EXHIBIT 4(a)(xiii)
Participation Agreement
N7__UW
=============================================================================
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
Dated as of
_________ __, 199_
Among
US AIRWAYS, INC.,
Lessee,
[__________________],
Owner Participant,
STATE STREET BANK AND TRUST COMPANY
not in its individual capacity except
as expressly provided herein, but solely as
Pass Through Trustee under each of the
Pass Through Trust Agreements,
Subordination Agent and Indenture Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly provided herein,
but solely as Owner Trustee,
-------------------------
One Airbus A319 Aircraft
U.S. Registration No. N7__UW
=============================================================================
INDEX TO PARTICIPATION AGREEMENT
Page
----
SECTION 1. DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . 2
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT . . . 3
(a) Participation by Pass Through Trustees
on the Delivery Date; Issuance of
Equipment Notes . . . . . . . . . . . . . . . . 3
(b) Payment of Owner Participant's Commitment . . . 3
(c) Lessee's Notice of Delivery Date . . . . . . . . 4
(d) Default by Pass Through Trustee or Owner
Participant . . . . . . . . . . . . . . . . . . 4
(e) Closing . . . . . . . . . . . . . . . . . . . . 4
(f) Postponement of Scheduled Closing Date . . . . 4
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE . . . . . . . . . 6
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . 6
(a) Conditions Precedent to the Participations
in the Aircraft . . . . . . . . . . . . . . . . 6
(b) Conditions Precedent to the Obligations
of Lessee . . . . . . . . . . . . . . . . . . . 16
SECTION 5. EXTENT OF INTEREST OF CERTIFICATE HOLDERS . . . . . 18
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE;
INDEMNITIES . . . . . . . . . . . . . . . . . . . . 18
(a) Representations and Warranties . . . . . . . . 18
(b) General Tax Indemnity . . . . . . . . . . . . . 22
(i) Indemnity . . . . . . . . . . . . . . . 22
(ii) Exclusions from General Tax Indemnity . 23
(iii) Payments. . . . . . . . . . . . . . . . 26
(iv) Contests. . . . . . . . . . . . . . . 28
(v) Refund. . . . . . . . . . . . . . . . . 31
(vi) Tax Filing. . . . . . . . . . . . 31
(vii) Forms. . . . . . . . . . . . . 32
(viii) Non-Parties . . . . . . . . . . 32
(ix) Subrogation. . . . . . . . . . . . . . . 32
(x) Foreign Tax On Loan Payments. . . . 32
(xi) Income Tax . . . . . . . . . . . . 33
(c) General Indemnity . . . . . . . . . . . . . . . 33
(d) Special Indemnity . . . . . . . . . . . . . . . 39
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.. . . . . 38
(a) Covenants Regarding Citizenship. . . . . . . . 38
(b) Location of Records . . . . . . . . . . . . . . 39
(c) Securities Act . . . . . . . . . . . . . . . . 39
(d) Reregistration . . . . . . . . . . . . . . . . 39
(e) Owner Participant Representations and
Warranties . . . . . . . . . . . . . . . . . . 42
(f) Lessor Liens . . . . . . . . . . . . . . . . . 44
(g) Quiet Enjoyment . . . . . . . . . . . . . . . . 44
(h) Equipment Notes Acquired for Investment . . . . 44
(i) . . . . . . . . . . . . . . . . . . . . . . . . 44
(j) Representations, Warranties and Covenants
of Indenture Trustee . . . . . . . . . . . . . 45
(k) Owner Participant Transfers . . . . . . . . . . 46
(l) Reserved . . . . . . . . . . . . . . . . . . . 48
(m) Compliance with Trust Indenture . . . . . . . . 48
(n) [ERISA Matters . . . . . . . . . . . . . . . . 48
(o) Confidentiality of Purchase Agreement . . . . . 49
(p) Margin Regulations . . . . . . . . . . . . . . 49
(q) Loan Participant Liens . . . . . . . . . . . . 49
(r) Indenture Trustee Liens . . . . . . . . . . . . 50
(s) Representations and Warranties of Owner
Trustee . . . . . . . . . . . . . . . . . . . . 50
(t) Owner Participant Obligations on Lease
Termination . . . . . . . . . . . . . . . . . . 54
(u) Transfer of Title; Assumption of Equipment
Notes . . . . . . . . . . . . . . . . . . . . 54
(v) Lessee Merger Covenant . . . . . . . . . . . . 55
(w) Further Assurances . . . . . . . . . . . . . . 56
(x) Rent Adjustments . . . . . . . . . . . . . . . 57
(y) Owner Participant Costs on Return . . . . . . . 57
(z) Transfer of Equipment Notes . . . . . . . . . . 57
(aa) Representations and Warranties of Pass
Through Trustee . . . . . . . . . . . . . . . . 57
(bb) Representations and Warranties of
Subordination Agent . . . . . . . . . . . . . . 60
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER . . . . . . . . . . 62
SECTION 9. OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . 62
SECTION 10. CERTAIN COVENANTS OF LESSEE . . . . . . . . . . . . 63
(a) Further Assurances . . . . . . . . . . . . . . 63
(b) Filings . . . . . . . . . . . . . . . . . . . . 63
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES . . . . . . . . . . . 64
SECTION 12. NOTICES; CONSENT TO JURISDICTION . . . . . . . . . 64
(a) Notices . . . . . . . . . . . . . . . . . . . . 64
(b) Consent to Jurisdiction . . . . . . . . . . . . 64
SECTION 13. CHANGE OF SITUS OF OWNER TRUST . . . . . . . . . . 65
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 66
(a) Consents Under Lease . . . . . . . . . . . . . 66
(b) Survival . . . . . . . . . . . . . . . . . . . 66
(c) Counterparts . . . . . . . . . . . . . . . . . 66
(d) Amendments and Waivers . . . . . . . . . . . . 67
(e) Successors and Assigns . . . . . . . . . . . . 67
(f) Governing Law . . . . . . . . . . . . . . . . . 67
(g) Trust Capacity . . . . . . . . . . . . . . . . 67
(h) Section 1110 . . . . . . . . . . . . . . . . . 68
SECTION 15. EXPENSES. . . . . . . . . . . . . . . . . . . . . . 68
(a) Invoices And Payment . . . . . . . . . . . . . 68
(b) Payment of Other Expenses. . . . . . . . . . . 68
SECTION 16. REFINANCINGS . . . . . . . . . . . . . . . . . . . . 69
(a) Refinancing Generally . . . . . . . . . . . . 69
(b) Limitation on Redemption . . . . . . . . . . . 72
ANNEXES
ANNEX A - Definitions
SCHEDULES
SCHEDULE I - Names and Addresses
SCHEDULE II - Commitments
SCHEDULE III - Pass Through Trust Agreement and Pass Through Trust
Supplements
EXHIBITS
Exhibit A - Schedule of Countries Authorized for Reregistration
Exhibit B-1 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), special counsel for Lessee
Exhibit B-2 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
special counsel for Lessee
Exhibit B-3 - Form of Opinion of Lessee's Legal Department
Exhibit C-1 - Form of Opinion of , special counsel for
the Manufacturer and the Seller
Exhibit C-2 - Form of Opinion of Manufacturer's Legal Department
Exhibit D - Form of Opinion of Ray, Xxxxxxx & Xxxxxxx, special counsel
for the Owner Trustee
Exhibit E-1 - Form of Opinion of ______________, special counsel for the
Owner Participant
Exhibit E-2 - Form of Opinion of Owner Participant's in-house counsel
Exhibit F - Form of Opinion of Xxxxx & Xxxxxxx, P.C., special FAA Counsel
Exhibit G - Form of Opinion of Xxxxxxx Xxxx LLP, special counsel for the
Indenture Trustee
Exhibit H - Form of Opinion of Xxxxxxx Xxxx LLP, special counsel for the
Pass Through Trustee
Exhibit I - Form of Opinion of Xxxxxxx Xxxx LLP, special counsel for the
Subordination Agent
PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
THIS PARTICIPATION AGREEMENT (US Airways, Inc. Trust No. N7__UW)
dated as of _______ ___, 199_ (as amended, supplemented or otherwise
modified from time to time, this "Agreement") among (i) US AIRWAYS, INC., a
Delaware corporation (together with its successors and permitted assigns,
the "Lessee", (ii) [_______________], a ______________ (together with its
successors and permitted assigns, the "Owner Participant"), (iii) STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as pass
through trustee under each of three separate Pass Through Trust Agreements
(in such capacity, together with its successors and permitted assigns, the
"Pass Through Trustee"), subordination agent and trustee under the
Intercreditor Agreement (in such capacity, together with its successors and
permitted assigns, the "Subordination Agent"), and Indenture Trustee under
the Trust Indenture (in such capacity, together with any successor
indenture trustee, the "Indenture Trustee"), and (iv) FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity except as expressly provided herein, but solely as Owner Trustee
under the Trust Agreement (herein, in such latter capacity, together with
any successor owner trustee, called the "Owner Trustee");
W I T N E S S E T H:
WHEREAS, prior to the execution and delivery of this Agreement,
the Owner Participant is entering into the Trust Agreement with the Owner
Trustee, pursuant to which Trust Agreement the Owner Trustee agrees, among
other things, to hold the Trust Estate for the use and benefit of the Owner
Participant;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Indenture Trustee and the Owner Trustee are entering into
the Trust Indenture pursuant to which the Owner Trustee will issue to the
Loan Participants Equipment Notes in three series, which Equipment Notes
are to be secured by the mortgage and security interests created by the
Owner Trustee in favor of the Indenture Trustee;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee will execute and deliver a Trust and Indenture
Supplement covering the Aircraft, supplementing the Trust Agreement and the
Trust Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Owner Trustee and Lessee have entered into the Lease
whereby, subject to the terms and conditions set forth therein, the Owner
Trustee agrees to lease to Lessee, and Lessee agrees to lease from the
Owner Trustee the Aircraft on the Delivery Date;
WHEREAS, on the Delivery Date for the Aircraft, the Lessee will
deliver a Lease Supplement covering the Aircraft;
WHEREAS, pursuant to the Note Purchase Agreement, the Pass
Through Trustee will purchase from the Owner Trustee on the Delivery Date,
on behalf of each Pass Through Trust, all of the Equipment Notes bearing
the same interest rate as the Certificates issued by such Pass Through
Trust;
WHEREAS, prior to the execution and delivery of this Agreement,
(i) the Liquidity Provider entered into three separate Liquidity
Facilities, one for the benefit of the holders of Certificates of each of
the Class A Pass Through Trust, the Class B Pass Through Trust and the
Class C Pass Through Trust (each referenced on Schedule III hereto), with
the Subordination Agent, as agent for the Pass Through Trustee on behalf of
each such Pass Through Trust; and (ii) the Pass Through Trustee, the
Liquidity Provider and the Subordination Agent have entered into the
Intercreditor Agreement;
WHEREAS, the Equipment Notes will be held by the Subordination
Agent pursuant to the Intercreditor Agreement on behalf of the Pass Through
Trusts;
WHEREAS, the acquisition of the Aircraft by Lessee from the
Seller and the aforementioned sale and leaseback transaction are integrally
related and constitute a series of events designed to provide financing for
such Aircraft and a means of providing the Aircraft to the Lessee for use
in its business.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATIONS IN LESSOR'S COST OF THE AIRCRAFT.
(a) Participation by Pass Through Trustees on the Delivery Date;
Issuance of Equipment Notes. Subject to the terms and conditions of this
Agreement, the Pass Through Trustee for each Pass Through Trust agrees to
make a non-recourse (except as provided herein) secured loan to the Owner
Trustee on the Delivery Date to finance, in part, the Owner Trustee's
payment of Lessor's Cost for the Aircraft by paying to the Owner Trustee
the aggregate purchase price of the Equipment Notes being issued to such
Pass Through Trustee as set forth on Schedule II opposite the name of such
Pass Through Trust. The Pass Through Trustees shall make such payments to
the Owner Trustee on a date to be designated pursuant to Section 2(c) but
in no event later than __________________, by transferring to the account
of the Owner Trustee at State Street Bank and Trust Company, 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, ABA No. 011-00-0028, Account No. 9903-
990-1, Reference: US Airways, Inc. 1998-1 EETC/US Airways, Inc. Trust No.
N7__UW), not later than 9:30 a.m., New York City time, on the Delivery Date
in immediately available funds in Dollars, the amount set forth opposite
the name of such Pass Through Trust on Schedule II hereto.
Upon the occurrence of the above transfers by the Pass Through
Trustee for each Pass Through Trust to the Owner Trustee, the Owner
Trustee, at the direction of the Owner Participant, shall issue, pursuant
to Article II of the Trust Indenture, to the Subordination Agent on behalf
of the Pass Through Trustee for each of the Pass Through Trusts, Equipment
Notes of the maturity and aggregate principal amount, bearing the interest
rate and for the purchase price set forth on Schedule II opposite the name
of such Pass Through Trust.
(b) Payment of Owner Participant's Commitment. Subject to the
terms and conditions of this Agreement, the Owner Participant agrees with
the Lessee and only with the Lessee on behalf of the Owner Trustee, subject
to the terms and conditions of this Agreement, to make the amount of its
Commitment as set forth on Schedule II available for and on account of the
Owner Trustee on the Delivery Date specified in the Delivery Notice
pursuant to Section 2(c) by wire transfer of such amount in immediately
available funds, to the Owner Trustee for deposit in its account at State
Street Bank and Trust Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, ABA No. 011-00-0028, Account No. 0000-000-0, Reference: US Airways
1998-1 EETC/US Airways, Inc. Trust No. N7__UW, not later than 9:30 a.m.,
New York City time. The amount of the Owner Participant's Commitment shall
be held for the account of the Owner Participant by the Owner Trustee until
released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 2(f).
(c) Lessee's Notice of Delivery Date. The Lessee agrees to give
the Owner Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee and the Subordination Agent at least three (3) Business
Days written or facsimile notice prior to the Delivery Date, which notice
shall specify the Lessor's Cost for the Aircraft, the estimated amount of
the Owner Participant's Commitment, the Delivery Date for the Aircraft, the
serial number of the Airframe and each Engine, and the United States
registration number for the Aircraft.
(d) Default by Pass Through Trustee or Owner Participant. In
case any of the Pass Through Trustee or the Owner Participant shall default
in its obligation under the provisions of this Section 2, no other such
party shall have any obligation to make any portion of such defaulted
amount available or to increase the amount of its Commitment and the
obligation of such nondefaulting party shall remain subject to the terms
and conditions set forth in this Agreement.
(e) Closing. The closing of the transactions referred to in
this Agreement shall take place commencing at 9:30 a.m. local time, on the
Delivery Date, at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
in Washington, D.C., except that the Trust Indenture, the Trust Supplement,
the Lease and the Lease Supplement shall be delivered at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP in New York, New York.
(f) Postponement of Scheduled Closing Date.
(i) If for any reason whatsoever the closing of the
transactions contemplated hereby is not consummated on the Delivery
Date provided for pursuant to Section 2(c) (the "Scheduled Delivery
Date"), the closing shall be deemed adjourned to the next Business
Day or to such other Business Day on or prior to _______________ as
Lessee shall specify by written notice to the Pass Through Trustee,
the Owner Participant, the Owner Trustee and the Indenture Trustee, in
which case the Owner Participant will keep its funds available, and
the Pass Through Trustee shall comply with its obligations under
Section 8.01 of each applicable Pass Through Trust Supplement.
(ii) If the closing fails to occur on the Scheduled Delivery
Date, the Owner Trustee shall promptly return to each Participant that
makes funds available to it in accordance with this Section 2 such
funds, together with interest or income earned thereon.
(iii) If the closing fails to occur on the Scheduled Delivery
Date and funds are not returned to each Participant that made funds
available as provided by clause (ii) above, the Owner Trustee shall,
if so instructed by Lessee, use reasonable efforts to invest, at the
risk of Lessee, the funds received by it from Participants in Cash
Equivalents. Any such obligations purchased by the Owner Trustee,
whether directly or through a repurchase agreement, shall be held in
trust by the Owner Trustee for the benefit of the respective
Participants that provided such funds, and not as part of the Trust
Estate or the Trust Indenture Estate.
(iv) If the closing fails to occur on the Scheduled Delivery
Date, unless the Owner Trustee returns all funds to the Participants
by 2:00 p.m., New York City time, on the Scheduled Delivery Date,
Lessee shall reimburse each Participant that has made funds available
pursuant to this Section 2 for the loss of the use of its funds an
amount equal to the excess, if any, of (x) interest at the Debt Rate
on the amount of such funds for the period from and including the
Scheduled Delivery Date to but excluding the actual Delivery Date or,
if earlier, the day on which such Participant's funds are returned if
such return is made by 2:00 p.m., New York City time (or to but
excluding the next following Business Day if such return is not made
by such time) over (y) any amount paid to such Participant in respect
of interest or income earned by the Owner Trustee pursuant to clause
(iii) above.
(v) On the Delivery Date or on the date funds are required to be
returned to Participants pursuant to clause (ii) above, Lessee shall
reimburse the Owner Trustee, for the benefit of Participants that
provided funds which are invested by the Owner Trustee pursuant to
this subsection (f), for any losses incurred on such investments.
All income and profits on the investment of such funds shall be for
the respective accounts of such Participants, and the Owner Trustee
shall not be liable for failure to invest such funds or for any losses
incurred on such investments, except for its own negligence or willful
misconduct.
SECTION 3. INSTRUCTIONS TO THE OWNER TRUSTEE.
The Owner Participant agrees that its releasing the amount
of its Commitment for the Aircraft to the account of the Owner Trustee in
accordance with the terms of Section 2 and its instructions to the Owner
Trustee to release such funds shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee:
(i) to purchase the Aircraft from Lessee and to pay to Lessee
the Lessor's Cost for the Aircraft;
(ii) to the extent not previously accomplished by a prior
authorization, to authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees, or an agent or
agents, of Lessee designated by Lessee) to accept delivery of the
Aircraft on the Delivery Date pursuant to the Acceptance Certificate;
(iii) to accept from Lessee the Xxxx of Sale and the FAA Xxxx
of Sale for the Aircraft referred to in Section 4(a)(v)(8) and
4(a)(v)(9);
(iv) to execute an Aircraft Registration Application, the Lease
Supplement and the Trust Supplement, in each case covering the
Aircraft;
(v) to borrow from the Pass Through Trustee and issue the
Equipment Notes as provided in Section 2(a); and
(vi) to take such other action as may be required to be taken by
the Owner Trustee on the Delivery Date by the terms of any Operative
Document.
SECTION 4. CONDITIONS PRECEDENT.
(a) Conditions Precedent to the Participations in the Aircraft.
It is agreed that the obligations of the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party),
prior to or on the Delivery Date of the following conditions precedent,
except that paragraphs (iii) and (v)(5), (xxi), (xxii) and (xxiii) shall
not be a condition precedent to the obligations of the Pass Through
Trustee, and paragraphs (iv), (vii) (insofar as it relates certificates and
documents to be delivered by the Owner Participant) and (xiv) shall not be
a condition precedent to the obligation of the Owner Participant and
paragraph (xxv) shall not be a condition precedent to the obligations of
the Subordination Agent:
(i) At least three (3) Business Days prior to the Delivery Date,
each of the parties hereto shall have received the Delivery Notice
pursuant to Section 2(c).
(ii) On the Delivery Date, no change shall have occurred after
the date of the execution and delivery of this Agreement in applicable
law or regulations or guidelines or interpretations thereof by
appropriate regulatory authorities which would make it a violation of
law or regulations or guidelines for the Pass Through Trustee or the
Owner Participant to make its Commitment available in accordance with
Section 2.
(iii) In the case of the Owner Participant, the Pass Through
Trustees shall have made available the amount of their Commitments for
the Aircraft in accordance with Section 2.
(iv) In the case of the Pass Through Trustees, the Owner
Participant shall have made available the amount of its Commitment for
the Aircraft in accordance with Section 2.
(v) The following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto,
shall each be satisfactory in form and substance to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent and shall be in full force and effect and
executed counterparts shall have been delivered to the Owner Trustee,
the Owner Participant, the Indenture Trustee, the Pass Through Trustee
and the Subordination Agent, or their respective counsel, provided
that only the Subordination Agent on behalf of each Pass Through
Trustee shall receive an executed original of such Pass Through
Trustee's respective Equipment Note and provided, further, that an
excerpted copy of the Purchase Agreement shall only be delivered to
and retained by the Owner Trustee (but the Indenture Trustee shall
also retain an excerpted copy of the Purchase Agreement which may be
inspected by the Owner Participant and its counsel prior to the
Delivery Date and subsequent to the Delivery Date may be inspected and
reviewed by the Indenture Trustee if and only if there shall occur and
be continuing an Indenture Event of Default), the chattel paper
counterpart of the Lease and the Lease Supplement covering the
Aircraft dated the Delivery Date shall be delivered to the Indenture
Trustee, the Tax Indemnity Agreement need only be satisfactory to the
Owner Participant and Lessee and shall only be delivered to Lessee and
the Owner Participant and their respective counsel:
(1) an excerpted copy of the Purchase Agreement
(insofar as it relates to the Aircraft);
(2) the Purchase Agreement Assignment;
(3) the Lease;
(4) a Lease Supplement covering the Aircraft dated the
Delivery Date;
(5) the Tax Indemnity Agreement;
(6) the Trust Agreement;
(7) a Trust Indenture and Trust Supplement covering
the Aircraft dated the Delivery Date;
(8) the Xxxx of Sale;
(9) the FAA Xxxx of Sale;
(10) an acceptance certificate covering the Aircraft in
the form agreed to by the Owner Participant and Lessee
(herein called the "Acceptance Certificate") duly completed
and executed by the Owner Trustee or its agent, which may be
a representative of Lessee, and by such representative on
behalf of Lessee;
(11) the Trust Indenture;
(12) the Equipment Notes; and
(13) the Consent and Agreement.
In addition, the Pass Through Trustee and the Owner Participant
each shall have received executed counterparts or conformed copies of
the following documents:
(1) each of the Pass Through Trust Agreements;
(2) the Intercreditor Agreement; and
(3) the Liquidity Facility for each of the Class A,
Class B and Class C Pass Through Trusts.
(vi) A Uniform Commercial Code financing statement or statements
covering all the security interests created by or pursuant to the
Granting Clause of the Trust Indenture that are not covered by the
recording system established by the Transportation Code shall have
been executed and delivered by the Owner Trustee, and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statement or
statements in all places necessary or advisable, and any additional
Uniform Commercial Code financing statements deemed advisable by the
Owner Participant or the Pass Through Trustee shall have been executed
and delivered by Lessee or the Owner Trustee and arrangements
satisfactory to the Owner Participant and the Indenture Trustee shall
have been made for the filing of such financing statements.
(vii) The Owner Trustee, the Owner Participant, the Indenture
Trustee, Pass Through Trustee and the Subordination Agent shall have
received the following, in each case in form and substance
satisfactory to it (except it shall not be a condition to the
obligation of any such party that it receive a certificate or other
document required to be delivered by it):
(A) (1) an incumbency certificate of Lessee as to the
person or persons authorized to execute and deliver the
Operative Documents to which the Lessee is a party and any
other documents to be executed on behalf of Lessee in
connection with the transactions contemplated hereby and the
signatures of such person or persons;
(2) a copy of the resolutions of the board of
directors of Lessee or Lessee's executive committee,
certified by the Secretary or an Assistant Secretary of
Lessee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
Lessee in connection with the transactions contemplated
hereby; and
(3) a copy of the certificate of incorporation of
Lessee, certified by the Secretary of State of
, a copy of the by-laws of Lessee certified by the
Secretary or Assistant Secretary of Lessee, and a
certificate or other evidence from the Secretary of State of
the State of , dated as of a date
shortly prior to the closing, as to the due incorporation
and good standing of Lessee in such state.
