount of the payment or payments made
by each such then existing or prior Certificate Holder pursuant to
said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount
of all Series G-2 Secured Certificates, and the accrued but
unpaid interest and other amounts due thereon and all other
Secured Obligations in respect of the Series G-2 Secured
Certificates to the date of distribution, shall be distributed
to the Certificate Holders of Series G-2, and in case the
aggregate amount so to be distributed shall be insufficient to
pay in full as aforesaid, then ratably, without priority of one
over the other, in the proportion that the aggregate unpaid
Principal Amount of all Series G-2 Secured Certificates held by
each Certificate Holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal Amount of
all Series G-2 Secured Certificates plus the accrued but unpaid
interest and other amounts due thereon to the date of
distribution; and
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(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-2
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in
respect of the Series C-2 Secured Certificates to the date of
distribution, shall be distributed to the Certificate Holders
of Series C-2, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C-2 Secured Certificates held by each Certificate Holder
plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid Principal Amount of all Series C-2 Secured
Certificates plus the accrued but unpaid interest and other
amounts due thereon to the date of distribution;
Fourth, the balance, if any, of such payments or amounts remaining thereafter
shall be distributed to the Owner Trustee.
No Make-Whole Amount shall be due and payable on the Secured
Certificates as a consequence of the acceleration of the Secured Certificates.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Trust Indenture and
for which such provision is made in the Lease, 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 Lease, the
Participation Agreement or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or Lessee in respect
of the Indenture Trustee in its individual capacity, any Certificate Holder or
any other Indenture Indemnitee, in each case whether pursuant to Section 7 of
the Participation Agreement or as Supplemental Rent, directly to the Person
entitled thereto. Any payment received by the Indenture Trustee under clause
(b) of 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, and any payment received by the Indenture Trustee
under clause (d) of the third paragraph of Section 2.02 shall be distributed
directly to the Persons entitled thereto.
(c) [Intentionally Omitted]
(d) Notwithstanding anything to the contrary contained in this
Article III, any amounts received by the Indenture Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the Indenture
Trustee directly to the Person or Persons entitled thereto.
(e) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by the Indenture Trustee that would, but for the
provisions of Section 3.03 hereof,
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otherwise be distributed to Lessee shall, notwithstanding the provisions of
said Section, be distributed to Lessee unless and until a Lease Event of
Default shall have occurred and be continuing.
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 Lease, the
Participation Agreement, elsewhere in this Trust Indenture or in any other
Operative Document shall be distributed by the Indenture Trustee to the extent
received or realized at any time (i) prior to the payment in full of all
Secured Obligations due the Certificate Holders, in the order of priority
specified in Section 3.01 hereof subject to the proviso thereto, and (ii)
after payment in full of all Secured Obligations due the Certificate Holders,
in the following order of priority:
First, to the extent payments or amounts described in clause "First" of
Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Documents or for which Lessee is obligated to indemnify
against thereunder, in the manner provided in clause "First" of
Section 3.03 hereof, and
Second, in the manner provided in clause "Fourth" of Section 3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the
Indenture Trustee under the Lease or otherwise with respect to the
Aircraft (including, without limitation, all amounts realized upon
the sale or release of the Aircraft after the termination of the
Lease with respect thereto), to the extent received or realized at
any time after payment in full of all Secured Obligations due the
Certificate Holders, shall be distributed by the Indenture Trustee
in the order of priority specified in clause (ii) of the immediately
preceding sentence of this Section 3.05.
SECTION 3.06. Payments to the Owner Trustee.
Any amounts distributed hereunder by the Indenture Trustee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type
received by the Indenture Trustee at such office and to such account or
accounts of such entity or entities as shall be designated by notice from the
Owner Trustee to the Indenture Trustee from time to time. The Owner Trustee
hereby notifies the Indenture Trustee that unless and until the Indenture
Trustee receives notice to the contrary from the Owner Trustee, all amounts to
be distributed to the Owner Trustee pursuant to clause "Second" of Section
3.01 hereof shall be distributed by wire transfer of funds of the type
received by the Indenture Trustee to the Owner Participant's account (within
the time limits contemplated by Section 2.04(a)) specified in Schedule I to
the Participation Agreement.
SECTION 3.07. Application of Payments Under Guarantee.
All payments received by the Indenture Trustee pursuant to the
Guarantee shall be distributed forthwith by the Indenture Trustee in the same
order of priority, and in the same
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manner, as it would have distributed the payment in respect of which such
payment under the Guarantee was received.
ARTICLE IV
COVENANTS OF THE OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of the Owner Trustee.
The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the
Principal Amount of, Make-Whole Amount, if any, and interest on and
other amounts due under the Secured Certificates and hereunder in
accordance with the terms of the Secured Certificates and this Trust
Indenture and all amounts, if any, payable by it to the Certificate
Holders under the Participation Agreement;
(b) the Owner Trustee in its individual capacity covenants and
agrees that it shall not, directly or indirectly, cause or permit to
exist a Lessor Lien attributable to it in its individual capacity
with respect to the Aircraft or any other portion of the Trust
Estate; that it will promptly, at its own expense, take such action
as may be necessary to duly discharge such Lessor Lien attributable
to it in its individual capacity; and that it will make restitution
to the Trust Estate for any actual diminution of the assets of the
Trust Estate resulting from such Lessor Liens attributable to it in
its individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge
of an Event of Default, a Default or an Event of Loss, the Owner
Trustee will give prompt written notice of such Event of Default,
Default or Event of Loss to the Indenture Trustee, each Certificate
Holder, Lessee and the Owner Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments
furnished to the Owner Trustee under the Lease, including, without
limitation, a copy of any Termination Notice and a copy of each
report or notice received pursuant to Section 9(a) and 11(c) of the
Lease to the extent that the same shall not have been furnished to
the Indenture Trustee pursuant to the Lease;
(e) except pursuant to the Operative Documents or with the
consent of the Indenture Trustee (acting pursuant to instructions
given in accordance with Section 9.01 hereof), the Owner Trustee will
not contract for, create, incur, assume or suffer to exist any Debt,
and will not guarantee (directly or indirectly or by an instrument
having the effect of assuring another's payment or performance on
any obligation or capability of so doing, or otherwise), endorse or
otherwise be
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or become contingently liable, directly or indirectly, in connection
with the Debt of any other person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions
contemplated hereby and by the Lease, the Participation Agreement,
the Trust Agreement and the other Operative Documents.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) any Lease Event of Default; or
(b) the failure of the Owner Trustee 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 Secured Certificate or hereunder (other than any
such failure arising by virtue of a tax withheld pursuant to Section 2.04(b)
hereof or as a result of a Lease Event of Default or a Lease Default) 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
the Owner Trustee or the Owner Participant receives written demand from the
Indenture Trustee or any Certificate Holder; or
(c) any Lien required to be discharged by the Owner Trustee, in its
individual capacity pursuant to Section 4.01(b) hereof or in its individual or
trust capacity pursuant to Section 8(h) of the Participation Agreement, or by
the Owner Participant pursuant to Section 8(h) of the Participation Agreement
shall remain undischarged for a period of thirty (30) days after the Owner
Trustee and the Owner Participant shall have received written notice from the
Indenture Trustee or any Certificate Holder of such Lien; or
(d) any representation or warranty made by the Owner Participant or
the Owner Trustee herein, in the Participation Agreement or in any document or
certificate furnished by the Owner Participant or the Owner Trustee to the
Indenture Trustee or any Certificate 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
Certificate 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 (or,
without affecting Section 4.02(f) hereof, in the case of the representations
made in Section 8(c) of the Participation Agreement as to the citizenship of
the Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within
sixty (60) days) following notice thereof from the Indenture Trustee or any
Certificate Holder to the Owner Trustee or the Owner Participant, as the case
may be; or
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(e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other
covenant or obligation of the Owner Trustee or Owner Participant, as the case
may be, for the benefit of the Indenture Trustee or the Certificate Holders
contained in the Participation Agreement, Section 4.01(a) of the Trust
Agreement, the Secured Certificates or this Trust Indenture which is not
remedied within a period of sixty (60) days after notice thereof has been
given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the laws of
the United States, the Owner Participant shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under the
Federal Aviation Act, and regulations then applicable thereunder, shall cease
to be effective; provided that no Event of Default shall be deemed to have
occurred under this paragraph (f) unless such circumstances continue
unremedied for more than sixty (60) days after the Owner Participant has
Actual Knowledge of the state of facts that resulted in such ineffectiveness
and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary case
or other proceeding in respect of the Owner Participant, the Owner Trustee or
the Trust Estate in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Owner Participant, the Owner Trustee
or the Trust Estate or for all or substantially all of its property, or
seeking the winding-up or liquidation of its affairs and the continuation of
any such case or other proceeding undismissed and unstayed for a period of
ninety (90) consecutive days; or (ii) the commencement by the Owner
Participant, the Owner Trustee or the Trust Estate of a voluntary case or
proceeding under the federal bankruptcy laws, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy, insolvency or
other similar law in the United States, or the consent by the Owner
Participant, the Owner Trustee or the Trust Estate to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Owner Participant, the Owner
Trustee or the Trust Estate or for all or substantially all of its property,
or the making by the Owner Participant, the Owner Trustee or the Trust Estate
of any assignment for the benefit of creditors or the Owner Participant or the
Owner Trustee shall take any action to authorize any of the foregoing;
provided, however, that an event referred to in this Section 4.02(g) with
respect to the Owner Participant shall not constitute an Event of Default if
within thirty (30) days of the commencement of the case or proceeding a final
non-appealable order, judgment or decree shall be entered in such case or
proceeding by a court or a trustee, custodian, receiver or liquidator, to the
effect that, no part of the Trust Estate (except for the Owner Participant's
beneficial interest therein) and no right, title or interest under the Trust
Indenture Estate shall be included in, or be subject to, any declaration or
adjudication of, or proceedings with respect to, the bankruptcy, insolvency or
liquidation of the Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. Certain Rights.