(B) (1) an incumbency certificate of the Indenture Trustee
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Indenture
Trustee is a party and any other documents to be executed on
behalf of the Indenture Trustee in connection with the
transactions contemplated hereby and the signatures of such
person or persons;
(2) a copy of the resolutions of the board of
directors of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture
Trustee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Indenture Trustee in connection with the transactions
contemplated hereby;
(3) a copy of the articles of association of the
Indenture Trustee certified by the Massachusetts
Commissioner of Banks, a copy of the by-laws of the
Indenture Trustee certified by the Secretary or an Assistant
Secretary of the Indenture Trustee, and a certificate or
other evidence from the Massachusetts Commissioner of Banks,
dated as of a date shortly prior to closing, as to the due
incorporation and good standing of the Indenture Trustee in
such state; and
(4) a certificate signed by an authorized officer of
the Indenture Trustee, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Indenture Trustee are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(C) (1) an incumbency certificate of the Owner Trustee as
to the person or persons authorized to execute and deliver
the Operative Documents to which the Owner Trustee is a
party and any other documents to be executed on behalf of
the Owner Trustee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Owner Trustee, certified by the Secretary
or an Assistant Secretary of the Owner Trustee, duly
authorizing the transactions contemplated hereby and the
execution and delivery of each of the documents required to
be executed and delivered on behalf of the Owner Trustee in
connection with the transactions contemplated hereby;
(3) a copy of the articles of association of the Owner
Trustee certified by the Comptroller of the Currency, a copy
of the by-laws of the Owner Trustee certified by the
Secretary or an Assistant Secretary of the Owner Trustee and
a certificate or other evidence from the Comptroller of the
Currency, dated as of a date shortly prior to closing, as to
the good standing of the Owner Trustee; and
(4) a certificate signed by an authorized officer of
the Owner Trustee, dated the Delivery Date, certifying that
the representations and warranties contained herein of the
Owner Trustee (in its individual capacity and as trustee)
are correct in all material respects as though made on and
as of the Delivery Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date).
(D) (1) an incumbency certificate of the Owner Participant
as to the person or persons authorized to execute and
deliver the Operative Documents to which the Owner
Participant is a party and any other documents to be
executed on behalf of the Owner Participant in connection
with the transactions contemplated hereby and the signatures
of such person or persons;
(2) a copy of the resolutions of the board of
directors of the Owner Participant, certified by the
Secretary or an Assistant Secretary of the Owner
Participant, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Owner Participant in connection with the transactions
contemplated hereby have been duly authorized;
(3) a copy of the certificate of incorporation of the
Owner Participant certified by the Secretary of State of the
State of __________, a copy of the by-laws of the Owner
Participant, each certified by the Secretary or an Assistant
Secretary of the Owner Participant, and a certificate or
other evidence from the Secretary of State of the State of
____________, dated as of a date shortly prior to closing,
as to the due incorporation and good standing of the Owner
Participant in such state; and
(4) a certificate signed by an authorized officer of
the Owner Participant, dated the Delivery Date, certifying
that the representations and warranties contained herein of
the Owner Participant are correct in all material respects
as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties are correct on and as of such
earlier date).
(viii) All appropriate action required to have been taken
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, authorizations, exemptions and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, authorizations,
exemptions and approvals shall be in full force and effect on the
Delivery Date.
(ix) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received a certificate signed by an authorized officer of Lessee
to the effect that:
(1) the Aircraft has been duly certified by the
Federal Aviation Administration as to type and has a current
certificate of airworthiness;
(2) the FAA Xxxx of Sale, the Lease, the Lease
Supplement, the Trust Indenture and the Trust Supplement
covering the Aircraft shall have been duly filed for
recordation (or shall be in the process of being so duly
filed for recordation) with the Federal Aviation
Administration, and the Trust Agreement shall have been
filed (or shall be in the process of being so filed) with
the Federal Aviation Administration;
(3) application for registration of the Aircraft in
the name of the Owner Trustee (together with any required
affidavits) has been duly made with the Federal Aviation
Administration; and
(4) the representations and warranties contained
herein of Lessee are correct in all material respects as
though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate
solely to an earlier date (in which case such
representations and warranties were correct on and as of
such earlier date).
(x) [Reserved.]
(xi) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, and reasonably
satisfactory as to scope and substance to each addressee thereof,
opinions dated the Delivery Date substantially in the form of Exhibit
B-1 hereto from Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois),
special counsel for Lessee, and an opinion dated the Delivery Date
substantially in the form of Exhibit B-2 hereto from Lessee's legal
department, and the Owner Participant shall have received, addressed
to such party and reasonably satisfactory as to scope and substance to
the Owner Participant, an opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel for Lessee, dated the Delivery Date
substantially in the form of Exhibit B-2 hereto.
(xii) The Pass Through Trustee and the Owner Participant
shall have received, addressed to the Pass Through Trustee, the
Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
and reasonably satisfactory as to scope and substance to the Pass
Through Trustee, the Owner Participant and Lessee, an opinion dated
the Delivery Date substantially in the form of Exhibit C hereto from
, special counsel to the Manufacturer and
the Seller, and an opinion dated the Delivery Date substantially in
the form of Exhibit C-2 hereto from Manufacturer's legal department,
with respect to the Manufacturer Documents, with respect to the
Manufacturer Documents.
(xiii) The Owner Participant, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit D hereto from Ray, Xxxxxxx &
Xxxxxxx, special counsel for the Owner Trustee.
(xiv) The Owner Trustee, the Indenture Trustee, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit E-1 hereto from
________________, special counsel for the Owner Participant, and an
opinion dated the Delivery Date substantially in the form of Exhibit
E-2 hereto from the Owner Participant's in-house counsel.
(xv) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received, addressed to each such party, and reasonably
satisfactory as to scope and substance to each addressee thereof, an
opinion dated the Delivery Date substantially in the form of Exhibit F
hereto from Xxxxx & Xxxxxxx, P.C., special FAA counsel.
(xvi) The Owner Trustee, the Owner Participant, the Pass
Through Trustee and the Subordination Agent shall have received,
addressed to each such party, and reasonably satisfactory as to scope
and substance to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit G from Xxxxxxx Xxxx LLP,
special counsel for the Indenture Trustee.
(xvii) [Reserved.]
(xviii) The Owner Trustee, the Owner Participant, the Indenture
Trustee, the Pass Through Trustee and the Subordination Agent shall
have received an independent insurance broker's report, in form and
substance satisfactory to the Owner Participant, as to the due
compliance with the terms of Section 11 of the Lease relating to
insurance with respect to the Aircraft.
(xix) The Owner Participant shall have received an appraisal
dated the Delivery Date from ______________ in form and substance
satisfactory to it.
(xx) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or the transactions
contemplated hereby.
(xxi) The Owner Participant shall have received from
____________________, special tax counsel to the Owner Participant, a
favorable opinion, in form and substance satisfactory to the Owner
Participant, with respect to certain Federal income tax aspects of the
transaction contemplated by the Operative Documents.
(xxii) There shall have been, since the date hereof, no
amendment, modification, addition, or change in or to the provisions
of the Code, the regulations promulgated under the Code (including
temporary regulations), Internal Revenue Service Revenue Procedures or
Revenue Rulings, or other administrative interpretations, applicable
judicial precedents or Executive Orders of the President of the United
States, all as in effect on the date hereof, the effect of which might
preclude the Owner Participant from obtaining any of the anticipated
income tax benefits with respect to the Aircraft.
(xxiii) The Owner Trustee, the Owner Participant, the Indenture
Trustee and the Subordination Agent, shall have received (A) a
certificate signed by an authorized officer of the Pass Through
Trustee, dated the Delivery Date, certifying that the representations
and warranties contained herein of the Pass Through Trustee are
correct as though made on and as of the Delivery Date, except to the
extent that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties are
correct on and as of such earlier date), (B) an opinion dated the
Delivery Date substantially in the form of Exhibit H hereto addressed
to each such party of Xxxxxxx Xxxx LLP, special counsel for the Pass
Through Trustee, and reasonably satisfactory as to scope and substance
to each addressee thereof, and (C) such other documents and evidence
with respect to the Pass Through Trustee as it may reasonably request
in order to establish the due consummation of the transactions
contemplated by this Agreement, the taking of all necessary corporate
action in connection therewith and compliance with the conditions
herein set forth.
(xxiv) No Lease Event of Default has occurred and is
continuing and no Event of Loss has occurred with respect to the
Airframe or any Engine.
(xxv) The Owner Trustee, the Owner Participant, the Indenture
Trustee and the Pass Through Trustee shall have received, addressed to
each such party, and reasonably satisfactory as to scope and
substance, to each addressee thereof, an opinion dated the Delivery
Date substantially in the form of Exhibit I from Xxxxxxx Xxxx LLP,
special counsel for the Subordination Agent.
Promptly upon the registration of the Aircraft and the recording of
the Trust Indenture, the Lease, the Lease Supplement covering the Aircraft
and the Trust Supplement covering the Aircraft pursuant to the
Transportation Code, Lessee will cause Xxxxx & Xxxxxxx, P.C., special FAA
counsel in Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee,
the Indenture Trustee, the Owner Participant, the Owner Trustee and Lessee
an opinion as to the due and valid registration of the Aircraft in the name
of the Owner Trustee, the due recording of the FAA Xxxx of Sale, the Trust
Indenture, such Lease Supplement, such Trust Supplement and the Lease and
the filing of the Trust Agreement and the lack of filing of any intervening
documents with respect to the Aircraft.
(b) Conditions Precedent to the Obligations of Lessee. It is
agreed that (A) the obligations of Lessee to sell the Aircraft to the Owner
Trustee and to accept delivery of the Aircraft under the Lease on the
Delivery Date, and (B) the obligations of Lessee to enter into the other
Operative Documents on the Delivery Date are all subject to the fulfillment
to the satisfaction of Lessee prior to the Delivery Date of the following
conditions precedent:
(i) All appropriate action required to have been taken on or
prior to the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken by the Federal
Aviation Administration, or any governmental or political agency,
subdivision or instrumentality of the United States, and all orders,
permits, waivers, exemptions, authorizations and approvals of such
entities required to be in effect on the Delivery Date in connection
with the transactions contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, exemptions,
authorizations and approvals shall be in full force and effect on the
Delivery Date.
(ii) The conditions specified in Sections 4(a)(ii), 4(a)(iii) and
4(a)(iv) hereof shall have been satisfied.
(iii) Those documents described in Section 4(a)(v) shall have
been duly authorized, executed and delivered by the respective party
or parties thereto (other than Lessee) in the manner specified in
Section 4(a)(v), shall each be satisfactory in form and substance to
Lessee, shall be in full force and effect on the Delivery Date, and an
executed counterpart of each thereof (other than the Equipment Notes)
shall have been delivered to Lessee or its special counsel.
(iv) Lessee shall have received (A) each certificate referred to
in Section 4(a)(vii) (other than the certificate and documents
referred to in clause (A) thereof), (B) the certificate referred to in
Section 4(a)(xxiii)(A), and (C) such other documents and evidence with
respect to the Pass Through Trustee as Lessee or its special counsel
may reasonably request in order to establish the due consummation of
the transactions contemplated by this Agreement, the taking of all
corporate proceedings in connection therewith and compliance with the
conditions herein set forth.
(v) Lessee shall have received the opinions set forth in
Sections 4(a)(xii), 4(a)(xiii), 4(a)(xiv), 4(a)(xv), 4(a)(xvi),
4(a)(xxv), and 4(a)(xxiii)(B) in each case addressed to Lessee and
dated the Delivery Date and in each case in scope and substance
reasonably satisfactory to Lessee and its special counsel.
(vi) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental
agency, nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency at the time
of the Delivery Date to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or the transactions
contemplated hereby.
(vii) No change shall have occurred after the date of the
execution and delivery of this Agreement in applicable law or
regulations or guidelines or interpretations by appropriate regulatory
authorities which would make it a violation of law or regulations or
guidelines for Lessee to enter into any transaction contemplated by
the Operative Documents.
(viii) There shall have been, since the date hereof, no
amendment, modification, addition or change in or to the Code, the
regulations promulgated under the Code (including temporary
regulations), Internal Revenue Service Revenue Procedures or Revenue
Rulings, or other administrative interpretations, applicable judicial
precedents or Executive Orders of the President of the United States
which might give rise to an indemnity obligation of Lessee under any
of the Operative Documents.
(ix) Lessee shall have been paid Lessor's Cost for the Aircraft.
SECTION 5. EXTENT OF INTEREST OF CERTIFICATE HOLDERS. No
Certificate Holder shall have any further interest in, or other right with
respect to, the mortgage and security interests created by the Trust
Indenture when and if the principal of and interest on all Equipment Notes
held by such holder and all other sums payable to such holder hereunder,
under the Trust Indenture and under such Equipment Notes shall have been
paid in full. Each Pass Through Trustee and, by its acceptance of a
Equipment Note, each Certificate Holder agrees that it will look solely to
the income and proceeds from the Trust Indenture Estate to the extent
available for distribution to such Certificate Holder as provided in
Article III of the Trust Indenture and that neither the Owner Participant
nor the Owner Trustee shall be personally liable to the Pass Through
Trustees or any Certificate Holder for any amounts payable under the
Equipment Notes, the Trust Indenture or hereunder, except as expressly
provided in the Operative Documents.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF LESSEE; INDEMNITIES.
(a) Representations and Warranties. Lessee represents and
warrants to the Pass Through Trustee, the Owner Trustee, the Indenture
Trustee, each Liquidity Provider, the Subordination Agent and the Owner
Participant that:
(i) Lessee is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, has
the corporate power and authority to own or hold under lease its
properties, has, or had on the respective dates of execution thereof,
the corporate power and authority to enter into and perform its
obligations under the Lessee Documents, the Pass Through Trust
Agreements and the other Operative Documents to which it is a party,
and is duly qualified to do business as a foreign corporation in each
state in which its operations or the nature of its business requires
other than failures to so qualify which would not have a material
adverse effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise;
(ii) Lessee is a Certificated Air Carrier, and its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code in effect in the State of Virginia) is located at
Arlington, Virginia;
(iii) the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements and each other Operative
Document to which Lessee is a party, and the performance of the
obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements and each other Operative Document to which Lessee is
a party, have been duly authorized by all necessary corporate action
on the part of Lessee, do not require any stockholder approval, or
approval or consent of any trustee or holder of any material
indebtedness or material obligations of Lessee, except such as have
been duly obtained and are in full force and effect, and do not
contravene any law, governmental rule, regulation or order binding on
Lessee or the certificate of incorporation or by-laws of Lessee, or
contravene the provisions of, or constitute a default under, or result
in the creation of any Lien (other than Permitted Liens) upon the
property of Lessee under, any indenture, mortgage, contract or other
agreement to which Lessee is a party or by which it may be bound or
affected which contravention, default or Lien, individually or in the
aggregate, would be reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one enterprise
provided, that insofar as the representations and warranties set forth
in this Section 6(a)(iii) apply to the prohibited transaction rules of
ERISA and Section 4975 of the Code, such representations and
warranties are based upon and subject to the truth and accuracy of the
representations, warranties and covenants set forth in Section 6(n)
and the representations and warranties made or deemed made by each
purchaser of Certificates issued by a Pass Through Trust;
(iv) neither the execution and delivery by Lessee of the Lessee
Documents, the Pass Through Trust Agreements or any other Operative
Document to which Lessee is a party, nor the performance of the
obligations of Lessee under the Lessee Documents, the Pass Through
Trust Agreements or the other Operative Documents to which Lessee is a
party, requires the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action in respect
of, the Department of Transportation, the FAA, or any other Federal,
state or foreign governmental authority having jurisdiction over
Lessee, other than (A) the registration of the Pass Through Trust
Certificates under the Securities Act and under the securities laws of
any state in which the Pass Through Trust Certificates may be offered
for sale if the laws of such state require such action, (B) the
qualification of the Pass Through Trust Agreements under the Trust
Indenture Act of 1939, as amended, pursuant to an order of the
Securities and Exchange Commission, (C) the orders, permits, waivers,
exemptions, authorizations and approvals of the regulatory
authorities having jurisdiction over the operation of the Aircraft by
Lessee or any Sublessee required to be obtained on or prior to the
Delivery Date, which orders, permits, waivers, exemptions,
authorizations and approvals have been, or on the Delivery Date will
be, duly obtained and are, or on the Delivery Date will be, in full
force and effect, (D) the application for registration of the Aircraft
referred to in Section 4(a)(ix)(3), (E) the registrations and filings
referred to in Section 6(a)(vi), and (F) authorizations, consents,
approvals, actions, notices and filings required to be obtained,
taken, given or made either only after the date hereof or the failure
of which to obtain, take, give or make would not be reasonably likely
to have a material adverse effect on the condition (financial or
otherwise), business or properties of Lessee and its subsidiaries
considered as one enterprise;
(v) this Agreement, each of the other Lessee Documents and the
Pass Through Trust Agreements to which Lessee is a party constitute
(or, in the case of documents to be executed on the Delivery Date,
will constitute) the legal, valid and binding obligations of Lessee
enforceable against Lessee in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting the rights of creditors or lessors generally
and by general principles of equity, whether considered in a
proceeding at law or in equity, and except, in the case of the Lease,
as limited by applicable laws which may affect the remedies provided
in the Lease;
(vi) except for (A) the filing of the Trust Agreement with the
FAA, (B) the registration of the Aircraft pursuant to the
Transportation Code, (C) the filing for recording pursuant to the
Transportation Code of the Lease with the Lease Supplement covering
the Aircraft, the Trust Indenture and the Trust Supplement attached
thereto and made a part thereof, the Trust Indenture with the Trust
Supplement attached thereto and made a part thereof and the FAA Xxxx
of Sale, (D) the filing of financing statements (and continuation
statements at periodic intervals) with respect to the security
interests created by such documents under the Uniform Commercial Code
of Virginia and Utah and such other states as may be specified in the
opinion furnished pursuant to Section 4(a)(xi) hereof, and (E) the
taking of possession by the Indenture Trustee of the original chattel
paper counterpart of each of the Lease and the Lease Supplement
covering the Aircraft, no further filing or recording of any document
(including any financing statement in respect thereof under Article 9
of the Uniform Commercial Code of any applicable jurisdiction) or
other action is necessary under the laws of the United States of
America or any State thereof in order to perfect the Owner Trustee's
title to and interest in the Aircraft as against Lessee and any third
parties, or to perfect the security interest in favor of the Indenture
Trustee in the Owner Trustee's interest in the Aircraft (with respect
to such portion of the Aircraft as is covered by the recording system
established by the FAA pursuant to 49 U.S.C. Section 44107) and in the
Lease in any applicable jurisdiction in the United States;
(vii) neither Lessee nor any of its Affiliates has directly
or indirectly offered any interest in the Trust Estate, the Equipment
Notes or the Pass Through Trust Certificates for sale to any Person
other than in a manner permitted by the Securities Act and by the
rules and regulations thereunder;
(viii) Lessee is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(ix) no event has occurred and is continuing which constitutes a
Lease Default or Lease Event of Default;
(x) no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the lapse of
time;
(xi) Lessee is solvent and will not be rendered insolvent by the
sale of the Aircraft; after the sale of the Aircraft the capital of
Lessee will not be unreasonably small for the conduct of the business
in which Lessee is engaged or is about to engage; Lessee has no
intention or belief that it is about to incur debts beyond its ability
to pay as they mature; and Lessee's sale of the Aircraft is made
without any intent to hinder, delay or defraud either present or
future creditors;
(xii) none of the proceeds from the issuance of the Equipment
Notes or from the acquisition by the Owner Participant of its
beneficial interest in the Trust Estate will be used directly or
indirectly by Lessee to purchase or carry any "margin security" as
such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System;
(xiii) on the Delivery Date, all sales or use tax then due and
for which Lessee is responsible pursuant to Section 6(b)(i) hereof
shall have been paid, other than such taxes which are being contested
by Lessee in good faith and by appropriate proceedings so long as such
proceedings do not involve any material risk of the sale, forfeiture
or loss of the Aircraft;
(xiv) except as may have been disclosed in the Lessee's
reports filed with the Securities Exchange Commission, there are no
pending or threatened actions or proceedings that individually or in
the aggregate which could be expected to have a material adverse
effect on the condition (financial or otherwise), business or
properties of Lessee and its subsidiaries considered as one
enterprise; and
(xv) the Owner Trustee will receive good and marketable title to
the Aircraft from Lessee free and clear of all Liens, except the
rights of Lessee under the Lease and the Lease Supplement covering the
Aircraft, the Lien of the Trust Indenture, the beneficial interest of
the Owner Participant in the Aircraft, and the Liens permitted by
clause (iv) (solely for Taxes not yet due but excluding any such Taxes
being contested) of Section 6 of the Lease.
(b) General Tax Indemnity.
(i) Indemnity. Except as provided in Section 6(b)(ii) hereof,
Lessee shall pay, protect, save and on written demand shall indemnify
and hold harmless each Indemnitee from and against (x) any and all
Taxes howsoever imposed upon or against any Indemnitee, Lessee or all
or any part of the Aircraft, the Airframe, the Engines, the Parts or
any part thereof or interest therein or otherwise by the United States
Federal government only, any state or local government or other taxing
authority in the United States or by any foreign government or any
political subdivision or taxing authority thereof or by any territory
or possession of the United States or by any international authority
upon or in connection with, relating to, or measured by (A) the
manufacture, financing, purchase, acceptance, delivery, rejection,
transport, ownership, possession, operation, use, sale, return,
storage, leasing, transfer of title to, transfer of registration of,
exportation or other disposition of, the Aircraft, the Airframe, the
Engines, the Parts or any part thereof or interest therein, (B) the
rentals, receipts or earnings from the Aircraft, the Airframe, the
Engines, the Parts or any part thereof or interest therein, (C) the
property or the income or other proceeds with respect to any of the
property held in the Trust Estate or the Trust Indenture Estate, (D)
the Aircraft, the Airframe, the Engines, the Parts or any part thereof
or interest therein, (E) the Secured Certificates, their issuance or
acquisition or the payments of any amounts thereunder, or the
Operative Documents, or amendments or supplements thereto and their
execution.
(ii) Exclusions from General Tax Indemnity. The provisions of
Section 6(b)(i) shall not apply:
(1) to any Income Tax imposed by (A) the United States
Federal government, (B) any state or local government or
other taxing authority in the United States or (C) any
foreign government or any political subdivision or taxing
authority thereof or any territory or possession of the
United States or by any international authority (a "Foreign
Jurisdiction") (A, B and C collectively referred to as,
"Taxing Authority"), provided, however, that unless the
Owner Participant maintains a permanent establishment,
office or other place of business in the foreign
jurisdiction imposing the tax (and for this purpose the
ownership or leasing of one or more aircraft in such
jurisdiction shall not be deemed a permanent establishment,
office or other place of business), the exclusion set forth
in this subparagraph (1) shall not apply to Income Taxes
imposed by a Foreign Jurisdiction on the Owner Participant
as a result of the use or location of the Aircraft in the
jurisdiction imposing such Tax, but only to the extent such
Income Taxes exceed the amount of Income Taxes imposed by
such Foreign Jurisdiction had the Aircraft not been used in
such jurisdiction;
(2) to Taxes (including intangible taxes or transfer
taxes) relating to any payments of principal, interest or
Make-Whole Amount, if any, on the Secured Certificates, or
to a Certificate Holder, imposed by any government or taxing
authority;
(3) to any Tax imposed on an Indemnitee as a result of
a voluntary transfer or disposition by such Indemnitee
including, without limitation, the revocation of the trust
created by the Trust Agreement or an involuntary transfer or
disposition of all or any portion of its respective
equitable or legal ownership interest in the Aircraft, the
Airframe, the Engines, the Parts or any part thereof, the
Trust Estate or the Operative Documents, unless such
transfer or disposition shall occur (A) upon 30 days prior
notice during a period when an Event of Default has
occurred and is continuing under the Lease at the time of
transfer or disposition, or (B) in connection with the
termination of the Lease or action or direction of the
Lessee pursuant to Sections 7(b)(i), (ii), (v), or (vi), 8
(but only to the extent of such disposition), 9, 10 or 19
thereof;
(4) to any Tax imposed on any Indemnitee or any
successor, assign or Affiliate of any thereof, as a result
of a voluntary or involuntary transfer or other disposition
by the Owner Participant of all or any portion of the Owner
Participant's respective equitable or legal interests in the
Aircraft, the Trust Estate or the Trust Indenture Estate;
(5) to any Tax imposed upon any Indemnitee which
results from the willful misconduct or negligence of any
Indemnitee;
(6) to any Tax based on, measured by or imposed with
respect to any fees, commissions or compensation received by
the Owner Trustee or the Indenture Trustee in connection
with any transaction contemplated by the Operative
Documents;
(7) to any Tax imposed with respect to any period
after (A) the expiration of the Term and return of
possession of the Aircraft to the Owner Trustee or its
designee pursuant to the terms of the Lease, (B) the earlier
discharge in full of Lessee's obligation to pay the
Termination Value and all other amounts due under the Lease
and transfer of title to the Aircraft or (C) placement in
storage of the Aircraft pursuant to Section 5(d) of the
Lease;
(8) to any Tax in the nature of an intangible or
similar tax upon or with respect to the value of the Owner
Participant's interest in the Trust Indenture Estate or the
value or principal amount of any interest, in any of the
Secured Certificates imposed by any government or taxing
authority;
(9) to any Tax imposed on or with respect to a
transferee (or subsequent transferee) of an original
Indemnitee to the extent (a) such Tax would not have been
required to be withheld or imposed on or with respect to
such original Indemnitee or (b) to the extent such Tax
exceeds the amount of the Tax that would have been imposed
on the original Indemnitee;
(10) to any Tax imposed resulting from, or which would
not have occurred but for, a Lessor Lien attributable to it;
(11) to any Tax which has been included in the Lessor's
Cost;
(12) to any Tax for which Lessee is obligated to pay
the Owner Participant under the Tax Indemnity Agreement;
(13) to any Tax that would not have been imposed but
for an Indemnitee's breach of any covenant, or the
inaccuracy of any representation or warranty, of such
Indemnitee contained in any Operative Document;
(14) to any Tax being contested pursuant to Section
6(b)(iv);
(15) to any Tax imposed by any jurisdiction which would
have been imposed on any Indemnity as a result of activities
in such jurisdiction unrelated to the transactions
contemplated by the Operative Documents;
(16) to interest, penalties and additions to Tax
imposed as a result of (in whole or in part) failure of
Owner Participant to timely and properly file any return,
unless such failure to file is caused by Lessee's failure to
timely provide information required to be provided under the
Operative Documents;
(17) to any U.S. withholding taxes imposed on payments
to a foreign person; and
(18) to any Taxes imposed by Section 4975 of the Code
or Section 502(i) of ERISA or any successor provisions.