The Indenture Trustee shall give the Certificate Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of
Default of which the Indenture
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Trustee has Actual Knowledge and, if any such Event of Default results from a
Lease Event of Default, shall give the Certificate Holders, the Owner Trustee
and the Owner Participant not less than ten (10) Business Days' prior written
notice of the date (the "Enforcement Date") on or after which the Indenture
Trustee may commence and consummate the exercise of any remedy or remedies
described in Section 4.04, 4.05 or 4.06 hereof, or the exercise of any remedy
or remedies pursuant to the provisions of Section 15 of the Lease. If an Event
of Default shall have occurred and be continuing, the Owner Trustee shall have
the following rights hereunder, any of which may be exercised directly by the
Owner Participant.
If as a result of the occurrence of an Event of Default in respect
of the nonpayment by Lessee of Basic Rent due under the Lease, the Indenture
Trustee shall have insufficient funds to make any payment of Principal Amount
and interest on any Secured Certificate on the day it becomes due and payable,
the Owner Trustee or the Owner Participant may, but shall not be obligated to,
pay the Indenture Trustee prior to the Enforcement Date, in the manner
provided in Section 2.04 hereof, for application in accordance with Section
3.01 hereof, an amount equal to the portion of the Principal Amount and
interest (including interest, if any, on any overdue payments of such portion
of Principal Amount and interest) then due and payable on the Secured
Certificates, and, unless the Owner Trustee has cured Events of Default in
respect of payments of Basic Rent on each of the six immediately preceding
Basic Rent payment dates, or the Owner Trustee has cured twelve previous
Events of Default in respect of payments of Basic Rent, such payment by the
Owner Trustee shall, solely for purposes of this Trust Indenture be deemed to
cure any Event of Default which would otherwise have arisen on account of the
nonpayment by Lessee of such installment of Basic Rent (but not any other
Default or Event of Default which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment of
Basic Rent by Lessee) which can be cured has occurred, the Owner Trustee or
the Owner Participant may, but shall not be obligated to, cure such Event of
Default by taking such action prior to the Enforcement Date as is necessary to
accomplish the observance or performance of the defaulted covenant, condition
or agreement.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such Event
of Default, obtain any Lien on any of the Mortgaged Property or any Rent
payable under the Lease for or on account of costs or expenses incurred in
connection with the exercise of such right, nor shall any claim of the Owner
Trustee against Lessee or any other party for the repayment of such costs or
expenses impair the prior right and security interest of the Indenture Trustee
in and to the Mortgaged Property. Upon any payment by the Owner Trustee or the
Owner Participant pursuant to the first or second preceding paragraphs of this
Section 4.03, the Owner Trustee or the Owner Participant, as the case may be,
shall be subrogated to the rights of the Indenture Trustee and the Certificate
Holders in respect of the Basic Rent which was overdue at the time of such
payment and interest payable by Lessee on account of its being overdue and any
Supplemental Rent in respect of the reimbursement of amounts paid by the Owner
Trustee pursuant to the immediately preceding paragraph (but in either case
shall have no rights as a secured party hereunder), and thereafter, the Owner
Trustee or the Owner Participant, as the case may be, shall be entitled to
receive such overdue Basic Rent or Supplemental Rent, as the case may be, and
interest thereon upon receipt thereof by the Indenture Trustee (and shall be
entitled to bring an action against Lessee to
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enforce such payment); provided, however, that (i) if the Principal Amount and
interest on the Secured Certificates shall have become due and payable
pursuant to Section 4.04(b) hereof, such subrogation shall, until the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to all Secured Certificates shall have been paid in
full, be subordinate to the rights of the Indenture Trustee and the
Certificate Holders in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not be
entitled to seek to recover any such payment (or any payment in lieu thereof)
except pursuant to the foregoing right of subrogation by demand or suit for
damages.
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, 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,
subject to the second paragraph of this Section 4.04(a), on and after the
Enforcement Date if such Event of Default results from a Lease Event of
Default, exercise any or all of the rights and powers and pursue any and all
of the remedies pursuant to this Article IV and shall have and may exercise
all of the rights and remedies of a secured party under the Uniform Commercial
Code and, in the event such Event of Default is also a Lease Event of Default,
any and all of the remedies pursuant to Section 15 of the Lease and may take
possession of all or any part of the properties covered or intended to be
covered by the Lien created hereby or pursuant hereto and may exclude the
Owner Participant, the Owner Trustee and Lessee and all persons claiming under
any of them wholly or partly therefrom, provided, that the Indenture Trustee
shall give the Owner Trustee and the Owner Participant twenty (20) days' prior
written notice of its intention to sell the Aircraft; provided, further, that
in the event the Indenture Trustee shall have validly terminated the Lease
(or, in the event of a reorganization proceeding involving Lessee instituted
under Chapter 11 of the Bankruptcy Code, such Lease is rejected), the
Indenture Trustee shall not, without the consent of the Owner Participant
(which consent shall not be unreasonably withheld), sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to Lessee or
any Affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the Owner
Participant may bid at any public sale and become the purchaser. 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.
Anything in this Trust Indenture to the contrary notwithstanding,
the Indenture Trustee shall not be entitled to exercise any remedy hereunder
as a result of an Event of Default which arises solely by reason of one or
more events or circumstances which constitute a Lease Event of Default unless
the Indenture Trustee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the remedies provided
for in Section 15 of the Lease to terminate the Lease or take possession
and/or sell the Aircraft; provided, however, that such requirement to exercise
one or more of such remedies under the Lease shall not apply in circumstances
where the Indenture Trustee is, and has been, for a continuous period in
excess of 60 days or such other period as may be specified in Section 1110 of
the Bankruptcy Code (such 60-day or other period being the "Section 1110
Period"), involuntarily stayed or prohibited by applicable Law or court order
from exercising such remedies under the Lease (a "Continuous Stay Period");
provided further, however, that the requirement to exercise one or
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more of such remedies under the Lease shall nonetheless be applicable during a
Continuous Stay Period subsequent to the expiration of the Section 1110 Period
to the extent that the continuation of such Continuous Stay Period subsequent
to the expiration of the Section 1110 Period (A) results from an agreement by
the trustee or the debtor-in-possession in such proceeding during the Section
1110 Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(2)(A) of the Bankruptcy Code and continues to
perform as required by Section 1110(a)(2)(A-B) of the Bankruptcy Code or (B)
is an extension of the Section 1110 Period with the consent of the Indenture
Trustee pursuant to Section 1110(b) of the Bankruptcy Code or (C) is the
consequence of the Indenture Trustee's own failure to give any requisite
notice to any Person. In the event that the applicability of Section 1110 of
the Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, both the Indenture Trustee and the Owner Trustee (without
affecting in any way any right or remedy of the Indenture Trustee hereunder)
shall have the right to participate in such proceedings.
It is expressly understood and agreed that, subject only to the
immediately preceding paragraph, the inability, described in such paragraphs,
of the Indenture Trustee to exercise any right or remedy under the Lease shall
in no event and under no circumstances prevent the Indenture Trustee from
exercising any or all of its rights, powers and remedies under this Trust
Indenture, including, without limitation, this Article IV.
(b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Indenture Trustee may (and shall, upon receipt
of a written demand therefor from a Majority in Interest of Certificate
Holders), subject to Section 4.03 hereof, at any time, by delivery of written
notice or notices to the Owner Trustee and the Owner Participant, declare all
the Secured Certificates to be due and payable, whereupon the unpaid Principal
Amount of all Secured Certificates then outstanding, together with accrued but
unpaid interest thereon (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.