The provisions of this Section 6(b)(ii) shall not apply to any Tax
imposed in respect of the receipt or accrual of any indemnity payment
made by Lessee pursuant to this Section 6(b) or Section 6(c) hereof;
provided, however, that this clause shall not result in any
duplication of any amounts of any gross-up payable under Section
6(b)(iii) or Section 6(c) hereof.
(iii) Payments. Lessee's indemnity obligation to an
Indemnitee under this Section 6(b) shall equal the amount which, after
taking into account any Tax imposed upon the receipt or accrual of the
amounts payable under this Section 6(b) and any tax benefits realized
by such Indemnitee as a result of the indemnifiable Tax (including,
without limitation, any benefits realized as a result of an
indemnifiable Tax being utilized by such Indemnitee as a credit
against Taxes not indemnifiable under this Section 6(b)), shall equal
the amount of the Tax indemnifiable under this Section 6(b).
At Lessee's request, the computation of the amount of any
indemnity payment owed by Lessee or any amount owed by a Indemnitee to
Lessee pursuant to this Section 6(b) shall be verified and certified
by a nationally recognized independent public accounting firm
reasonably acceptable to Lessee and the Indemnitee. The costs of such
verification (including the fee of such public accounting firm) shall
be borne by Lessee unless such verification shall result in an
adjustment in Lessee's favor of 5% or more of the net present value of
the payment as computed by such Indemnitee, in which case the costs
shall be paid by such Indemnitee.
Each Indemnitee shall provide Lessee with such
certifications, information and documentation as shall be in such
Indemnitee's possession and as shall be reasonably requested by Lessee
to minimize any indemnity payment pursuant to this Section 6(b).
Each Indemnitee shall promptly forward to Lessee any written
notice, xxxx or advice received by it from any Taxing Authority
concerning any Tax for which it seeks indemnification under this
Section 6(b). Lessee shall pay any amount for which it is liable
pursuant to this Section 6(b) directly to the appropriate Taxing
Authority if legally permissible or upon demand of an Indemnitee, to
such Indemnitee within 30 days of such demand (or, if a contest occurs
in accordance with Section (6)(iv), within 30 days after a Final
Determination (as defined below)), but in no event more than one
business day prior to the date the Tax to which such amount payable
hereunder relates is due. If requested by an Indemnitee in writing,
Lessee shall furnish to the appropriate Indemnitee the original or a
certified copy of a receipt for Lessee's payment of any Tax paid by
Lessee or such other evidence of payment of such Tax as is acceptable
to such Indemnitee. Lessee shall also furnish promptly upon written
request such data as any Indemnitee may reasonably require to enable
such Indemnitee to comply with the requirements of any taxing
jurisdiction unless such data is not reasonably available to Lessee
or, unless such data is specifically requested by a Taxing Authority,
is not customarily furnished by domestic air carriers under similar
circumstances. For purposes of this Section 6(b), a "Final
Determination" shall mean (i) a decision, judgment, decree or other
order by any court of competent jurisdiction that occurs pursuant to
the provisions of Section 6(b)(iv), which decision, judgment, decree
or other order has become final and unappealable, (ii) a closing
agreement or settlement agreement entered into in accordance with
Section 6(b)(iv) that has become binding and is not subject to further
review or appeal (absent fraud, misrepresentation, etc.), or (iii) the
termination of administrative proceedings and the expiration of the
time for instituting a claim in a court proceeding.
If any Indemnitee shall realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 6(b)
(whether such tax savings shall be by means of a foreign tax credit,
depreciation or cost recovery deduction or otherwise) and such savings
is not otherwise taken into account in computing such payment or
indemnity such Indemnitee shall pay to Lessee an amount equal to the
lesser of (i) the amount of such tax savings, plus any additional tax
savings recognized as the result of any payment made pursuant to this
sentence, when, as if, and to the extent, realized or (ii) the amount
of all payments pursuant to this Section 6(b) by Lessee to such
Indemnitee (less any payments previously made by such Indemnitee to
Lessee pursuant to this Section 6(b)(iii)) and the excess, if any, of
the amount described in clause (i) over the amount described in clause
(ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Lessee to make payments to such Indemnitee
pursuant to this Section 6(b)). Each such Indemnitee shall in good
faith use reasonable efforts in filing its tax returns and in dealing
with Taxing Authorities to seek and claim any such tax benefit.
(iv) Contests. If a written claim is made against an Indemnitee
for Taxes with respect to which Lessee could be liable for payment or
indemnity hereunder, or if an Indemnitee makes a determination that a
Tax is due for which Lessee could have an indemnity obligation
hereunder, such Indemnitee shall promptly give Lessee notice in
writing of such claim (provided, that failure to so notify Lessee
shall not relieve Lessee of its indemnity obligations hereunder unless
such failure to notify effectively forecloses Lessee's rights to
require a contest of such claim) and shall take no action with respect
to such claim without the prior written consent of Lessee for 30 days
following the receipt of such notice by Lessee; provided, that, in the
case of a claim made against an Indemnitee, if such Indemnitee shall
be required by law to take action prior to the end of such 30-day
period, such Indemnitee shall, in such notice to Lessee, so inform
Lessee, and such Indemnitee shall take no action for as long as it is
legally able to do so (it being understood that a Indemnitee shall be
entitled to pay the Tax claimed and xxx for a refund prior to the end
of such 30-day period if (i)(A) the failure to so pay the Tax would
result in substantial penalties (unless immediately reimbursed by
Lessee) and the act of paying the Tax would not materially prejudice
the right to contest or (B) the failure to so pay would result in
criminal penalties and (ii) such Indemnitee shall take any action so
required in connection with so paying the Tax in a manner that is the
least prejudicial to the pursuit of the contest). In addition, such
Indemnitee shall (provided, that Lessee shall have agreed to keep such
information confidential other than to the extent necessary in order
to contest the claim) furnish Lessee with copies of any requests for
information from any Taxing Authority relating to such Taxes with
respect to which Lessee may be required to indemnify hereunder. If
requested by Lessee in writing within 30 days after its receipt of
such notice, such Indemnitee shall, at the expense of Lessee
(including all reasonable out-of-pocket costs and reasonable
attorneys' and accountants' fees), in good faith contest (or, if
permitted by applicable law, allow Lessee to contest) through
appropriate administrative and judicial proceedings the validity,
applicability or amount of such Taxes by (I) resisting payment
thereof, (II) not paying the same except under protest if protest is
necessary and proper or (III) if the payment is made, using reasonable
efforts to obtain a refund thereof in an appropriate administrative
and/or judicial proceeding. If requested to do so by Lessee, the
Indemnitee shall appeal any adverse administrative or judicial
decision, except that the Indemnitee shall not be required to pursue
any appeals to the United States Supreme Court. If and to the extent
the Indemnitee is able to separate the contested issue or issues from
other issues arising in the same administrative or judicial proceeding
that are unrelated to the transactions contemplated by the Operative
Agreements without, in the good faith judgment of such Indemnitee,
adversely affecting such Indemnitee, such Indemnitee shall permit
Lessee to control the conduct of any such proceeding and shall provide
to Lessee (at Lessee's cost and expense) with such information or data
that is in such Indemnitee's control or possession that is reasonably
necessary to conduct such contest. In the case of a contest controlled
by a Indemnitee, such Indemnitee shall consult with Lessee in good
faith regarding the manner of contesting such claim and shall keep
Lessee reasonably informed regarding the progress of such contest. An
Indemnitee shall not fail to take any action expressly required by
this Section 6(b)(iv) (including, without limitation, any action
regarding any appeal of an adverse determination with respect to any
claim) or settle or compromise any claim without the prior written
consent of the Lessee (except as contemplated by this Section
6(b)(iv).
Notwithstanding the foregoing, in no event shall an
Indemnitee be required to pursue any contest (or to permit Lessee to
pursue any contest) unless (i) Lessee shall have agreed to pay such
Indemnitee on demand all reasonable out-of-pocket costs and reasonable
attorneys' and accountants' fees, (ii) if such contest shall involve
the payment of the claim, Lessee shall advance the amount thereof (to
the extent indemnified hereunder) plus interest, penalties and
additions to tax with respect thereto that are required to be paid
prior to the commencement of such contest on an interest-free after-
Tax basis to such Indemnitee (and such Indemnitee shall promptly pay
to the Lessee any net realized tax benefits resulting from such
advance including any tax benefits resulting from making such
payment), (iii) such Indemnitee shall have reasonably determined that
the action to be taken will not result in any material risk of
forfeiture, sale or loss of the Aircraft (unless Lessee shall have
made provisions to protect the interests of any such Indemnitee in a
manner reasonably satisfactory to such Indemnitee) (provided, that
such Indemnitee agrees to notify Lessee in writing promptly after it
becomes aware of any such risk), (iv) no Lease Event of Default shall
have occurred and be continuing unless Lessee has provided security
for its obligations hereunder by advancing to such Indemnitee before
proceeding or continuing with such contest, the amount of the Tax
being contested, plus any interest and penalties and an amount
estimated in good faith by such Indemnitee for expenses, and (v) prior
to commencing any judicial action controlled by Lessee, Lessee shall
have acknowledged its liability for such claim hereunder, provided
that Lessee shall not be bound by its acknowledgment if the Final
Determination articulates conclusions of law and fact that demonstrate
that Lessee has no liability for the contested amounts hereunder.
Notwithstanding the foregoing, if any Indemnitee shall release, waive,
compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 6(b) without the written permission of
Lessee, Lessee's obligation to indemnify such Indemnitee with respect
to such claim (and all directly related claims and claims based on the
outcome of such claim) shall terminate, subject to this Section
6(b)(iii), and subject to Section 6(b)(iii), such Indemnitee shall
repay to Lessee any amount previously paid or advanced to such
Indemnitee with respect to such claim, plus interest at the rate that
would have been payable by the relevant Taxing Authority with respect
to a refund of such Tax.
Notwithstanding anything contained in this Section 6(b), a
Indemnitee will not be required to contest the imposition of any Tax
and shall be permitted to settle or compromise any claim without
Lessee's consent if such Indemnitee (i) shall waive its right to
indemnity under this Section 6(b) with respect to such Tax (and any
directly related claim and any claim the outcome of which is
determined based upon the outcome of such claim), (ii) shall pay to
Lessee any amount previously paid or advanced by Lessee pursuant to
this Section 6(b) with respect to such Tax, plus interest at the rate
that would have been payable by the relevant Taxing Authority with
respect to a refund of such Tax, and (iii) shall agree to discuss with
Lessee the views or positions of any relevant Taxing Authority with
respect to the imposition of such Tax.
(v) Refund. If any Indemnitee shall receive a refund of, or be
entitled to a credit against other liability for, all or any part of
any Taxes paid, reimbursed or advanced by Lessee, such Indemnitee
shall pay to Lessee within 30 days of such receipt an amount equal to
the lesser of (a) the amount of such refund or credit plus any net tax
benefit (taking into account any Taxes incurred by such Indemnitee by
reason of the receipt of such refund or realization of such credit)
actually realized by such Indemnitee as a result of any payment by
such Indemnitee made pursuant to this sentence (including this clause
(a)) and (b) such tax payment, reimbursement or advance by Lessee to
such Indemnitee theretofore made pursuant to this Section 6(b) (and
the excess, if any, of the amount described in clause (a) over the
amount described in clause (b) shall be carried forward and applied to
reduce pro tanto any subsequent obligation of Lessee to make payments
to such Indemnitee pursuant to this Section 6(b)). If, in addition to
such refund or credit, such Indemnitee shall receive (or be credited
with) an amount representing interest on the amount of such refund or
credit, such Indemnitee shall pay to Lessee within 30 days of such
receipt or realization of such credit that proportion of such interest
that shall be fairly attributable to Taxes paid, reimbursed or
advanced by Lessee prior to the receipt of such refund or realization
of such credit.
(vi) Tax Filing. If any report, return or statement is required
to be filed with respect to any Tax which is subject to
indemnification under this Section 6(b), Lessee shall timely file the
same (except for any such report, return or statement which a
Indemnitee has timely notified the Lessee in writing that such
Indemnitee intends to file, or for which such Indemnitee is required
by law to file, in its own name); provided, that the relevant
Indemnitee shall furnish Lessee with any information in such
Indemnitee's possession or control that is reasonably necessary to
file any such return, report or statement and is reasonably requested
in writing by Lessee. Lessee shall either file such report, return or
statement and send a copy of such report, return or statement to such
Indemnitee, and Owner Trustee if the Indemnitee is not Owner Trustee,
or, where Lessee is not permitted to file such report, return or
statement, it shall notify such Indemnitee of such requirement and
prepare and deliver such report, return or statement to such
Indemnitee in a manner satisfactory to such Indemnitee within a
reasonable time prior to the time such report, return or statement is
to be filed.
(vii) Forms. Each Indemnitee agrees to furnish from time to
time to Lessee or Loan Trustee or to such other person as Lessee or
Loan Trustee may designate, at Lessee's or Loan Trustee's request,
such duly executed and properly completed forms as may be necessary or
appropriate in order to claim any reduction of or exemption from any
withholding or other Tax imposed by any Taxing Authority, if (x) such
reduction or exemption is available to such Indemnitee and (y) Lessee
has provided such Indemnitee with any information necessary to
complete such form not otherwise reasonably available to such
Indemnitee.
(viii) Non-Parties. If a Indemnitee is not a party to this
Agreement, Lessee may require the Indemnitee to agree in writing, in a
form reasonably acceptable to Lessee, to the terms of this Section
6(b) prior to making any payment to such Indemnitee under this Section
6(b).
(ix) Subrogation. Upon payment of any Tax by Lessee pursuant to
this Section 6(b) to or on behalf of a Indemnitee, Lessee, without any
further action, shall be subrogated to any claims that such Indemnitee
may have relating thereto. Such Indemnitee shall cooperate with Lessee
(to the extent such cooperation does not result in any unreimbursed
cost, expense or liability to such Indemnitee) to permit Lessee to
pursue such claims.
(x) Foreign Tax On Loan Payments. If an Owner Participant is
incorporated or organized, or maintains a place of business or
conducts activities in, a country other than the United States or in a
territory, possession or commonwealth of the United States (within the
meaning of the tax law of that foreign jurisdiction) and if as a
result thereof any foreign Taxes (including withholding Taxes) are
imposed on the Pass Through Trustees, Pass Through Trusts, or
Certificate Holders, then Owner Participant shall reimburse Lessee for
any payments Lessee is required to make to or on behalf of any Pass
Through Trustee, Pass Through Trust, or Certificate Holder under this
Section 6(b) as a result of the imposition of such Taxes. The amount
payable by Owner Participant to Lessee shall be an amount which, after
taking into account any such Taxes, any Tax imposed upon the receipt
or accrual by Lessee of such payment by Owner Participant and any tax
benefits or tax savings realized by Lessee with respect to the payment
of such withholding Tax or the payment hereunder, shall equal the
amount of Lessee's payment to or on behalf of such Pass Through
Trustee, or Certificate Holder.
(xi) Income Tax. For purposes of this Section 6, the term Income
Tax means any Tax based on or measured by or with respect to gross or
net income or gross or net receipts (including, without limitation,
capital gains taxes, branch profit taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes, estate taxes,
minimum taxes, any withholding taxes on, based on or measured by gross
or net income or receipts and taxes on tax preference items)
(including in each case other than sales, use, license or property
Taxes) and Taxes which are capital, doing business, franchise, excess
profits, net worth taxes and interest, additions to tax, penalties or
other charges in respect thereof.
(c) General Indemnity. Lessee hereby agrees to indemnify each
Indemnitee against, and agrees to protect, save and keep harmless each of
them from (whether or not the transactions contemplated herein or in any of
the other Operative Documents are consummated), any and all Expenses
imposed on, incurred by or asserted against any Indemnitee, in any way
relating to, based on or arising out of (A) the execution, delivery and
performance of the Operative Documents or the Pass Through Documents and
the transactions contemplated thereby; (B) the manufacture, purchase,
acceptance or rejection of the Airframe or any Engine or Parts; (C) the
Aircraft (or any portion thereof) or any engine installed on the Airframe
or any airframe on which an Engine is installed whether or not arising out
of the manufacture, purchase, registration, reregistration, financing,
refinancing, ownership, delivery, nondelivery, inspection, lease, sublease,
possession, storage, use or non-use, operation, maintenance, overhaul,
modification, alteration, condition, replacement, repair, substitution,
sale, return or other disposition of the Aircraft including, without
limitation, any violation of law relating to the Aircraft (including
environmental laws), latent or other defects, whether or not discoverable,
strict tort liability and any claim for patent, trademark or copyright
infringement; (D) the offer or sale of any interest in the Trust Estate or
the Trust Agreement or any similar interest on or prior to the Delivery
Date (including any violation of securities laws or ERISA); or (E) the
offer or sale of any interest in the Equipment Notes or the Pass Through
Certificates (or other evidence of the debt relating to the Aircraft) on
the Delivery Date or in connection with a refinancing in accordance with
the terms hereof (including any violation of securities laws or ERISA);
provided, that the foregoing indemnity shall not extend to an Indemnitee
with respect to any Expense to the extent such Expense is attributable to
one or more of the following: (1) any representation or warranty by such
Indemnitee in the Operative Documents or the Pass Through Documents being
incorrect, or (2) the failure by such Indemnitee to perform or observe any
of its agreements, covenants or conditions in any of the Operative
Documents or the Pass Through Documents, or (3) the willful misconduct or
the gross negligence of such Indemnitee, or (4) (A) in the case of any
Indemnitee, the offer, sale or other disposition (voluntary or involuntary)
by such Indemnitee of all or any part of its interest in the Airframe or
any Engine (other than during the continuance of a Lease Event of Default
or pursuant to and in accordance with Sections 9, 10, 15 or 19 of the
Lease), (B) in the case of a Certificate Holder, the offer, sale or other
disposition (voluntary or involuntary) by such Certificate Holder of all or
any part of its interest in any Equipment Note or (C) in the case of any
Indemnitee, the offer, sale or other disposition by such Indemnitee of all
or any part of such Indemnitee's interest in the Operative Documents, or
(5) any Tax (other than taxes under ERISA or Section 4975 of the Code)
whether or not Lessee is required to indemnify for such Tax pursuant to
Section 6(b) hereof (it being understood that Section 6(b) hereof and the
Tax Indemnity Agreement exclusively provide for Lessee's liability with
respect to Taxes), or (6) in the case of the Owner Participant, the offer
or sale by the Owner Participant after the Delivery Date of any interest in
the Trust Estate or the Trust Agreement or any similar interest except
during the continuance of an Event of Default so long as such disposition
is made in accordance with Section 7(k), or (7) in the case of the Owner
Trustee in its individual and trust capacities, and the Affiliates,
successors and assigns thereof, a failure on the part of the Owner Trustee
to distribute in accordance with the Trust Agreement any amounts
distributable by it thereunder, or (8) in the case of the Indenture Trustee
in its individual and trust capacities, failure on the part of the
Indenture Trustee to distribute in accordance with the Trust Indenture any
amounts distributable by it thereunder, or (9) in the case of any Pass
Through Trustee, failure on the part of such Pass Through Trustee or the
Subordination Agent to distribute in accordance with the Intercreditor
Agreement and the Pass Through Trust Agreement amounts received and
distributable thereunder, or (10) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents which amendments, supplements,
waivers or consents (a) are not or were not requested by Lessee or (b) are
not occasioned by a specific requirement of the Operative Documents, or
(11) except to the extent fairly attributable to acts or events occurring
during the Term or actions taken (or required to be taken and not taken)
during the Term, actions taken (or required to be taken and not taken) or
events occurring after the earlier of: (I) the return of possession of the
Aircraft to the Owner Trustee or its designee pursuant to the terms of the
Lease (other than pursuant to and in accordance with Section 15 thereof, in
which case Lessee's liability under this Section 6(c) shall survive for so
long as Lessor shall be entitled to exercise remedies under such Section
15), (II) the termination of the Term in accordance with Section 9 of the
Lease, (III) the payment by Lessee of all amounts required to be paid under
the Lease following an Event of Loss or (IV) termination of the Lease and
payment by Lessee of all amounts required to be paid by Lessee pursuant to
the terms of the Operative Documents or (12) any amount which any
Indemnitee expressly agrees to pay under any Operative Document or any
amount which is expressly stated to be an Expense that is not reimbursable
by Lessee under the Operative Documents, or (13) any amount that is an
ordinary and usual operating or overhead expense of any Indemnitee (it
being understood out-of-pocket expenses payable to third parties do not
constitute "ordinary and usual operating and overhead expenses"), or (14)
any amounts relating to the deregistration with the FAA of the Aircraft as
a result of the Owner Participant or the Owner Trustee, as the case may be,
not being a Citizen of the United States or any other act or omission of
the Owner Trustee, the Owner Participant or such Indemnitee, or (15) any
amounts attributable to any Lien which such Indemnitee is required to
remove pursuant to the terms of the Operative Documents or the Pass Through
Documents, or (16) any loss of tax benefits or increases in tax liability
whether or not the Lessee is required to indemnify an Indemnitee elsewhere
in the Operative Documents, or (17) principal of, or interest or premium on
the Equipment Notes, or (18) any prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975(c)(1) of the Code, occurring with
respect to the purchase or holding of any Pass Through Certificate (i) over
which purchase or holding the Owner Participant or any Affiliate thereof
has discretion or control (other than in the capacity of a directed trustee
or custodian), or (ii) by an employee benefit plan, within the meaning of
Section 3(3) of ERISA, or individual retirement account or plan subject to
Section 4975 of the Code with respect to which the Owner Participant (or
any Affiliate thereof) has the power, directly or indirectly, to appoint or
terminate, or to negotiate the terms of the management agreement with, the
person or persons having discretion or control (other than in the capacity
of a directed trustee or custodian), over such purchase or holding.
Lessee's indemnity obligation to an Indemnitee under this Section
6(c) shall equal the amount which, after taking into account any Tax
imposed upon the receipt or accrual of the amounts payable under this
Section 6(c) and any tax benefits realized by such Indemnitee as a result
of the accrual or payment of such Expense shall equal the amount of the
Expense indemnifiable under this Section 6(c).
If any Indemnitee shall realize a tax savings by reason of any
Tax paid or indemnified by Lessee pursuant to this Section 6(c) (whether
such tax savings shall be by means of a foreign tax credit, depreciation or
cost recovery deduction or otherwise) and such savings is not otherwise
taken into account in computing such payment or indemnity such Indemnitee
shall pay to Lessee an amount equal to the lesser of (i) the amount of such
tax savings, plus any additional tax savings recognized as the result of
any payment made pursuant to this sentence, when, as if, and to the extent,
realized or (ii) the amount of all payments pursuant to this Section 6(c)
by Lessee to such Indemnitee (less any payments previously made by such
Indemnitee to Lessee pursuant to this Section 6(c)) (and the excess, if
any, of the amount described in clause (i) over the amount described in
clause (ii) shall be carried forward and applied to reduce pro tanto any
subsequent obligations of Lessee to make payments to such Indemnitee
pursuant to this Section 6(c)).
Nothing in this Section 6(c) shall be construed as a guaranty by
Lessee of payments due pursuant to the Equipment Notes or of the residual
value of the Aircraft.
If a claim is made against an Indemnitee involving one or more
Expenses and such Indemnitee has notice thereof, such Indemnitee shall
promptly after receiving such notice give notice of such claim to Lessee;
provided that the failure to give such notice shall not affect the
obligations of Lessee hereunder except to the extent Lessee is prejudiced
by such failure or the Lessee's indemnification obligations are increased
as a result of such failure. If no Lease Event of Default shall have
occurred and be continuing, Lessee shall be entitled, at its sole cost and
expense, acting through counsel reasonably acceptable to the respective
Indemnitee, (A) in any judicial or administrative proceeding that involves
solely a claim for one or more Expenses, to assume responsibility for and
control thereof, (B) in any judicial or administrative proceeding involving
a claim for one or more Expenses and other claims related or unrelated to
the transactions contemplated by the Operative Documents, to assume
responsibility for and control of such claim for Expenses to the extent
that the same may be and is severed from such other claims (and such
Indemnitee shall use its best efforts to obtain such severance), and (C) in
any other case, to be consulted by such Indemnitee with respect to judicial
proceedings subject to the control of such Indemnitee and to be allowed, at
Lessee's sole expense, to participate therein. Notwithstanding any of the
foregoing to the contrary, Lessee shall not be entitled to assume
responsibility for and control of, or participate in or be consulted with
respect to any such judicial or administrative proceedings if such
proceedings will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on, the
Aircraft, the Trust Estate, the Trust Indenture Estate or any part thereof
unless in such an event Lessee shall have posted a bond or other security
satisfactory to the relevant Indemnitees in respect to such risk. The
Indemnitee may participate at its own expense and with its own counsel in
any judicial proceeding controlled by Lessee pursuant to the preceding
provisions.
The affected Indemnitee shall supply Lessee with such information
reasonably requested by Lessee as is necessary or advisable for Lessee to
control or participate in any proceeding to the extent permitted by this
Section 6(c). Such Indemnitee shall not enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Lessee, which consent shall not be unreasonably withheld or delayed, unless
such Indemnitee waives its right to be indemnified with respect to such
Expense under this Section 6(c).
The Lessee shall supply the Indemnitee with such information
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent
permitted by this Section 6(c).
Upon payment of any Expense pursuant to this Section 6(c),
Lessee, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give such
further assurances or agreements and to cooperate with Lessee to permit
Lessee to pursue such claims, if any, to the extent reasonably requested by
Lessee.
If an Indemnitee is reimbursed, in whole or in part, with respect
to any Expense paid by Lessee hereunder, it will promptly pay the amount
refunded, including interest received thereto (but not an amount in excess
of the amount Lessee or any of its insurers has paid in respect of such
Expense pursuant to this Section 6(c)) over to Lessee.
To the extent permitted by applicable law, interest at the Base
Rate plus one percent (1.0%) shall be paid, on demand, on any amount or
indemnity not paid when due pursuant to this Section 6 until the same shall
be paid. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
Any amount which is payable to Lessee by any Person pursuant to
this Section 6 shall not be paid to Lessee if a Lease Event of Default has
occurred and is continuing or if any payment is due and owing by Lessee to
such Person under the Lease or any other Operative Document. Any such
amount shall be held by such Person (the Lessee hereby granting a security
interest in such amount to such Person) and, if a Lease Event of Default
shall have occurred and be continuing, shall be applied against Lessee's
obligations hereunder to such Person as and when due (and, to the extent
that Lessee has no obligations hereunder to such Person, such amount shall
be paid to Lessee). At such time as there shall not be continuing any such
Lease Event of Default or there shall not be due and owing any such
payment, such amount shall be paid to Lessee to the extent not previously
applied in accordance with the immediately preceding sentence.
(d) Special Indemnity. If a Class C Special Indemnity Event
shall be continuing at any time during any Lease Period, then on the last
day of such Lease Period, Lessee shall pay to the Pass Through Trustee on
behalf of the US Airways Pass Through Trust 1998-C the amount which has
accrued during such Lease Period in accordance with the following sentence
and which remains unpaid on such Lease Period Date (such amount, the "Class
C Special Indemnity Payment"). The Class C Special Indemnity Payment shall
accrue during each Lease Period at a daily rate equal to the Multiplier, in
effect from time to time during such Lease Period, multiplied by the
aggregate principal amount of the Series C Equipment Notes outstanding on
such date divided by 360. The Pass Through Trustee agrees that it will
accept and receive the Class C Special Indemnity Payment on behalf of the
US Airways Pass Through Trust 1998-C and that it will distribute the Class
C Special Indemnity Payment in accordance with the Trust Agreement for the
US Airways Pass Through Trust 1998-C.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Covenants Regarding Citizenship. Each of the Owner
Participant and First Security Bank, National Association, in its
individual capacity, represents and warrants to the other parties to this
Agreement that it is, and on the Delivery Date will be, a Citizen of the
United States without making use of any voting trust, voting powers
agreement or similar arrangement. The Owner Participant agrees, solely for
the benefit of Lessee and the Loan Participants, that if (i) it shall cease
to be, or believes itself likely to cease to be, a Citizen of the United
States and (ii) the Aircraft shall or would therefore become ineligible for
registration in the name of the Owner Trustee under the Transportation Code
and regulations then applicable thereunder, then the Owner Participant
shall (at its own expense and without any reimbursement or indemnification
from Lessee) as soon as practicable, but in any event within 60 days of
obtaining knowledge of such ineligibility or loss of citizenship effect a
voting trust, voting powers agreement or other similar arrangement or take
any other action as may be necessary to prevent any deregistration and to
maintain the United States registration of the Aircraft. It is agreed
that: (A) the Owner Participant shall be liable to pay on request to each
of the other parties hereto and to each holder of a Equipment Note for any
damages suffered by any such other party or holder as the result of the
representation and warranty of the Owner Participant in the first sentence
of this Section 7(a) proving to be untrue as of the Delivery Date; and (B)
the Owner Participant shall be liable to Lessee, any Sublessee and the Loan
Participants for any damages which may be incurred by Lessee, any Sublessee
or the Loan Participants as a result of the Owner Participant's failure to
comply with its obligations pursuant to the second sentence of this Section
7(a). Each party hereto agrees, upon the request and at the sole expense
of the Owner Participant, to cooperate with the Owner Participant in
complying with its obligations under the provisions of the second sentence
of this Section 7(a). First Security Bank, National Association, in its
individual capacity, agrees that if at any time an officer or responsible
employee of the Corporate Trust Department of First Security Bank, National
Association, shall obtain actual knowledge that First Security Bank,
National Association, has ceased to be a Citizen of the United States
without making use of a voting trust, voting powers agreement or similar
arrangement, it will promptly resign as Owner Trustee (if and so long as
such citizenship is necessary under the Transportation Code as in effect at
such time or, if it is not necessary, if and so long as the Owner Trustee's
citizenship would have any material adverse effect on the Loan
Participants, Lessee or the Owner Participant), effective upon the
appointment of a successor Owner Trustee in accordance with Section 9.01 of
the Trust Agreement. If the Owner Participant or First Security Bank,
National Association, in its individual capacity, does not comply with the
requirements of this Section 7(a), the Owner Trustee, the Indenture Trustee
and the Participants hereby agree that a Lease Default or Lease Event of
Default shall not have occurred and be continuing due to non-compliance by
Lessee with the registration requirements in the Lease.
(b) Location of Records. First Security Bank, National
Association, in its individual capacity, agrees that it will not change
the location of its principal place of business or the office where it
maintains its books and records with respect to the Aircraft and the Trust
Estate to a location outside of Salt Lake City, Utah, without prior written
notice to all parties.
(c) Securities Act. Each Loan Participant represents and
warrants that neither it nor anyone acting in its behalf has offered any
Equipment Notes for sale to, or solicited any offer to buy any Equipment
Note from, any person or entity other than in a manner in compliance with,
and which does not require registration under, the Securities Act or the
rules and regulations thereunder.
(d) Reregistration. The Owner Participant, the Indenture
Trustee, the Pass Through Trustee and each Loan Participant agree that, at
any time after the Depreciation Period, so long as no Lease Event of
Default shall have occurred and be continuing, Lessee may elect to effect a
change in registration of the Aircraft, at Lessee's cost and expense, so
long as the country of registry of the Aircraft is a country listed on
Exhibit A. Upon the request of the Lender, Exhibit A shall be amended from
time to time to include any other country which the Owner Participant and
the Indenture Trustee have determined, acting reasonably, would provide
substantially equivalent protection for the rights of owner participants,
lessors or lenders in similar transactions as provided under the laws of
the United States and the states thereof. In order for Lessee to effect a
change in the country of registry of the Aircraft, Lessee shall deliver to
the Owner Participant, the Owner Trustee (in its individual capacity) and
the Indenture Trustee the following:
(I) an Officer's Certificate to the effect that (A) the insurance or
self-insurance required by Section 11 of the Lease shall be in
full force and effect at the time of such change in registration
after giving effect to such change in registration, (B) all
indemnities in favor of the Owner Participant, the Owner Trustee
(in its individual capacity and as trustee under the Trust
Agreement) and the Indenture Trustee under any Operative Document
afford each such party substantially the same protection as
provided prior to such change of registry, (C) the lien of the
Trust Indenture in favor of the Trustee will continue as a first
priority lien following such change of registry, (D) such change
will not result in the imposition of, or increase in the amount
of, any Tax for which Lessee is not required to indemnify, or is
not then willing to enter into a binding agreement to indemnify,
the Owner Participant, the Certificate Holders, the Indenture
Trustee, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee or the
Trust Estate pursuant to this Agreement or the Tax Indemnity
Agreement, and (E) that the new country of registry imposes
aircraft maintenance standards not materially less stringent from
those of any Permitted Foreign Air Authority; and
(II) a favorable opinion (subject to customary exceptions) of counsel
(opinion and counsel reasonably acceptable to the Owner
Participant) addressed to the Owner Participant and the Indenture
Trustee, from counsel of recognized reputation qualified in the
laws of the relevant jurisdiction to the effect that: (A) the
obligations of Lessee, and the rights and remedies of the Owner
Trustee, under the Lease shall remain valid, binding and (subject
to customary bankruptcy and equitable remedies exceptions and to
other exceptions customary in foreign opinions generally)
enforceable under the laws of such jurisdiction (or the laws of
the jurisdiction to which the laws of such jurisdiction would
refer as the applicable governing law); (B) it is not necessary,
solely as a consequence of such change in registration and
without giving effect to any other activity of the Owner Trustee,
the Owner Participant or the Indenture Trustee (or any Affiliate
thereof), as the case may be, for the Owner Trustee, the Owner
Participant or the Indenture Trustee to register or qualify to do
business in such jurisdiction; (C) there is no tort liability of
the owner of an aircraft not in possession thereof under the laws
of such jurisdiction (it being agreed that, in the event such
latter opinion cannot be given in a form satisfactory to the
Owner Participant, such opinion shall be waived if insurance
reasonably satisfactory to the Owner Participant is provided to
cover such risk); (D) unless Lessee shall have agreed to provide
insurance covering the risk of requisition of use of such
Aircraft by the government of such jurisdiction so long as such
Aircraft is registered under the laws of such jurisdiction, the
laws of such jurisdiction require fair compensation by the
government of such jurisdiction payable in currency freely
convertible into Dollars for the loss of use of such Aircraft in
the event of the requisition by such government of such use; and
(E) after giving effect to such change in registration, the Lien
of the Trust Indenture on the Owner Trustee's right, title and
interest in and to the Aircraft and the Lease shall continue as a
valid and duly perfected first priority security interest and all
filing, recording or other action necessary to protect the same
shall have been accomplished (or, if such opinion cannot be given
at the time of such proposed change in registration because such
change in registration is not yet effective, (1) the opinion
shall detail what filing, recording or other action is necessary,
and (2) the Owner Trustee and the Indenture Trustee shall have
received a certificate from Lessee that all possible preparations
to accomplish such filing, recording and other action shall have
been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be
delivered to the Owner Trustee and the Indenture Trustee on or
prior to the effective date of such change in registration).
Upon receipt of the foregoing certificate and opinion, the Owner
Participant and the Indenture Trustee will instruct the Owner Trustee to
make such change of registration.
Lessee shall pay all reasonable costs, expenses, fees, recording
and registration taxes, including the reasonable fees and expenses of
counsel to the Owner Trustee, the Owner Participant and the Indenture
Trustee, and other charges in connection with any such change in
registration.
(e) Owner Participant Representations and Warranties. The Owner
Participant represents and warrants to Lessee, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Trustee, in its capacity as such and in
its individual capacity, as follows:
(i) it is duly incorporated, validly existing and in good
standing under the laws of the State of __________ and has the
corporate power and authority to carry on its present business and
operations and to own or lease its properties, and has the corporate
power and authority to enter into and to perform its obligations under
the Owner Participant Documents; this Agreement and the other Owner
Participant Documents have been duly authorized, executed and
delivered by it; and this Agreement and each of the other Owner
Participant Documents constitute the legal, valid and binding
obligations of the Owner Participant enforceable against it in
accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors generally and
by general principles of equity, whether considered in a proceeding at
law or in equity; [and the Owner Participant is a Qualified Owner
Participant;(1) ]
----------------------
(1) Not applicable to transactions with Xxxx Xxxxxxx
Leasing Corporation or MarCap Corporation.
(ii) neither (A) the execution and delivery by the Owner
Participant of the Owner Participant Documents nor (B) compliance by
it with all of the provisions thereof, (x) will contravene any law or
order of any court or governmental authority or agency applicable to
or binding on the Owner Participant (it being understood that no
representation or warranty is made with respect to laws, rules or
regulations relating to aviation or to the nature of the equipment
owned by the Owner Trustee other than such laws, rules or regulations
relating to the citizenship requirements of the Owner Participant
under applicable law), or (y) will contravene the provisions of, or
constitutes or has constituted or will constitute a default under, or
result in the creation of any Lien (other than Liens provided for in
the Operative Documents) upon any property of the Owner Participant
under, its certificate of incorporation or by-laws or any indenture,
mortgage, contract or other agreement or instrument to which the Owner
Participant is a party or by which it or any of its property may be
bound or affected;
(iii) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body (other than as required by the Transportation Code or the
regulations promulgated thereunder) is required for the due execution,
delivery or performance by it of the Owner Participant Documents;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings before any court or administrative agency or
arbitrator which would materially adversely affect the Owner
Participant's ability to perform its obligations under this Agreement,
the Participation Agreement, the Tax Indemnity Agreement and the Trust
Agreement;
(v) neither the Owner Participant nor anyone authorized by it to
act on its behalf (it being understood that in proposing, facilitating
and otherwise taking any action in connection with the financing
contemplated hereby and agreed to herein by the Owner Participant,
Lessee has not acted as agent of the Owner Participant) has directly
or indirectly offered any Equipment Note or Pass Through Trust
Certificate or any interest in and to the Trust Estate, the Trust
Agreement or any similar interest for sale to, or solicited any offer
to acquire any of the same from, any Person; the Owner Participant's
interest in the Trust Estate and the Trust Agreement is being acquired
for its own account and is being purchased for investment and not with
a view to any resale or distribution thereof;
(vi) on the Delivery Date, the Trust Estate shall be free of
Lessor Liens attributable to the Owner Participant; and
(vii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangement).
(f) Lessor Liens. Each of First Security Bank, National
Association, in its individual capacity, and the Owner Participant
covenants and agrees that it shall not cause or permit to exist a Lessor
Lien attributable to it with respect to the Aircraft or any other portion
of the Trust Estate. Each of First Security Bank, National Association, in
its individual capacity, and the Owner Participant agrees that it will
promptly, at its own expense, take such action as may be necessary duly to
discharge such Lessor Lien attributable to it. Each of First Security
Bank, National Association, in its individual capacity, and the Owner
Participant agrees to make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from Lessor Liens
attributable to it. The Owner Participant agrees to make restitution to
the Trust Estate for any actual diminution of the assets of the Trust
Estate resulting from any Taxes or Expenses imposed on the Trust Estate
against which Lessee is not required to indemnify the Trust Estate pursuant
to Section 6.
(g) Quiet Enjoyment. Each Loan Participant and each of the
Indenture Trustee, the Subordination Agent, the Owner Trustee, the Pass
Through Trustee and the Owner Participant covenants and agrees that, so
long as no Lease Event of Default shall have occurred and be continuing and
the Lessee has not been duly declared in default and, notwithstanding
default by any Loan Participant, the Indenture Trustee, the Owner Trustee,
the Pass Through Trustee or the Owner Participant, that such Person shall
not (and shall not permit any Affiliate or other Person claiming by,
through or under it to) interfere with Lessee's (or any Sublessee's)
continued possession, use and operation of, and quiet enjoyment of, the
Aircraft or Lessee's rights, benefits and obligations pursuant to the
Transactions during the Term of the Lease, and the Lease shall not be
terminated except as expressly provided therein.
(h) Equipment Notes Acquired for Investment. Each Loan
Participant represents and warrants that the Equipment Note to be issued to
it pursuant to the Trust Indenture is being acquired by it for investment
and not with a view to resale or distribution (it being understood that
such Loan Participant may pledge or assign as security its interest in each
Equipment Note issued to it), except that the Loan Participants may sell,
transfer or otherwise dispose of any Equipment Note or any portion thereof,
or grant participations therein, in a manner which in itself does not
require registration under the Securities Act.
(i) [Reserved.]
(j) Representations, Warranties and Covenants of Indenture
Trustee. State Street Bank and Trust Company represents, warrants (as of
the Delivery Date) and covenants, in its individual capacity, to Lessee,
the Owner Trustee, the Pass Through Trustee, the Subordination Agent, the
Liquidity Provider and the Owner Participant as follows:
(i) the Indenture Trustee is a Massachusetts trust company duly
incorporated, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, is a Citizen of the United States
(without making use of any voting trust, voting powers agreement or
similar arrangement), will notify promptly all parties to this
Agreement if in its reasonable opinion its status as a Citizen of the
United States (without making use of any voting trust, voting powers
agreement or similar arrangement) is likely to change and will resign
as Indenture Trustee as provided in Section 8.02 of the Trust
Indenture promptly after it obtains actual knowledge that it has
ceased to be such a Citizen of the United States (without making use
of a voting trust, voting powers agreement or similar arrangement),
and has the full corporate power, authority and legal right under the
laws of the Commonwealth of Massachusetts and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver each of this Agreement, the Trust Indenture and each other
Operative Document to which it is a party and to carry out its
obligations under this Agreement, the Trust Indenture, each other
Operative Document to which it is a party and to authenticate the
Equipment Notes;
(ii) the execution and delivery by the Indenture Trustee of the
Indenture Trustee Documents and the authentication of the Equipment
Notes and the performance by the Indenture Trustee of its obligations
under the Indenture Trustee Documents have been duly authorized by the
Indenture Trustee and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or
other agreement to which it is a party or by which it is bound;
(iii) this Agreement and each of the other Indenture Trustee
Documents constitute the legal, valid and binding obligations of the
Indenture Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iv) there are no pending or, to its knowledge, threatened
actions or proceedings against the Indenture Trustee, either in its
individual capacity or as Indenture Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Indenture Trustee, in
its individual capacity or as Indenture Trustee as the case may be, to
perform its obligations under the Operative Documents to which it is a
party; and
(v) there are no Indenture Trustee Liens on the Aircraft or any
portion of the Trust Estate.
(k) Owner Participant Transfers. So long as the Aircraft shall
be leased to the Lessee under the Lease, the Owner Participant will not,
directly or indirectly, sell, assign, convey or otherwise transfer any of
its right, title or interest in and to this Agreement, the Trust Estate or
the Trust Agreement or any proceeds therefrom to any person or entity,
unless (i) the proposed transferee is a "Transferee" (as defined below),
(ii) Lessee shall have (1) received an opinion (in form and substance
reasonably satisfactory to Lessee) of counsel to the Owner Participant (who
shall be reasonably satisfactory to Lessee) to the effect that such
transfer will not result in any risk of loss of tax benefits to, or any
increase in the tax liability of, Lessee and (2) received from the Owner
Participant so seeking to transfer such right, title or interest reasonably
satisfactory indemnification for any loss of tax benefits to, and increase
in the tax liability of, Lessee, and (iii) the Owner Participant sells,
assigns, conveys or otherwise transfers all of its right, title and
interest in and to this Agreement, the Trust Estate, the Trust Agreement
and the proceeds therefrom to a single entity. A "Transferee" shall mean
either (A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least $50,000,000 or a corporation
whose tangible net worth is at least $50,000,000, exclusive of goodwill, in
either case as of the proposed date of such transfer, as determined in
accordance with generally accepted accounting principles, or (B) any
subsidiary of such a bank, financial institution or corporation, provided
that such bank, financial institution or corporation furnishes to the Owner
Trustee, the Indenture Trustee and Lessee a guaranty with respect to the
Owner Participant's obligations under the Operative Documents to which the
Owner Participant is a party in form and substance reasonably satisfactory
to Lessee, the Owner Trustee, and the Indenture Trustee, or (C) is an
affiliate of the Owner Participant and the Owner Participant agrees to
remain liable for all obligations of the Owner Participant under the
Operative Documents; provided, further, that any Transferee shall not be an
airline, a commercial aircraft operator, an air freight forwarder, an
entity engaged in the business of parcel transport by air or other similar
Person or an Affiliate thereof. Each such transfer to a Transferee shall
be subject to the conditions that (S) upon giving effect to such transfer,
the Transferee is a Citizen of the United States (without making use of a
voting trust agreement, voting powers agreement or other similar
arrangement unless approved by Lessee), and has full power and authority to
enter into the transactions contemplated hereby, (T) the Transferee has the
requisite power and authority to enter into and carry out the transactions
contemplated hereby and such Transferee shall have delivered to Lessee, the
Owner Trustee and the Indenture Trustee an opinion of counsel in form and
substance reasonably satisfactory to Lessee and the Owner Trustee as to the
due authorization, delivery, legal, valid and binding effect and
enforceability of the agreement or agreements referred to in the next
clause with respect to the Transferee and any guaranty provided pursuant to
the provisions of this Section 7(k) as to the guarantor, (U) the Transferee
enters into an agreement or agreements, in form and substance reasonably
satisfactory to the Owner Trustee and Lessee, whereby the Transferee
confirms that it shall be deemed a party to this Agreement and a party to
the Trust Agreement and agrees to be bound by all the terms of, and to
undertake all of the obligations of the transferor Owner Participant
contained in, the Owner Participant Documents (to the extent of the
participation so transferred to it) and makes the representations and
warranties made by the Owner Participant thereunder, (V) such transfer does
not affect registration of the Aircraft under the Transportation Code, or
any rules or regulations promulgated thereunder or create a relationship
which would be in violation thereof or violate any provision of the
Securities Act or any other applicable Federal or state law and the Lessee
shall be entitled to require an opinion of counsel to such effect, (W) the
transferor Owner Participant assumes the risk of any adverse tax
consequences with respect to the true lease nature of the transaction
(including, without limitation, loss of depreciation and amortization
deductions and interest deductions resulting from such transfer, (X) the
transferor Owner Participant pays all of the reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of
counsel) incurred in connection with such transfer, including the
reasonable costs and expenses of the Owner Trustee, the Indenture Trustee,
Lessee and the Loan Participants in connection therewith without the right
of indemnification or reimbursement by Lessee, (Y) the terms of the
Operative Documents and the Transactions shall not be altered and (Z) such
transfer will not give rise to a Default under the Trust Indenture or an
Indenture Event of Default. Upon any such transfer by the Owner
Participant as above provided, the Transferee shall be deemed the Owner
Participant for all purposes hereof and of the other Operative Documents
and each reference herein to the transferor Owner Participant shall
thereafter be deemed for all purposes to be to the Transferee and the
transferor Owner Participant shall be relieved of all obligations of the
transferor Owner Participant under the Owner Participant Documents arising
after the date of such transfer except to the extent fully attributable to
or arising out of acts or events occurring prior thereto and not assumed by
the Transferee. If the Owner Participant intends to transfer any of its
interests hereunder, it shall give thirty (30) days prior written notice
thereof to the Indenture Trustee, the Owner Trustee and Lessee, specifying
the name and address of the proposed Transferee and providing the financial
statements of such proposed Transferee.