This Section 4.04(b), however, is subject to the condition that, if
at any time after the Principal Amount of the Secured Certificates shall have
become so due and payable, and before any judgment or decree for the payment
of the money so due, or any thereof, shall be entered, all overdue payments of
interest upon the Secured Certificates and all other amounts payable under the
Secured Certificates (except the Principal Amount of the Secured Certificates
which by such declaration shall have become payable) shall have been duly
paid, and every other Default and Event of Default with respect to any
covenant or provision of this Trust Indenture shall have been cured, then and
in every such case a Majority in Interest of Certificate Holders may (but
shall not be obligated to), by written instrument filed with the Indenture
Trustee, rescind and annul the Indenture Trustee's declaration and its
consequences; but no such rescission or annulment shall extend to or affect
any subsequent Default or Event of Default or impair any right consequent
thereon.
(c) Any Certificate Holder shall be entitled, at any sale pursuant
to Section 15 of the Lease or this Section 4.04, to credit against any
purchase price bid at such sale by such holder all or any part of the unpaid
obligations owing to such Certificate Holder and secured by the Lien of this
Trust Indenture (but only to the extent that such purchase price would have
been
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paid to such Certificate Holder pursuant to Article III hereof if such
purchase price were paid in cash and the foregoing provisions of this
subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture,
the unpaid Principal Amount of all Secured Certificates then outstanding,
together with accrued interest thereon, and other amounts due thereunder,
shall immediately become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Certificate Holder, the Indenture Trustee will not be
authorized or empowered to acquire title to any Mortgaged Property or take any
action with respect to any Mortgaged Property so acquired by it if such
acquisition or action would cause any Pass Through Trust to fail to qualify as
a "grantor trust" for federal income tax purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be continuing,
subject to Sections 4.03 and 4.04 hereof, at the request of the Indenture
Trustee, the Owner Trustee shall promptly execute and deliver to the Indenture
Trustee such instruments of title and other documents as the Indenture Trustee
may deem necessary or advisable to enable 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 Trust Indenture
Estate to which the Indenture Trustee shall at the time be entitled hereunder.
If the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture
Trustee the right to immediate possession and requiring the Owner Trustee to
execute and deliver such instruments and documents to the Indenture Trustee,
to the entry of which judgment the Owner Trustee 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, in the event that a
Lease Event of Default has occurred and is continuing, may enter any of the
premises of Lessee wherever such Mortgaged Property may be or be supposed to
be and search for such Mortgaged Property and take possession of and remove
such Mortgaged Property. All expenses of obtaining such judgment or of
pursuing, searching for and taking such property shall, until paid, be secured
by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to maintain, use, operate, store, insure, lease,
control, manage, dispose of, modify or alter the Mortgaged Property and to
carry on the business and to exercise all rights and powers of the Owner
Participant and the Owner Trustee relating to the Mortgaged Property, as the
Indenture Trustee shall deem best, including the right to enter
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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 (including Rent),
revenues, issues, income, products and profits of the Mortgaged Property and
every part thereof, except Excluded Payments, without prejudice, however, to
the right of the Indenture Trustee under any provision of this Trust Indenture
to collect and receive all cash held by, or required to be deposited with, the
Indenture Trustee hereunder. Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of
the maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make all
payments which the Indenture Trustee may be required or may elect to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Mortgaged Property or any part thereof (including the employment of engineers
and accountants to examine, inspect and make reports upon the properties and
books and records of the Owner Trustee), and all other payments which the
Indenture Trustee may be required or authorized to make under any provision of
this Trust Indenture, as well as just and reasonable compensation for the
services of the Indenture Trustee, and of all persons properly engaged and
employed by the Indenture Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Indenture Trustee,
and the exercise or the beginning of the exercise of any power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner Trustee or
Lessee 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 Trust Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Owner
Trustee, the Indenture Trustee and Lessee shall, subject to any determination
in such proceedings, be restored to their former positions and rights
hereunder with respect to the Mortgaged Property, and all rights, remedies and
powers of the Owner Trustee, the Indenture Trustee or Lessee shall continue as
if no such proceedings had been instituted.
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SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Certificate
Holders, the Indenture Trustee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; provided,
that in the absence of written instructions from all the Certificate Holders,
the Indenture Trustee shall not waive any Default (i) in the payment of the
Principal Amount, Make-Whole Amount, if any, and interest and other amounts
due under any Secured Certificate then outstanding, or (ii) in respect of a
covenant or provision hereof which, under Article IX hereof, cannot be
modified or amended without the consent of each Certificate Holder.
SECTION 4.09. Appointment of Receiver.
The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged Property,
whether such receivership be incidental to a proposed sale of the Mortgaged
Property or the taking of possession thereof or otherwise, and the Owner
Trustee hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of the
Mortgaged Property shall be entitled to exercise all the rights and powers of
the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of Sale,
Etc..
The Owner Trustee irrevocably appoints the Indenture Trustee the
true and lawful attorney-in-fact of the Owner Trustee in its name and stead
and on its behalf, for the purpose, if an Event of Default shall have occurred
and be continuing, of effectuating any sale, assignment, transfer or delivery
for the enforcement of the Lien of this Trust Indenture, whether pursuant to
foreclosure or power of sale, assignments and other instruments as may be
necessary or appropriate, with full power of substitution, the Owner Trustee
hereby ratifying and confirming all that such attorney or any substitute shall
do by virtue hereof in accordance with applicable Law. Nevertheless, if so
requested by the Indenture Trustee or any purchaser, the Owner Trustee 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 Certificate Holders to Receive Payment.
Notwithstanding any other provision of this Trust Indenture, the
right of any Certificate Holder to receive payment of principal of, and
premium, if any, and interest on a Secured Certificate on or after the
respective due dates expressed in such Secured Certificate, or to bring suit
for the enforcement of any such payment on or after such respective dates in
accordance with the terms hereof, shall not be impaired or affected without
the consent of such Certificate Holder.
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ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay Rent, the Indenture
Trustee shall give prompt written notice thereof to the Owner Trustee, the
Owner Participant, Lessee, each Certificate Holder and Lessee's independent
insurance broker who last provided the report required by Section 11(c) of the
Lease. Subject to the terms of Sections 4.03, 4.04, 4.08, 5.02 and 5.03
hereof, the Indenture Trustee shall take such action, or refrain from taking
such action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the Indenture
Trustee shall be instructed in writing by a Majority in Interest of
Certificate Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to the
Certificate Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section 5.01,
take such action, or refrain from taking such action, but shall be under no
duty to take or refrain from taking any action, with respect to such Event of
Default or Default as it shall determine advisable in the best interests of
the Certificate Holders; provided, however, that the Indenture Trustee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest
of Certificate Holders. If the Indenture Trustee shall at any time declare the
Lease to be in default pursuant to Section 15 thereof or shall elect to
foreclose or otherwise enforce this Trust Indenture, the Indenture Trustee
shall forthwith notify the Owner Participant, the Certificate Holders, the
Owner Trustee and Lessee. For all purposes of this Trust Indenture, in the
absence of Actual Knowledge on the part of the Indenture Trustee, the Owner
Trustee or the Owner Participant, the Indenture Trustee, the Owner Trustee or
the Owner Participant, as the case may be, shall not be deemed to have
knowledge of a Default or an Event of Default (except, in the case of the
Indenture Trustee, the failure of Lessee to pay any installment of Basic Rent
within one (1) Business Day after the same shall become due, if any portion of
such installment was then required to be paid to the Indenture Trustee, which
failure shall constitute knowledge of a Default) unless notified in writing by
Lessee, the Owner Trustee, the Owner Participant or one or more Certificate
Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a), 4.08, 5.01
and 5.03 hereof, upon the written instructions at any time and from time to
time of a Majority in Interest of Certificate Holders, the Indenture Trustee
shall, subject to the terms of this Section 5.02, take such of the following
actions as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder as shall be
specified in such instructions; (ii) give such notice or direction or exercise
such right, remedy or power under the Lease, the Participation Agreement, the
Purchase Agreement, or any other part of the Trust Indenture Estate as shall
be specified in such instructions; and (iii) after the occurrence and during
the continuance of an Event of Default, approve as satisfactory to the
Indenture Trustee all matters required by the terms of the Lease to be
satisfactory to the Owner Trustee, it being understood that without the
written instructions of a Majority in Interest of Certificate Holders,
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the Indenture Trustee shall not approve any such matter as satisfactory to the
Indenture Trustee; provided, that anything contained in this Trust Indenture,