(l) Reserved.
(m) Compliance with Trust Indenture. First Security Bank,
National Association, and State Street Bank and Trust Company, each in its
individual capacity, agrees for the benefit of Lessee to comply with the
terms of the Trust Indenture which it is required to comply with in its
individual capacity.
(n) ERISA Matters. The Owner Participant represents and
warrants as of the Delivery Date that it is not acquiring or holding its
interest in the Trust Estate, any Equipment Note or any interests
represented thereby with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA or of any "plan" within the meaning of
Section 4975(e)(1) of the Code, including, without limitation, as
applicable, an insurance company general account ("Plan Accounts"). Each
Loan Participant agrees that it will not transfer any Equipment Note (or
any part thereof) to any entity (except pursuant to Section 2.14 of the
Trust Indenture) unless such entity makes (or is deemed to have made) a
representation and warranty as of the date of transfer that either no part
of the funds to be used by it for the purchase and holding of such
Equipment Note (or any part thereof) constitutes Plan Assets or that such
purchase and holding will not control or result in a prohibited transaction
(as defined in Section 4975 of the Code and ERISA). The Owner Participant
agrees that it will not transfer any of its right, title or interest in and
to this Agreement, the Trust Estate or the Trust Agreement or any proceeds
therefrom to any entity unless such entity makes (or is deemed to have
made) a representation and warranty as of the date of transfer that either
no part of the funds to be used by it for the purchase of such right, title
and interest (or any part thereof) constitutes assets of any "employee
benefit plan" or that such transfer will not result in a prohibited
transaction (as defined in Section 4975 of the Code and ERISA). The Pass
Through Trustee agrees that it will not agree to any amendment,
modification or waiver of Section 1.01(e)(1) of the initial supplement to
each Pass Through Trust Agreement without the prior written consent of the
Owner Participant.
(o) Confidentiality of Purchase Agreement. Each Participant,
the Owner Trustee and the Indenture Trustee agrees for the benefit of the
Manufacturer and Lessee that it will not disclose or suffer to be disclosed
the terms of the Purchase Agreement to any third party except (A) as may be
required by any applicable statute, court or administrative order or decree
or governmental ruling or regulation or to any regulatory authorities
having official jurisdiction over them, (B) in connection with the
financing of the Aircraft and the other transactions contemplated by the
Operative Documents (including any transfer of Equipment Notes (including
by way of participation or assignment of an interest, provided such
participant or assignee agrees to hold such terms confidential to the same
extent as herein provided) or the Owner Participant's beneficial interest
in the Trust Estate and any exercise of remedies under the Lease and the
Trust Indenture), (C) with the prior written consent of the Manufacturer
and Lessee, (D) to the Owner Trustee's, the Indenture Trustee's and each
Participant's counsel or special counsel, independent insurance brokers or
other agents who agree to hold such information confidential, or (E) in the
case of the Owner Participant and/or the Owner Trustee, it may disclose so
much of the Purchase Agreement as has been assigned to the Owner Trustee
under the Purchase Agreement Assignment to bona fide potential purchasers
of the Aircraft.
(p) Margin Regulations. The Owner Trustee and the Owner
Participant severally, not jointly, represent and warrant, as of the
Delivery Date that none of the funds made available by the Pass Through
Trustee pursuant to Section 1 hereof will be used for the purpose of
purchasing or carrying any "margin security" as defined in Regulation U of
the Board of Governors of the Federal Reserve System or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry such margin security or for any other purpose which might
cause the transaction contemplated by this Agreement to constitute a
"purpose credit" within the meaning of Regulation X of the Board of
Governors of the Federal Reserve System, assuming that the proceeds were
and are applied as contemplated by the provisions of this Agreement.
(q) Loan Participant Liens. Each Loan Participant covenants and
agrees that it shall not cause or permit to exist a Loan Participant Lien
attributable to it with respect to the Aircraft or any other portion of the
Trust Estate. Each Loan Participant agrees that it will promptly, at its
own expense, take such other action as may be necessary duly to discharge
such Loan Participant Lien attributable to it. Each Loan Participant agrees
to make restitution to the Trust Estate for any actual diminution of the
assets of the Trust Estate resulting from such Loan Participant Lien
attributable to it.
(r) Indenture Trustee Liens. State Street Bank and Trust
Company, in its individual capacity, covenants and agrees that it shall not
cause or permit to exist any Indenture Trustee's Liens with respect to the
Trust Indenture Estate or the Trust Estate. State Street Bank and Trust
Company, in its individual capacity, agrees that it will promptly, at its
own expense, take such action as may be necessary duly to discharge such
Indenture Trustee's Liens. State Street Bank and Trust Company, in its
individual capacity, agrees to make restitution to the Trust Estate for any
actual diminution of the assets of the Trust Indenture Estate or the Trust
Estate resulting from such Indenture Trustee's Liens.
(s) Representations and Warranties of Owner Trustee. The Owner
Trustee, in its individual capacity (except as provided in clauses (iii)
and (vii) below) and (but only as provided in clauses (iii) and (vii) and,
to the extent that it relates to the Owner Trustee, clauses (ii), (ix) and
(xi) below) as Owner Trustee, represents and warrants to Lessee, the Pass
Through Trustee, the Subordination Agent, the Liquidity Provider and the
Owner Participant as follows:
(i) the Owner Trustee, in its individual capacity, is a national
banking association duly organized and validly existing in good
standing under the laws of the United States, has full corporate power
and authority to carry on its business as now conducted, has the
corporate power and authority to execute and deliver the Trust
Agreement, has the corporate power and authority to carry out the
terms of the Trust Agreement, and has (assuming the authorization,
execution and delivery of the Trust Agreement by the Owner
Participant), as Owner Trustee, and to the extent expressly provided
herein or therein, in its individual capacity, the corporate power and
authority to execute and deliver and to carry out the terms of this
Agreement, the Trust Indenture, the Equipment Notes, the Lease and
each other Operative Document (other than the Trust Agreement) to
which it is a party;
(ii) the Owner Trustee in its trust capacity and, to the extent
expressly provided herein, in its individual capacity, has duly
authorized, executed and delivered this Agreement, in its individual
capacity, has duly authorized, executed and delivered the Trust
Agreement and in its trust capacity, except as expressly provided
therein, has duly authorized, executed and delivered (or, in the case
of Owner Trustee Documents to be executed on the Delivery Date, will
on the Delivery Date, execute and deliver) the other Owner Trustee
Documents and (assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant) this Agreement and
each of the other Owner Trustee Documents constitutes (or, in the case
of documents to be executed and delivered on the Delivery Date, upon
execution and delivery will constitute) the legal, valid and binding
obligations of the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, enforceable against it in its
individual capacity or as Owner Trustee, as the case may be, in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, whether considered in a proceeding at
law or in equity;
(iii) assuming the due authorization, execution and delivery
of the Trust Agreement by the Owner Participant, the Owner Trustee has
duly authorized, and on the Closing Date shall have duly issued,
executed and delivered to the Indenture Trustee for authentication,
the Equipment Notes pursuant to the terms and provisions hereof and of
the Trust Indenture, and each Equipment Note on the Closing Date will
constitute the valid and binding obligation of the Owner Trustee and
will be entitled to the benefits and security afforded by the Trust
Indenture in accordance with the terms of such Equipment Note and the
Trust Indenture;
(iv) neither the execution and delivery by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may be, of
any Owner Trustee Document, nor the consummation by the Owner Trustee,
in its individual capacity or as Owner Trustee, as the case may be, of
any of the transactions contemplated thereby, nor the compliance by
the Owner Trustee, in its individual capacity or as Owner Trustee, as
the case may be, with any of the terms and provisions thereof, (A)
requires or will require any approval of its stockholders, or approval
or consent of any trustees or holders of any indebtedness or
obligations of it, or (B) violates or will violate its articles of
association or by-laws, or contravenes or will contravene any
provision of, or constitutes or will constitute a default under, or
results or will result in any breach of, or results or will result in
the creation of any Lien (other than as permitted under the Operative
Documents) upon its property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sale contract, bank loan or
credit agreement, license or other agreement or instrument to which it
is a party or by which it is bound, or contravenes or will contravene
any law, governmental rule or regulation of the United States of
America or the State of Utah governing the trust powers of the Owner
Trustee, or any judgment or order applicable to or binding on it;
(v) no consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Utah state or local governmental authority or agency
or any United States Federal governmental authority or agency
regulating the trust powers of the Owner Trustee in its individual
capacity is required for the execution and delivery of, or the
carrying out by, the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated hereby or by the Trust Agreement, the Participation
Agreement, the Trust Indenture, the Lease or the Equipment Notes, or
any other Operative Document to which it is or will be a party or by
which it is or will be bound, other than any such consent, approval,
order, authorization, registration, notice or action as has been duly
obtained, given or taken or which is described in Section 7(a)(iv);
(vi) there exists no Lessor Lien attributable to the Owner
Trustee, in its individual capacity;
(vii) there exists no Lessor Lien attributable to the Owner
Trustee, as lessor under the Lease;
(viii) there are no Taxes payable by the Owner Trustee, either
in its individual capacity or as Owner Trustee, imposed by the State
of Utah or any political subdivision thereof in connection with the
issuance of the Equipment Notes, or the execution and delivery in its
individual capacity or as Owner Trustee, as the case may be, of any of
the instruments referred to in clauses (i), (ii), (iii) and (iv)
above, that, in each case, would not have been imposed if the Trust
Estate were not located in the State of Utah and First Security Bank,
National Association had not (a) had its principal place of business
in, (b) performed (in its individual capacity or as Owner Trustee) any
or all of its duties under the Operative Documents in, and (c) engaged
in any activities unrelated to the transactions contemplated by the
Operative Documents in, the State of Utah;
(ix) there are no pending or, to its knowledge, threatened
actions or proceedings against the Owner Trustee, either in its
individual capacity or as Owner Trustee, before any court or
administrative agency which, if determined adversely to it, would
materially adversely affect the ability of the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, to
perform its obligations under any of the instruments referred to in
clauses (i), (ii), (iii) and (iv) above;
(x) both its chief executive office, and the place where its
records concerning the Aircraft and all its interests in, to and under
all documents relating to the Trust Estate, are located in Salt Lake
City, Utah;
(xi) the Owner Trustee has not, in its individual capacity or as
Owner Trustee, directly or indirectly offered any Equipment Note or
Pass Through Certificate or any interest in or to the Trust Estate,
the Trust Agreement or any similar interest for sale to, or solicited
any offer to acquire any of the same from, anyone other than the Pass
Through Trustee and the Owner Participant; and the Owner Trustee has
not authorized anyone to act on its behalf (it being understood that
in arranging and proposing the refinancing contemplated hereby and
agreed to herein by the Owner Trustee, the Lessee has not acted as
agent of the Owner Trustee) to offer directly or indirectly any
Equipment Note, any Certificate or any interest in and to the Trust
Estate, the Trust Agreement or any similar interest for sale to, or to
solicit any offer to acquire any of the same from, any person;
(xii) it is a Citizen of the United States (without making
use of a voting trust agreement, voting powers agreement or similar
arrangements);
(xiii) there has not occurred any event which constitutes (or,
to the best of its knowledge would, with the passing of time or the
giving of notice or both, constitute) an Indenture Event of Default
which has been caused by or relates to the Owner Trustee, in its
individual capacity, and which is presently continuing; and
(xiv) on the Delivery Date the Owner Trustee shall have
received whatever title to the Aircraft as was conveyed to it by
Lessee.
(t) Owner Participant Obligations on Lease Termination. The
Owner Participant covenants and agrees that if (i) Lessee has elected
pursuant to Section 9(a)(1) of the Lease to terminate the Lease by causing
the Aircraft to be sold pursuant to Section 9(b) of the Lease and (ii) the
Owner Trustee has, pursuant to Section 9(b) of the Lease, given to Lessee
written notice of Lessor's election to retain title to the Aircraft and
(iii) the Owner Trustee has failed to make, on or before the Termination
Date, any payment required to be made by the Owner Trustee pursuant to
Section 9(b) of the Lease in connection with its retention of title to the
Aircraft, the Owner Participant will indemnify Lessee for any losses,
damages, costs or expenses of any kind (including any additional rents paid
by Lessee and any fees and expenses of lawyers, appraisers, brokers or
accountants) incurred as a consequence of such failure by the Owner
Trustee.
(u) Transfer of Title; Assumption of Equipment Notes. Each of
the Owner Participant, the Owner Trustee, the Indenture Trustee and Lessee
covenants and agrees that if Lessee elects (A) to purchase the Aircraft
pursuant to Section 19(b) of the Lease or (B) to terminate the Lease and
purchase the Aircraft pursuant to Section 19(c) of the Lease, then each of
the parties will execute and deliver appropriate documentation transferring
all right, title and interest in the Aircraft to Lessee (including, without
limitation, such bills of sale and other instruments and documents as
Lessee shall reasonably request to evidence (on the public record or
otherwise) such transfer and the vesting of all right, title and interest
in and to the Aircraft in Lessee), and if Lessee, in connection with such
purchase, elects to assume the obligations of the Owner Trustee pursuant to
the Trust Indenture and the Equipment Notes each of the parties will
execute and deliver appropriate documentation permitting Lessee to assume
such obligations on the basis of full recourse to Lessee, maintaining the
security interest in the Aircraft created by the Trust Indenture, releasing
the Owner Participant and the Owner Trustee from all future obligations in
respect of the Equipment Notes, the Trust Indenture and all other Operative
Documents and all such other actions as are reasonably necessary to permit
such assumption by Lessee. Notwithstanding the provisions of this Section
7(u), unless waived by the Loan Participants, Lessee shall not be entitled
to assume the Equipment Notes on the date for purchase of the Aircraft
pursuant to Section 19(c) of the Lease if on such date a Specified Default
or Lease Event of Default shall have occurred and be continuing.
Notwithstanding the foregoing, Lessee shall not be entitled to
assume the obligations of the Owner Trustee in respect of the Equipment
Notes unless Lessee causes to be delivered to the Indenture Trustee an
opinion of counsel to the effect that (i) the Lien of the Trust Indenture
continues to be a valid and duly perfected first priority security interest
in and to the Aircraft, (ii) the Indenture Trustee will be entitled to the
benefits of 11 U.S.C. Section 1110; provided that the opinion required by
subclause (ii) need only be given if immediately prior to such assumption
the Owner Trustee would have been entitled to the benefits of 11 U.S.C.
Section 1110 and (iii) the Pass Through Trusts will not be subject to
Federal income taxation and the Certificate Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
assumption and will be subject to taxation in the same amounts, in the same
manner, and at the same times as would have been the case if such
assumption had not occurred.
(v) Lessee Merger Covenant. Lessee will not consolidate with
or merge into any other corporation or convey, transfer or lease
substantially all of its assets as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety
shall be (i) organized and validly existing under the laws of the
United States of America or any state thereof or the District of
Columbia, (ii) a "citizen of the United States" as defined in 49
U.S.C. Section 40102(a)(15), as amended, and (iii) a Certificated Air
Carrier, if and so long as such status is a condition of entitlement
to the benefits of Section 1110 of the Bankruptcy Code with respect to
the Lease or the Aircraft;
(ii) the corporation formed by such consolidation or into which
Lessee is merged or the Person which acquires by conveyance, transfer
or lease substantially all of the assets of Lessee as an entirety
shall execute and deliver to the Owner Trustee, the Indenture Trustee
and the Owner Participant an agreement in form and substance
reasonably satisfactory to the Owner Participant a duly authorized,
valid, binding and enforceable agreement containing an assumption by
such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of the
Operative Documents to which Lessee is a party to be performed or
observed by Lessee;
(iii) immediately after giving effect to such transaction, no
Lease Event of Default shall have occurred and be continuing; and
(iv) Lessee shall have delivered to the Owner Trustee, the
Indenture Trustee and the Owner Participant a certificate signed by
the President, any Executive Vice President, any Senior Vice President
or any Vice President and by the Secretary or an Assistant Secretary
of Lessee, and an opinion of counsel (which may be Lessee's General
Counsel, Deputy General Counsel or Associate General Counsel)
reasonably satisfactory to the Owner Participant, each to the effect
that such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (ii) above comply with this
Section 7(v) and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Upon any such consolidation or merger or any such conveyance,
transfer or lease of substantially all of the assets of Lessee as an
entirety in accordance with this Section 7(v), the successor corporation or
Person formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, Lessee under
this Agreement with the same effect as if such successor corporation or
Person had been named as Lessee herein. No such conveyance, transfer or
lease of substantially all of the assets of Lessee as an entirety shall
have the effect of releasing Lessee or any successor corporation or Person
which shall theretofore have become such in the manner prescribed in this
Section 7(v) from its liability in respect of any Operative Document to
which it is a party.
(w) Further Assurances. Lessee, at its expense, will take, or
cause to be taken, such action with respect to the recording, filing, re-
recording and refiling of the Lease, the Lease Supplement, the Trust
Agreement, the Trust Indenture, the Trust Supplement and any financing
statements or other instruments as are necessary to maintain, so long as
the Trust Indenture or the Lease is in effect, the perfection of the
security interests created by the Trust Indenture and any security interest
that may be claimed to have been created by the Lease and the ownership
interest of the Owner Trustee in the Aircraft or will furnish to the Owner
Trustee, the Owner Participant and the Indenture Trustee timely notice of
the necessity of such action, together with such instruments, in execution
form, and such other information as may be required to enable them to take
such action. Lessee will notify the Owner Trustee, the Owner Participant
and the Indenture Trustee of any change in the location of its chief
executive office (as such term is used in Article 9 of the Uniform
Commercial Code) promptly after making such change or in any event within
the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the
Operative Documents.
(x) Rent Adjustments. Section 3 of the Lease contemplates that,
under certain circumstances, the Owner Participant will make certain
recalculations of Basic Rent, EBO Amount and Termination Value, and the
Owner Participant hereby agrees to make such recalculations as and when
contemplated by the Lease and subject to all the terms and conditions of
the Lease and promptly to take such further actions as may be necessary or
desirable to give effect to and to cause the Owner Trustee to give effect
to the provisions of Section 3 of the Lease.
(y) Owner Participant Costs on Return. The Owner Participant
hereby agrees with Lessee that it will pay, or cause to be paid, all costs
and expenses that are for the account of the Owner Trustee pursuant to
Section 5 of the Lease without the right of reimbursement or
indemnification from Lessee.
(z) Transfer of Equipment Notes. Each Loan Participant hereby
represents, warrants and agrees that it shall not transfer any interest in
any Equipment Note unless and until the transferee agrees in writing
(copies of which shall be provided by the Indenture Trustee to Lessee, the
Owner Trustee and the Owner Participant) to make the representations
contemplated to be made by a Loan Participant in this Agreement and to be
bound by the terms of this Agreement and the Trust Indenture (including,
without limitation, the representations and covenants set forth in Sections
7(c), 7(h), 7(i), 7(n), and 7(q) hereof and this Section 7(z) and Sections
2.03, 2.14 and 4.03 of the Trust Indenture).
(aa) Representations and Warranties of Pass Through Trustee.
The Pass Through Trustee represents and warrants to Lessee, the Indenture
Trustee, the Subordination Agent, the Liquidity Provider, the Owner
Participant and the Owner Trustee, in its capacity as such and in its
individual capacity, as follows:
(i) the Pass Through Trustee is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver each of the Pass Through
Trust Agreements, the Intercreditor Agreement and this Agreement and
to perform its obligations under the Pass Through Trust Agreements,
the Intercreditor Agreement and this Agreement;
(ii) this Agreement, each of the Pass Through Trust Agreements
and the Intercreditor Agreement have been duly authorized, executed
and delivered by the Pass Through Trustee; this Agreement, each of the
Pass Through Trust Agreements and the Intercreditor Agreement
constitute the legal, valid and binding obligations of the Pass
Through Trustee enforceable against it in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general principles
of equity, whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Pass Through Trustee of any of the Pass Through Trust Agreements, the
Intercreditor Agreement or this Agreement, the purchase by the Pass
Through Trustee of the Equipment Notes pursuant to this Agreement, or
the issuance of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the
Commonwealth of Massachusetts or any United States governmental
authority or agency regulating the Pass Through Trustee's banking,
trust or fiduciary powers or any judgment or order applicable to or
binding on the Pass Through Trustee and does not contravene or result
in any breach of, or constitute a default under, the Pass Through
Trustee's articles of association or by-laws or any agreement or
instrument to which the Pass Through Trustee is a party or by which it
or any of its properties may be bound;
(iv) neither the execution and delivery by the Pass Through
Trustee of any of the Pass Through Trust Agreements, the Intercreditor
Agreement or this Agreement, nor the consummation by the Pass Through
Trustee of any of the transactions contemplated hereby or thereby,
requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action with respect to,
any Massachusetts governmental authority or agency or any Federal
governmental authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Pass Through Trustee
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, any of the Pass Through Trust Agreements or the
Intercreditor Agreement (other than franchise or other taxes based on
or measured by any fees or compensation received by the Pass Through
Trustee for services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements), and there
are no Taxes payable by the Pass Through Trustee imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the Pass
Through Trustee of any of the Equipment Notes (other than franchise or
other taxes based on or measured by any fees or compensation received
by the Pass Through Trustee for services rendered in connection with
the transactions contemplated by any of the Pass Through Trust
Agreements), and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but rather, each
will be characterized either as a grantor trust under subpart E, Part
I, of Subchapter J of the Code or as a partnership, such trusts will
not be subject to any Taxes imposed by the Commonwealth of
Massachusetts or any political subdivision thereof;
(vi) there are no pending or threatened actions or proceedings
against the Pass Through Trustee before any court or administrative
agency which individually or in the aggregate, if determined adversely
to it, would materially adversely affect the ability of the Pass
Through Trustee to perform its obligations under this Agreement, the
Intercreditor Agreement or any Pass Through Trust Agreement;
(vii) except for the issue and sale of the Pass Through Trust
Certificates contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Equipment Note for sale to any
Person or solicited any offer to acquire any Equipment Notes from any
Person, nor has the Pass Through Trustee authorized anyone to act on
its behalf to offer directly or indirectly any Equipment Note for sale
to any Person, or to solicit any offer to acquire any Equipment Note
from any Person; and the Pass Through Trustee is not in default under
any Pass Through Trust Agreement; and
(viii) the Pass Through Trustee is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
(bb) Representations and Warranties of Subordination Agent. The
Subordination Agent represents and warrants to Lessee, the Indenture
Trustee, the Pass Through Trustee, the Liquidity Provider, the Owner
Participant and the Owner Trustee, in its capacity as such and in its
individual capacity, as follows:
(i) the Subordination Agent is a state chartered trust company
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has the full corporate
power, authority and legal right under the laws of the Commonwealth of
Massachusetts and the United States pertaining to its banking, trust
and fiduciary powers to execute and deliver this Agreement, the
Liquidity Facilities and the Intercreditor Agreement and to perform
its obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) this Agreement, each of the Liquidity Facilities and the
Intercreditor Agreement have been duly authorized, executed and
delivered by the Subordination Agent; this Agreement, each of the
Liquidity Facilities and the Intercreditor Agreement constitute the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with their respective terms,
except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of each of the Liquidity Facilities, the
Intercreditor Agreement or this Agreement contravenes any law, rule or
regulation of the Commonwealth of Massachusetts or any United States
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order applicable
to or binding on the Subordination Agent and do not contravene or
result in any breach of, or constitute a default under, the
Subordination Agent's articles of association or by-laws or any
agreement or instrument to which the Subordination Agent is a party or
by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of any of the Liquidity Facilities, the Intercreditor Agreement
or this Agreement nor the consummation by the Subordination Agent of
any of the transactions contemplated hereby or thereby requires the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any
Massachusetts governmental authority or agency or any Federal
governmental authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the Commonwealth of Massachusetts or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by the Subordination Agent of this
Agreement, any of the Liquidity Facilities or the Intercreditor
Agreement (other than franchise or other taxes based on or measured by
any fees or compensation received by the Subordination Agent for
services rendered in connection with the transactions contemplated by
the Intercreditor Agreement or any of the Liquidity Facilities), and
there are no Taxes payable by the Subordination Agent imposed by the
Commonwealth of Massachusetts or any political subdivision thereof in
connection with the acquisition, possession or ownership by the
Subordination Agent of any of the Equipment Notes (other than
franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative
agency which individually or in the aggregate, if determined adversely
to it, would materially adversely affect the ability of the
Subordination Agent to perform its obligations under this Agreement,
the Intercreditor Agreement or any Liquidity Facility;
(vii) the Subordination Agent has not directly or indirectly
offered any Equipment Note for sale to any Person or solicited any
offer to acquire any Equipment Notes from any Person, nor has the
Subordination Agent authorized anyone to act on its behalf to offer
directly or indirectly any Equipment Note for sale to any Person, or
to solicit any offer to acquire any Equipment Note from any Person;
and the Subordination Agent is not in default under any Liquidity
Facility; and
(viii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee or Lessee.