the Lease or the other Operative Documents to the contrary notwithstanding:
(1) the Owner Trustee or the Owner Participant may, without the
consent of the Indenture Trustee, demand, collect, xxx for or otherwise
obtain all amounts included in Excluded Payments from Lessee or the
Guarantor, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or equitable
remedies to require Lessee or the Guarantor to maintain the insurance
coverage referred to in Section 11 of the Lease; provided, that the rights
referred to in this clause (1) shall not be deemed to include the exercise
of any remedies provided for in Section 15 of the Lease other than the
right to proceed by appropriate court action, either at law or in equity,
to enforce payment by Lessee or the Guarantor of such amounts included in
Excluded Payments or performance by Lessee or the Guarantor of such
insurance covenant, or to recover damages for the breach thereof or for
specific performance of any covenant of Lessee or the Guarantor;
(2) (A) the Indenture Trustee shall not, without the consent of the
Owner Trustee, execute or deliver amendments or modifications in respect
of any provisions of the Lease, and (B) unless an Event of Default and an
Indenture Trustee Event shall have occurred and be continuing and except
as provided in clause (4) below, the Indenture Trustee shall not, without
the consent of the Owner Trustee, which consent shall not be withheld if
no right or interest of the Owner Trustee or the Owner Participant shall
be diminished or impaired thereby, (i) enter into, execute or deliver
waivers or consents in respect of any of the provisions of the Lease, or
(ii) approve any accountants, engineers, appraisers or counsel as
satisfactory to render services for or issue opinions to the Owner Trustee
pursuant to the Operative Documents; provided that, whether or not an
Event of Default shall have occurred and be continuing, no amendment,
modification, waiver or consent in respect of the Lease shall affect the
amount or timing of, or the right to enforce payment of, any Excluded
Payment;
(3) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee and the Owner
Participant shall have the right, together with the Indenture Trustee, (i)
to receive from Lessee all notices, certificates, reports, filings,
opinions of counsel and other documents and all information which any
thereof is permitted or required to give or furnish to the Owner Trustee
or Lessor pursuant to any Operative Document (including pursuant to
Section 7(b) of the Participation Agreement), (ii) to exercise inspection
rights pursuant to Section 12 of the Lease, (iii) to retain all rights
with respect to insurance maintained for its own account which Section
11(e) of the Lease specifically confers on Lessor or the Owner
Participant, (iv) to exercise, to the extent necessary to enable it to
exercise its rights under Section 4.03 hereof, the rights of Lessor under
Section 21 of the Lease and (v) to give notices of default under Section
14 of the Lease;
(4) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee shall have the
right to the exclusion of the
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Indenture Trustee to adjust Rent, Stipulated Loss Values and Termination
Values as provided in Section 3(d) of the Lease and to select counsel with
respect to any opinion relating to tax matters to be delivered solely to
the Owner Participant;
(5) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee may, without
the consent of the Indenture Trustee, (i) solicit and make bids with
respect to the Aircraft under Section 9 of the Lease in respect of a
termination of the Lease by Lessee pursuant to Section 9 thereof, (ii)
determine "fair market sales value" and "fair market rental value" under
Section 19 of the Lease for all purposes except following an Event of
Default pursuant to Section 15 of the Lease, and (iii) make an election
pursuant to and in accordance with the provisions of Section 9(c) of the
Lease; and
(6) so long as no Event of Default shall have occurred and be
continuing, except as provided in clauses (2) and (3) above, all rights of
the "Lessor" under the Lease shall be exercised by the Owner Trustee to
the exclusion of the Indenture Trustee including, without limitation, the
right to (i) exercise all rights with respect to Lessee's use and
operation, modification or maintenance of the Aircraft and any Engine
which the Lease specifically confers on Lessor, and (ii) consent to and
approve any assignment pursuant to Section 13 of the Lease; provided that
the foregoing shall not limit (A) any rights separately granted to the
Indenture Trustee under the Operative Documents or (B) the right of the
Indenture Trustee to receive any funds to be delivered to the "Lessor"
under the Lease (except with respect to Excluded Payments) and under the
Purchase Agreement.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, to the exclusion of the Owner Trustee
and the Owner Participant, to (A) declare the Lease to be in default under
Section 15 thereof and (B) subject only to the provisions of Sections 4.03,
4.04(a) and 2.14 hereof, exercise the remedies set forth in such Section 15
(other than in connection with Excluded Payments) at any time that a Lease
Event of Default shall have occurred and be continuing.
The Indenture Trustee will execute and the Owner Trustee will file
or cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Trust
Indenture Estate as specified by Lessee pursuant to Section 8(e) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Certificate Holders (which
instructions may, by their terms, be operative only at a future date and which
shall be accompanied by the form of such continuation statement so to be
filed). The Indenture Trustee will furnish to each Certificate Holder (and,
during the continuation of an Indenture Trustee Event, to the Owner Trustee
and Owner Participant), promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, certificates and other instruments
furnished to the Indenture Trustee under the Lease or hereunder, including,
without limitation, a copy of any Termination Notice (as defined in the Lease)
and a copy of each report or notice received pursuant to Sections 9(a) and
11(c) of the Lease, respectively, to the extent that the same shall not have
been furnished to such Certificate Holder pursuant hereto or to the Lease.
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(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event
of Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Certificate Holders, the Indenture Trustee shall
declare the Lease to be in default pursuant to Section 15 thereof and exercise
those remedies specified by such Certificate Holders. The Indenture Trustee
agrees to provide to the Certificate Holders, the Owner Trustee, the Owner
Participant and Lessee concurrently with such declaration by the Indenture
Trustee, notice of such declaration by the Indenture Trustee.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be under any obligation to take any
action under this Trust Indenture and nothing herein or therein shall require
the Indenture Trustee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it (the written indemnity of any Certificate Holder who
is a QIB, signed by an authorized officer thereof, in favor of, delivered to
and in form reasonably satisfactory to Indenture Trustee shall be accepted as
reasonable assurance of adequate indemnity). The Indenture Trustee shall not
be required to take any action under Section 5.01 (other than the first
sentence thereof) or 5.02 or Article IV hereof, nor shall any other provision
of this Trust Indenture or any other Operative Document be deemed to impose a
duty on the Indenture Trustee to take any action, if the Indenture Trustee
shall have been advised by counsel that such action is contrary to the terms
hereof or of the Lease or is otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Trust Indenture Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
this Trust Indenture or any part of the Trust Indenture Estate, except as
expressly provided by the terms of this Trust Indenture or as expressly
provided in written instructions from Certificate Holders as provided in this
Trust Indenture; and no implied duties or obligations shall be read into this
Trust 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 7.01 hereof), promptly take such action as may be necessary duly to
discharge all liens and encumbrances on any part of the Trust Indenture Estate
which result from claims against it in its individual capacity not related to
the ownership of the Aircraft or the administration of the Trust Indenture
Estate or any other transaction pursuant to this Trust Indenture or any
document included in the Trust Indenture Estate.
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SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions.
The Owner Trustee and the Indenture Trustee agree that they will not
use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Trust Indenture Estate except
(i) as required by the terms of the Lease or (ii) in accordance with the
powers granted to, or the authority conferred upon, the Owner Trustee and the
Indenture Trustee pursuant to this Trust Indenture and in accordance with the
express terms hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to the Owner Trustee an appropriate instrument releasing such Airframe
and/or Engine as appropriate from the Lien of this Trust Indenture and the
Indenture Trustee shall execute and deliver such instrument as aforesaid, but
only upon compliance by Lessee with the applicable provisions of Section 10 of
the Lease and upon receipt by or deposit with the Indenture Trustee of the
following:
(1) A written request from the Owner Trustee, requesting such
release specifically describing the Airframe and/or Engine(s) so to be
released.
(2) A certificate signed by a duly authorized officer of Lessee
stating the following:
A. With respect to the replacement of any Airframe:
(i) a description of the Airframe which shall be
identified by manufacturer, model, FAA registration
number (or other applicable registration information)
and manufacturer's serial number;
(ii) a description of the Replacement Airframe to be received
(including the manufacturer, model, FAA registration
number (or other applicable registration information)
and manufacturer's serial number) as consideration for
the Airframe to be released;
(iii) that the Replacement Airframe is of the same or an
improved model as the Airframe requested to be released
from this Indenture;
(iv) the value, utility and remaining useful life (without
regard to hours or cycles) of the Replacement Airframe
as of the date of such certificate (which in the
judgment of Lessee shall be not less than the value,
utility and remaining useful life (without
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regard to hours or cycles) of the Airframe requested to
be released (assuming no Event of Loss and that such
Airframe was in the condition and repair required to be
maintained under the Lease)); and
(v) that no Lease Event of Default and no event which, with
lapse of time or notice, or both, would become a Lease
Event of Default, has occurred which has not been
remedied or waived, and that Lessee will not be in
default, by the making and granting of the request for
release and the addition of a Replacement Airframe, in
the performance of any of the terms and covenants of the
Lease.
B. with respect to the replacement of any Engine:
(i) a description of the Engine which shall be identified by
manufacturer's serial number;
(ii) a description of the Replacement Engine (including the
manufacturer's name and serial number) as consideration
for the Engine to be released;
(iii) that such Replacement Engine is substantially the same
as the Engine to be released (or an improved model);
(iv) the value, utility and remaining useful life (without
regard to hours or cycles) of the Replacement Engine as
of the date of such certificate (which value shall not
be less than the value, utility and remaining useful
life (without regard to hours or cycles) of the Engine
to be released (assuming no Event of Loss and that such
Engine was in the condition and repair required to be
maintained under the Lease));
(v) that each of the conditions specified in Section 10(b)
of the Lease with respect to such Replacement Engine
have been satisfied; and
(vi) that, with respect to the replacement of an Engine
pursuant to Section 9(d) of the Lease, no Lease Event of
Default and no Lease Default has occurred which has not
been remedied or waived.
(3) (a) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the
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Airframe or Engine to be released and (ii) assigning to the Owner Trustee the
benefit of all manufacturer's and vendor's warranties generally available with
respect to such Replacement Airframe or Replacement Engine, and a Trust
Agreement and Indenture Supplement subjecting such Replacement Airframe or
Replacement Engine and any related warranty rights to the lien of this
Indenture.
(b) With respect to the replacement of any Engine, such Uniform
Commercial Code financing statements covering the lien created by this
Indenture as deemed necessary or desirable by counsel for the Indenture
Trustee to protect the lien under the Indenture in the Replacement Engine.
(4) A certificate from either an aircraft engineer (who may be an
employee of Lessee) or a firm of independent aircraft appraisers selected by
Lessee confirming the accuracy of the information set forth in clause (2)A(iv)
of this Section 5.06.
(5) The opinion of in-house counsel to Lessee, or other counsel
satisfactory to the Indenture Trustee, stating that the Replacement Airframe
or Replacement Engine has been validly subjected to the lien of this Indenture
and covered by the Lease, the instruments subjecting such Replacement Airframe
or Replacement Engine to the Lease and to the Lien of this Trust Indenture, as
the case may be, have been duly filed for recordation pursuant to the Federal
Aviation Act or any other law then applicable to the registration of the
Aircraft, and no further action, filing or recording of any document is
necessary or advisable in order to establish and perfect the right, title,
estate and interest of the Owner Trustee to and the lien of this Trust
Indenture on such Replacement Aircraft or Replacement Engine.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the
Indenture Trustee agree for the benefit of the Certificate Holders and Lessee,
subject to fulfillment of the conditions precedent and compliance by Lessee
with its obligations set forth in Section 10 of the Lease and the requirements
of Section 5.06 hereof with respect to such Replacement Airframe or
Replacement Engine, to execute and deliver a Lease Supplement and a Trust
Agreement and Indenture Supplement, as applicable, as contemplated by Section
10 of the Lease.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a Replacement
Engine pursuant to Section 10 of the Lease, (a) all provisions of this Trust
Indenture relating to the Airframe or Engine or Engines being replaced shall
be applicable to such Replacement Airframe or Replacement Engine or Engines
with the same force and effect as if such Replacement Airframe or Replacement
Engine or Engines were the same airframe or engine or engines, as the case may
be, as the Airframe or Engine or Engines being replaced but for the Event of
Loss with respect to the Airframe or Engine or Engines being replaced, and (b)
the provisions of this Trust Indenture shall no longer be applicable to the
Airframe or Engine or Engines being replaced, which shall be released from the
Lien of this Trust Indenture.
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SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee as assignee of the Owner
Trustee's rights to hold monies for security pursuant to Section 22(a) of the
Lease shall be held in accordance with the terms of such Section and the
Indenture Trustee agrees, for the benefit of Lessee, to perform the duties of
the Owner Trustee under such Section. Any amounts held by the Indenture
Trustee pursuant to the proviso to the first sentence of Section 3.01,
pursuant to Section 3.02, or pursuant to any provision of any other Operative
Document providing for amounts to be held by the Indenture Trustee which are
not distributed pursuant to the other provisions of Article III hereof shall
be invested by the Indenture Trustee from time to time in Cash Equivalents as
directed by the Owner Trustee in the case of amounts held pursuant to the
proviso to the first sentence of Section 3.01 and otherwise by Lessee so long
as the Indenture Trustee may acquire the same using its best efforts. Unless
otherwise expressly provided in this Trust Indenture, any income realized as a
result of any such investment, net of the Indenture Trustee's reasonable fees
and expenses in making such investment, shall be held and applied by the
Indenture Trustee in the same manner as the principal amount of such
investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Indenture Trustee shall not be liable for any loss resulting
from any investment required to be made by it under this Trust Indenture other
than by reason of its willful misconduct or gross negligence, and any such
investment may be sold (without regard to its maturity) by the Indenture
Trustee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture. Any investment permitted under
Section 22(a) of the Lease or hereunder may be made through or with, as
applicable, the entity acting as Indenture Trustee or its Affiliates.
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Trust Indenture and agrees to receive and disburse all monies
constituting part of the Trust Indenture Estate in accordance with the terms
hereof. The Owner Trustee, in its individual capacity, and the Indenture
Trustee, in its individual capacity, shall not be answerable or accountable
under any circumstances, except (i) for their own willful misconduct or gross
negligence (other than for the handling of funds, for which the standard of
accountability shall be willful misconduct or negligence), (ii) in the case of
the Indenture Trustee, as provided in the fourth sentence of Section 2.04(a)
hereof and the last sentence of Section 5.04 hereof, and (iii) for liabilities
that may result, in the case of the Owner Trustee, from the inaccuracy of any
representation or warranty of the Owner Trustee expressly made in its
individual capacity in the Participation Agreement or in Section 4.01(b) or
6.03 hereof (or in any certificate furnished to the Indenture Trustee or any
Certificate Holder in connection with the transactions contemplated by the
Operative Documents) or, in the case of the Indenture Trustee (in its
individual capacity), from the inaccuracy of any representation or warranty of
the Indenture Trustee (in its individual capacity) in the Participation
Agreement or
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expressly made hereunder. Neither the Owner Trustee nor the Indenture Trustee
shall be liable for any action or inaction of the other or of the Owner
Participant.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections 5.03
and 5.04 hereof and, in the case of the Owner Trustee, except as provided in
Section 4.01(b) hereof, the Owner Trustee and the Indenture Trustee shall have
no duty (i) to see to any registration of the Aircraft or any recording or
filing of the Lease or of this Trust Indenture or any other document, or to
see to the maintenance of any such registration, recording or filing, (ii) to
see to any insurance on the Aircraft or to effect or maintain any such
insurance, whether or not Lessee shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of any
kind against any part of the Trust Estate or the Trust Indenture Estate, (iv)
to confirm, verify or inquire into the failure to receive any financial
statements from Lessee, or (v) to inspect the Aircraft at any time or
ascertain or inquire as to the performance or observance of any of Lessee's
covenants under the Lease with respect to the Aircraft. The Owner Participant
shall not have any duty or responsibility hereunder, including, without
limitation, any of the duties mentioned in clauses (i) through (v) above;
provided, that nothing contained in this sentence shall limit any obligations
of the Owner Participant under the Participation Agreement or relieve the
Owner Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents.