SECTION 8. RELIANCE OF LIQUIDITY PROVIDER. Each of the parties
hereto agrees and acknowledges that the Liquidity Provider shall be a third
party beneficiary of each of the representations, warranties and covenants
made herein by such party, and that the Liquidity Provider may rely on such
representations and warranties to the same extent as if such
representations and warranties were made to the Liquidity Provider
directly. Lessee agrees and acknowledges that the Liquidity Provider shall
be a third party beneficiary of the indemnities contained in Section 6(c)
hereof, and may rely on such indemnities to the same extent as if such
indemnities were made to the Liquidity Provider directly.
SECTION 9. OTHER DOCUMENTS. Each of the Owner Participant and the
Owner Trustee hereby (a) agrees with Lessee and the Loan Participants to
comply with all of the terms of the Trust Agreement (as the same may
hereafter be amended or supplemented from time to time in accordance with
the terms thereof) applicable to it; (b) agrees with Lessee and the
Indenture Trustee not to amend, supplement or otherwise modify any
provision of the Trust Agreement in a manner adversely affecting such party
without the prior written consent of such party; and (c) agrees with Lessee
and the Loan Participants not to revoke the Trust Agreement without the
prior written consent of Lessee and the Indenture Trustee. Notwithstanding
the foregoing, so long as the Lease has not been terminated, the
Subordination Agent, the Pass Through Trustee, the Indenture Trustee, the
Owner Participant and the Owner Trustee hereby agree for the benefit of
Lessee that without the consent of Lessee they will not amend, modify or
supplement the definition of "Secured Obligations" or Articles II, III, IX
or Section 5.02 of the Trust Indenture. Furthermore, so long as the Lease
has not been terminated, the Pass Through Trustee, the Subordination Agent,
the Indenture Trustee, the Owner Participant and the Owner Trustee hereby
agree for the benefit of Lessee that without Lessee's consent, each such
party will not amend any other provision of any Operative Document or Pass
Through Document in a manner adversely affecting Lessee. Each of the Owner
Participant, the Indenture Trustee, the Subordination Agent, the Pass
Through Trustee and the Owner Trustee agree to promptly furnish to Lessee
copies of any supplement, amendment, waiver or modification of any of the
Operative Documents or Pass Through Documents to which Lessee is not a
party. Each Loan Participant agrees that it will not take any action in
respect of the Trust Indenture Estate except through the Indenture Trustee
pursuant to the Trust Indenture or as otherwise permitted by the Trust
Indenture.
SECTION 10. CERTAIN COVENANTS OF LESSEE. Lessee covenants and
agrees with each of the Loan Participants, the Owner Participant, the
Indenture Trustee and the Owner Trustee, as follows:
(a) Further Assurances. Lessee will cause to be done, executed,
acknowledged and delivered all and every such further acts, conveyances and
assurances as the Owner Trustee, the Indenture Trustee or the Owner
Participant shall reasonably require for accomplishing the purposes of this
Agreement and the other Operative Documents; provided that any instrument
or other document so executed by Lessee will not expand any obligations or
limit any rights of Lessee in respect of the transactions contemplated by
any Operative Documents. Lessee, forthwith upon delivery of the Aircraft
under the Lease, shall cause the Aircraft to be duly registered, and at all
times thereafter to remain duly registered, in the name of the Owner
Trustee, except as otherwise required or permitted hereunder or under the
Lease, under the Transportation Code, or shall furnish to the Owner Trustee
such information as may be required to enable the Owner Trustee to make
application for such registration (at the expense of Lessee), and shall
promptly furnish to the Owner Trustee such information as may be required
to enable the Owner Trustee to timely file any reports required to be filed
by it as the lessor under the Lease or as the owner of the Aircraft with
any governmental authority (including tax authorities).
(b) Filings. Lessee, at its expense, will cause the Lease, all
Lease Supplements, all amendments to the Lease, the Trust Indenture, all
supplements and amendments to the Trust Indenture and this Agreement to be
promptly filed and recorded, or filed for recording, to the extent
permitted under the Transportation Code, or required under any other
applicable law. Upon the execution and delivery of the FAA Xxxx of Sale,
the Lease, the Lease Supplement covering the Aircraft, the Trust Supplement
and the Trust Indenture shall be filed for recording with the Federal
Aviation Administration in the following order of priority; First, the FAA
Xxxx of Sale, Second, the Lease, with the Lease Supplement covering the
Aircraft, the Trust Indenture and the Trust Supplement attached, and Third,
the Trust Indenture, with the Trust Supplement attached.
SECTION 11. OWNER FOR FEDERAL TAX PURPOSES. It is hereby agreed
among Lessee, the Owner Participant and the Owner Trustee that for Federal
income tax purposes the Owner Participant will be the owner of the Aircraft
to be delivered under the Lease and Lessee will be the lessee thereof, and
each party hereto agrees to characterize the Lease as a lease for Federal
income tax purposes.
SECTION 12. NOTICES; CONSENT TO JURISDICTION.
(a) Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by
prepaid courier service, and shall be deemed to be given for purposes of
this Agreement on the day that such writing is delivered to the recipient
thereof in accordance with the provisions of this Section 12(a). Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 12(a), notices, demands, instructions
and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to their
respective telecopier numbers) as follows: (A) if to Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent, the Indenture
Trustee or the Owner Participant, to the respective addresses set forth
below the signatures of such parties at the foot of this Agreement, or (B)
if to a subsequent Owner Participant, addressed to such subsequent Owner
Participant at such address as such subsequent Owner Participant shall have
furnished by notice to the parties hereto, or (C) if to any subsequent
Certificate Holder, addressed to such Certificate Holder at its address set
forth in the Equipment Note register maintained pursuant to Section 2.07 of
the Trust Indenture.
(b) Consent to Jurisdiction. Each of the parties hereto (A)
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and to
the non-exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, for the purposes of any suit, action or other
proceeding arising out of this Agreement, the Lease, the Tax Indemnity
Agreement or any other Operative Document, the subject matter of any
thereof or any of the transactions contemplated hereby or thereby brought
by any party or parties thereto, or their successors or assigns, and (B)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, to the extent permitted
by applicable law, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper, or that this Agreement, the Lease, the Tax Indemnity Agreement or
any other Operative Document or the subject matter of any thereof or any of
the transactions contemplated hereby or thereby may not be enforced in or
by such courts; provided, however that the foregoing shall not apply to the
right any party may have to seek removal of such suit, action or proceeding
to federal court or to seek consolidation of any separate actions, suits or
proceedings brought by one or more of the other parties in the same or
different jurisdictions. The agreement set forth in this Section 12(b) is
given solely for the benefit of the parties hereto and shall not inure to
the benefit of any other Person.
SECTION 13. CHANGE OF SITUS OF OWNER TRUST. The Owner Participant
agrees that if, at any time, the Trust Estate becomes subject to any Taxes
for which it is indemnified pursuant to Section 6(b) hereof and if, as a
consequence thereof, Lessee should request that the situs of the trust be
moved to another state in the United States from the state in which it is
then located, the situs of the trust may be moved and the Owner Participant
will take whatever action may be reasonably necessary to accomplish such
removal; provided that (A) Lessee shall provide such additional tax
indemnification as the Owner Participant and the Indenture Trustee may
reasonably request, (B) the rights and obligations under the Operative
Documents of the Owner Participant and the Indenture Trustee shall not be
altered as a result of the taking of such action, (C) the lien of the Trust
Indenture on the Trust Indenture Estate shall not be adversely affected by
such action, and (D) the Owner Participant and the Indenture Trustee shall
have received an opinion or opinions of counsel (reasonably satisfactory to
the Owner Participant), in scope, form and substance satisfactory to the
Owner Participant to the effect that (I) the trust, as thus removed, shall
remain a validly established trust, (II) any amendments to the Trust
Agreement necessitated by such removal shall have been duly authorized,
executed and delivered by the parties thereto and shall constitute the
valid and binding obligations of such parties, enforceable in accordance
with their terms, (III) such removal will not result in the imposition of,
or increase in the amount of, any Tax for which Lessee is not required to
indemnify the Owner Participant, the Indenture Trustee, the Owner Trustee
or the Trust Estate pursuant to Section 6(b) hereof (taking into account
any additional indemnification provided by Lessee pursuant to clause (A) of
this sentence), and (IV) if such removal involves the replacement of the
Owner Trustee, an opinion of counsel to such successor Owner Trustee in
form and substance reasonably satisfactory to the Owner Participant
covering the matters described in the opinion delivered pursuant to Section
4(a)(xiii) and such other matters as the Owner Participant may reasonably
request, and (E) Lessee shall indemnify and hold harmless the Owner
Participant and the Indenture Trustee on a net after-tax basis against any
and all reasonable and actual costs and expenses including reasonable
counsel fees and disbursements, registration fees, recording or filing fees
and taxes incurred by the Owner Trustee, the Owner Participant and the
Indenture Trustee in connection with such change of situs. Notwithstanding
anything to the contrary contained herein or in any other Operative
Document, the Owner Participant agrees with Lessee that it will not consent
to or direct a change in the situs of the Trust Estate without the prior
consent of Lessee unless the Owner Trustee, the Indenture Trustee, the
Certificate Holders and the Trust Estate each waives its right to any
indemnity payable by the Lessee under Section 6(b) as a result of the
change in situs.
SECTION 14. MISCELLANEOUS.
(a) Consents Under Lease. The Owner Participant covenants and
agrees that it shall not unreasonably withhold its consent to any consent
requested of the Owner Trustee, as Lessor, under the terms of the Lease
which by its terms is not to be unreasonably withheld by the Owner Trustee,
as Lessor.
(b) Survival. The representations, warranties, indemnities and
agreements of Lessee, the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee and the Owner Participant
provided for in this Agreement or any other Operative Document, and
Lessee's, the Owner Trustee's, the Indenture Trustee's, the Subordination
Agent's, the Pass Through Trustee's and the Owner Participant's obligations
under any and all thereof, shall survive the making available of the
respective Commitments by the Pass Through Trustee and the Owner
Participant, the delivery or return of the Aircraft, the transfer of any
interest of the Owner Participant in the Trust Estate or the Aircraft or
any Engine or the transfer of any interest by any Loan Participant in any
Equipment Note or the Trust Indenture Estate and the expiration or other
termination of this Agreement or any other Operative Document.
(c) Counterparts. This Agreement may be executed by the parties
hereto in separate 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.
(d) Amendments and Waivers. Neither this Agreement nor any of
the terms hereof may be terminated, amended, supplemented, waived or
modified, except by an instrument in writing signed by the party against
which the enforcement of the termination, amendment, supplement, waiver or
modification is sought; and no such termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy thereof
shall have been delivered to the Indenture Trustee and the Owner Trustee.
(e) Successors and Assigns. The terms of this Agreement shall
be binding upon, and inure to the benefit of, Lessee and, subject to the
terms of this Agreement, its successors and permitted assigns, the Pass
Through Trustee and its successors as Pass Through Trustee (and any
additional trustee appointed) under any of the Pass Through Trust
Agreements, the Owner Participant and, subject to the terms of this
Agreement, its successors and permitted assigns, each Certificate Holder
and its successors and registered assigns, the Indenture Trustee and its
successors as Indenture Trustee under the Trust Indenture and the Owner
Trustee and its successors as Owner Trustee under the Trust Agreement. The
terms of this Agreement shall inure to the benefit of the Liquidity
Provider, its successors and permitted assigns.
(f) Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
(g) Trust Capacity. The parties hereto agree that all of the
statements, representations, covenants and agreements made by the Owner
Trustee (when made in such capacity) contained in this Agreement 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 Agreement or such other agreements to
the contrary notwithstanding (except for any express provisions that the
Owner Trustee is responsible for in its individual capacity), no recourse
shall be had with respect to this Agreement 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; provided, however, that this
Section 14(g) shall not be construed to prohibit any action or proceeding
against any party hereto for its own willful misconduct or grossly
negligent conduct for which it would otherwise be liable; and provided,
further, that nothing contained in this Section 14(g) shall be construed to
limit the exercise and enforcement in accordance with the terms of this
Agreement or such other agreements of rights and remedies against the Trust
Estate. The foregoing provisions of this Section 14(g) shall survive the
termination of this Agreement and the other Operative Documents.
(h) Section 1110. It is the intention of the parties hereto
that the Owner Trustee, as Lessor under the Lease, and the Indenture
Trustee, as assignee of such Owner Trustee's rights under the Lease
pursuant to the Trust Indenture, will be entitled to the benefits of 11
U.S.C. Section 1110 in the event of any reorganization of Lessee under
such Section.
SECTION 15. EXPENSES.
(a) Invoices And Payment. Each of the parties hereto shall
promptly submit to the Owner Trustee and Lessee for their prompt approval
(which shall not be unreasonably withheld) copies of invoices in reasonable
detail of the Transaction Expenses for which it is responsible for
providing information as they are received. The Owner Participant agrees
to transfer to the Owner Trustee promptly such amount as shall be necessary
in order to enable the Owner Trustee to pay, or if previously paid by
Lessee, to reimburse Lessee for, Transaction Expenses. To the extent of
funds received by it, the Owner Trustee agrees to pay all invoices of
Transaction Expenses that have been approved by it and Lessee promptly upon
receipt thereof and, to the extent such invoices have previously been paid
by Lessee, to reimburse Lessee promptly therefor. Notwithstanding the
foregoing, to the extent that Transaction Expenses exceed 2% of Lessor's
Cost, Lessee at its sole option shall have the right to pay directly any or
all Transaction Expenses which are in excess of 2% of Lessor's Cost.
(b) Payment of Other Expenses. In the event that the
transaction contemplated by this Participation Agreement fails to close as
a result of the Owner Participant's failure to negotiate in good faith or
to comply with the terms and conditions upon which its participation in the
transaction was predicated, the Owner Participant will be responsible for
all of its fees and expenses, including but not limited to the fees,
expenses and disbursements of its special counsel.
SECTION 16. REFINANCINGS.
(a) Refinancing Generally. So long as no Lease Event of
Default shall have occurred and be continuing, Lessee shall have the right
to refinance all (but not less than all) of the Equipment Notes no more
than three times by giving written notice to the Owner Participant and the
Owner Trustee that there shall be effected a voluntary redemption of the
Equipment Notes by the Owner Trustee, whereupon the Owner Participant
agrees to negotiate promptly in good faith to conclude an agreement with
Lessee as to the terms of such refinancing operation (including the terms
of any debt to be issued in connection with such refinancing); provided
that no such refinancing shall require an increase in the amount of the
Owner Participant's investment in the beneficial ownership of the Aircraft
or in the principal amount of the Equipment Notes; and provided further
that the Owner Participant may reject any terms that, in its reasonable
judgment, materially and adversely affect the Owner Participant.
Upon such agreement:
(1) within ten (10) Business Days after the reaching
of such agreement, the Owner Participant will deliver to
Lessee a certificate of an authorized representative of the
Owner Participant (the "Refinancing Certificate") setting
forth (i) (based upon information provided by Lessee and on
the agreement reached between Lessee and the Owner
Participant) the proposed date on which the outstanding
Equipment Notes will be redeemed and a description of any
new debt to be issued and the other aspects of such
refinancing that will be consummated (such date, the
"Refinancing Date") and (ii) the following information
calculated pursuant to the provisions of paragraph (6) of
this Section 16(a): (A) the proposed adjusted debt/equity
ratio, (B) the principal amount of debt to be issued by the
Owner Trustee on the Refinancing Date, (C) the amount, if
any, by which the Owner Participant's aggregate investment
in the beneficial interest in the Aircraft is to be
decreased and (D) the proposed revised schedules of Basic
Rent percentages, debt amortization, EBO Amount, Termination
Value percentages and other purchase option or termination
percentages. The Refinancing Certificate shall not provide
for a debt/equity ratio of more than [_:1]. Within fourteen
days of its receipt of the Refinancing Certificate, Lessee
may demand a verification pursuant to Exhibit E to the Lease
of the information set forth in the Refinancing Certificate.
Upon the acceptance by Lessee of the accuracy of the
information set forth in the Refinancing Certificate (or the
determination pursuant to such verification procedures), as
to the debt/equity ratio, the principal amount of debt to be
issued by the Owner Trustee on the Refinancing Date and the
revised Basic Rent percentages, debt amortization, EBO
Amount, Termination Value percentages and other buyout and
termination percentages (such information, whether as set
forth or as so determined, the "Refinancing Information")
the appropriate parties will take the actions specified in
paragraphs (2) through (5) below;
(2) the appropriate parties will enter into
appropriate documentation (which may involve an underwriting
agreement in connection with such sale or the sale of the
Owner Trustee's interest in the Trust Estate and/or the
Aircraft and its resale to the Owner Trustee) with the
institution or institutions to be named therein providing
for (A) (i) the issuance and sale by the Owner Trustee to
such institution or institutions on the Refinancing Date of
debt securities in an aggregate principal amount specified
in the Refinancing Information which amount shall be equal
to the aggregate principal amount of all Equipment Notes
outstanding on the Refinancing Date (such debt securities,
the "New Debt") except that the principal amount of New Debt
may exceed the principal amount of all outstanding Equipment
Notes in connection with the first refinancing under this
Section 16, (ii) the application of the proceeds of the sale
of the New Debt to the redemption of all such Equipment
Notes on the Refinancing Date and (iii) the payment of the
excess, if any, of such proceeds over the amounts necessary
to effect such redemption to the Owner Trustee and (B)
pursuant to which the parties to the refinancing transaction
(including the Owner Participant, the Lessee, the Owner
Trustee and the Loan Participants, but excluding the holders
of the Pass Through Certificates) make such representations,
warranties and covenants as Lessee and Owner Participant
reasonably require;
(3) Lessee shall give the notice to the Indenture
Trustee pursuant to Section 2.11 of the Trust Indenture, and
Lessee and the Owner Trustee will amend the Lease to provide
that (i) Basic Rent payable in respect of the period from
and after the Refinancing Date shall be as provided in the
Refinancing Information and (ii) amounts payable in respect
of EBO Amount and Termination Value from and after the
Refinancing Date shall be as provided in the Refinancing
Information;
(4) the Owner Trustee will enter into an agreement to
provide for the securing thereunder of the New Debt in like
manner as the Equipment Notes and will enter into such
amendments and supplements to the Trust Indenture (or such
new indenture or other security agreement) as may be
necessary to effect such refinancing;
(5) the Lessee shall pay all of the reasonable
expenses of such refinancing (including, but not limited to,
the reasonable fees, expenses and disbursements of counsel
and any placement or underwriting fees); and
(6) when calculating any of the information required
to be set forth in a Refinancing Certificate, the Owner
Participant shall make such calculations in a manner which
(A) maintains the Owner Participant's Net Economic Return
(except to the extent the assumptions referred are the
subject of the recalculations being conducted by the Owner
Participant), and (B) minimizes the Net Present Value of
Rents to Lessee to the extent possible consistent with
clause (A). All adjustments to Basic Rent, EBO Amount and
Termination Value shall also be in compliance with the tests
of Sections 4.02(5) and 4.07 of Rev. Proc. 75-28 and with
one or more of any "safe harbors" from characterization of
the Lease as a "disqualified leaseback or long-term
agreement" set forth in Section 467 of the Code (or any
proposed, temporary or final regulations thereunder
applicable to the Lease) or, if no "safe harbor" exists,
made in a manner to avoid characterization of the Lease as a
"disqualified leaseback or long-term agreement" within the
meaning of Section 467 of the Code.
(b) Limitation on Redemption. The Equipment Notes shall not be
subject to voluntary redemption by the Owner Trustee without the consent of
Lessee except as set forth in Section 2.14 of the Trust Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first above written.
US AIRWAYS, INC.,
Lessee
By:__________________________________
Name:
Title:
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn:
Telecopy:
[OWNER PARTICIPANT],
as Owner Participant
By:_________________________________
Name:
Title:
Address: ___________________________
___________________________
___________________________
Attn:
STATE STREET BANK AND
TRUST COMPANY,
not in its individual capacity
except as otherwise provided herein,
but solely as Indenture Trustee
By:_________________________________
Name:
Title:
Address: Two Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly provided herein, but solely as
Owner Trustee
By:_________________________________
Name:
Title:
Address: 00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 84111
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity,
except as otherwise provided herein, but
solely as Pass Through Trustee
By:_________________________________
Name:
Title:
Address: Two International Place, 4th Floor
Boston, Massachusetts 02110
STATE STREET BANK AND
TRUST COMPANY, not in its individual
capacity, except as otherwise provided
herein, but solely as Subordination Agent
By:_________________________________
Name:
Title:
Address: Two International Place, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
SCHEDULE I
NAMES AND ADDRESSES
Lessee: US Airways, Inc.
U.S. MAIL
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
OVERNIGHT COURIER
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Assistant Treasurer
Telecopy No.: (000) 000-0000
WIRE TRANSFER
PNC Bank, N.A.
ABA No. 000-000-000
Acct. No. 214-7591
Reference: US Airways, Inc.
Owner Participant: ____________________________
U.S. Mail
____________________________
____________________________
Attn:_______________________
Telecopy No.:_______________
OVERNIGHT COURIER
____________________________
____________________________
Attn:
Telecopy No.: (___) ___-____
WIRE TRANSFER
ABA No._________________
Acct. No._________________
Indenture Trustee, State Street Bank and Trust Company
Pass Through
Trustee and
Subordination
Agent: U.S. MAIL
Two International Place, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
OVERNIGHT COURIER
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
WIRE TRANSFER
State Street Bank and Trust Company
ABA No. 011-00-0028
for credit to State Street Bank and Trust Company
Acct. No. 0000-000-0
Attn: Corporate Trust Department
Xxxxxxx Xxxxxxxxxxx
Reference: US Airways, Inc. 1998-1/US Airways, Inc.
Trust No. N7__UW
Owner Trustee: First Security Bank, National Association
U.S. MAIL
00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
OVERNIGHT COURIER
00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Department
Telecopy No.: (000) 000-0000
WIRE TRANSFER
First Security Bank, National Association
ABA No. 000000000
Acct. No. 051-0922115
Re: US Airways, Inc. Trust No. N7__UW
SCHEDULE II
COMMITMENTS
PERCENTAGE OF
PURCHASERS INTEREST RATE
LESSOR'S COST AND MATURITY PURCHASE PRICE
-------------- ------------- --------------
US Airways, Inc.