NEITHER THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE
TRUST AGREEMENT, NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE
MADE AND EACH HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH
SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR
ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK
OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN
TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, except the Owner
Trustee in its individual capacity warrants that (i) the Owner Trustee has
received on the Delivery Date whatever title was conveyed to it by Lessee, and
(ii) the Aircraft is free and clear of Lessor Liens (including for this
purpose Liens which would be Lessor Liens but for the proviso in the
definition of Lessor Liens) attributable to the Owner Trustee in its
individual capacity. Neither the Owner Trustee, in its individual capacity or
as Owner Trustee under the Trust Agreement, nor the Indenture Trustee, in its
individual or trust capacities, makes or shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Trust Indenture, the Trust Agreement, the Participation Agreement, the
Secured Certificates, the Lease,
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the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement or the Guarantee, or as to the correctness of any statement
contained in any thereof, except for the representations and warranties of the
Owner Trustee made in its individual capacity and the representations and
warranties of the Indenture Trustee, in each case expressly made in this Trust
Indenture or in the Participation Agreement. The Loan Participants, the
Certificate Holders and the Owner Participant make no representation or
warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant to
any provision hereof and not then required to be distributed to the
Certificate Holders, Lessee or the Owner Trustee as provided in Article III
hereof need not be segregated in any manner except to the extent required by
Law or Section 10(f) or 11(g) of the Lease and Section 5.09 hereof, and may be
deposited under such general conditions as may be prescribed by Law, and the
Indenture Trustee shall not be liable for any interest thereon (except that
the Indenture Trustee shall invest all monies held as directed by Lessee so
long as no Lease Event of Default or Lease Default has occurred and is
continuing (or in the absence of such direction, by the Majority In Interest
of Certificate Holders) in Cash Equivalents; provided, however, that any
payments received, or applied hereunder, by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
Neither the Owner Trustee nor the Indenture Trustee shall incur any
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee and the Indenture
Trustee may accept a copy of a resolution of the Board of Directors (or, in
the case of the Owner Participant which originally executed the Participation
Agreement, evidence of the approval by the Executive Committee thereof) of any
party to the Participation Agreement, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the
same is in full force and effect. As to the aggregate unpaid Principal Amount
of Secured Certificates outstanding as of any date, the Owner Trustee 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 Lessee the manner of ascertainment of which is not
specifically described herein, the Owner Trustee and the Indenture Trustee may
for all purposes hereof rely on a certificate, signed by a duly authorized
officer of Lessee, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee and the Indenture Trustee for
any action taken or omitted to be taken by them in good faith in reliance
thereon. The Indenture Trustee shall assume, and shall be fully protected in
assuming, that the Owner Trustee is authorized by the Trust Agreement to enter
into this Trust Indenture and to take all action to be taken by it pursuant to
the provisions hereof, and shall not inquire into the authorization of the
Owner Trustee with respect thereto. In the administration of the trusts
hereunder, the Owner Trustee and the Indenture Trustee each may execute any of
the trusts or powers hereof and perform its powers and duties hereunder
directly or through agents or attorneys and may at the
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expense of the Trust Indenture Estate, consult with counsel, accountants and
other skilled persons to be selected and retained by it, and the Owner Trustee
and the Indenture Trustee shall not be liable for anything done, suffered or
omitted in good faith by them in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.
SECTION 6.06. Capacity in Which Acting.
The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. Compensation.
The 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
Trust Indenture Estate for the payment of such compensation, to the extent
that such compensation shall not be paid by Lessee, and shall have the right,
on and subsequent to an Event of Default hereunder, to use or apply any monies
held by it hereunder in the Trust Indenture Estate toward such payments. The
Indenture Trustee agrees that it shall have no right against the Loan
Participants, the Certificate Holders, the Owner Trustee or the Owner
Participant for any fee as compensation for its services as trustee under this
Trust Indenture.
SECTION 6.08. Instructions from Certificate Holders.
In the administration of the trusts created hereunder, the Indenture
Trustee shall have the right to seek instructions from a Majority in Interest
of Certificate Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should the 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
INDEMNIFICATION OF THE INDENTURE TRUSTEE BY THE OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.
The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, except as otherwise provided in Section 2.03
hereof, to assume liability for, and does hereby indemnify, protect, save and
keep harmless the Indenture Trustee (in its individual and trust capacities),
and its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any
taxes payable by the Indenture Trustee on or measured by any compensation
received by the Indenture Trustee for its services under this Trust
Indenture), claims, actions, suits, costs, expenses or disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever, which may be
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imposed on, incurred by or asserted against the Indenture Trustee (whether or
not also indemnified against by any other Person under any other document) in
any way relating to or arising out of this Trust Indenture or any other
Operative Document to which it is a party or the enforcement of any of the
terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, non-acceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation,
latent or other defects, whether or not discoverable, and any claim for
patent, trademark or copyright infringement), or in any way relating to or
arising out of the administration of the Trust Indenture Estate or the action
or inaction of the Indenture Trustee hereunder, to the extent not reimbursed
by Lessee. Without limiting the foregoing, the Indenture Trustee agrees that,
prior to seeking indemnification from the Trust Indenture Estate, it will
demand, and take such action as it may in its discretion determine to be
reasonable to pursue, indemnification available to the Indenture Trustee under
the Lease or the Participation Agreement. Notwithstanding the foregoing, the
Indenture Trustee shall not be entitled to any indemnification for any Taxes
or Expenses to the extent relating to or arising from the willful misconduct
or gross negligence (or negligence in the case of handling funds) of the
Indenture Trustee in the performance of its duties hereunder or resulting from
the inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) referred to in Section 6.03 hereof, or as provided in
Section 6.01 hereof or in the last sentence of Section 5.04 hereof, or as
otherwise excluded by the terms of Sections 7(b) and 7(c) of the Participation
Agreement from Lessee's indemnities under such Sections. In addition, if
necessary, the Indenture Trustee shall be entitled to indemnification from the
Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7.01 to the extent not reimbursed by Lessee or
others, but without releasing any of them from their respective agreements of
reimbursement; and to secure the same the Indenture Trustee shall have a prior
Lien on the Trust Indenture Estate. The Owner Trustee shall be subrogated to
the Indenture Trustee's rights, if any, to any indemnity payment from Lessee
for the amounts paid by the Owner Trustee under this Section 7.01.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.
In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Indenture Trustee, Lessee and
the Certificate Holders.
SECTION 8.02. 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 Lessee,
the Owner Trustee, the
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Owner Participant and each Certificate Holder, such resignation to be
effective upon the acceptance of the trusteeship by a successor Indenture
Trustee. In addition, a Majority in Interest of Certificate Holders may at any
time (but only with the consent of Lessee, which consent shall not be
unreasonably withheld, except that such consent shall not be necessary if a
Lease Event of Default is continuing) remove the Indenture Trustee without
cause by an instrument in writing delivered to the Owner Trustee, Lessee, the
Owner Participant and the Indenture Trustee, and the Indenture Trustee shall
promptly notify each Certificate Holder thereof in writing, such removal to be
effective upon the acceptance of the trusteeship by a successor Indenture
Trustee. In the case of the resignation or removal of the Indenture Trustee, a
Majority in Interest of Certificate Holders may appoint a successor Indenture
Trustee by an instrument signed by such holders, which successor, so long as
no Lease Event of Default shall have occurred and be continuing, shall be
subject to Lessee's reasonable approval. If a successor Indenture Trustee
shall not have been appointed within 30 days after such notice of resignation
or removal, the Indenture Trustee, the Owner Trustee, the Owner Participant or
any Certificate Holder may apply to any court of competent jurisdiction to
appoint a successor Indenture Trustee to act until such time, if any, as a
successor shall have been appointed as above provided. The successor Indenture
Trustee so appointed by such court shall immediately and without further act
be superseded by any successor Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Indenture Trustee
and Lessee an instrument accepting such appointment and assuming the
obligations of the Indenture Trustee under the Participation Agreement arising
from and after the time of such appointment, and thereupon such successor
Indenture Trustee, without further act, shall become vested with all the
estates, properties, rights, powers and duties of the predecessor Indenture
Trustee hereunder in the trust hereunder applicable to it with like effect as
if originally named the Indenture Trustee herein; but nevertheless upon the
written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to such
successor Indenture Trustee, upon the trusts herein expressed applicable to
it, all the estates, properties, rights and powers of such predecessor
Indenture Trustee, and such predecessor Indenture Trustee shall duly assign,
transfer, deliver and pay over to such successor Indenture Trustee all monies
or other property then held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be a
bank or trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston,
Massachusetts and having (or whose obligations under the Operative Documents
are guaranteed by an affiliated entity having) a combined capital and surplus
of at least $100,000,000, if there be such an institution willing, able and
legally qualified to perform the duties of the Indenture Trustee hereunder
upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of paragraph (c) of this Section 8.02, be a successor
Indenture Trustee and the Indenture Trustee under this Trust Indenture without
further act.
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SECTION 8.03. 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 Trust Indenture Estate shall be situated or to make any claim
or bring any suit with respect to or in connection with the Trust Indenture
Estate, this Trust Indenture, any other Indenture Agreement, the Secured
Certificates or any of the transactions contemplated by the Participation
Agreement, (ii) the Indenture Trustee shall be advised by counsel satisfactory
to it that it is so necessary or prudent in the interests of the Certificate
Holders (and the Indenture Trustee shall so advise the Owner Trustee and
Lessee), or (iii) the Indenture Trustee shall have been requested to do so by
a Majority in Interest of Certificate Holders, then in any such case, the
Indenture Trustee and, upon the written request of the Indenture Trustee, the
Owner Trustee, shall execute and deliver an indenture supplemental hereto and
such other instruments as may from time to time be necessary or advisable
either (1) to constitute one or more bank or trust companies or one or more
persons approved by the Indenture Trustee, either to act jointly with the
Indenture Trustee as additional trustee or trustees of all or any part of the
Trust Indenture Estate, or to act as separate trustee or trustees of all or
any part of the Trust Indenture Estate, in each case with such rights, powers,
duties and obligations consistent with this Trust Indenture as may be provided
in such supplemental indenture or other instruments as the Indenture Trustee
or a Majority in Interest of Certificate Holders may deem necessary or
advisable, or (2) to clarify, add to or subtract from the rights, powers,
duties and obligations theretofore granted any such additional and separate
trustee, subject in each case to the remaining provisions of this Section
8.03. If the Owner Trustee shall not have taken any action requested of it
under this Section 8.03(a) that is permitted or required by its terms within
15 days after the receipt of a written request from the 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
8.03(a) without the concurrence of the Owner Trustee; and the Owner Trustee
hereby irrevocably appoints (which appointment is coupled with an interest)
the Indenture Trustee, its agent and attorney-in-fact to act for it under the
foregoing provisions of this Section 8.03(a) in either of such contingencies.
The 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
8.03(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 8.03(a).
(b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the 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 Trust 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
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incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations (including the holding of title to all or part
of the Trust Indenture Estate in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Indenture Trustee or a Majority in Interest of Certificate Holders. No trustee
hereunder shall be personally liable by reason of any act or omission of any
other trustee hereunder, except that the Indenture Trustee shall be liable for
the consequences of its lack of reasonable care in selecting, and Indenture
Trustee's own actions in acting with, any additional or separate trustee. Each
additional or separate trustee appointed pursuant to this Section 8.03 shall
be subject to, and shall have the benefit of Articles IV through VIII and
Article X hereof insofar as they apply to the Indenture Trustee. The powers of
any additional or separate trustee appointed pursuant to this Section 8.03
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 Certificate Holders, or in the event that
the Indenture Trustee shall have been requested to do so in writing by a
Majority in Interest of Certificate Holders, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee.
The Indenture Trustee may act on behalf of the Owner Trustee under this
Section 8.03(c) when and to the extent it could so act under Section 8.03(a)
hereof.
ARTICLE IX
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.
(a) Except as provided in Section 5.02 hereof, and except with
respect to Excluded Payments, the Owner Trustee agrees it shall not enter into
any amendment of or supplement to the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement or the Guarantee, or
execute and deliver any written waiver or modification of, or consent under,
the terms of the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement or the Guarantee, unless such
supplement, amendment, waiver, modification or consent is consented to in
writing by the Indenture Trustee and a Majority in Interest of Certificate
Holders. Anything to the contrary contained herein notwithstanding, without
the necessity of the consent of any of the Certificate Holders or the
Indenture Trustee, (i) any Excluded Payments payable to the Owner Participant
may be modified, amended, changed or waived in such manner as shall be agreed
to by the Owner Participant and Lessee and (ii) the Owner Trustee and Lessee
may enter into amendments of or additions to the Lease to modify Section 5
(except to the extent that such amendment would affect the rights or exercise
of remedies under Section 15 of the Lease), Section 9 or Section 19 of the
Lease so long as such amendments, modifications and changes do not and would
not affect the time of, or reduce the amount of, Rent payments until after the
payment in full of all Secured Obligations or otherwise adversely affect the
Certificate Holders.
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(b) Without limiting the provisions of Section 9.01(a) hereof and
subject to Section 5.02(a)(2)(i) hereof, the Indenture Trustee agrees with the
Certificate Holders that it shall not enter into any amendment, waiver or
modification of, supplement or consent to this Trust Indenture, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Guarantee or the Participation Agreement, or any other
agreement included in the Trust Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by a
Majority in Interest of Certificate Holders, or does not adversely affect the
Certificate Holders, but upon the written request of a Majority in Interest of
Certificate Holders, the Indenture Trustee shall from time to time enter into
any such supplement or amendment, or execute and deliver any such waiver,
modification or consent, as may be specified in such request and as may be (in
the case of any such amendment, supplement or modification), to the extent
such agreement is required, agreed to by the Owner Trustee and Lessee or, as
may be appropriate, the Manufacturer; provided, however, that, without the
consent of each holder of an affected Secured Certificate then outstanding, no
such amendment of or supplement to this Trust Indenture, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Guarantee or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 9.01, or of Sections 2.02, 2.10, 2.11,
2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 14 (except to add
an Event of Default) of the Lease, the definitions of "Event of Default",
"Default", "Lease Event of Default", "Lease Default", "Majority in Interest of
Certificate Holders", "Make-Whole Amount" or "Certificate Holder", or the
percentage of Certificate Holders required to take or approve any action
hereunder, (ii) reduce the amount, or change the time of payment or method of
calculation of any amount, of Principal Amount, Make-Whole Amount, if any, or
interest with respect to any Secured Certificate, or alter or modify the
provisions of Article III hereof with respect to the order of priorities in
which distribution thereunder shall be made as among the Certificate Holders,
the Owner Trustee and Lessee, (iii) reduce, modify or amend any indemnities in
favor of the Certificate Holders, (iv) consent to any change in the Trust
Indenture or the Lease which would permit redemption of Secured Certificates
earlier than permitted under Section 2.10 or 2.11 hereof or the purchase of
the Secured Certificates other than as permitted by Section 2.14 hereof, (v)
modify any of the provisions of Section 3(d)(v) of the Lease, or modify, amend
or supplement the Lease or consent to any assignment of the Lease, in either
case releasing Lessee from its obligations in respect of the payment of Basic
Rent, Stipulated Loss Value or Termination Value for the Aircraft or altering
the absolute and unconditional character of the obligations of Lessee to pay
Rent as set forth in Sections 3 and 18 of the Lease or (vi) permit the
creation of any Lien on the Trust Indenture Estate or any part thereof other
than Permitted Liens or deprive any Certificate Holder of the benefit of the
Lien of this Trust Indenture on the Trust Indenture Estate, except as provided
in connection with the exercise of remedies under Article IV hereof. So long
as no Lease Event of Default has occurred and is continuing, without the
consent of Lessee no amendment or supplement to this Trust Indenture or waiver
or modification of the terms hereof shall adversely affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Certificate Holder for any of the following
purposes: (i) (a) to cure any defect or inconsistency herein or in the Secured
Certificates, or to make any change not inconsistent with the provisions
hereof (provided that such change does not adversely affect the interests of
any Certificate
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Holder in its capacity solely as Certificate Holder) or (b) to cure any
ambiguity or correct any mistake; (ii) to evidence the succession of another
party as the Owner Trustee in accordance with the terms of the Trust Agreement
or to evidence the succession of a new trustee hereunder pursuant hereto, the
removal of the trustee hereunder or the appointment of any co-trustee or
co-trustees or any separate or additional trustee or trustees; (iii) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee or to make any other provisions with respect to matters or
questions arising hereunder so long as such action shall not adversely affect
the interests of the Certificate Holders in its capacity solely as Certificate
Holder; (iv) to correct or amplify the description of any property at any time
subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Trust Indenture, the Airframe or Engines or any
Replacement Airframe or Replacement Engine; (v) to add to the covenants of the
Owner Trustee for the benefit of the Certificate Holders, or to surrender any
rights or power herein conferred upon the Owner Trustee, the Owner Participant
or Lessee; (vi) to add to the rights of the Certificate Holders; and (vii) to
include on the Secured Certificates any legend as may be required by law.
SECTION 9.02. Trustees Protected.
If, in the opinion of the institution acting as Owner Trustee under
the Trust Agreement or the institution acting as Indenture Trustee hereunder,
any document required to be executed by it pursuant to the terms of Section
9.01 hereof adversely affects any right, duty, immunity or indemnity with
respect to such institution under this Trust Indenture or the Lease, such
institution may in its discretion decline to execute such document.
SECTION 9.03. Documents Mailed to Certificate Holders.
Promptly after the execution by the Owner Trustee or the Indenture
Trustee of any document entered into pursuant to Section 9.01 hereof, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to Lessee and to each Certificate Holder at its address last set forth
in the Secured Certificate Register, but the failure of the Indenture Trustee
to mail such copies shall not impair or affect the validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement.
No written request or consent of the Indenture Trustee, the
Certificate Holders or the Owner Participant pursuant to Section 9.01 hereof
shall be required to enable the Owner Trustee to enter into any Lease
Supplement specifically required by the terms of the Lease or to execute and
deliver a Trust Agreement and Indenture Supplement specifically required by
the terms hereof.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust 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 Secured Certificates and provided that there shall then be no other
Secured Obligations due to the Certificate Holders and the Indenture Trustee
hereunder or under the Participation Agreement, the Owner Trustee shall direct
the Indenture Trustee to execute and deliver to or as directed in writing by
the Owner Trustee an appropriate instrument releasing the Aircraft and the
Engines from the Lien of this Trust Indenture and releasing the Lease, the
Purchase Agreement, the Purchase Agreement Assignment with the Consent and
Agreement attached thereto and the Guarantee from the assignment and pledge
thereof hereunder and the Indenture Trustee shall execute and deliver such
instrument as aforesaid and give written notice thereof to Lessee; provided,
however, that this Trust Indenture and the trusts created hereby shall earlier
terminate and this Trust Indenture shall be of no further force or effect upon
any sale or other final disposition by the Indenture Trustee of all property
constituting part of the Trust Indenture Estate and the final distribution by
the Indenture Trustee of all monies or other property or proceeds constituting
part of the Trust Indenture Estate in accordance with the terms hereof. Except
as aforesaid otherwise provided, this Trust Indenture and the trusts created
hereby shall continue in full force and effect in accordance with the terms
hereof.