Pass Through Trust:
1998-1A 6.85% Series A Secured $__________
_______% Certificates due July 30,
2019
1998-1B 7.35% Series B Secured $__________
_______% Certificates due July 30,
2019
1998-1C 6.82% Series C Secured $__________
______% Certificates due January 30,
2016
OWNER PARTICIPANT EQUITY INVESTMENT
_____% $__________
100% Total Commitments $__________
SCHEDULE III
PASS THROUGH TRUST AGREEMENT AND PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, Inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998.
EXHIBIT A
TO PARTICIPATION AGREEMENT
(US Airways, Inc. Trust No. N7__UW)
SCHEDULE OF COUNTRIES FOR REREGISTRATION
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of registration such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
Form Definitions
N7__UW
ANNEX A
DEFINITIONS
(US Airways, Inc. Trust No. N7__UW)
The following terms shall have the following meanings for all
purposes of the Operative Documents referred to below, unless otherwise
defined in an Operative Document or the context thereof shall otherwise
require and such meanings shall be equally applicable to both the singular
and the plural forms of the terms herein defined. In the case of any
conflict between the provisions of this Annex A and the provisions of the
main body of any Operative Document, the provisions of the main body of
such Operative Document shall control the construction of such Operative
Document.
Except as otherwise provided herein, all references to any
agreement defined in this Annex A shall be deemed to include such agreement
as the same may from time to time be amended, supplemented or otherwise
modified in accordance with its terms and, where applicable, the terms of
the other Operative Documents. All references to statutes, rules and
regulations shall be deemed to include all amendments, replacements and
successors thereto unless otherwise specified herein.
"Acceptable Alternate Engine" means (i) a CFM International Model
56-5 (or improved type) engine having not less than 1,500 cycles left
before such engine's next scheduled maintenance overhaul or (ii) an engine
of the same or another manufacturer suitable for use on the Airframe and
having a value and utility equal to or greater than a CFM Model 56-5 type
engine, assuming such engine is in the condition required by the Lease.
"Acceptance Certificate" has the meaning specified for such term
in Section 4(a)(v) of the Participation Agreement.
"Actual Knowledge" means, (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.
"Additional Insured" means Lessor, in its individual capacity and
as owner of the Aircraft, the Indenture Trustee, the Owner Participant, the
Pass Through Trustee, the Liquidity Provider, Lessee in its capacity as
sublessor under any Sublease, and each of their respective Affiliates,
successors and permitted assigns, and the respective directors, officers,
employees and agents of the foregoing.
"Additional Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control"
(including "controlled by" and "under common control with") shall mean the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise.
"AIFS" means Airbus Industrie Financial Services, a corporation
formed under the laws of Ireland.
"Aircraft" means the Airframe to be delivered and leased under
the Lease (or any airframe from time to time substituted for such Airframe
pursuant to Section 10(a) of the Lease) together with the two Engines
initially leased under the Lease (or any engine substituted for either of
such Engines pursuant to the terms of the Lease), in each case as specified
in the Applicable Lease Supplement, whether or not any of such initial or
substituted Engines may from time to time be installed on such initial or
substituted Airframe or may be installed on any other airframe or on any
other aircraft.
"Airframe" means: (i) the Airbus aircraft (except Engines or
engines from time to time installed thereon) specified in the initial Lease
Supplement, which aircraft shall be leased by Lessor to Lessee under the
Lease and under such Lease Supplement, and any aircraft (except Engines or
engines from time to time installed thereon) which may from time to time be
substituted for such aircraft (except Engines or engines from time to time
installed thereon) pursuant to clause (ii) of the first paragraph of
Section 10(a) of the Lease; and (ii) any and all Parts (A) so long as the
same shall be incorporated or installed in or attached to such aircraft
(except Engines or engines from time to time installed thereon), or (B) so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such aircraft (except
Engines or engines from time to time installed thereon); provided, however,
that at such time as an aircraft (except Engines or engines from time to
time installed thereon) shall be deemed part of the property leased under
the Lease in substitution for the Airframe pursuant to the applicable
provisions of the Lease, the replaced Airframe shall cease to be an
Airframe under the Lease; provided further that the Airframe shall not
include Passenger Convenience Equipment.
"Amortization Amount" means, with respect to any Principal Amount
Repayment Date, the amount set forth opposite such Date as the Principal
Amount to be repaid on the Amortization Schedule.
"Amortization Schedule" means the amortization schedule for the
Equipment Notes delivered pursuant to Section 2.02 of the Trust Indenture.
"Applicable Rate" means as of any date the weighted average of
the interest rates borne by the Equipment Notes then outstanding and, if no
Equipment Notes shall be outstanding, the Base Rate.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended, or any subsequent legislation that amends, supplements or
supersedes such provisions.
"Base Rate" means the rate of interest announced publicly by
Chase Manhattan, N.A. in New York, New York from time to time as its base
rate.
"Basic Rent" means, for the Basic Term, the rent payable for the
Aircraft pursuant to Section 3(b) of the Lease as adjusted as provided in
Section 3(c) of the Lease but subject always to the provisions of Section
3(c)(v) of the Lease and, for any Renewal Term, Basic Rent determined
pursuant to Section 19 of the Lease.
"Basic Term" means the term for which the Aircraft is leased
pursuant to Section 3(a) of the Lease, commencing on the Delivery Date and
ending on the Basic Term Expiration Date.
"Basic Term Expiration Date" means , or such
earlier date as the Lease may be terminated in accordance with the
provisions thereof.
"Xxxx of Sale" means a full warranty xxxx of sale covering the
Aircraft, executed by Lessee in favor of the Owner Trustee, dated the
Delivery Date, specifically referring to the Airframe and each Engine,
which Xxxx of Sale shall contain, among other things, a statement that such
Xxxx of Sale thereby conveys to the Owner Trustee good title to the
Airframe and each Engine described in such Xxxx of Sale, free and clear of
all liens, encumbrances and rights of others except Permitted Liens.
"Burdensome Termination Event" means an event which shall be
deemed to have occurred if (A) one or more events have occurred which give
rise to an obligation on the part of Lessee to pay or indemnify any costs
or expenses under Sections 6(b) or 6(c) of the Participation Agreement or
under the Tax Indemnity Agreement if the aggregate amount of such indemnity
or other payments would exceed (as to future payments on a present value
basis discounted at the Debt Rate) 2.50% of Lessor's Cost or (B) Lessee
plans non-severable improvements to the Aircraft which (i) are necessary or
desirable in Lessee's sole discretion, (ii) are expected to cost in excess
of $2.5 million and (iii) the Owner Participant will not permit to be
financed under similar terms then available in the market for similar
transaction.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in the
City of New York, New York; Boston, Massachusetts, Pittsburgh, Pennsylvania
or the city and state where the office of the Owner Trustee is located.
"Cash Equivalents" means (i) direct obligations of the United
States of America and agencies guaranteed by the United States government
having a final maturity of ninety (90) days or less from date of purchase
thereof; (ii) certificates of deposit issued by, bankers' acceptances of,
or time deposits with, any bank, trust company or national banking
association incorporated under the laws of the United States of America or
one of the states thereof having combined capital and surplus and retained
earnings as of its last report of condition of at least $500,000,000 and
having a rating of Aa or better by Xxxxx'x Investors Service, Inc.
("Moody's") or AA or better by Standard & Poor's Corporation ("S&P") and
having a final maturity of ninety (90) days or less from date of purchase
thereof; and (iii) commercial paper of any holding company of a bank, trust
company or national banking association described in (ii) and commercial
paper of any corporation or finance company incorporated or doing business
under the laws of the United States of America or any state thereof having
a rating assigned to such commercial paper of A1 by S&P or P1 by Moody's
and having a final maturity of ninety (90) days or less from the date of
purchase thereof; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Certificated Air Carrier" means a Citizen of the United States
holding a carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49, United States Code, for
aircraft capable of carrying ten or more individuals or 6,000 pounds or
more of cargo or that otherwise is certified or registered to the extent
required to fall within the purview of 11 U.S.C. Section 1110 or any
analogous successor provision of the Bankruptcy Code.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States of America enacted in substitution
or replacement therefor.
"Civil Reserve Air Fleet Program" means the Civil Reserve Air
Fleet Program currently administered by the United States Air Force Air
Mobility Command pursuant to Executive Order No. 11490, as amended, or any
substantially similar program.
"Class A Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class B Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Liquidity Provider" means ABN AMRO Bank, N.V., a bank
organized under the laws of the Netherlands acting through its Chicago
branch, or any successor thereto.
"Class C Purchase Agreement" means that certain Purchase
Agreement, dated as of December 14, 1998, by and between Lessee and AIFS.
"Class C Special Indemnity Event" means the existence of any
condition or event which, pursuant to Section 3 of the Registration
Agreement, requires US Airways, Inc. to pay liquidated damages to the US
Airways Pass Through Trust 1998-C in accordance with such Section 3,
subject to the last sentence of the first paragraph of Section 3 of the
Registration Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment pursuant to the Participation
Agreement of a Pass Through Trustee or of the Owner Participant, as the
case may be, to finance the Owner Trustee's payment of Lessor's Cost for
the Aircraft.
"Consent and Agreement" means the Consent and Agreement (US
Airways, Inc. Trust No. N7__UW), dated as of the date of the Lease,
executed by the Seller, as the same may be amended, modified or
supplemented from time to time in accordance with the applicable provisions
thereof.
"Continuous Stay Period" has the meaning specified for such term
in Section 4.04(a) of the Trust Indenture.
"Corporate Trust Office" means the principal office of the
Indenture Trustee located at Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, 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 Note
Holder.
"Debt" means 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" means, 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).
"Delivery Date" means the date of the initial Lease Supplement
for the Aircraft, which date shall be the date the Aircraft is leased by
Lessor to Lessee and accepted by Lessee under the Lease.
"Delivery Notice" means the notice of delivery delivered pursuant
to Section 2(c) of the Participation Agreement.
"Depositaries" means collectively, Credit Suisse First Boston,
New York Branch and Citibank, N.A.
"Depreciation Period" means the period commencing on the Delivery
Date and ending at the end of the calendar year during which the seventh
(7th) anniversary of the Delivery Date occurs, or such earlier date as the
Lease may be terminated in accordance with the provisions of the Lease.
"Designated Interest Rate" has the meaning specified for such
term in Section 2.02 of the Trust Indenture.
"Dollars" and "$" mean the lawful currency of the United States
of America.
"EBO Amount" means the applicable amount for the relevant EBO
Date set forth on Exhibit D to the Lease.
"EBO Date" means the applicable date set forth on Exhibit D to
the Lease.
"Enforcement Date" has the meaning specified for such term in
Section 4.03 of the Trust Indenture.
"Engine" means (i) each of the two CFM International 56-5 type
engines listed by manufacturer's serial number in the initial Lease
Supplement, whether or not from time to time thereafter installed on the
Airframe or installed on any other airframe or on any other aircraft; and
(ii) any Acceptable Alternate Engine that may from time to time be
substituted, pursuant to the terms of the Lease, for either of such two
engines, together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts removed therefrom so
long as title thereto shall remain vested in Lessor in accordance with the
terms of Section 8 of the Lease after removal from such Engine; provided,
however, that at such time as an engine shall be deemed part of the
property leased under the Lease in substitution for an Engine pursuant to
the applicable provisions of the Lease, the replaced Engine shall cease to
be an Engine under the Lease. The term "Engines" means, as of any date of
determination, all Engines then leased under the Lease.
"Equipment Note Holder" has the meaning specified for such term
in Section 2.07 of the Trust Indenture.
"Equipment Notes" means and include any Equipment Notes issued
under the Trust Indenture, and issued in exchange therefor or replacement
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of the Participation Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or
substituted therefor.
"Event of Default" (i) when such term is used in or with respect
to the Lease has the meaning specified for such term in Section 14 of the
Lease and (ii) when such term is used in or with respect to the Trust
Indenture has the meaning specified for such term in Section 4.02 of the
Trust Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe or
any Engine, any of the following events with respect to such property: (i)
the loss of such property or of the use thereof due to the destruction of
or damage to such property which renders repair uneconomic or which renders
such property permanently unfit for normal use by Lessee (or any Sublessee)
for any reason whatsoever; (ii) any damage to such property which results
in an insurance settlement with respect to such property on the basis of a
total loss, or a constructive or compromised total loss; (iii) the theft or
disappearance of such property for a period in excess of one hundred eighty
(180) days or, if earlier, the expiration of the Term; (iv) the requisition
for use of such property by any governmental authority (other than a
requisition for use by the United States Government or any government of
registry of the Aircraft or any agency or instrumentality thereof) that
shall have resulted in the loss of possession of such property by Lessee
(or any Sublessee) for a period in excess of one hundred eighty (180)
consecutive days or, if earlier, the expiration of the Term; (v) the
requisition for use by the United States Government or any government of
registry of the Aircraft or any instrumentality or agency thereof, which
shall have occurred during the Basic Term (or any Renewal Term) and shall
have continued for a period of thirty (30) days beyond the Term, provided,
however, that no Event of Loss pursuant to this clause (v) shall exist if
Lessor shall have furnished to Lessee the written notice specified in
Section 10(d) of the Lease; (vi) condemnation, confiscation, requisition or
taking of title of the Aircraft or the Airframe for more than thirty (30)
days, or if earlier, the expiration of the Term; (vii) as a result of any
law, rule, regulation, order or other action by the Federal Aviation
Administration or other governmental body of the government of registry of
the Aircraft having jurisdiction, the use of such property in the normal
course of the business of air transportation shall have been prohibited for
a period of one hundred eighty (180) consecutive days, unless Lessee (or
Sublessee) shall have undertaken and shall be diligently carrying forward
all steps which are necessary or desirable to permit the normal use of such
property by Lessee (or such Sublessee), but in any event an "Event of Loss"
shall occur if such "grounding" extends for a period of more than three
hundred sixty (360) days (or, if earlier, the expiration of the Term);
provided that no Event of Loss shall be deemed to occur if such "grounding"
is applicable to Lessee's entire fleet of A319 aircraft and Lessee, prior
to the expiration of one year from the prohibition of such use, shall have
conformed at least one such aircraft in its fleet to the requirements of
any such law, rule, regulation, order or other action and commenced regular
commercial use of the same in such jurisdiction and shall be diligently
carrying forward, on a non-discriminatory basis, all steps which are
necessary or desirable to permit the normal use of the Aircraft by Lessee
(or such Sublessee), but in any event an "Event of Loss" shall be deemed to
have occurred if such use shall have been prohibited for a period of two
consecutive years or such use shall be prohibited at the expiration of the
Term; and (viii) with respect to an Engine only, any divestiture of title
to or interest in an Engine or any event with respect to an Engine that is
deemed to be an Event of Loss with respect to such Engine pursuant to
Section 7(b) of the Lease. An Event of Loss with respect to the Aircraft
shall be deemed to have occurred if an Event of Loss occurs with respect to
the Airframe.
"Excluded Payments" means (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 6(b),
6(c), 15 or 16 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 Indemnitee and permitted under Section 11
of the Lease in Exhibit H thereto, (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, (vi) provided that the Equipment Notes shall have been duly
assumed by Lessee pursuant to Section 2.13 of the Trust Indenture, the
amounts payable to the Owner Trustee pursuant to Section 19(b) of the Lease
plus all reasonable expenses incurred by the Owner Trustee and the Owner
Participant in connection with such assumption, as applicable, (vii)
interest accrued on any of the above, and (viii) any right to enforce the
payment of any amount described in clauses (i) through (vii) above
(provided the rights referred to in this clause (viii) shall not be deemed
to include the exercise of any remedies provided for in the Lease other
than the right to xxx for specific performance of any covenant or to make
such payment or to xxx for damages in respect of the breach of any such
covenant) and the right to declare an Event of Default in respect of any of
the foregoing amounts. Solely for purposes of the Granting Clause of the
Trust Indenture, amounts payable to AIFS under Section 6(d) of the
Participation Agreement shall be considered Excluded Payments.
"Expenses" means all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and
disbursements of legal counsel, accountants, appraisers, inspectors or
other professionals and reasonable costs of investigation).
"Fair Market Renewal Term" has the meaning specified for such
term in Section 19(a)(2) of the Lease.
"FAA Xxxx of Sale" means a xxxx of sale for the Aircraft on AC
Form 8050-2 or such other form as may be approved by the Federal Aviation
Administration on the Delivery Date for the Aircraft, executed by Lessee in
favor of the Owner Trustee and dated the Delivery Date.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any agency or instrumentality of
the United States government succeeding to their functions.
"Federal Funds Rate" means a fluctuating interest rate per annum
in effect from time to time, which rate per annum shall at all times be
equal to the weighted average of the rates on overnight Federal funds
transactions with 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 so 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.
"Fixed Renewal Term" has the meaning specified for such term in
Section 19(a)(1) of the Lease.
"Foreign Air Carrier" means any air carrier which is not a U.S.
Air Carrier and which performs, or contracts for the performance of,
maintenance, preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are approved by, or
which are substantially equivalent to those required by, the Federal
Aviation Administration or any Permitted Foreign Air Authority.
"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 Documents or relating to the observance or performance of the
obligations of any of the parties to the Operative Documents.
"Indemnitee" means (i) the Owner Trustee, in its individual
capacity and as trustee under the Trust Agreement, (ii) the Indenture
Trustee, (iii) the Owner Participant, (iv) the Trust Estate, (v) the Loan
Participants and each other Note Holder, (vi) the Subordination Agent,
(vii) the Liquidity Provider, (viii) the Pass Through Trustees, (ix) each
Affiliate of the Persons described in clauses (i) through (iv), inclusive,
(x) each Affiliate of the Persons described in clauses (vi), (vii) and
(viii), (xi) the respective directors, officers, employees, agents and
servants of each of the Persons described in clauses (i) through (viii),
inclusive, (xii) the successors and permitted assigns of the Persons
described in clauses (i) through (iv), inclusive, and (xiii) the successors
and permitted assigns of the Persons described in clauses (v), (vi), (vii)
and (viii).
"Indemnity Agreements" means each of (i) that certain Indemnity
Agreement, dated as of December 14, 1998, between Citibank, N.A. and Lessee
and (ii) that certain Indemnity Agreement, dated as of December 14, 1998,
between Credit Suisse First Boston, New York Branch, and Lessee.
"Indenture Agreements" means the Participation Agreement, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement, the Bills of Sale and any other contract, agreement
or instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Event of Default" has the meaning given the term
"Event of Default" in the Trust Indenture.
"Indenture Excess Amount" has the meaning specified for such term
in Section 2.03(b) of the Trust Indenture.
"Indenture Indemnitees" means (i) State Street and the Indenture
Trustee, (ii) each separate or additional trustee appointed pursuant to the
Trust Indenture, (iii) the Subordination Agent, (iv) the Liquidity
Provider, (v) each Pass Through Trustee, and (vi) each of the respective
directors, officers, employees, agents and servants of each of the Persons
described in clauses (i) through (v), inclusive.
"Indenture Trustee" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its individual capacity, but solely as
Indenture Trustee, and any entity which may from time to time be acting as
indenture trustee under the Trust Indenture.
"Indenture Trustee Documents" means the Participation Agreement
and the Trust Indenture and any other agreements between the Indenture
Trustee and any other party to the Participation Agreement relating to the
Transactions, delivered on the Delivery Date.
"Indenture Trustee Event" means either (i) the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) of the Trust
Indenture, (ii) the Indenture Trustee has taken action or notified Owner
Trustee that it intends to take action to foreclose the Lien of the Trust
Indenture or otherwise commence the exercise of any significant remedy
under the Trust Indenture or the Lease or (iii) in the event of a
reorganization proceeding involving Lessee under Chapter 11 of the
Bankruptcy Code, (A) the trustee in such proceeding or Lessee not assuming
or agreeing to perform its obligations under the Lease, as contemplated
under Section 1110, during the 60-day period under Section 1110(a)(1)(A) of
the Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) or (B) at any time after agreeing to
perform or assuming such obligations, such trustee or Lessee ceasing to
perform such obligations with the result that the Continuous Stay Period
comes to an end.
"Indenture Trustee's Liens" means any Lien which arises as a
result of (A) claims against the Indenture Trustee not related to its
interest in the Aircraft or the administration of the Trust Estate pursuant
to the Trust Indenture, (B) acts of the Indenture Trustee not permitted by,
or failure of the Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such failure arises
from or constitutes gross negligence or willful misconduct, (C) claims
against the Indenture Trustee relating to Taxes or Expenses which are
excluded from the indemnification provided by Section 6 of the
Participation Agreement pursuant to said Section 6, or (D) claims against
the Indenture Trustee arising out of the transfer by the Indenture Trustee
of all or any portion of its interest in the Aircraft, the Trust Estate,
the Trust Indenture Estate or the Operative Documents other than a transfer
of the Aircraft pursuant to Section 9, 10 or 19 of the Lease or Article IV
or V of the Trust Indenture, or a transfer of the Aircraft pursuant to
Section 15 of the Lease while an Event of Default is continuing and prior
to the time that the Indenture Trustee has received all amounts due
pursuant to the Trust Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the date of the Lease, among the Pass Through
Trustees, the Liquidity Provider and the Subordination Agent.
"Law" means (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision
under, any of the foregoing.
"Lease" means that certain Lease Agreement (US Airways, Inc.
Trust No. N7__UW), dated as of _________ __, 199_, entered into by the
Owner Trustee and Lessee concurrently with the execution and delivery of
the Trust Indenture, 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 the Trust
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" means any event which with the giving of notice
or the lapse of time or both would become a Lease Event of Default.
"Lease Event of Default" means an "Event of Default" as defined
in Section 14 of the Lease.
"Lease Period" means each of the consecutive periods throughout
the Basic Term and any Renewal Term ending on a Lease Period Date, the
first such period commencing on and including the Delivery Date.
"Lease Period Date" means _____ 30, 199_ and each succeeding
_________ 30 and _________ 30, to and including the last such date in the
Term.
"Lease Supplement" means a Lease Supplement, substantially in the
form of Exhibit A to the Lease, to be entered into between Lessor and
Lessee on the Delivery Date for the purpose of leasing the Aircraft under
and pursuant to the terms of the Lease Agreement, and any subsequent Lease
Supplement entered into in accordance with the terms of the Lease.
"Lessee" means US Airways, Inc., a Delaware corporation.
"Lessee Documents" means the Participation Agreement, the Lease,
the Lease Supplement covering the Aircraft, the Purchase Agreement (insofar
as it relates to the Aircraft), the FAA Xxxx of Sale, the Xxxx of Sale, the
Purchase Agreement Assignment, the Tax Indemnity Agreement and each other
agreement between the Lessee and any other party to the Lease Agreement
delivered on the Delivery Date.
"Lessor" means First Security Bank, National Association, not in
its individual capacity, but solely as Owner Trustee, or any of its
successors and permitted assigns acting as lessor under the Lease.
"Lessor Liens" means any Lien or disposition of title or interest
arising as a result of (i) claims against Lessor, First Security Bank,
National Association, in its individual capacity, or the Owner Participant
not related to the transactions contemplated by the Operative Documents,
(ii) any act or omission of the Owner Participant, Lessor, or First
Security Bank, National Association, in its individual capacity, which is
not related to the transactions contemplated by the Operative Documents or
is in violation of any of the terms of the Operative Documents, (iii)
claims against the Owner Participant, Lessor, or First Security Bank,
National Association, in its individual capacity, with respect to Taxes or
Expenses against which Lessee is not required to indemnify the Owner
Participant, Lessor or First Security Bank, National Association, in its
individual capacity, pursuant to Section 6 of the Participation Agreement
or (iv) claims against Lessor or the Owner Participant arising out of any
transfer by Lessor or the Owner Participant of all or any portion of the
respective interests of Lessor or the Owner Participant in the Aircraft,
the Trust Estate or the Operative Documents other than the transfer of
possession of the Aircraft by Lessor pursuant to the Lease, the transfer
pursuant to the Trust Indenture or a transfer of the Aircraft pursuant to
Section 9, 10 or 19 of the Lease or pursuant to the exercise of the
remedies set forth in Section 15 of the Lease.
"Lessor's Cost" for the Aircraft means the amount denominated as
such in Exhibit B to the Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease, sub-sublease or security interest.
"Liquidity Facilities" means the three Revolving Credit
Agreements between the Subordination Agent, as borrower, and the Liquidity
Provider, and any replacement thereof, in each case as the same may be
amended, modified or supplemented.