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Certificate Holders.
No holder of a Secured Certificate shall have legal title to any
part of the Trust Indenture Estate. No transfer, by operation of law or
otherwise, of any Secured Certificate or other right, title and interest of
any Certificate Holder in and to the Trust Indenture Estate or hereunder shall
operate to terminate this Trust Indenture or entitle such holder or any
successor or transferee of such holder to an accounting or to the transfer to
it of any legal title to any part of the Trust Indenture Estate.
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding.
Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the
Indenture Trustee made pursuant to the terms of this Trust Indenture shall
bind the Certificate Holders and shall be effective to transfer or convey all
right, title and interest of the Indenture Trustee, the Owner Trustee, the
Owner Participant and such holders in and to such Trust Indenture Estate or
part thereof. No purchaser or other grantee shall be required to inquire as to
the authorization, necessity, expediency or regularity of such sale or
conveyance or as to the application of any sale or other proceeds with respect
thereto by the Indenture Trustee.
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SECTION 10.04. Trust Indenture for Benefit of the Owner Trustee, the
Indenture Trustee, Owner Participant, Lessee and Certificate Holders.
Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner Trustee, the Indenture
Trustee, the Owner Participant, Lessee and the Certificate Holders, any legal
or equitable right, remedy or claim under or in respect of this Trust
Indenture.
SECTION 10.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed
by certified mail, postage prepaid, or by facsimile or confirmed telex, and
(i) if to the Owner Trustee, addressed to it at its office at MAC: U1228-120,
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Attention:
Corporate Trust Services (Telecopy No. (000) 000-0000), with a copy to the
Owner Participant addressed as provided in clause (iii) below, (ii) if to the
Indenture Trustee, addressed to it at its office at, for U.S. mail at
Corporate Trust Department, X.X. Xxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000-0000,
and for overnight courier at Corporate Trust Department, 0 Xxxxxx xx
Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (Telecopy No. (000) 000-0000),
(iii) if to any Participant, Lessee or any Certificate Holder, addressed to
such party at such address as such party shall have furnished by notice to the
Owner Trustee and the Indenture Trustee, or, until an address is so furnished,
addressed to the address of such party (if any) set forth on the signature
pages to the Participation Agreement or in the Secured Certificate Register.
Whenever any notice in writing is required to be given by the Owner Trustee,
any Participant or the Indenture Trustee or any Certificate Holder or Lessee
to any of the other of them, such notice shall be deemed given and such
requirement satisfied when such notice is received, or if such notice is
mailed by certified mail, postage prepaid, three Business Days after being
mailed, addressed as provided above. Any party hereto may change the address
to which notices to such party will be sent by giving notice of such change to
the other parties to this Trust Indenture.
SECTION 10.06. Severability.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Secured
Certificates may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the Owner Trustee and the Indenture
Trustee, in compliance with Section 9.01 hereof. Any waiver of the terms
hereof or of any Secured Certificate shall be effective only in the specific
instance and for the specific purpose given.
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SECTION 10.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Certificate
Holder shall bind the successors and assigns of such holder. This Trust
Indenture and the Trust Indenture Estate shall not be affected by any
amendment or supplement to the Trust Agreement or by any other action taken
under or in respect of the Trust Agreement, except that each reference in this
Trust Indenture to the Trust Agreement shall mean the Trust Agreement as
amended and supplemented from time to time to the extent permitted hereby,
thereby and by the Participation Agreement. Each Certificate Holder by its
acceptance of a Secured Certificate agrees to be bound by this Trust Indenture
and all provisions of the Participation Agreement applicable to a Loan
Participant or a Certificate Holder.
SECTION 10.09. Headings.
The headings of the various Articles and sections herein and in the
table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 10.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner Trustee, 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 Lessee, fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
SECTION 10.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture
may be executed by the parties hereto in separate counterparts (or upon
separate signature pages bound together into one or more counterparts), each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 10.12. Voting By Certificate Holders.
All votes of the Certificate Holders shall be governed by a vote of
a Majority in Interest of Certificate Holders, except as otherwise provided
herein.
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SECTION 10.13. Bankruptcy.
It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Indenture Trustee as assignee of the Owner Trustee
hereunder), shall be entitled to the benefits of Section 1110 with respect to
the right to take possession of the Aircraft, Airframe, Engines and Parts as
provided in the Lease in the event of a case under Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor, and in any instance where more
than one construction is possible of the terms and conditions hereof or any
other pertinent Operative 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 10.14. No Action Contrary to Lessee's Rights Under the
Lease.
Notwithstanding any of the provisions of this Trust Indenture or the
Trust Agreement to the contrary, neither the Indenture Trustee nor the Owner
Trustee will take any action contrary to Lessee's rights under the Lease,
including the right to possession and use of, and the quiet enjoyment of, the
Aircraft, except in accordance with provisions of the Lease.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided herein,
but solely as Owner Trustee,
Owner Trustee
By: _____________________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity, except
as expressly provided herein, but solely as
Indenture Trustee,
Indenture Trustee
By: _____________________________________________
Name:
Title:
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--------------------------------------------
EXHIBIT A
TO
TRUST INDENTURE
AND SECURITY AGREEMENT
--------------------------------------------
TRUST INDENTURE SUPPLEMENT
[NW ____ _]
This TRUST INDENTURE SUPPLEMENT [NW ____ _], dated [___________]
(herein called this "Trust Indenture Supplement") of XXXXX FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as
Owner Trustee (herein called the "Owner Trustee") under that certain Trust
Agreement [NW ____ _] dated as of [_______________] (the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _],
dated as of [_______________] (as amended and supplemented to the date hereof,
the "Trust Indenture") between the Owner Trustee and STATE STREET BANK AND
TRUST COMPANY, as Indenture Trustee (the "Indenture Trustee"), provides for
the execution and delivery of a supplement thereto substantially in the form
hereof, which shall particularly describe the Aircraft, and shall specifically
mortgage such Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and Engines
described below, and a counterpart of the Trust Indenture is attached hereto
and made a part hereof and this Trust Indenture Supplement, together with such
counterpart of the Trust Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the
Trust Indenture Estate covers all of the Owner Trustee's right, title and
interest in and to the following described property:
EXHIBIT A-1
AIRFRAME
One airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
----------------- --------- ---------------- -------------------
together with all of the Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereinafter acquired and
which are from time to time incorporated or installed in or attached to said
airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's Model Serial Number
------------ -------------------- -------------
together with all of the Owner Trustee's right, title and interest in and to
all Parts of whatever nature, whether now owned or hereafter acquired and
which are from time to time incorporated or installed in or attached to any of
such engines.
Together with all of the Owner Trustee'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).
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors and
assigns, for the security and benefit of the Loan Participants and of the
Certificate Holders, in the
EXHIBIT A-2
trust created by the Trust Indenture, all of the right, title and interest of
the Owner Trustee in, to and under the Lease Supplement [of even date
herewith] covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Certificate Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Secured Certificate over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as supplemental
to the Trust Indenture and shall form a part thereof. The Trust Indenture is
each hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.
This Trust Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid
Lease Supplement has been delivered to the Owner Trustee and is included in
the property of the Owner Trustee covered by all the terms and conditions of
the Trust Agreement, subject to the pledge and mortgage thereof under the
Trust Indenture.
EXHIBIT A-3
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto
duly authorized, on the day and year first above written.
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Owner Trustee, Owner Trustee
By:
----------------------------------------
Name:
Title:
EXHIBIT A-4
SCHEDULE I
Principal Amount Interest Rate Maturity Date
---------------- ------------- -------------
Series G-2.............. $[_________] 6.264% [_________]
Series C-2.............. $[_________] 9.055% [_________]
Secured Certificates Amortization
SERIES G-2
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
---------------- -----------------------
EXHIBIT A-6
SERIES C-2
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
---------------- -----------------------
EXHIBIT A-7
SCHEDULE II
PASS THROUGH TRUST AGREEMENTS
1. Pass Through Trust Agreement, dated as of June 3, 1999 among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1G-2, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.
2. Pass Through Trust Agreement, dated as of June 3, 1999 among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company of Connecticut, National Association, as supplemented by
Trust Supplement No. 2002-1C-2, dated as of the Issuance Date among
Northwest Airlines, Inc., Northwest Airlines Corporation and State Street
Bank and Trust Company of Connecticut, National Association.
SCHEDULE II-1