"Liquidity Provider" means ABN AMRO Bank, N.V., a bank organized
under the laws of the Netherlands acting through its Chicago branch, as
Class A Liquidity Provider, Class B Liquidity Provider and Class C
Liquidity Provider under the Liquidity Facilities, or any successor
thereto.
"Loan Participant" means each Purchaser and its respective
successors and registered assigns, including any Note Holder.
"Loan Participant Liens" means any Lien which arises from acts or
claims against any Loan Participant not related to the transactions
contemplated by the Operative Documents.
"Loss Payment Date" has the meaning specified for such term in
Section 10(a) of the Lease.
"Majority in Interest of Note Holders" as of a particular date of
determination means the holders of more than a majority in aggregate unpaid
Principal Amount of all Equipment Notes outstanding as of such date
(excluding any Equipment Notes 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 of the Trust Indenture (unless all
Equipment Notes 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 Equipment Note,
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 Equipment Note 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 Equipment Note plus
accrued interest. For purposes of determining the Make-Whole Amount,
"Treasury Yield" means, at the time of determination, 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 and trading in the public securities market either as determined by
interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities, trading in the public
securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date and (B) the other maturing as close as possible
to, but later than, the Average Life Date, 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 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. "Average Life Date" means,
for each Equipment Note to be redeemed, the date which follows the
redemption date by a period equal to the Remaining Weighted Average Life at
the redemption date of such Equipment Note.
"Manufacturer" means Airbus Industrie G.I.E., a groupement
d'interet economique established under Ordonnance No. 67-821 dated
September 23, 1967 of the Republic of France, and its successors and
assigns.
"Manufacturer Documents" means the Purchase Agreement and the
Consent and Agreement.
"Mortgaged Property" has the meaning specified for such term in
Section 3.03 of the Trust Indenture.
"Multiplier" means (i) on any date when no Class C Special
Indemnity Event is continuing , 0.00, (ii) on each day during the first
ninety (90)-day period immediately following the occurrence of a Class C
Special Indemnity Event, 0.0025, and (iii) thereafter, on each day during
each subsequent ninety (90)-day period for so long as such Class C Special
Indemnity Event exists, the Multiplier in effect for the immediately
preceding ninety (90)-day period plus 0.0025; provided, that (a)
notwithstanding the foregoing, the maximum Multiplier shall be 0.01, and
(b) the Multiplier shall reset after such Class C Special Indemnity Event
has ceased or no longer exists and clause (i) shall apply again to any
subsequent Class C Special Indemnity Event.
"Net Economic Return" has the meaning specified for such term in
paragraph 2 of Exhibit E to the Lease.
"Net Present Value of Rents" means the net present value, as of
the date of calculation, of Basic Rent set forth in Exhibit B to the Lease,
discounted at an annual interest rate of ten percent (10%) on a semi-annual
basis.
"New Debt" has the meaning specified for such term in Section
16(a) of the Participation Agreement.
"Net Interest and Related Charges" has the meaning specified for
such term in Section 2.02 of the Trust Indenture.
"Note Holder" means any holder from time to time of one or more
Equipment Notes.
"Note Purchase Agreement" means the Note Purchase Agreement dated
as of the Pass Through Trust Closing Date among Lessee, the Pass Through
Trustee for the Class A, Class B and Class C Pass Through Trusts, the
Subordination Agent, First Security Bank, National Association, as Escrow
Agent, and State Street Bank and Trust Company, as Paying Agent.
"Obsolete Parts" has the meaning specified for such term in
Section 8(c) of the Lease.
"Operative Documents" means, collectively, the Participation
Agreement, the Lease, the Trust Indenture, the Trust Agreement, an
acceptance certificate covering the Aircraft in the form agreed to by the
Participants and Lessee, the Tax Indemnity Agreement, the Lease Supplement
covering the Aircraft, the Trust Supplement covering the Aircraft, the
Equipment Notes, the Xxxx of Sale, the FAA Xxxx of Sale, the Purchase
Agreement (insofar as it relates to the Aircraft), the Purchase Agreement
Assignment and the Consent and Agreement (each, an "Operative Document").
"Operative Indentures" means each of the indentures under which
notes have been issued and purchased by the Pass Through Trustees.
"Owner Indemnitee" has the meaning specified for such term in the
definition of Excluded Payments.
"Owner Participant" means ___________________, a [_____________]
corporation, so long as such party shall have any interest in the Trust
Estate, and transferees thereof as permitted by Section 7(k) of the
Participation Agreement and Section 8.01 of the Trust Agreement.
"Owner Participant Documents" means the Participation Agreement,
the Trust Agreement, and the Tax Indemnity Agreement and each other
agreement between the respective parties thereto relating to the subject
matter thereof, delivered on the Delivery Date.
"Owner Trustee" means First Security Bank, National Association,
not in its individual capacity but solely as owner trustee, and any entity
appointed as successor Owner Trustee pursuant to Section 9.01 of the Trust
Agreement, and references to a predecessor Owner Trustee in its individual
capacity by name in the Operative Documents shall include such successor
Owner Trustee in its individual capacity from and after such succession.
"Owner Trustee Documents" means the Participation Agreement, the
Trust Agreement, the Trust Supplement covering the Aircraft, the Lease, the
Lease Supplement covering the Aircraft, the Purchase Agreement Assignment,
the Trust Indenture and the Equipment Notes and each other agreement
between the respective parties thereto relating to the subject matter
thereof, delivered on the Delivery Date.
"Owner Trustee's pro rata share" has the meaning specified for
such term in the Trust Indenture.
"Participants" means the Loan Participants and the Owner
Participant, collectively (each individually, a "Participant").
"Participation Agreement" means that certain Participation
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the dated of
the Lease, among the Owner Trustee, the Subordination Agent, the Indenture
Trustee, Lessee, the Owner Participant and the Pass Through Trustee, 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.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
(a) complete Engines or engines, (b) any items leased by Lessee from a
third party (other than Lessor) and (c) cargo containers) which may from
time to time be incorporated or installed in or attached to the Airframe or
any Engine or so long as title thereto shall remain vested in Lessor in
accordance with Section 8 of the Lease after removal therefrom; provided
that "Parts" shall not include Passenger Convenience Equipment.
"Pass Through Certificates" means the pass through certificates
to be issued by the Pass Through Trustee in connection with the
Transactions.
"Pass Through Documents" means the Participation Agreement, the
Pass Through Trust Agreements and the Intercreditor Agreement.
"Pass Through Indemnitees" means (i) the Subordination Agent, the
Liquidity Provider and the Pass Through Trustee, (ii) each Affiliate of a
Person described in the preceding clause (i), (iii) the respective
directors, officers, employees, agents and servants of each of the Persons
described in the preceding clauses (i) and (ii), and (iv) the successors
and permitted assigns of the Persons described in the preceding clauses
(i), (ii) and (iii).
"Pass Through Trust" means, collectively, the three separate
grantor trusts set forth in Schedule III to the Participation Agreement
created, pursuant to the Pass Through Trust Agreements and each of the Pass
Through Trust Supplements set forth in Schedule III to the Participation
Agreement, to facilitate certain of the transactions contemplated by the
Operative Documents.
"Pass Through Trust Agreement" means the pass through trust
agreement and each of the three separate pass through trust supplements
referred to on Schedule III to the Participation Agreement.
"Pass Through Trust Closing Date" means December 14, 1998.
"Pass Through Trustee" means State Street Bank and Trust Company,
a Massachusetts trust company, in its capacity as trustee under each Pass
Through Trust Agreement, and each other Person that may from time to time
be acting as successor trustee under any such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means available components or
systems installed on or affixed to the Airframe that are used to provide
individual telecommunications or electronic entertainment to passengers
aboard the Aircraft.
"Past Due Rate" has the meaning specified for such term in
Exhibit B to the Lease.
"Payment Date" means each January 30 and July 30, commencing on
________ 30, ____ (or, if any such day is not a Business Day, the
immediately succeeding Business Day) until the Equipment Notes have been
paid in full.
"Permitted Foreign Air Authority" means the Civil Aviation
Authority of the United Kingdom, the Direction Generale de l'Aviation
Civile of the French Republic, the Luftfahrt Bundesamt of the Federal
Republic of Germany, the Rijflauchtraatdienst of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the Federal
Ministry of Transport of Canada (and any agency or instrumentality of the
applicable government succeeding to the functions of any of the foregoing
entities).
"Permitted Lien" means any Lien referred to in clauses (i)
through (viii) of Section 6 of the Lease.
"Permitted Sublessee" means any entity domiciled in a country
listed in Exhibit F to the Lease as in effect from time to time and as may
be modified in accordance with Section 7(d) of the Participation Agreement.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal Amount", with respect to a Equipment Note, means the
stated original principal amount of such Equipment Note and, with respect
to all Equipment Notes, means the aggregate stated original principal
amounts of all Equipment Notes.
"Principal Amount Repayment Date" means each Payment Date on
which any portion of the Principal Amount is due and payable in accordance
with the Amortization Schedule.
"Purchase Agreement" means the Sale and Purchase Agreement, dated
as of October 31, 1997, between the Seller and US Airways Group, Inc., as
the same has been assigned to Lessee, relating to the purchase by Lessee of
the Aircraft, as originally executed or as modified, amended or
supplemented in accordance with the terms thereof, but only insofar as the
foregoing relates to the Aircraft.
"Purchase Agreement Assignment" means the Purchase Agreement
Assignment (US Airways, Inc. Trust No. N7__UW), dated as of the date of
the Lease, between Lessee and Lessor, as the same may be amended,
supplemented or modified from time to time, with a form of Consent and
Agreement to be executed by the Seller attached thereto.
"Purchase Option Date" has the meaning specified for such term in
Section 19(b) of the Lease.
"Purchasers" means the Pass Through Trustees under each Pass
Through Trust Agreement.
"QIB" has the meaning specified for such term in Section 2.08 of
the Trust Indenture.
"Qualified Owner Participant" means a Person which has a tangible
net worth, calculated in accordance with generally accepted accounting
principles, greater than $50,000,000, or a Person whose obligations under
the Operative Documents are unconditionally guaranteed by such a Person.
"Refinancing Certificate" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Refinancing Date" has the meaning specified for such term in
Section 16(a) of the Participation Agreement.
"Refinancing Information" has the meaning specified for such term
in Section 16(a) of the Participation Agreement.
"Registration Agreement" means the Registration Agreement dated
December 14, 1998 by Lessee, and confirmed and accepted by AIFS, in respect
of the 6.82% Pass Through Certificates, Series 1998-1, Class C, as such
Registration Agreement may be amended, modified and supplemented from time
to time in accordance with the provisions thereof.
"Related Indemnitee Group" means, with respect to any Indemnitee,
any officer, director, servant, employee, agent or Affiliate thereof.
"Remaining Weighted Average Life" of a Equipment Note, at the
redemption date of such Equipment Note, means 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 Equipment Note, 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 Equipment Note.
"Renewal Term" means any Fixed Renewal Term or Fair Market
Renewal Term.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Replacement Airframe" means any airframe substituted for the
Airframe pursuant to Section 10 of the Lease.
"Replacement Engine" means any engine substituted for an Engine
pursuant to Sections 9(c) and 10 of the Lease.
"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.
"Scheduled Delivery Date" has the meaning specified for such term
in Section 2(f) of the Participation Agreement.
"Section 1110 Period" has the meaning specified for such term in
Section 4.04(a) of the Trust Indenture.
"Secured Obligations" has the meaning specified for such term in
the Granting Clause of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means AVSA, S.A.R.L., a societE a responsabilite limitee
organized and existing under the laws of the Republic of France.
"Senior Holder" has the meaning specified for such term in
Section 2.15(c) of the Trust Indenture.
"Series A" or "Series A Equipment Notes" means Equipment Notes
issued and designated as "Series A" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series A."
"Series B" or "Series B Equipment Notes" means Equipment Notes
issued and designated as "Series B" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series B."
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued and designated as "Series C" under the Trust Indenture, in the
Principal Amount and maturities and bearing interest as specified in
Schedule I to the Trust Indenture under the heading "Series C."
"Significant Expenditure" means an expenditure or planned
expenditure of the type described in clause (B) of the definition of
Burdensome Termination Event.
"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.
"Sublease" means any sublease permitted by the terms of Section
7(b)(x) of the Lease.
"Sublessee" means any Person for so long, but only so long, as
such Person is in possession of the Airframe and/or any Engine pursuant to
the terms of a Sublease which is then in effect pursuant to Section 7(b)(x)
of the Lease.
"Subordination Agent" means State Street Bank and Trust Company,
a Massachusetts trust company, as subordination agent under the
Intercreditor Agreement, or any successor thereto.
"Subsequent Owner Participant" means any entity to which the
Owner Participant or any transferee from the Owner Participant or any
Subsequent Owner Participant shall have transferred at any time after the
Delivery Date all of the undivided right, title and interest originally
held by the Owner Participant in the Trust Agreement, the Trust Estate and
the Participation Agreement, to the extent permitted by Section 8.01 of the
Trust Agreement and Section 7(k) of the Participation Agreement.
"Supplemental Rent" means, without duplication, (a) all amounts,
liabilities, indemnities and obligations (other than Basic Rent) that
Lessee assumes or becomes obligated to or agrees to pay under any Lessee
Document to or on behalf of Lessor or any other Person, including, without
limitation, payments of Termination Value, any amounts in respect of a
purchase price payable pursuant to Section 19(c) of the Lease and payments
of indemnities under Section 6 of the Participation Agreement, but
excluding any amount as to which Lessee is obligated to pay a pro rata
share pursuant to clause (d) or (e) of this definition, (b) (i) to the
extent not payable (whether or not in fact paid) under Section 7(a) of the
Note Purchase Agreement (as originally in effect or amended with the
consent of the Owner Participant), an amount or amounts equal to the fees
payable to the Liquidity Provider under Section 2.03 of each Liquidity
Facility and the related Fee Letter (as defined in the Intercreditor
Agreement) multiplied by a fraction the numerator of which shall be the
then outstanding aggregate principal amount of the Series A Equipment
Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal
amount of all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indenture) issued under the Operative Indentures; (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y)
the fraction specified in the foregoing clause (i); (iii) (x) the amount
equal to interest on any Non-Extension Advance (other than any Applied Non-
Extension Advance) payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings from such Non-Extension Advance multiplied by (y)
the fraction specified in the forgoing clause (i); (iv) if any payment
default shall have occurred and be continuing with respect to interest on
any Series A Equipment Note, Series B Equipment Note or Series C Equipment
Note, (x) the excess, if any, of (1) an amount equal to interest on any
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07 of each Liquidity Facility over (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at
the Past Due Rate actually payable (whether or not in fact paid) by Lessee
in respect of the overdue scheduled interest on the Equipment Notes in
respect of which such Unpaid Advance, Applied Downgrade Advance or Applied
Non-Extension Advance was made multiplied by (y) a fraction the numerator
of which shall be the then aggregate overdue amounts of interest on the
Series A Equipment Notes, Series B Equipment Notes and Series C Equipment
Notes (other than interest becoming due and payable solely as a result of
acceleration of any such Equipment Notes) and the denominator of which
shall be the then aggregate overdue amounts of interest on all "Series A
Equipment Notes", "Series B Equipment Notes" and "Series C Equipment
Notes" (in each case as defined in the relevant Operative Indenture) issued
under the Operative Indenture (other than interest becoming due and payable
solely as a result of acceleration of any such "Equipment Notes," in each
case as defined in the relevant Operative Indenture) issued under the
Operative Indentures); and (v) Lessee's pro rata share of any other amounts
owed to the Liquidity Provider by the Subordination Agent as borrower
under each Liquidity Facility (other than amounts due as repayment of
advances thereunder or as interest on such advances), except to the extent
payable pursuant to clause (i), (ii), (iii) or (iv) above, (c) Lessee's
pro rata share of all compensation and reimbursement of expenses,
disbursements and advances payable by Lessee under the Pass Through Trust
Agreements, (d) Lessee's pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income
or franchise taxes incurred by the Subordination Agent in connection with
the transactions contemplated by the Intercreditor Agreement and (e)
Lessee's pro rata share of any amount payable under Section 6(c) of the
Participation Agreement to any Pass Through Indemnitee to the extent such
amount relates to, results from or arises out of or in connection with (i)
the Pass Through Trust Agreement or the enforcement of any of the terms of
any Pass Through Document, (ii) the offer, sale, or delivery of the Pass
Through Certificates or any interest therein or represented thereby or
(iii) any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Lessee under any Pass Through Document or the falsity of any
representation or warranty of Lessee in any Pass Through Document. As used
herein, "Lessee's pro rata share" means as of any time a fraction, the
numerator of which is the principal balance then outstanding of Equipment
Notes and the denominator of which is the aggregate principal balance then
outstanding of all "Equipment Notes" (in each case as defined in the
relevant Operative Indenture) issued under the Operative Indentures. For
purposes of this definition, the terms "Applied Downgrade Advance",
"Applied Non-Extension Advance", "Cash Collateral Account", "Downgrade
Advance", "Final Advance", "Investment Earnings", "Non-Extension Advance"
and "Unpaid Advance" shall have the meanings specified in each Liquidity
Facility. For the avoidance of doubt, it is understood and agreed that
Supplemental Rent includes, without limitation, any amounts payable under
the third paragraph of Section 2.02 of the Trust Indenture.
"Tax Indemnitee" means (i) the Owner Participant, the Owner
Trustee, in its individual capacity and as trustee under the Trust
Agreement, the Trust Estate, the Indenture Trustee, (ii) the respective
Affiliates, successors and permitted assigns of each of the entities
described in the preceding clause (i), and (iii) the Trust Indenture
Estate.
"Tax Indemnity Agreement" means that certain Tax Indemnity
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the date of the
Lease, between the Owner Participant and Lessee, as originally executed or
as modified, amended or supplemented pursuant to the applicable provisions
thereof.
"Taxes" means any and all fees (including, without limitation,
license, recording, documentation and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value added, property (tangible and intangible), excise and stamp taxes),
license, levies, imposts, duties, recording charges and assessments of any
kind whatsoever that are in the nature of taxes or other governmental
charges including interest, penalties and additions to tax (each,
individually a "Tax").
"Term" means the Basic Term and, if actually entered into, any
Renewal Term.
"Termination Date" has the meaning set forth in Section 9(a) of
the Lease.
"Termination Value" with respect to the Aircraft as of any date
during the Term means, but subject always to the provisions of Section
3(c)(v) of the Lease, the amount determined by multiplying Lessor's Cost
for the Aircraft by the percentage specified in Exhibit D to the Lease
opposite the Termination Date with respect to which the amount is
determined (as such Exhibit D may be adjusted from time to time as provided
in Section 3(c) of the Lease and as expressly provided in any other
Operative Document).
"Transaction Expenses" means: all of the reasonable out-of-pocket
costs, fees and expenses incurred by Lessee, the Owner Trustee, the Pass
Through Trustee, the Subordination Agent and the Indenture Trustee in
connection with the transactions contemplated by the Participation
Agreement, the other Operative Documents, the Pass Through Trust
Agreements, the Pass Through Documents, the Intercreditor Agreement, the
Liquidity Facilities and the Underwriting Agreement (except, in each case,
as otherwise provided therein) including, without limitation:
(a) the reasonable and actual fees, expenses and
disbursements of (A) Xxxxxxx, Xxxx & Xxxxx LLP, special counsel for the
Pass Through Trustee and the Indenture Trustee, (B) Ray, Xxxxxxx & Xxxxxxx,
special counsel for the Owner Trustee, (C) Shearman & Sterling, special
counsel for the Underwriters, and (D) Xxxxx & Xxxxxxx, P.C., special
counsel in Oklahoma City, Oklahoma and (E) Xxxxxxx Xxxxxxx & Xxxxxxxx,
special counsel to AIFS;
(b) the initial fees and reasonable and actual disbursements
of the Owner Trustee under the Trust Agreement;
(c) the initial fee and reasonable and actual disbursements
of the Indenture Trustee under the Trust Indenture;
(d) the initial fees and expenses of the Liquidity Provider,
the Pass Through Trustee and the Subordination Agent;
(e) underwriting fees and commissions;
(f) the fees and expenses with respect to the appraisal of
the Aircraft;
(g) the reasonable fees, expenses and disbursements of
_________________, special counsel to the Owner Participant, such fees not
to exceed the amount previously agreed to by the Owner Participant and
Lessee;
(h) the fees, expenses and disbursements of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP and its affiliates, special counsel for Lessee;
(i) the costs of filing and recording documents with the FAA
and filing Uniform Commercial Code statements in the United States;
(j) the reasonable fees, expenses and disbursements of
special counsel to the Liquidity Provider; and
(k) the expenses of the Depositaries payable under Section
10(a) of each Indemnity Agreement; and
(l) the reasonable fees, expenses and disbursements of,
special counsel to the Seller and the Manufacturer.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Transferee" has the meaning specified for such term in Section
7(k) of the Participation Agreement.
"Transportation Code" means that portion of the United States Code
comprising those provisions formerly referred to as the Federal Aviation
Act of 1958, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"Trust Agreement" means that certain Trust Agreement (US Airways,
Inc. Trust No. N7__UW), dated as of the date of the Lease, between the
Owner Participant and First Security Bank, National Association, in its
individual capacity, as originally executed or as modified, amended or
supplemented pursuant to the applicable provisions thereof, including,
without limitation, supplementation thereof by one or more Trust
Supplements entered into pursuant to the applicable provisions thereof.
"Trust Agreement and Indenture Supplement" or "Trust Supplement"
means a supplement to the Trust Agreement and the Trust Indenture,
substantially in the form of Exhibit A to the Trust Indenture, 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 Estate" means all estate, right, title and interest of the
Owner Trustee in and to the Aircraft, the Lease, any Lease Supplement, the
Purchase Agreement, the Purchase Agreement Assignment, the Xxxx of Sale and
the FAA Xxxx of Sale, including, without limitation, all amounts of Basic
Rent and Supplemental Rent including without limitation insurance proceeds
(other than insurance proceeds payable to or for the benefit of the Owner
Trustee, for its own account or in its individual capacity, the Owner
Participant, the Loan Participants or the Indenture Trustee) and
requisition, indemnity or other payments of any kind for or with respect to
the Aircraft (except amounts owing to the Owner Participant, to the
Indenture Trustee, to the Owner Trustee, in its individual capacity, or to
the Loan Participants or any other holder of a Equipment Note, or to any of
their respective directors, officers, employees, servants and agents,
pursuant to Section 6 of the Participation Agreement). Notwithstanding the
foregoing, "Trust Estate" shall not include any Excluded Payments.
"Trust Indenture" means that certain Trust Indenture and Security
Agreement (US Airways, Inc. Trust No. N7__UW), dated as of the date of the
Lease, between Lessor and the Indenture Trustee, as it may from time to
time be supplemented or amended as therein provided, including
supplementing by the Trust Agreement and Indenture Supplement pursuant to
the Trust Indenture.
"Trust Indenture Estate" means all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in
the Granting Clause of the Trust Indenture, excluding Excluded Payments.
"Underwriters" means Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Xxxxx
Barney Inc., Xxxxxx Brothers Inc. and Credit Suisse First Boston Corporation.
"U.S. Air Carrier" means any Certificated Air Carrier as to which
there is in force an air carrier operating certificate issued pursuant to
Part 121 of the regulations under the Transportation Code, or which may
operate as an air carrier by certification or otherwise under any successor
or substitute provisions therefor or in the absence thereof.
"Wet Lease" means any arrangement whereby the Lessee (or any
Sublessee) agrees to furnish the Airframe and Engines or engines installed
thereon to a third party pursuant to which such Airframe and Engines or
engines (i) shall be operated solely by regular employees of Lessee (or any
Sublessee) possessing all current certificates and licenses that would be
required under the Transportation Code, or, if the Aircraft is not
registered in the United States, all certificates and licenses required by
the laws of the jurisdiction of registry, for the performance by such
employees of similar functions within the United States of America or such
other jurisdiction of registry (it is understood that cabin attendants need
not be regular employees of Lessee (or any Sublessee)) and (ii) shall be
maintained by Lessee (or any Sublessee) in accordance with its normal
maintenance practices.
